2009 Hematology/Oncology Carrier Advisory Committee (CAC)
2009 Hematology/Oncology Carrier Advisory Committee (CAC)
2009 Hematology/Oncology Carrier Advisory Committee (CAC)
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<strong>2009</strong> Annual Meeting of the<br />
<strong>Hematology</strong>/<strong>Oncology</strong><br />
<strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong><br />
<strong>CAC</strong> Network
7:00 Breakfast<br />
7:55 Speaker Introductions<br />
July 24, <strong>2009</strong> ASCO Headquarters Alexandria, VA<br />
<strong>CAC</strong> Network Meeting Co-Chairs:<br />
Charles Rosenbaum, MD, ASCO<br />
Lawrence Solberg, MD, PhD, ASH<br />
8:00 Keynote Address<br />
Karen Davenport, Director of Health Policy<br />
Center for American Progress<br />
9:00 Individual Attendee Introductions<br />
<strong>CAC</strong> Network Meeting Co-Chairs:<br />
Charles Rosenbaum, MD, ASCO<br />
Lawrence Solberg, MD, PhD, ASH<br />
Group Introductions ...........................Tab 1<br />
Attendees<br />
9:10 CMS Regulations for Hospice Care …Tab 2<br />
10:40 BREAK<br />
ANNUAL MEETING OF THE HEMATOLOGY/ONCOLOGY<br />
CARRIER ADVISORY COMMITTEE NETWORK<br />
Lori Anderson, Director<br />
CMS Division of Home Health and Hospice<br />
Susan Ponder-Stansel, President and CEO<br />
Community Hospice of Northeast Florida<br />
10:50 CMD Panel Discussion<br />
(Transition to MACs)……………..…….Tab 3<br />
Medicare CMDs<br />
Arthur Lurvey, MD, Palmetto<br />
William Mangold, MD, Noridian<br />
Laurence Clark, MD, FACP, Highmark<br />
<strong>CAC</strong> Representatives<br />
Thomas Marsland, MD, Florida<br />
David Gordon, MD, Texas<br />
Heather Allen, MD, Nevada<br />
11:50 “Lunch and Learn” (3 Breakout Sessions)<br />
1. Clinical Compendia and Off-Label Drugs<br />
2. Intravenous Vs. Oral Antiemetic Drugs<br />
3. Genetic Tests for Screening<br />
12:50 Recovery Audit Contractors ..............Tab 4<br />
LT Gia Lawrence, RN, Project Officer<br />
CMS Division of Recovery Audit Operations<br />
Pamela Durbin, Nurse Consultant<br />
CMS Division of Recovery Audit Operations<br />
1:50 Clinical Trials and<br />
Comparative Effectiveness ................Tab 5<br />
3:20 BREAK<br />
Leslye Fitterman, PhD<br />
Center for Medical Technology Policy<br />
Andrea Denicoff, Nurse Consultant<br />
National Cancer Institute<br />
3:30 CMD Panel Discussion<br />
(Questions & Answers)<br />
4:00 Wrap-Up<br />
Medicare CMDs<br />
Arthur Lurvey, MD, Palmetto<br />
Dick Whitten, MD, MBA, Noridian<br />
William Mangold, MD, Noridian<br />
George Costantino, MD, NGS<br />
Charles Rosenbaum, MD, ASCO<br />
Lawrence Solberg, MD, PhD, ASH<br />
SUPPLEMENTAL MATERIALS………………….Tab 6<br />
Refer to listings on e-binder tab facesheets
ANNUAL MEETING OF THE HEMATOLOGY/ONCOLOGY<br />
CARRIER ADVISORY COMMITTEE NETWORK<br />
JULY 24, <strong>2009</strong> ♦ ASCO HEADQUARTERS ♦ ALEXANDRIA, VA<br />
WELCOME AND INTRODUCTIONS<br />
CHARLES ROSENBAUM, MD LAURENCE SOLBERG, MD, PHD<br />
ASCO ASH<br />
Massachusetts Florida<br />
Included in this tab is the following:<br />
LIST OF MEETING ATTENDEES<br />
• A list of <strong>2009</strong> <strong>Hematology</strong>/<strong>Oncology</strong> <strong>CAC</strong> Network Meeting attendees and staff.<br />
(NOTE: If you have any changes to your contact information, please<br />
email cacnetworkmeeting@asco.org.)<br />
American Society of <strong>Hematology</strong><br />
www.hematology.org<br />
American Society of Clinical <strong>Oncology</strong><br />
www.asco.org
ANNUAL MEETING OF THE HEMATOLOGY/ONCOLOGY<br />
CARRIER ADVISORY COMMITTEE NETWORK<br />
Heather Allen, MD<br />
Comprehensive Cancer Centers of<br />
Nevada<br />
3730 South Eastern Avenue<br />
Las Vegas, NV 89109<br />
P (702) 952-3400<br />
F (702) 952-3448<br />
heather.allen@usoncology.com<br />
Lori Anderson<br />
7500 Security Boulevard<br />
Mail Stop: C5-06-27<br />
Baltimore, MD 21244-1850<br />
P (410) 786-6190<br />
Lori.anderson@cms.hhs.gov<br />
John Azar, MD, FACP<br />
Primary <strong>Oncology</strong> Network<br />
1325 Locust Avenue, Suite 15<br />
Fairmont, WV 26554<br />
P (304) 366-0111<br />
F (304) 366-2099<br />
jazarmd@aol.com<br />
July 24, <strong>2009</strong>♦ASCO Headquarters♦Alexandria, VA<br />
Thomas Beck, MD<br />
St. Luke's Mountain States Tumor Institute<br />
100 East Idaho Street<br />
Boise, ID 83712-6223<br />
P (208) 381-2737<br />
F (208) 381-2787<br />
beckt@slrmc.org<br />
Mila Becker, Esq.<br />
American Society of <strong>Hematology</strong><br />
1900 M St., NW, Suite 200<br />
Washington, DC 20036<br />
P (202) 776-0544<br />
F (202) 776-0545<br />
mbecker@hematology.org<br />
ATTENDEES<br />
As of July 23, <strong>2009</strong><br />
Thomas Bensinger, MD<br />
7525 Greenway Center Drive, Suite 205<br />
Greenbelt, MD 20770<br />
P (301) 982-9800<br />
F (301) 982-2420<br />
tabens@hemonconline.com<br />
Scott Blair, MD<br />
Columbus <strong>Oncology</strong> Associates<br />
810 Jasonway Avenue, Suite A<br />
Columbus, OH 43214-2329<br />
P (614) 442-3130<br />
sblair@coainc.com<br />
Richard Bohannon, MD<br />
1580 Valencia Street, Room 504<br />
San Francisco, CA 94110<br />
P (415) 648-7623<br />
F (415) 648-6805<br />
richbohannon@aol.com<br />
Timothy Bowers, MD, FACP<br />
PO Box 948<br />
Martinsburg, WV 25402<br />
P (304) 263-7591<br />
L. Eamonn Boyle, MD<br />
25 Monument Road, Suite 294<br />
York, PA 17403-5049<br />
P (717) 741-9229<br />
F (717) 741-9605<br />
lebsvb@aol.com<br />
Daniel Bradford, MD<br />
Highlands <strong>Oncology</strong> Group<br />
3232 N. North Hills Blvd<br />
Fayetteville, AR 72703<br />
P (479) 587-1700<br />
F (479) 587-1756<br />
latehogathome@sbcglobal.net<br />
1
Patrick Byrne, MD<br />
Northern Virginia <strong>Oncology</strong> Group<br />
3020 Hamaker Court, Suite 101<br />
Fairfax, VA 22031<br />
P (703) 560-3205<br />
F (703) 698-9624<br />
pbyrne@nvog.net<br />
Marci Cali, FACP<br />
<strong>Oncology</strong> State Society Network<br />
11600 Nebel Street, Suite 201<br />
Rockville, MD 20852-2557<br />
P (301) 984-9496 x238<br />
F (301) 770-1949<br />
mcali@accc-cancer.org<br />
Kevin Callahan, DO<br />
1930 East Route 70, Suite W112<br />
Cherry Hill, NJ 08003<br />
P (856) 424-3311<br />
F (856) 424-5634<br />
kcallahan@centerforcancer.com<br />
Luis Campos, MD<br />
<strong>Oncology</strong> Consultants, PA<br />
925 Gessner, Suite 600<br />
Houston, TX 77024-2448<br />
P (713) 827-9525<br />
F (713) 461-2113<br />
lcampos@oncologyconsultants.com<br />
Laura Cathro<br />
American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, Suite 800<br />
Alexandria, VA 22314<br />
P (571)483-1642<br />
F (571)366-9568<br />
Laura.Cathro@asco.org<br />
Paul Celano, MD<br />
Greater Baltimore Medical Center<br />
6569 N. Charles, Suite 205<br />
Baltimore, MD 21204<br />
P (443) 849-3279<br />
F (443) 849-3057<br />
pcelano@gbmc.org<br />
Laurence Clark, MD, FACP<br />
Contractor Medical Director<br />
Highmark Medicare Services<br />
P.O. Box 890089, 1800 Center Street<br />
Camp Hill, PA 17089-0089<br />
Laurence.ClarkMD@highmarkmedicarese<br />
rvices.com<br />
Liz Cleland<br />
113 W 7th Street, Suite 205<br />
Vancouver, WA 98660<br />
P (503) 841-6775<br />
F (360) 695-6937<br />
lizzywa@comcast.net<br />
Rise Marie Cleland<br />
113 W 7th Street, Suite 205<br />
Vancouver, WA 98660<br />
P (503) 841-6775<br />
F (360) 695-6937<br />
rise@oplinc.com<br />
Terry Coleman, Esq.<br />
Ropes & Gray<br />
700-12th Street, NW, Suite 900<br />
Washington, DC 20005<br />
P (202) 508-4646<br />
F (202) 508-4650<br />
Barbara Conley, MD<br />
Michigan State University<br />
401 W. Greenlawn<br />
Lansing, MI 48901<br />
P (517) 353-3128<br />
F (517) 432-9471<br />
Barbara.Conley@hc.msu.edu<br />
George Costantino, MD<br />
National Government Services, Inc.<br />
PO Box 4846<br />
Syracuse, NY 13221-4846<br />
P (215) 369-2765<br />
F (215) 369-8213<br />
George.Costantino@Empireblue.com<br />
John Cox, DO<br />
Texas <strong>Oncology</strong> Methodist Cancer Center<br />
3555 West Wheatland Rd, Suite 200<br />
Dallas, TX 75237-3461<br />
P (972) 709-2580<br />
F (972) 283-0136<br />
john.cox@usoncology.com<br />
Karen Davenport<br />
Center for American Progress<br />
1333 H. Street NW., 10th Floor<br />
Washington, DC 20005<br />
P (202) 682-1611<br />
F (202) 682-1867<br />
KDavenport@americanprogress.org<br />
2
Patti Davenport<br />
Government Relations Liaison<br />
MJ Executive Management Inc.<br />
8805 N 145 th E Ave, Suite 203<br />
Owasso, OK 74055<br />
P (918) 274-8374<br />
F (918) 274-8354<br />
Patti@mjexecmgmt.com<br />
Andrea Denicoff<br />
National Cancer Institute (NCI)<br />
6116 Executive Boulevard<br />
Bethesda, MD 20892-8322<br />
P (301) 435-9182<br />
denicofa@dctod.nci.nih.gov<br />
Joseph DiBenedetto, Jr, MD<br />
<strong>Oncology</strong> <strong>Hematology</strong> Associates<br />
193 Waterman Street<br />
Providence, RI 02906-4014<br />
P (401) 351-4470<br />
F (401) 351-0163<br />
joedibenedetto@msn.com<br />
Dave Dillahunt, CAE<br />
Ohio <strong>Hematology</strong> <strong>Oncology</strong> Society<br />
3401 Mill Run Drive<br />
Hilliard, OH 43026<br />
P (614) 527-6751<br />
F (614) 527-7979<br />
ddillahunt@osma.org<br />
David Eagle, MD<br />
Lake Norman <strong>Hematology</strong> <strong>Oncology</strong><br />
Specialists<br />
156 Centre Church Road, Suite 207<br />
Mooresville, NC 28117<br />
P (704) 799-3946<br />
F (704) 799-3956<br />
deagle@lnho.org<br />
Peter Ellis, MD<br />
UPMC Cancer Centers<br />
200 Delafield Road, Suite 3050<br />
Pittsburgh, PA 15215<br />
P (412) 781-3744<br />
F (412) 781-3793<br />
ellispg@upmc.edu<br />
Ira Felman, MD<br />
<strong>Oncology</strong> Care Medical Association<br />
101 East Beverly Blvd., Suite 200<br />
Montebello, CA 90640-3951<br />
P (323) 726-7535<br />
F (323) 726-2544<br />
ocmaief@yahoo.com<br />
Leslye Fitterman, Ph.D.<br />
Center for Medical Technology Policy<br />
400 East Pratt Street, Suite 814<br />
Baltimore, MD 21202<br />
P (443) 759-3197<br />
leslye.fitterman@cmtpnet.org<br />
Stan Forston, MD<br />
<strong>Oncology</strong> <strong>Hematology</strong> Care<br />
5053 Wooster Road<br />
Cincinnati, OH 45226<br />
P (513) 751-2145<br />
F (513) 751-2138<br />
sforston@ohcmail.com<br />
Matthew Gertzog, MBA, CAE<br />
American Society of <strong>Hematology</strong><br />
1900 M St., NW, Suite 200<br />
Washington, DC 20036<br />
P (202) 776-0544<br />
F (202) 776-0545<br />
mgertzog@hematology.org<br />
Shawn Glisson, MD<br />
Kentuckiana Cancer Institute<br />
100 East Liberty Street, Suite 500<br />
Louisville, KY 40202<br />
P (502) 561-8200<br />
F (502) 561-9596<br />
drglisson@kci.us<br />
David Gordon III, MD<br />
8527 Village Drive, Suite 101<br />
San Antonio, TX 78217<br />
P (210) 656-7177<br />
F (210) 656-3687<br />
david.gordon@usoncology.com<br />
Thomas Hauch, MD<br />
Carolina's Cancer Care, PA<br />
411 Billingsley Road, Suite 103<br />
Charlotte, NC 28211<br />
P (704) 344-1995<br />
F (704) 344-9125<br />
thauch@carolinascancercare.com<br />
3
Daniel Hayes, MD<br />
Maine Center for Cancer Medicine<br />
100 U.S. Route 1, Unit 108<br />
Scarborough, ME 04074<br />
P (207) 885-7600<br />
F (207) 885-7610<br />
hayesd@mccm.org<br />
Andrew Hertler, MD<br />
Maine General Health Association<br />
MGHC Thayer Unit<br />
149 North Street<br />
Waterville, ME 04901<br />
P (207) 872-1140<br />
F (207) 872-1882<br />
andrew.hertler@mainegeneral.org<br />
Deborah Kamin, PhD<br />
American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, Suite 800<br />
Alexandria, VA 22314<br />
P (571) 483-1610<br />
F (571) 366-9568<br />
Deborah.Kamin@asco.org<br />
Stephanie Kart<br />
American Society of <strong>Hematology</strong><br />
1900 M St., NW, Suite 200<br />
Washington, DC 20036<br />
P (202) 776-0544, ext. 5263<br />
F (202) 776-0545<br />
skart@hematology.org<br />
Kristen King<br />
Inkthinker Communications, LLC<br />
P.O. Box 357<br />
Ruther Glen, VA 22546<br />
P (540) 220-2184<br />
F (814) 284-7499<br />
kristen@inkthinkercommunications.com<br />
Anupama Kurup, MD<br />
Providence <strong>Oncology</strong> & <strong>Hematology</strong> Care<br />
9155 SW. Barnes Rd., Suite 533<br />
Portland, OR 97225<br />
P (503) 216-6300<br />
F (503) 216-6324<br />
anupama.kurup@providence.org<br />
Robert Langdon, MD<br />
Bergan Medical Building<br />
7710 Mercy Road, Suite 122<br />
Omaha, NE<br />
P (402) 393-3110<br />
F (402) 393-5732<br />
rlangdon@onchemwest.com<br />
Renatto LaRocca, MD<br />
Kentuckiana Cancer Institute, PLL<br />
100 East Liberty Street, Suite 300<br />
Louisville, KY 40202<br />
P (502) 561-8200<br />
F (502) 584-2089<br />
rvl@kci.us<br />
LT Gia Lawrence, RN<br />
Centers for Medicare & Medicaid Services<br />
7500 Security Blvd<br />
MailStop: C3-09-13<br />
Baltimore, MD 21244<br />
P (410) 786-2749<br />
Gia.Lawrence@cms.hhs.gov<br />
Martha Liggett, Esq.<br />
American Society of <strong>Hematology</strong><br />
1900 M St., NW, Suite 200<br />
Washington, DC 20036<br />
P (202) 776-0544<br />
F (202) 776-0545<br />
mliggett@hematology.org<br />
James T. Lin, MD<br />
1001 Coal Ave SE.<br />
Albuquerque, NM 87106<br />
P (505) 938-5858<br />
F (505) 938-5859<br />
jamesl@hoanm.com<br />
Keith Logie, MD<br />
Central Indiana Cancer Centers<br />
10212 Lantern Road<br />
Fishers, IN 46038<br />
P (317) 841-5656<br />
F (317) 841-5751<br />
keith.logie@usoncology.com<br />
William Loui, MD<br />
Oncare Hawaii, Inc.<br />
Queen's Physician Office Building II<br />
1329 Lusitana Street, Suite 307<br />
Honolulu, HI 96813<br />
P (808) 524-6115<br />
F (808) 528-1711<br />
wsloui@yahoo.com<br />
4
Arthur Lurvey, MD<br />
Contractor Medical Director<br />
Palmetto GBA-J1 MAC<br />
Medical Review Part B<br />
PO Box 1476<br />
Augusta Georgia 30903<br />
P (803) 476-5760<br />
F (803) 462-3918<br />
Arthur.Lurvey@Palmettogba.com<br />
Mary Malloy, CAE<br />
Michigan Society of <strong>Hematology</strong> & <strong>Oncology</strong><br />
3630 Rockingham Road<br />
Royal Oak, MI 48073<br />
P (800) 456-3413<br />
F (248) 549-1608<br />
mmalloy@msho.org<br />
William J. Mangold, Jr., MD, JD<br />
Noridian Administrative Services, LLC<br />
8920 N 23rd Avenue, Suite 1<br />
Phoenix, AZ 85021<br />
P (602) 749-2506<br />
William.Mangold@noridian.com<br />
Thomas Marsland, MD<br />
Orange Park Cancer Center<br />
2161 Kingsley Ave Ste 200<br />
Orange Park, FL 32073-4414<br />
P (904) 272-3139<br />
F (904) 272-6521<br />
thomas.marsland@foa.cc<br />
James May, III, MD<br />
Virginia Cancer Institute<br />
1401 Johnston Willis Drive, Suite 4200<br />
Richmond, VA 23235<br />
P (804) 330-7990<br />
F (804) 330-3541<br />
jmay@vacancer.com<br />
Barbara McAneny, MD<br />
New Mexico <strong>Oncology</strong> <strong>Hematology</strong><br />
Consultants<br />
4901 Lang Ave NE<br />
Albuquerque, NM 87109<br />
P (505) 842-8171<br />
F (505) 246-0684<br />
mcaneny@nmohc.com<br />
Charles Miller, MD<br />
Hawaii Permanente Medical Group<br />
3288 Moanalua Road<br />
Honolulu, HI 96819<br />
P (808) 432-8587<br />
F (808) 432-8590<br />
charles.f.miller@kp.org<br />
Roscoe Morton, MD<br />
Medical <strong>Oncology</strong> & <strong>Hematology</strong> Associates<br />
1221 Pleasant Street, Suite 100<br />
Des Moines, IA 50309<br />
P (515) 282-2921<br />
F (515) 282-1035<br />
morton.roscoe@gmail.com<br />
Therese Mulvey, MD<br />
Commonwealth Hem Onc<br />
10 Willard St.<br />
Quincy, MA 01269<br />
P (617) 479-3550<br />
F (617) 773-0367<br />
mulveyt@southcoast.org<br />
Michael Neuss, MD<br />
Onc/Hem Care Inc<br />
4350 Malsbary Road<br />
Cincinnati, OH 45242<br />
P (513) 891-4800<br />
F (513) 792-5845<br />
mneuss@ohcmail.com<br />
David Nix, MD<br />
Meridian <strong>Oncology</strong><br />
1704 23rd Avenue, 2 nd Floor<br />
Meridian, MS 39301<br />
P (601) 482-1555<br />
F (601) 696-4611<br />
dnixmd@meridianoncology.com<br />
Thien Oo, MD, FACP, FRCP<br />
St. Elizabeth's Medical Center<br />
736 Cambridge Street<br />
Boston, MA 02135<br />
P (617) 789-2903<br />
thienoo@pol.net<br />
Naimish Pandya, MD<br />
University of Maryland<br />
22 South Greene Street, Rm S9D04C<br />
Baltimore, MD 21201<br />
P (410) 328-2567<br />
F (410) 328-6896<br />
npandya@umm.edu<br />
5
Mark Pascal, MD<br />
Northern New Jersey Cancer Associates<br />
20 Prospect Avenue, Suite 400<br />
Hackensack, NJ 07601-1901<br />
P (201-996-5900<br />
F (201-996-9246<br />
mspchemo@hotmail.com<br />
Taral Patel, MD<br />
Mid-Ohio <strong>Hematology</strong> <strong>Oncology</strong><br />
3100 Plaza Properties Blvd.<br />
Columbus, OH 43219<br />
P (614) 383-6000<br />
F (614) 383-6001<br />
tpatel@zangcenter.com<br />
William (Charles) Penley, MD<br />
Tennessee <strong>Oncology</strong><br />
300 20th Ave N., Suite 301<br />
Nashville, TN 37203<br />
P (615) 329-0570<br />
F (615) 320-7091<br />
cpenley@tnonc.com<br />
Dorothy Phillips<br />
Florida Society of Clinical <strong>Oncology</strong><br />
3709 West Jetton Avenue<br />
Tampa, FL 33629-5146<br />
P (813) 253-0541, ext. 4410<br />
F (813) 254-5857<br />
dorothy.green@cancer.org<br />
Susan Ponder-Stansel<br />
Community Hospice of Northeast Florida<br />
4266 Sunbeam Road<br />
Jacksonville, FL 32257<br />
P (904) 596-6362<br />
ceo@communityhospice.com<br />
Kanti Rai, MD<br />
Long Island Jewish Medical Center<br />
270-05 76th Avenue<br />
New Hyde Park, NY 11040<br />
P (718) 470-7135<br />
F (718) 347-6073<br />
rai@lij.edu<br />
David Regan, MD<br />
5050 NE Hoyt Street, Suite 256<br />
Portland, OR 97213-2982<br />
P (503) 239-7767<br />
F (503) 215-6897<br />
david.regan@usoncology.com<br />
Gerald Robbins, MD<br />
Florida Cancer Institute<br />
8763 River Crossing Blvd.<br />
New Port Richey, FL 34655-1112<br />
P (727) 842-8411<br />
F (727) 847-2923<br />
grobbins3@tampabay.rr.com<br />
Charles Rosenbaum, MD<br />
65 Fremont Street<br />
Marlborough, MA 01752<br />
P (508) 481-4213<br />
F (508) 481-7841<br />
CroseMD1@aol.com<br />
Judy Schmidt, MD, FACP<br />
2835 Fort Missoula Road, Suite 301<br />
Missoula, MT 59804<br />
P (406) 721-1118<br />
F (406) 728-4055<br />
judy@drjudyschmidt.com<br />
Burton Schwartz, MD<br />
Minnesota <strong>Oncology</strong> <strong>Hematology</strong><br />
800 East 28th Street, Suite 405<br />
Minneapolis, MN 55407<br />
P (612) 863-8585<br />
F (612) 863-8586<br />
burton.schwartz@usoncology.com<br />
Carol Schwartz, MPH<br />
American Society of <strong>Hematology</strong><br />
1900 M St., NW, Suite 200<br />
Washington, DC 20036<br />
P (202) 776-0544<br />
F (202) 776-0545<br />
cschwartz@hematology.org<br />
Eric Seifter, MD<br />
10755 Falls Road, Suite 200<br />
Lutherville, MD 21093<br />
P (410) 583-7122<br />
F (410) 583-7128<br />
eseifte@jhmi.edu<br />
Arvind Shah, MD<br />
401 Division Street, Suite 100<br />
South Charleston, WV 25309<br />
P (304) 766-4350<br />
ashah2733@aol.com<br />
6
Julie Shroyer<br />
West Virginia <strong>Oncology</strong> Society<br />
211 Marion Square<br />
P.O. Box 2990<br />
Fairmont, WV 26554<br />
P (304) 368-4575<br />
F (304) 367-9470<br />
Julie@wvos.info<br />
Samuel Silver, MD, Ph.D.<br />
University of Michigan<br />
1500 East Medical Center Drive<br />
SPC 5843, C450 Med Inn<br />
Ann Arbor, MI 48109-5843<br />
P (734) 936-4302<br />
F (734) 936-8788<br />
msilver@med.umich.edu<br />
Lawrence Solberg, Jr, MD, PhD<br />
Mayo Clinic<br />
Division of <strong>Hematology</strong>/<strong>Oncology</strong><br />
4500 San Pablo Road<br />
Jacksonville, FL 32224<br />
P (904) 953-2000<br />
F (904) 953-2315<br />
solberg.lawrence@mayo.edu<br />
Steven Stranne, MD, JD<br />
Bryan Cave, LLP<br />
1155 F. Street, NW<br />
Washington, DC 20004<br />
P (202) 508-6349<br />
F (202) 220-7649<br />
steven.stranne@bryancave.com<br />
Howard Terebelo, DO<br />
Providence Hospital<br />
22301 Foster Winter Drive<br />
PO Box 2043<br />
Southfield, MI 48075<br />
P (248) 552-0620<br />
F (248) 552-8602<br />
hiccup@comcast.net<br />
Tammy Thiel<br />
Denali <strong>Oncology</strong> Group<br />
2741 DeBarr Road, Suite C405<br />
Anchorage, AK 99508<br />
P (907) 257-9803<br />
F (907) 257-9855<br />
tammy@hotsheet.com<br />
Christian Thomas, MD<br />
Vermont Center for Cancer Medicine<br />
792 College Parkway, Suite 207<br />
Colchester, VT 05446-3040<br />
P (802) 655-3400<br />
F (802) 655-9170<br />
christian.thomas@vtmednet.org<br />
Maria Tirona, MD<br />
Need Contact Information<br />
JuliaTomkins<br />
American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, Suite 800<br />
Alexandria, VA 22314<br />
P (571) 483-1651<br />
F (571) 366-9568<br />
Julia.Tomkins@asco.org<br />
Elaine Towle, CMPE<br />
<strong>Oncology</strong> Metrics<br />
351 Fremont Road<br />
Chester, NH 03036<br />
P (603) 887-8433<br />
F (603) 887-8435<br />
etowle@oncomet.com<br />
Donna Walker, MD<br />
Northwest Louisiana <strong>Oncology</strong><br />
Associates, Highland Clinic<br />
1455 East Bert Kouns<br />
Shreveport, LA 71105<br />
P (318) 773-3344<br />
dwalker@highlandclinic.com<br />
Sabina Wallach, MD<br />
9850 Genessee Avenue, Suite 400<br />
La Jolla, CA 92037<br />
P (858) 558-8666<br />
F (858) 558-9233<br />
joan@oncologylajolla.com<br />
Jeffery Ward, MD<br />
Puget Sound Cancer Centers<br />
21605 76th Avenue West, Suite 200<br />
Edmonds, WA<br />
P (425) 775-1677<br />
F (425) 778-1635<br />
jeffery.ward@usoncology.com<br />
7
Robert Weinstein, MD<br />
Umass Memorial Medical Center<br />
Chief, Division of Transfusion Medicine<br />
55 Lake Avenue North<br />
Worcester, MA 01655<br />
P (508) 334-3725<br />
F (508) 334-7939<br />
WeinsteR@ummhc.org<br />
Richard Whitten, MD, MBA<br />
Noridian Administrative Services<br />
6811 South 204 th , Suite 300<br />
Kent, WA 98032-2359<br />
P 253-437-5402<br />
richard.whitten@noridian.com<br />
Mary Jo Wichers<br />
State Society Executive Director<br />
8805 N 145 th E Avenue, Suite 203<br />
Owasso, OK 74055<br />
P (918) 261-8951<br />
F (918) 274-8354<br />
maryjo@oscoOK.org<br />
Mary Wilkinson, MD<br />
Northern Virginia <strong>Oncology</strong> Group<br />
8501 Arlington Blvd., Suite 340<br />
Fairfax, VA 22031<br />
P (703) 207-0733<br />
F (703) 207-0736<br />
marywilkinson@nvoncology.com<br />
Michael Willen, MD<br />
New York <strong>Oncology</strong> <strong>Hematology</strong><br />
1003 Loudon Road<br />
PO Box 610<br />
Latham, NY 12110<br />
P (518) 786-3122<br />
F (518) 786-3150<br />
Michael.willen@usoncology.com<br />
8
ANNUAL MEETING OF THE HEMATOLOGY/ONCOLOGY<br />
CARRIER ADVISORY COMMITTEE NETWORK<br />
JULY 24, <strong>2009</strong> ♦ ASCO HEADQUARTERS ♦ ALEXANDRIA, VA<br />
CMS REGULATIONS FOR<br />
HOSPICE CARE<br />
American Society of <strong>Hematology</strong><br />
www.hematology.org<br />
LORI ANDERSON<br />
Centers for Medicare & Medicaid Services<br />
SUSAN PONDER-STANSEL<br />
Community Hospice of Northeast Florida<br />
Ms. Anderson will be providing an overview of the CMS regulations for hospice<br />
care and coverage, whereas Ms. Ponder-Stansel will be providing an overview on<br />
improving reimbursement, and of the new roles for palliative care training<br />
programs for hospice organizations. Ms. Anderson and Ms. Ponder-Stansel will<br />
then participate in a joint “Question and Answer” session immediately following.<br />
Included in this tab are the following:<br />
• Presentation slides, “CMS Regulations for Hospice Care”<br />
• Presentation slides, “Palliative Care Training Programs”<br />
American Society of Clinical <strong>Oncology</strong><br />
www.asco.org
Speaker Introduction for<br />
Susan Ponder-Stansel, President & CEO<br />
Community Hospice of Northeast Florida<br />
Susan Ponder-Stansel is the President & CEO of Community Hospice of<br />
Northeast Florida, a community-focused, non-profit health care<br />
organization serving patients with advanced illnesses in Northeast Florida.<br />
She joined Community Hospice as a volunteer clinical social worker for its<br />
newly established St. Augustine branch office in 1985 and was hired as its<br />
first full-time social worker for the Jacksonville headquarters in June 1986.<br />
She became the organization’s chief executive in September 1988.<br />
Since Susan’ appointment as Chief Executive, Community Hospice has<br />
grown from serving 60 patients a day with a staff of 35, to an organization<br />
of 750 full- and part-time staff serving 1,000 patients each day, making it<br />
one of the nation’s largest independent hospice programs. Susan was<br />
instrumental in Community Hospice achieving the honor of being named<br />
Program of the Year by the National Hospice Organization, the highest<br />
honor available to any hospice program in the United States and<br />
Community Hospice has received many other awards for innovation and<br />
service during her tenure.<br />
She received a bachelor’s degree from Florida State University in 1979 and<br />
a master’s in Clinical Social Work (MSW) from FSU in 1985. She is a<br />
member of the Academy of Certified Social Workers (ACSW), a Qualified<br />
Clinical Social Worker (QCSW) and a board-certified Licensed Clinical<br />
Social Worker in the State of Florida.<br />
Professionally, Susan serves on the Executive Board of the Florida Hospice<br />
Association (FHPC). Susan also serves on several health care-related<br />
advisory boards in Florida, serves as a consultant in the hospice industry,<br />
writes and contributes to various publications on the topics of hospice care<br />
and end of life care, and has held various consulting positions in the home<br />
health care and long-term care fields. She lives with her husband and<br />
daughter in St. Augustine, Florida and is active in her community’s civic<br />
life.<br />
Updated 11/28/07
Biographical Information for<br />
Susan Ponder-Stansel, President & CEO<br />
Community Hospice of Northeast Florida<br />
Susan Ponder-Stansel is the President & CEO of Community Hospice of<br />
Northeast Florida, a community-focused, community-supported nonprofit health<br />
care organization serving patients with advanced illnesses in Northeast Florida.<br />
She joined Community Hospice as a volunteer clinical social worker for its newly<br />
established St. Augustine branch office in 1985 and was hired as its first full-time<br />
social worker for the Jacksonville headquarters in June 1986. Susan was named<br />
the organization’s Assistant Director in January 1987 and Executive Director in<br />
September 1988. She became President & CEO in April 1991.<br />
During her tenure as President & CEO, Community Hospice has grown from<br />
serving 60 patients a day with a staff of 35 to an organization of 700+ full- and<br />
part-time staff serving nearly 1,000 patients each day. Susan also has been<br />
instrumental in Community Hospice achieving the honor of being named<br />
Program of the Year by the National Hospice Organization, the highest honor<br />
available to any hospice program in the United States.<br />
Susan also has been a guiding force in the development of the Earl B. Hadlow<br />
Center for Caring, a 50,000-square-foot, 38-bed inpatient care center for hospice<br />
patients that opened in June 1995 in Jacksonville. In June 2001, Susan also saw<br />
her vision for a hospital-based hospice unit come to fruition, when the 17-bed<br />
George and Margaret Morris Center for Caring opened on the Shands<br />
Jacksonville campus. In September 2000 under her leadership, Community<br />
Hospice launched a pediatric initiative with Wolfson Children’s Hospital, Nemours<br />
Children’s Clinic, and the University of Florida called Community PedsCare<br />
(pronounced PEEDS-care), a palliative and hospice care program for children<br />
with life-threatening conditions. Since its inception, the program has grown to<br />
serve more than 100 pediatric patients each day.<br />
In June 2002, Community Hospice officially opened the Charles M. Neviaser<br />
Educational Institute. Susan was instrumental in bringing this building and<br />
service from concept to reality. The Neviaser Educational Institute provides<br />
education and training on end-of-life care to health care professionals and<br />
community members. It is one of only six such centers in the United States.<br />
Under Susan’s dedicated leadership, Community Hospice has continued to grow<br />
and recently added more inpatient care centers to meet the needs of the<br />
community. In 2007, two newly constructed facilities—the Dr. Gaston J. Acosta-<br />
Rua Center for Caring on Jacksonville’s Westside and the Anne and Donald<br />
McGraw Center for Caring on the campus of the Mayo Clinic—each with 16 beds<br />
in private rooms in unique homelike settings.<br />
Updated 11/28/07
Susan has also held various consulting positions in the home health care and<br />
long-term care fields. She received a bachelor’s degree from Florida State<br />
University in 1979 and a master’s in Clinical Social Work (MSW) from FSU in<br />
1985. She is a member of the Academy of Certified Social Workers (ACSW), a<br />
Qualified Clinical Social Worker (QCSW) and a board-certified Licensed Clinical<br />
Social Worker in the State of Florida.<br />
Susan is a native of St. Augustine where she is active in the community,<br />
including serving as President of the Junior Service League of St. Augustine from<br />
1993-94; serving on the Board of Directors of United Way of St. Johns County;<br />
and on the <strong>Advisory</strong> Board of the Historic St. Augustine Preservation Board, and<br />
the North Shores Improvement Association. She is a member of the Rotary Club<br />
of St. Augustine, the Women’s Exchange of St. Augustine, and is an active<br />
member of the Cathedral Parish of St. Augustine. In Jacksonville, Susan, is<br />
member of the Leadership Jacksonville Class of 1991, a Trustee Member of the<br />
Jacksonville Chamber of Commerce, and a member of the Jacksonville Women’s<br />
Network. She serves on the Board of Directors of the Northeast Florida Health<br />
Planning Council.<br />
Professionally, Susan serves on the Executive Board of Directors of the Florida<br />
Hospice Association (FHPC), chairing their Access Initiative committee. Susan<br />
also serves on several health care-related advisory boards in Florida, serves as a<br />
consultant in the hospice industry, and writes and contributes to various<br />
publications on the topics of hospice care and end of life care, including serving<br />
on the national editorial board of The Hospice Letter.<br />
Updated 11/28/07
ASCO-ASH ASCO ASH <strong>CAC</strong> NETWORK MEETING<br />
JULY 24, 24 <strong>2009</strong><br />
ASCO Headquarters<br />
Alexandria, va<br />
S Susan Ponder-Stansel, P d St l PPresident id t & CEO<br />
Community Hospice of Northeast Florida, Inc.
Hospice Care Background<br />
• Community Hospice of Northeast Florida<br />
– Serves ffive-county North hFlorida l d area with hover 1 million ll<br />
population<br />
– One of the oldest hospices p in the US-organized g in 1978<br />
– Serves approximately 6,000 patients plus estimated 24,000<br />
family members each year making it one of the largest<br />
programs in the US<br />
– Is a freestanding not-for-profit corporation focused solely<br />
on hospice care<br />
– Has revenues of over $ $62 million annually and patient<br />
census of approximately 1,000 per day and 750 employees
Hospice Care Overview<br />
• History<br />
– In the United States since 1974<br />
– Is a holistic, team-based, patient-centered approach to<br />
care<br />
– Focuses on comfort or “palliation” of symptoms and<br />
pain, without attempting to treat or cure the<br />
underlying illness itself<br />
– Philosophically based in belief that death is a natural<br />
part p of the life cycle, y rather than an adverse outcome<br />
– Has changed from a movement to an industry
Hospice length of stay, by diagnosis, 2006<br />
(MedPAC Data)<br />
Diagnosis share of total cases<br />
Percent of cases with length of<br />
stay greater than 180 days<br />
Cancer (except lung cancer) 24% 9%<br />
Circulatory, y except p heart failure 11 19<br />
Lung cancer 10 8<br />
Heart failure 8 20<br />
Debility, NOS 8 21<br />
Alzheimer’s and similar disease 6 31<br />
Chronic airway obstruction,<br />
NOS<br />
6 24<br />
Unspecific symptoms/signs 6 21<br />
Dementia 5 26<br />
Organic psychoses 4 25<br />
Genitourinary y disease 3 5<br />
Nervous system, except<br />
Alzheimer’s<br />
3 28<br />
Respiratory diseases 3 12<br />
Oh Other 2 13<br />
Digestive diseases 2 9<br />
All 100 17
Hospice Care Overview<br />
• How the MHB Works:<br />
– Patients make a special election, including signing a<br />
statement acknowledging the terminal state of their<br />
illness and agreeing to forgo curative treatment<br />
• Community Hospice Northeast Patient/Family<br />
Election Statement<br />
– I/We understand that I will be receiving comfort/palliative<br />
care only and that I/We waive the right to receive services<br />
that are for curative purposes related to my terminal<br />
illness. Care for all illnesses other than the primary<br />
diagnosis for which Community Hospice is treating me can<br />
be billed to Medicare in the traditional manner manner.
Hospice Care Overview<br />
• How the MHB Works (cont’d): (cont d):<br />
– Hospices receive set per diem for each day the patient<br />
is enrolled in the program and must accept that as full<br />
payment, regardless of cost of caring for patient<br />
– Hospice providers assume financial risk for 100% of<br />
costs associated with care care, including all care by<br />
professionals, drugs, medical equipment, supplies,<br />
therapies, transportation, and bereavement for<br />
survivors i f for up to t 13 months<br />
th
Hospice Care Overview<br />
• How the MHB Works (cont’d): (cont d):<br />
– Levels of care include Routine Home Care<br />
(RHC), ( ), General Inpatient p ( (GIP), ), Respite, p , and<br />
Continuous Home Care (CHC) all reimbursed<br />
at different rates<br />
– There is no limit on the number of days<br />
patients can be under hospice care, but<br />
providers id must h have ongoing i ddocumentation i<br />
that patient’s prognosis remains terminal.
Hospice Care Overview<br />
• Although Medicare has supported the growth of<br />
hospice, there are some barriers to access that<br />
exist as well:<br />
– Election statement requiring patients to<br />
acknowledge they are foregoing the chance<br />
for cure is a “deal breaker” for many.<br />
– The “Either/Or” paradigm reflecting<br />
DDying/Not i /N Dying D i d does not represent how h<br />
most patients move through their illness
Position in Palliative Care<br />
Community Hospice provides<br />
Physician Palliative Consult<br />
Therapies to modify disease<br />
Diagnosis of chronic<br />
or life threatening<br />
illness<br />
Referral to hospice<br />
Palliative Care<br />
Death<br />
Bereavement<br />
Care
Palliative Care Overview<br />
• New form of care that is still developing<br />
developing.<br />
• Goal is to address symptoms and pain just<br />
like hospice care care, but unlike hospice hospice, does<br />
not require that patients be at last six (6)<br />
months of life or cease curative treatment treatment.<br />
• Has some definition by organizations such<br />
as th the World W ld Health H lth Organization, O i ti but b t<br />
goals of treatment, standards of care, and<br />
practices, ti are still till evolving.<br />
l i
Public Policy Issues<br />
• Growing recognition that much of our end of<br />
life spending goes into things that produce<br />
poor outcomes<br />
• 28% of Medicare dollars spent on any single<br />
patient will be invested in delaying death<br />
during the last 12 months of life<br />
• 50% of Medicare spending in the last year of life<br />
occurs IN THE LAST 30 DAYS<br />
• 23% of Medicare beneficiaries with five (5) or<br />
more chronic illnesses account for almost 68%<br />
of Medicare’s spending, p g with much of that<br />
taking place in the last year of life
Public Policy Issues<br />
• National groups like the American Academy of<br />
Hospice and Palliative Medicine (AAHPM) have<br />
identified Palliative and End of Life Care as one of six<br />
(6) national reform priorities<br />
• Recommendations include increasing the number of<br />
specialists in this area, increasing research on issues<br />
related to end of life care and improving access to care<br />
for all patients with life-threatening illnesses<br />
• There are emerging legislative proposals to address<br />
barriers and support development of palliative models<br />
of care such as the “Compassionate Care Act”
Public Policy Issues<br />
• Regulatory Impacts on Hospice and End of Life Care<br />
– Revised Medicare Hospice Conditions of Participation (CoPs) became<br />
effective in 2008-first major revision in over a decade<br />
– New CoPs provided more guidance on:<br />
• Patient-directed care and best practices p<br />
• Tying activities to outcomes and focusing on measurable quality<br />
results<br />
• Patient rights<br />
• Admission process<br />
• New CoPs also increased providers’ risks, especially in admitting patients<br />
and determining appropriateness for care
General Trends in Hospice<br />
Include<br />
• Greater documentation, reporting and other administrative requirements<br />
by Federal and State regulators, and Fiscal Intermediaries<br />
• Increased emphasis on quality, transparency and outcomes, which<br />
majority of providers welcome<br />
• Florida has voluntarily reported outcomes so consumers can have better<br />
information<br />
• Increased emphasis on partnership between physicians physicians, hospice staff, staff and<br />
patients/families that works toward measurable goals and results that are<br />
meaningful to patients’ quality of life<br />
• Focus on pain p and symptom y p management g and answering g qquestion:<br />
“What was different because hospice was involved?”
Patient Comfort<br />
Patients Reporting g Pain on Admission<br />
Less than Severe Pain<br />
284<br />
60%<br />
Severe Pain<br />
192<br />
40%<br />
January January-March, March <strong>2009</strong>
Continual pain pain at 6 or<br />
higher<br />
7<br />
4%<br />
Patient Comfort<br />
Severe Pain Outcomes by End of Day 4<br />
Unable to report by day<br />
4<br />
60<br />
31%<br />
Reduction to 5 or less by<br />
day 4<br />
125<br />
65%<br />
January‐March, January March, <strong>2009</strong>
Outcomes at the Last Place of<br />
Care<br />
Provided Desired Physical Comfort and<br />
Emotional Support to Patients<br />
Outcome Home<br />
Care<br />
Hospice Nursing<br />
Facility<br />
Patient did not receive any or enough help with:<br />
Hospital<br />
Pain 42.6 % 18.3 % 31.8 % 19.3 %<br />
Dyspnea 38.0 % 25.6 % 23.7 % 18.9 %<br />
Emotional<br />
Support<br />
70.0 % 34.6 % 56.2 % 51.7 %<br />
JAMA, January 7, 2004- Vol. 291
Public Policy Issues<br />
• Reimbursement Issues:<br />
– All medical providers are facing cuts in reimbursement<br />
reimbursement.<br />
Hospice estimated to be cut by almost $10 billion over the<br />
next decade in current reform proposal<br />
– Proposals for changes in how hospice is paid are being<br />
considered but availability and reliability of data are of<br />
concern<br />
– Decreases in reimbursement and resources for<br />
“upstream” providers will likely place more demand and<br />
pressure on hospices when taking patients under their<br />
care<br />
– Hospice providers will continue to advocate for adequate<br />
payment well supported by documentable results at the<br />
bedside
Roles for Palliative Care during<br />
Active Treatment<br />
• There is growing evidence that core principles<br />
of hospice care that focus on palliation can<br />
improve care provided to patients beyond the<br />
traditional six-month MHB threshold<br />
– Regulatory barriers, barriers including fraud and abuse<br />
concerns, can make it difficult to provide what the<br />
patient really needs<br />
– Current system places hospice in silo at the very end<br />
of life<br />
– Goal would be to integrate hospice and palliative<br />
care principles in general into mainstream care<br />
system so patient has seamless experience<br />
– Benefit/burden of treatment changes along the<br />
course of illness
Roles for Palliative Care during<br />
Active Treatment<br />
• Can support shared decision decision-making, making clarity of goals<br />
for care and treatment and care planning<br />
• Specific p clinical expertise p with ppain and symptom y p<br />
management can improve patient’s quality of life<br />
throughout illness and improve outcomes, increase and<br />
patient satisfaction, satisfaction and reduce unnecessary<br />
hospitalizations
Roles for Palliative Care during<br />
Active Treatment<br />
• Palliative Care Programs-Some Approaches Include:<br />
– Sponsoring or participating in palliative medicine fellowships, and<br />
educational programs that include research on best practices,<br />
improving clinical outcomes, sustainable models of care<br />
– Development of models and research on how treatment and palliation<br />
can co-exist, including evaluation of financial and clinical impacts<br />
– Palliative care consultative services offered in both acute and long<br />
term care settings including Grand Rounds<br />
– Sh Shared d models d l of f care in i acute t care settings tti<br />
– For the future, hospice and palliative care and its defined body of<br />
practice should be an integral part of how we deliver end of life care<br />
in the United States
For the future, hospice and palliative care<br />
and its defined body of practice should<br />
be an integral part of how we deliver end<br />
of life care in the United States
ANNUAL MEETING OF THE HEMATOLOGY/ONCOLOGY<br />
CARRIER ADVISORY COMMITTEE NETWORK<br />
JULY 24, <strong>2009</strong> ♦ ASCO HEADQUARTERS ♦ ALEXANDRIA, VA<br />
American Society of <strong>Hematology</strong><br />
www.hematology.org<br />
TRANSITION TO MACS<br />
PANEL DISCUSSION<br />
ARTHUR LURVEY, MD<br />
Palmetto, Jurisdiction 1<br />
WILLIAM MANGOLD, MD<br />
Noridian, Jurisdiction 3<br />
LAURENCE CLARK, MD, FACP<br />
Highmark, Jurisdiction 12<br />
THOMAS MARSLAND, MD<br />
Florida <strong>Oncology</strong> <strong>CAC</strong> Representative<br />
DAVID GORDON, MD<br />
Texas <strong>Hematology</strong> <strong>CAC</strong> Representative<br />
HEATHER ALLEN, MD<br />
Nevada <strong>Oncology</strong>/<strong>Hematology</strong> <strong>CAC</strong> Representative<br />
Medicare Contractor Medical Directors (CMDs) and <strong>Oncology</strong> and <strong>Hematology</strong> <strong>CAC</strong><br />
representatives will discuss their individual experiences concerning the MAC transitions.<br />
They will also answer questions and suggest ways to become an effective <strong>CAC</strong> member<br />
during a time of transition.<br />
Included in this tab are the following:<br />
• Presentation slides, “MAC Transition Overview”<br />
• ASCO-ASH National MAC Transition Survey Results, May <strong>2009</strong><br />
• List of Medicare Administrative Contracts Awarded to Date<br />
• Medicare Administrative Contractor Highlights<br />
• CMS MedLearn Matters article, “Preparing for a Transition to MACs”<br />
• Primary A/B MAC Jurisdictions Map<br />
• <strong>Carrier</strong>-Intermediary Closeout Handbook<br />
• ASCO MAC <strong>Advisory</strong> Group Minutes, 2.19.09<br />
• ASCO MAC <strong>Advisory</strong> Group Minutes, 5.20.09<br />
American Society of Clinical <strong>Oncology</strong><br />
www.asco.org
ASCO ASCO-ASH<br />
ASCO ASCO-ASH ASH<br />
NATIONAL <strong>CAC</strong><br />
MEETING<br />
ASCO Headquarters<br />
Al Alexandria, d i Virginia Vi i i<br />
July 24, <strong>2009</strong><br />
1
NEW CONTRACTOR AREAS<br />
2
TRANSITION ISSUES<br />
• Enrollment…NPI, PTAN issues<br />
• Electronic Data Interchange<br />
• Electronic Funds Transfer<br />
• Claims…Carried Over<br />
• <strong>CAC</strong>s …Minimum Minimum 3 per year<br />
• Coverage…LCD Changes<br />
• Address Changes for Claims, etc.<br />
3
NEW MACs and OLD LCDs<br />
• New contractor must review old A & B LCDs<br />
from former contractor(s)<br />
– L Least t restrictive t i ti / most t appropriate i t LCD f from<br />
one contractor will be used -- some exceptions<br />
– LCDs can’t be amended or revised until cutover<br />
– New LCDs posted on the websites with<br />
connections to CMS Medicare Data Base<br />
• <strong>CAC</strong> (<strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong>) structure<br />
will continue in each jurisdiction<br />
jurisdiction-3 3 per year<br />
mandated by CMS<br />
• After cutover, reconsideration always<br />
possible using <strong>CAC</strong> process<br />
4
PURPOSE & VALUE OF <strong>CAC</strong>S<br />
• For Contractor: Can we talk?<br />
– Input for LCDs<br />
– Learn about problems<br />
– Specialty Advice<br />
– Outreach Activities<br />
• For F For Societies: S i ti C Can we i influence? fl ?<br />
– Input & knowledge of LCDs<br />
– Update on Medicare Rules/Regs<br />
– Chance to air problems, complaints<br />
– Contact with Med Directors<br />
5
NATIONAL COVERAGE DECISIONS<br />
• National: NCDs come from CMS<br />
– Based on scientific studies & data collected<br />
– Presented often at M<strong>CAC</strong> M<strong>CAC</strong>-open open meetings<br />
– Notice and comment welcome<br />
– Reconsiderations Reconsiderations always possible<br />
• NCDs cover entire country<br />
– May specify services always covered<br />
– May specify services never covered<br />
– P Published bli h d i in CMS C Coverage M Manual l<br />
– May change as science changes, new<br />
studies emerge, g , or as laws change. g<br />
6
NATIONAL COVERAGE DECISIONS<br />
• Examples of NCDs (303 currently)<br />
– Abarelix for treatment of prostate ca<br />
– Acupuncture<br />
– Bariatric surgery for morbid obesity<br />
– Bone (mineral) density studies<br />
– Breast reconstruction post mastectomy<br />
– C Colonic l i irrigation i i ti<br />
– Deep brain stimulation for Parkinson’s<br />
– Electrical Electrical nerve ner e stim stimulators lators st studies dies<br />
– Xenon Scan<br />
7
LOCAL COVERAGE DECISIONS<br />
• Local: LCDs from 1 or more states/areas<br />
– Written by local CMDs about situations that are<br />
d data t based b d & & need d control t l or i instruction t ti<br />
– Presented at state <strong>CAC</strong>s open to medical and<br />
specialty p y societies representatives<br />
p<br />
– Notice and comment always welcome<br />
– Reconsiderations eco s de at o s aalways always ays possible poss possible b e<br />
• LCDs cover a Medicare Jurisdiction (e.g., J-1) J 1)<br />
– Discuss and describe medical necessity<br />
– Usually give codes & conditions for payment<br />
– May state frequency of service and diagnoses<br />
and always published locally and nationally<br />
8
LOCAL COVERAGE DECISIONS<br />
• Example of JJ-1<br />
1 LCDs (Currently 90 “B” LCDs)<br />
– Abdominal and peritoneal ultrasound<br />
– Actinic keratosis<br />
– Botulinin toxin, types A and B<br />
– Category III CPT codes<br />
– CT colonography<br />
– External counterpulsation (ECP)<br />
– Gonadotropin Gonadotropin releasing hormone analogs<br />
– Intravenous immune globulin g ( (IVIg) g)<br />
–Non Non-invasive invasive peripheral arterial studies<br />
– Physical medicine and rehabilitation policy<br />
– Vitamin B-12 B 12 injection<br />
9
REQUESTING<br />
RECONSIDERATIONS<br />
• Send in writing to local Contractor<br />
– Specific address for reconsiderations or<br />
– Specific address of CMD<br />
• Add supporting scientific evidence<br />
– Literature in peer reviewed journals<br />
– Expert opinion from credible sources<br />
– Guidelines/statements from specialty societies<br />
– R Results lt of f medium di or l long t term studies t di<br />
• Be specific in requests<br />
– CPT, , ICD ICD-9, 9, , organ g systems y or special p circumstances<br />
• Be conscious of vested interests<br />
• Contractor must respond in 30 days<br />
10
RESPONDING TO MEDICAL REVIEW<br />
• WHO CAN ASK FOR<br />
RECORDS / DOWNCODE<br />
OR DENY PAYMENT<br />
– MEDICARE A/B ADMIN.<br />
CONTRACTORS (MACs) ( )<br />
– MEDICAL INTEGRITY<br />
(FRAUD) CONTRACTOR<br />
– CERT CONTRACTOR<br />
– RAC CONTRACTOR<br />
–QIO QIO<br />
– BUNDLING AND MEDICAL<br />
UNLIKELY EDITS<br />
– PRIVATE INSURANCE<br />
COMPANIES (FOR<br />
MEDICARE ADVANTAGE)<br />
11
OTHER REVIEWS OR<br />
POSSIBLE DENIALS<br />
• Medicare bundling edits: “Correct<br />
Coding Initiative” (CCI)<br />
– Some procedure codes part of<br />
other codes and not split apart<br />
– If bill separately you may be paid<br />
lesser code<br />
• Medicare unlikely edit (MUE)<br />
– Occurs when frequency of services<br />
extremely unusual compared to norm<br />
– Usually coding error not medical<br />
necessity error<br />
• MUA: Medication unlikely audit<br />
– For medication dosage<br />
extremely high<br />
12
HOW YOU COPE WITH POLICIES<br />
• Know what is covered and which<br />
diagnoses and CPT codes to use-<br />
they’re y written in most LCDs<br />
– e.g., screening vs diagnostic<br />
– J HCPCS codes for drugs<br />
• Know the number tests, , number<br />
specimens, frequencies or time<br />
frames that will be paid<br />
• Doctor should chart any unusual cases<br />
or exceptions if f may need to appeal<br />
• If you believe Medicare will not pay:<br />
– Have patient p sign g an ABN<br />
(Advanced Beneficiary Notice)<br />
– ABN is downloadable from CMS<br />
13
KNOW YOUR APPEAL RIGHTS<br />
• Initial Determination<br />
Determination-MAC MAC<br />
• Redetermination<br />
Redetermination-MAC MAC<br />
• Reconsideration<br />
Reconsideration-QIO<br />
Reconsideration<br />
Reconsideration-QIO QIO<br />
• Administrative Law Judge<br />
• Medicare Appeals Board<br />
• Federal Court<br />
14
APPEALS PROCESS<br />
• Instructions come with<br />
any d denial i l<br />
– Time frames (120 days)<br />
– Addresses<br />
• No penalty for appeals<br />
– Fresh person p with each<br />
appeal<br />
• Recommend appeals<br />
with CERT CERT, RAC<br />
• Useful to discuss with<br />
med organizations and<br />
societies to see if other<br />
appeals win<br />
15
<strong>Hematology</strong>/<strong>Oncology</strong> <strong>CAC</strong><br />
Network<br />
William J. Mangold, Jr., MD, JD<br />
Contractor Medical Director<br />
Part B & J3 MAC Region<br />
Noridian Administrative Services<br />
July <strong>2009</strong><br />
Outline<br />
• Medicare History<br />
• Medicare Conversion Factor<br />
• Medicare Enrollment<br />
• Medicare Expenditures<br />
• Current Health Care Problems<br />
• Health Care Reform Solutions<br />
• Health Care Reform Predictions<br />
Medicare History Medicare History<br />
Medicare History<br />
• By the time Truman prepared to leave office in early 1953, he had<br />
backed off from his original plan of universal coverage. The focus<br />
increasingly turned toward insuring Social Security beneficiaries.<br />
Nearly two decades of futile debate ensued, with conservative<br />
opponents, joined by the American Medical Association, repeatedly<br />
warning of the dangers of “socialized socialized medicine. medicine.”<br />
• The legislative logjam finally broke with the election of 1964, which<br />
swept LBJ into the White House behind large Democratic majorities in<br />
both houses of Congress. Shortly after that election, a breakthrough<br />
occurred when House Ways and Means Chairman Rep. Wilbur Mills<br />
(D-Ark.), who had previously blocked Medicare proposals, said, "I can<br />
support a payroll tax for financing health benefits just as I have<br />
supported a payroll tax for cash benefits."<br />
President Johnson signs Medicare bill on July 30, 1965<br />
On this day in 1965, President Lyndon Johnson signed into law<br />
Medicare, which provides p low-cost hospitalization p and medical<br />
insurance for the nation's elderly. The legislation remains an important<br />
legacy of LBJ’s “Great Society” society initiative.<br />
Thirty years earlier, Congress had shelved the first governmentmandated<br />
health insurance proposal, put forward as a companion to the<br />
then-new Social Security program. Ten years after that, as World War<br />
II ended, President Harry Truman asked the lawmakers to create a<br />
national health insurance plan.<br />
Medicare History<br />
• When the long-stalled Medicare effort came before the 89th Congress<br />
in January 1965, congressional leaders designated the bills as H.R. 1<br />
and S. 1. Despite determined resistance by organized medicine and<br />
some of its congressional allies, the Medicare bill moved forward. A<br />
Mills rewrite cleared the House on April 8 by 313-115. The Senate<br />
approved its version on July 9 by 68 68-21. 21. A conference committee<br />
labored for more than a week in mid-July to reconcile 513 differences<br />
between the two chambers.<br />
At the White House bill-signing ceremony, Johnson enrolled Truman<br />
as the first Medicare beneficiary and presented him with the nation’s<br />
first Medicare card.<br />
1
Medicare History<br />
• 1965<br />
• Medicare & Medicaid established<br />
• Signed into law by President Lyndon<br />
Johnson July 30, 1965<br />
• First proposed by President Harry Truman<br />
in 1948<br />
• Former President Truman first enrollee<br />
Medicare History<br />
1966<br />
• Private insurance companies selected to perform<br />
Medicare administration (Billing ( g& Payment) y )<br />
• Part A (Hospital Insurance-HI) Blue Cross Plans<br />
• Part B (Supplementary Medical Insurance-SMI)<br />
Blue Shield Plans<br />
• Administered by Social Security<br />
Administration (SSA)<br />
Medicare History<br />
1966<br />
• Medicare coverage began July 1, 1966<br />
• All over 65 covered under Part A<br />
• Part A funded by HI payroll tax<br />
• Voluntary signup for Part B<br />
• Part B funded by combination of general tax<br />
revenues and beneficiary (SMI) premiums<br />
Medicare History<br />
1965<br />
• Compromise between Republicans &<br />
Democrats<br />
• No screening or preventive benefits<br />
• Considered to be a transitional step<br />
toward broader coverage<br />
Medicare History<br />
1966<br />
• Separate funding for Part A & Part B<br />
• Different rules forPartA&PartB<br />
for Part A & Part B<br />
• Dichotomy continues today!<br />
Medicare History<br />
1966<br />
• Medicare Part A deductible: $40/year<br />
• Medicare Part B premium: $3/month<br />
• Medicare Part B premium: $3/month<br />
• Total Medicare population: 19.1 million<br />
2
Medicare History<br />
1969<br />
• Task Force on Prescription Drugs studied<br />
projected cost and feasibility for potential<br />
coverage<br />
• Prescription drug coverage added in 2006!<br />
Medicare History<br />
1972<br />
• Coverage added for:<br />
Chiropractic<br />
Physical Therapy<br />
Speech Therapy<br />
Medicare History<br />
1975<br />
• Medicare Part A deductible: $92/year<br />
• Medicare Part B premium: $6 $6.70/month 70/month<br />
• Total Medicare population: 25.0 million<br />
Medicare History<br />
1970<br />
• Medicare Part A deductible: $52/year<br />
• Medicare Part B premium: $4/month<br />
• Total Medicare population: 20.5 million<br />
Medicare History<br />
1973<br />
• Medicare eligibility extended to individuals under<br />
65 with disabilities (SSDI) and end-stage renal<br />
disease (ESRD)<br />
• SSDI & ESRD expanded coverage for 2 million<br />
• Professional Standards Review Organizations<br />
(PSRO) established<br />
• PSROs now called Quality Improvement<br />
Organizations (QIO)<br />
Medicare History<br />
1977<br />
• Health Care Financing Administration<br />
(HCFA) established to administer Medicare<br />
and Medicaid<br />
• 1500 employees transferred from Social<br />
Security Administration to HCFA<br />
3
Medicare History<br />
1980<br />
• Medicare Part A deductible: $180/year<br />
• Medicare Part B premium: $8 $8.70/month 70/month<br />
• Total Medicare population: 28.5 million<br />
Medicare History<br />
1982<br />
• Part B premium increased to cover 25%<br />
of total cost of Part B<br />
• Hospice services added as benefit<br />
Medicare History<br />
1984<br />
• Physicians fees frozen<br />
• Participating Physician Physician’ss Program<br />
(PPP) established<br />
• Fee schedules established for<br />
laboratory services<br />
Medicare History<br />
1980<br />
• Home heath expanded<br />
• Developed Ambulatory Surgery Center<br />
(ASC) list of approved procedures<br />
• ASC paid by Prospective Payment System<br />
(PPS)<br />
Medicare History<br />
1983<br />
• Diagnostic Related Groups (DRG)<br />
payment system established for<br />
hospital inpatients<br />
Medicare History<br />
1985<br />
• Medicare Part A deductible: $400/year<br />
• Medicare Part B premium: $15 50/month<br />
• Medicare Part B premium: $15.50/month<br />
• Total Medicare population: 31.1 million<br />
4
Medicare History<br />
1985<br />
• Required federal, state, & local government<br />
employees to pay HI payroll tax<br />
• Emergency Medical Treatment & Labor Act<br />
(EMTALA) required hospitals participating<br />
in Medicare to provide appropriate<br />
screening and stabilization of patients<br />
Medicare History<br />
1988<br />
• Began coverage of Medicare premiums and<br />
cost sharing with Medicaid for beneficiaries<br />
with incomes below 100% of Federal<br />
poverty level<br />
• Expanded hospital and skilled nursing<br />
home benefits<br />
Medicare History<br />
1989<br />
• Retracted major 1988 provisions due to<br />
increased costs<br />
No long term care<br />
No drug benefit<br />
No limit on out of pocket expenses<br />
Medicare History<br />
1987<br />
• Imposed quality standards on Medicare &<br />
Medicaid certified nursing homes<br />
• Froze Medicare payment rates<br />
• Each state required to have <strong>Carrier</strong> Medical<br />
Director (CMD)<br />
Medicare History<br />
1988<br />
• Congressional discussions of:<br />
Long term care benefit<br />
Outpatient drug benefit<br />
Cap on beneficiary out of pocket<br />
expenses<br />
(None of these were implemented)<br />
Medicare History<br />
1989<br />
• Established RBRVS to replace UCR<br />
• Limits placed on balance billing<br />
• Limits placed on balance billing<br />
• Prohibited physician referral to clinical labs<br />
with ownership financial interest<br />
5
Medicare History<br />
1990<br />
• Medicare Part A deductible: $592/year<br />
• Medicare Part B premium: $28 $28.60/month 60/month<br />
• Total Medicare population: 34.2 million<br />
Medicare History<br />
1992<br />
• Formation of <strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong>s<br />
(<strong>CAC</strong>)<br />
• <strong>CAC</strong> mission to foster better relations and<br />
trust between carriers and providers<br />
• <strong>Advisory</strong> capacity only<br />
RBRVS<br />
• Relative Value Units (RVU )<br />
• Geographic Practice Cost Indexes (GPCI)<br />
added to all RVUs<br />
Work GPCI<br />
Practice Expense GPCI<br />
Professional Liability GPCI<br />
Medicare History<br />
1990<br />
• Congress required state Medicaid programs<br />
to cover Medicare premiums p for<br />
beneficiaries with incomes between100%<br />
and 120% of federal poverty level<br />
• Coverage expanded for mammography and<br />
partial hospitalization services in<br />
community mental health centers<br />
Medicare History<br />
1992<br />
• Resource Based Relative Value Scale (RBRVS)<br />
with new CPT codes<br />
• Multi year phase in from Customary, Prevailing,<br />
& Reasonable fees (CPR) to RBRVS fees<br />
• Medicare CPR based upon private insurance<br />
Usual, Customary, & Reasonable fees (UCR)<br />
RBRVS<br />
• Total RVUs = Sum of three separate RVUs<br />
Work RVU x Work GPCI<br />
Practice Expense (PE) RVU x PE GPCI<br />
Professional Liability (PLI) RVU x<br />
PLI GPCI<br />
6
RBRVS<br />
• Fee = Total RVU x Conversion Factor (CF)<br />
Medicare History<br />
1993<br />
• Cap lifted on wages subject to HI tax<br />
Medicare History<br />
1995<br />
• Medicare Part A deductible: $716/year<br />
• Medicare Part B premium: $46 $46.10/month 10/month<br />
• Total Medicare population: 37.5 million<br />
RBRVS<br />
• CPT Code Total RVUs<br />
• 99213 (office visit) 1.39<br />
• 44950 (appendectomy) 15 15.38 38<br />
• 70553 (MRI brain) 29.14<br />
• 33510 (Coronary …Graft) 47.65<br />
Medicare History<br />
1995<br />
• First version of Evaluation & Management<br />
(E&M) Guidelines published with no single<br />
organ system exams<br />
Medicare History<br />
1996<br />
• Medicare Integrity Program (MIP)<br />
established with dedicated funding<br />
• Emphasized detection of fraud & abuse in<br />
billing & payment<br />
7
Medicare History<br />
1997<br />
• PPS added for inpatient rehabilitation<br />
services, skilled nursing g facility yservices,<br />
home health services, hospital outpatient<br />
services, and outpatient rehabilitation<br />
services<br />
• Medicare premium assistance added for<br />
individuals with incomes 120% to 175% of<br />
federal poverty levels<br />
Medicare History<br />
1998<br />
• Huge outcry against 1997 E&M Guidelines<br />
with demand for replacement p (most (<br />
physicians forget that these guidelines were<br />
prepared and vetted by the Specialty<br />
Societies – NOT CMS)<br />
• No acceptable replacement for E&M<br />
guidelines has yet been found<br />
Medicare History<br />
2001<br />
• HCFA renamed Centers for Medicare &<br />
Medicaid Services (CMS)<br />
• RBRVS phase in completed<br />
Medicare History<br />
1997<br />
• Part B Sustainable Growth Rate (SGR) formula<br />
mandated by Congress and instituted for Medicare<br />
PPart tBf B fee calculations l l ti<br />
• Progressive increase in screening and<br />
related benefits<br />
• Second version of Evaluation & Management<br />
Guidelines published with general exam and ten<br />
single organ system exams<br />
Medicare History<br />
2001<br />
• Medicare Part A deductible: $792/year<br />
• Medicare Part B premium: $50/month<br />
• Total Medicare population: 40.1 million<br />
• Total Medicare spending $217 billion<br />
Medicare History<br />
2002<br />
• 5.5% fee decrease due to SGR<br />
• Temporary annual 1.5% 1 5% Part B fee increase<br />
for 2003-2004-2005 by Congress to<br />
override SGR<br />
8
Medicare History<br />
2003<br />
• Medicare Part A deductible: $876/year<br />
• Medicare Part B premium: $66 $66.60/month 60/month<br />
• Total Medicare population: 41.9 million<br />
• Total Medicare spending: $295 billion<br />
Medicare Modernization Act<br />
(MMA)<br />
2003<br />
• Establishes contracting reform 2005-<strong>2009</strong><br />
• 15 Part A and Part B Medicare<br />
Administrative Contractors (MAC)<br />
• 4 Durable Medical Equipment MACs<br />
• 4 Recovery Audit Contractors (RAC)<br />
15 AB MACs 4 DME MACs<br />
4 RACs<br />
Recovery Audit Contractors<br />
D<br />
C<br />
B<br />
A<br />
Medicare Modernization Act<br />
(MMA)<br />
2003<br />
• Drug coverage to start in 2006<br />
• Zone Program Integrity Contractors (ZPIC)<br />
• Zone Program Integrity Contractors (ZPIC)<br />
replace Payment Safety Contractors (PSC)<br />
• Qualified Independent Contractors (QIC)<br />
for second level of appeal<br />
9
Medicare Modernization Act<br />
(MMA)<br />
2003<br />
• Recovery Audit Contractors (RAC)<br />
Paid on contingency basis<br />
• Quality Improvement Organization (QIO)<br />
Medicare History<br />
2004<br />
• Temporary drug discount program and $600<br />
assistance program for low income<br />
beneficiaries until 2006<br />
• 13% increase in Part B spending<br />
Medicare History<br />
2006<br />
• Medicare Part A deductible: $952/year<br />
• Medicare Part B premium: $88 $88.50/month 50/month<br />
• Total Medicare population: 43.4 million<br />
• Total Medicare spending: $374 billion<br />
Medicare History<br />
2004<br />
• Medicare Part A deductible: $876/year<br />
• Medicare Part B premium: $66 $66.60/month 60/month<br />
• Total Medicare population: 41.9 million<br />
• Total Medicare spending: $295 billion<br />
Medicare History<br />
2005<br />
• Medicare Part A deductible: $912/year<br />
• Medicare Part B premium: $78 $78.20/month 20/month<br />
• Total Medicare population: 42.6 million<br />
• Total Medicare spending: $325 billion<br />
Medicare History<br />
2006<br />
• Drug benefit (Medicare Part D) starts<br />
• Estimated cost up to $700 billion in<br />
• Estimated cost up to $700 billion in<br />
next decade<br />
MMA Prohibited CMS from Negotiating with<br />
Drug Industry for Lower Pricing of Part D<br />
Drugs<br />
10
Medicare History<br />
2006<br />
• Physician Voluntary Reporting Program<br />
(PVRP) for reporting quality measures<br />
adopted by CMS<br />
• PVRP replaced by Physician Quality<br />
Reporting Initiative<br />
Medicare History<br />
2007<br />
• Medicare Part A deductible: $992/year<br />
• Medicare Part B premium: $93 $93.50/month 50/month<br />
• Total Medicare population: 44.1 million<br />
• Total Medicare spending: $426 billion<br />
Medicare History<br />
2008<br />
• Medicare Part A deductible: $1024<br />
• Medicare Part B premium: $96 $96.40 40<br />
• Total Medicare population: 45.3 million<br />
• Total Medicare spending $444 billion<br />
Medicare History<br />
2006<br />
• 4.4% fee decrease due to SGR<br />
• End of temporary 11.5% 5% annual<br />
three year fee increase<br />
• 2006 CF ($36.1770) lower than<br />
2000 CF ($36.6137)<br />
Medicare History<br />
2007<br />
• Income related Part B premium for<br />
higher income beneficiaries<br />
• Added screening benefits<br />
• Scheduled annual 5% fee decreases<br />
due to SGR<br />
• PQRI begins<br />
Medicare History<br />
<strong>2009</strong><br />
• Medicare Part A deductible: $1068 (+ $44)<br />
• Medicare Part B premium: $96 40 (+ 0)<br />
• Medicare Part B premium: $96.40 (+ 0)<br />
• Total Medicare population: ?<br />
• Total Medicare spending: ?<br />
11
Medicare History<br />
<strong>2009</strong><br />
• Part B fees increased 1.1% (CF decreased)<br />
• PQRI continues<br />
• Major overall health care reform ?<br />
• 2000 $36.6137<br />
• 2001 $38.2581<br />
• 2002 $36 $36.1992 1992<br />
• 2003 $36.7856<br />
• 2004 $37.3374<br />
Conversion Factor<br />
Medicare Enrollment Millions<br />
• 1966 19.1<br />
• 1970 20.5 (Disability added 1973)<br />
• 1975 25 25.0 0 (ESRD added 1973)<br />
• 1980 28.5<br />
• 1985 31.1<br />
• 1990 34.2<br />
Medicare …Near-term Future?<br />
2010<br />
• Recovery Audit Contractors fully<br />
implemented in all jurisdictions<br />
• Medicare Advantage payments decrease<br />
• Medicare contracting reform completed<br />
• PQRI continues<br />
Conversion Factor<br />
• 2005 $37.8975<br />
• 2006 $37.8975<br />
• 2007 $37 $37.8975 8975<br />
• 2008 $38.0870<br />
• <strong>2009</strong> $36.0666<br />
• 2010 $28.3123? (if -21.5% SGR cut)<br />
Medicare Enrollment Millions<br />
• 1995 37.5<br />
• 2000 39.6<br />
• 2005 42 6<br />
• 2005 42.6<br />
• 2008 45.3<br />
• 2010 48+?<br />
12
Medicare Expenditures Billions<br />
• 2002 $230<br />
• 2004 $295<br />
• 2006 $374 (drug benefit added)<br />
• 2008 $444<br />
• 2010 $???<br />
Solutions – no current consensus<br />
• Coverage<br />
Subsidize the poor<br />
Require all to pay fair share<br />
Require coverage for all<br />
Solutions – will there ever be<br />
consensus?<br />
• Quality<br />
“Best practice” medicine<br />
BBasic i science i researchh<br />
Clinical research<br />
Payment based upon quality<br />
The Problem<br />
• Three critical problems<br />
Coverage-45 to 50 million uninsured<br />
Cost Cost-High High and rapidly increasing<br />
Quality-Widely variable<br />
Solutions – still no consensus<br />
• Cost<br />
Eliminate regional variation<br />
Reduce fraud<br />
Reduce overuse of services<br />
Establish independent institute for<br />
technology assessments<br />
Solutions – hope springs eternal<br />
• Medicare Payment <strong>Advisory</strong> Commission<br />
(MedPAC)<br />
• Change MedPAC to Medicare Payment<br />
And Access Commission (MedPAAC)<br />
• Move from Legislative to Executive<br />
• Current Senate bill (Rockefeller D-WVA)<br />
13
Solutions – an answer?<br />
•MedPAC<br />
Consists of 17 appointed members<br />
Legislative entity<br />
Advises Congress<br />
Congress lobbied by special interests<br />
& struggles with contentious issues<br />
Congress can ignore MedPAC advice<br />
Predictions<br />
• “To a man doing well all change is grief”<br />
Euripedes<br />
• “I’m Im for leaving the status quo like it is” is<br />
Yogi Berra<br />
Predictions - ?<br />
2010<br />
• PQRI bonus further refined<br />
• Comprehensive Error Rate Testing (CERT)<br />
continuation<br />
• Medicare access problems increase<br />
• Primary care shortages worsen<br />
Solutions – can we ever remove<br />
special interest influence??<br />
• MedPAAC<br />
Establish independent executive agency<br />
Similar to Federal Reserve Board<br />
Establish reimbursement & access regs<br />
Implement payment rates & policies<br />
Remove special interest influence<br />
Could make requisite difficult choices<br />
Predictions - ?<br />
2010<br />
• Major health care reform enacted - ?<br />
• No liability reforms enacted – Congress could do<br />
this without major cost…except perhaps lost<br />
campaign contributions<br />
• E-Prescribing bonus starts<br />
• Increasing pressure to use Electronic Health<br />
Records (EHR) – is this really going to help cost?<br />
Predictions - ?<br />
2010<br />
•SGR temporary fix prevents 21.5% CF cut<br />
• Regional payment variations decrease<br />
• Regional payment variations decrease<br />
• Congress increases concerns with<br />
provider-industry relationships<br />
• MedPAAC established in Executive Branch<br />
14
Annual <strong>Hematology</strong>/<strong>Oncology</strong> <strong>CAC</strong> Network<br />
National MAC Transition Survey Results<br />
MAC Award Chart:<br />
Jurisdiction Award Date Company States<br />
1 10/25/2007 Palmetto GBA<br />
American Samoa, Guam,<br />
Northern Mariana Islands,<br />
CA, HI, & NV<br />
2 5/5/2008<br />
Nat’l Heritage Insurance Corp.<br />
(NHIC)??<br />
AK, ID, OR, WA<br />
3 7/31/2006<br />
Noridian Administrative<br />
Services<br />
AZ, MT, ND, SD, UT, WY<br />
4 8/3/2007 Trailblazer Health Enterprises CO, NM, OK, TX<br />
5 9/4/2007<br />
Wisconsin Physician Services<br />
(WPS)<br />
IA, KS, MO, NE<br />
6 1/7/<strong>2009</strong><br />
Noridian Administrative<br />
Services<br />
IL, MN, WI<br />
7 6/11/2008 Pinnacle Business Solutions?? AR, LA, MS<br />
8 1/7/<strong>2009</strong> National Government Services IN, MI<br />
9 9/12/2008 First Coast Service Options<br />
FL, Puerto Rico,<br />
& Virgin Islands<br />
10 1/7/<strong>2009</strong> Cahaba GBA AL, GA, TN<br />
11 1/7/<strong>2009</strong> Palmetto GBA NC, SC, VA, WV<br />
12 10/24/2007<br />
Highmark Government<br />
Services (HGS)<br />
DE, DC, MD, NJ, PA<br />
13 3/18/2008<br />
National Government Services<br />
(NGS)<br />
CT, NY<br />
14 11/19/2008<br />
Nat’l Heritage Insurance Corp.<br />
(NHIC)<br />
ME, MA, NH, RI, VT<br />
15 1/7/<strong>2009</strong><br />
Highmark Medicare Services<br />
(HMS)<br />
KY, OH<br />
*NOTE: The awards for jurisdictions 2, 6, 7, 8, 11, and 15 are in dispute.<br />
Total Started Survey: 46<br />
Total Completed Survey: 27 (58.7%)
In what year did your individual A/B MAC transition take place (or when will the process<br />
be completed if your region has not already fully transitioned)?<br />
NOTE: This chart excludes the jurisdictions that have not transitioned.<br />
Did you experience any MAC transition delays due to a disputed contract awarded by the<br />
Centers for Medicare and Medicaid Services (CMS)?<br />
Answer Options<br />
Response<br />
Percent<br />
Response<br />
Count<br />
No 61.8% 21<br />
Yes (please describe the difficulties) 38.2% 13<br />
Yes (please describe the difficulties)<br />
IL, J6<br />
Noridian is appealing loss of contract. Little is happening where Noridian is improperly<br />
denying claims like for apheresis services.<br />
LA, J7 Dispute between Pinnacle and new service.<br />
AR, J7 J7 has been in hurry up and wait mode for many months.<br />
NHIC/Medicare protested the J1/MAC award to Palmetto. This moved back the<br />
CA, J1 implementation date. I can't say for sure that the transition difficulties were caused by the<br />
protest, however.<br />
WA, J2 Protests were filed, and we are told that at least part of the contract is being re-bid.<br />
WA, J2<br />
Not completed yet but process has caused turnover in Noridian’s Contractor Medical<br />
Directors.<br />
NY, J13<br />
Delay in getting claims paid, as well as appealed claims paid; crossover of physician<br />
information did not go correctly.<br />
CA, J1 No payments for 4 months<br />
In February, there was a protest to Palmetto GBA remaining our Medicare contractor.<br />
WV, J11 The protest was dismissed on April 2nd, but there has been no official word yet on who<br />
won the contract, and no outcome will be announced until June 29th.<br />
MI, J8 I understand the contract award is being challenged.
From the time of the final awarding of the new A/B MAC contract to the actual transition<br />
date, what was (or currently is) the work of the outgoing carrier? Check all that apply.<br />
Answer Options<br />
Response<br />
Percent<br />
Response<br />
Count<br />
<strong>Carrier</strong> was/is working on pending enrollment applications 45.2% 14<br />
<strong>Carrier</strong> was/is processing claims 90.3% 28<br />
<strong>Carrier</strong> was/is reviewing appealed claims and disputed denials 58.1% 18<br />
Did you experience a delay in claims processing and/or Medicare payment? If so, what was<br />
the cause of the delay? Check all that apply.
Yes - Other (please specify)<br />
KS, J5 Various transition issues; backlog form prior carrier<br />
NPI and PTAN and re-enrollment applications were collected by the outgoing carrier but not<br />
CA, J1 acted upon but only transferred to the new MAC. You might want to speak with Art Lurvey,<br />
MD, J1 CMD, regarding some of these NHIC to Palmetto hand-over issues.<br />
NM, J4 Unknown cause of delay over the beginning of the year<br />
CA, J1 Problem with PTAN collapse.<br />
Has your Medicare Administrative Contractor (MAC) been in communication with you<br />
about claims processing and other provider payment or system issues, and have they been<br />
working to resolve these issues as quickly as possible?<br />
Answer Options<br />
Response<br />
Percent<br />
Response<br />
Count<br />
Yes 56.7% 17<br />
No 43.3% 13<br />
Please briefly describe the situation and also mention any successes (if any) experienced by the<br />
contractor and/or providers (including your practice, if applicable) in the resolution of these<br />
issues:<br />
CA, J1<br />
Once Palmetto/J1MAC took over, there has been responsive communication to and from<br />
the MAC.<br />
NY, J13 Very limited...difficulty in getting someone to work with us.<br />
CA, J1 We had to track them down. They did not do much to help.<br />
FL, J9 Since award we have begun to see some slowdown in resolving claims issues<br />
What procedures have been put in place by your new Medicare Administrative Contractor<br />
to educate providers before, during, and after the MAC transition? Check all that apply.<br />
Answer Options<br />
Response<br />
Percent<br />
Response<br />
Count<br />
Monthly Newsletter 34.5% 10<br />
Communication Listserv 44.8% 13<br />
Weekly Updates Online 24.1% 7<br />
MAC Transition Website 34.5% 10<br />
MAC Transition Workshops 34.5% 10<br />
Other (please specify) 37.9% 11<br />
Other (please specify)<br />
NM, J4 We no longer seem to have the educational seminars that Pinnacle did.<br />
NY, J13 Quarterly Webcasts<br />
WV, J11 Provider Outreach and Education <strong>Advisory</strong> Group
What was/is the process used by your incoming Medicare Administrative Contractor (or<br />
A/B MAC) in consolidating, revising, and adopting local coverage policies for the new<br />
Medicare contractor jurisdiction? Please check one.<br />
Answer Options<br />
Response<br />
Percent<br />
Response<br />
Count<br />
Adopt most clinically-appropriate LCDs 11.5% 3<br />
Adopt the least-restrictive LCDs and revise them later as<br />
needed<br />
23.1% 6<br />
Adopt the most-restrictive LCDs 15.4% 4<br />
Rewrite new LCDs incorporating elements of former<br />
carrier LCDs<br />
7.7% 2<br />
Other (please specify) 42.3% 11<br />
*IN, J8 (“Other” comment) –Adopt NGS LCD already in use and eliminate all others<br />
What are the specific local coverage policies that affect your organization or practice the<br />
most? Check all that apply.<br />
Answer Options<br />
Response<br />
Percent<br />
Response<br />
Count<br />
Drugs and Biologicals 68.0% 17<br />
ESAs 68.0% 17<br />
Off-Label 56.0% 14<br />
Clinical Trials 16.0% 4<br />
Other (please specify) 24.0% 6
Other (please specify)<br />
IN, J8 IV Iron therapy with ESA's<br />
ME, J14<br />
Requirement for PO antiemetics before allowing IV antiemetics to control<br />
CINV<br />
WA, J2 Anti-thrombics and potentially IV anti-emetics<br />
NY, J13 Must use oral antiemetics when there is an interchange<br />
Do you agree or disagree with the local coverage policies identified in the previous<br />
question?<br />
Answer Options<br />
Response<br />
Percent<br />
Response<br />
Count<br />
Yes 73.7% 14<br />
No 26.3% 5<br />
Please feel free to add additional comment:<br />
IN, J8 Disagree with the IV iron therapy claims adjudication logic.<br />
NY, J13 Not the NGS position on antiemetics.<br />
CA, J1 We agreed with the LCDs adopted by the J1/MAC.<br />
NM, J4 We have altitude issues and no change in the HCT level for ESAs.<br />
WA, J2 Disagree<br />
NM, J4<br />
ESA policy still not perfect regarding MDS (procrit approved but not aranesp unless<br />
one states a reason why using aranesp....)<br />
NY, J13 Very restrictive and difficult to enforce with noncompliant patients<br />
TX, J4 They are not consistent with other carriers.<br />
IN, J8 NGS does not seem to take advice well.<br />
NY, J8 Disagree<br />
MO, J5<br />
WPS has been quite good at communicating issues. They seem to understand the<br />
policies and are willing to listen to problems. Overall, I've been pleased.<br />
MD, J12 Problem is the NCD
Have you been actively involved as a state society leader or as a <strong>Hematology</strong> or <strong>Oncology</strong><br />
<strong>CAC</strong> Representative in the LCD consolidation process?<br />
Answer Options<br />
Response<br />
Percent<br />
Response<br />
Count<br />
No 36.0% 9<br />
Yes (please explain your involvement) 64.0% 16<br />
If you disagree with any of your new contractor policies, and desire ASCO or ASH’s review<br />
and assistance in sending comments or a formal letter to your local Contractor Medical<br />
Director (CMD), or even to CMS, please provide us with some background and your<br />
reasoning for the request?<br />
Response Text<br />
OR, J2 Pheresis supervision coverage<br />
NM, J4<br />
I am worried about the NH MAC deciding to go with oral anti nausea meds, and don't want<br />
that here.<br />
WA, J2 New policies remain TBD<br />
NM, J4 ASH and ASCO have already had input and the LCD is final...<br />
NY, J13 ASCO did sent a letter on our behalf which was not successful<br />
IN, J8 You have been involved in oral anti-emetic and vitamin D LCD's.<br />
NY, J13 Done already<br />
If you are a current oncology or hematology <strong>CAC</strong> representative, have you experienced or<br />
observed any differences to the overall <strong>CAC</strong> structure and process due to the transition?<br />
Answer Options<br />
Response<br />
Percent<br />
Response<br />
Count<br />
No 72.2% 13<br />
Yes (please describe the differences) 27.8% 5<br />
Yes (please describe the differences)<br />
NM, J4 Less information on cert, denials policy<br />
WA, J2 Not activated yet<br />
IN, J8 NGS is a national administrator and does not make policy for just IN and MI<br />
MO, J5<br />
Only that expected. We have maintained our <strong>CAC</strong> for now. Since the western MO <strong>CAC</strong><br />
is also the Kansas <strong>CAC</strong>, there is room for us both. We met in St. Louis, as before.<br />
Are the <strong>CAC</strong> Meetings for your MAC jurisdiction scheduled monthly, quarterly, or<br />
annually, and do meetings take place for each state or by region only (or both)? Check all<br />
that apply.<br />
Answer Options Monthly Quarterly Annually Response<br />
Count<br />
By State 1 9 2 12<br />
By Region 0 4 2 6<br />
Both State and Region 0 4 2 6
Has your Medicare Contractor Medical Director (CMD) implemented the instructions<br />
from CMS regarding the expanded list of compendia?<br />
Answer Options<br />
Response<br />
Percent<br />
Response<br />
Count<br />
Yes 78.3% 18<br />
No 21.7% 5<br />
Have you experienced denials of coverage for off-label drugs that are in the Medicareapproved<br />
list of compendia?<br />
Answer Options<br />
Response<br />
Percent<br />
Response<br />
Count<br />
No 80.0% 16<br />
Yes (please describe the difficulties) 20.0% 4<br />
Yes (please describe the difficulties)<br />
VA, J11 ESA, Biologics<br />
NY, J13 problems getting Rituxan paid<br />
TX, J4 NCCN adoption is the most contentious issue<br />
FL, J9 denials for fda approved drugs, treanda<br />
Is your Medicare CMD open to provider feedback and/or literature supporting off-label<br />
coverage for drugs and services?<br />
Answer Options<br />
Response<br />
Percent<br />
Response<br />
Count<br />
Yes 87.5% 21<br />
No 12.5% 3
Medicare Administrative Contractors<br />
The following table outlines each jurisdiction, and the states under each jurisdiction, the company awarded the<br />
MAC contract, and the award date.<br />
Jurisdiction Award Date Company States<br />
1 10/25/2007 Palmetto GBA<br />
American Samoa, Guam,<br />
Northern Mariana Islands,<br />
CA, HI, & NV<br />
2 5/5/2008<br />
Nat’l Heritage Insurance Corp.<br />
(NHIC)??<br />
AK, ID, OR, WA<br />
3 7/31/2006<br />
Noridian Administrative<br />
Services<br />
AZ, MT, ND, SD, UT, WY<br />
4 8/3/2007 Trailblazer Health Enterprises CO, NM, OK, TX<br />
5 9/4/2007<br />
Wisconsin Physician Services<br />
(WPS)<br />
IA, KS, MO, NE<br />
6 1/7/<strong>2009</strong><br />
Noridian Administrative<br />
Services<br />
IL, MN, WI<br />
7 6/11/2008 Pinnacle Business Solutions?? AR, LA, MS<br />
8 1/7/<strong>2009</strong> National Government Services IN, MI<br />
9 9/12/2008 First Coast Service Options<br />
FL, Puerto Rico,<br />
& Virgin Islands<br />
10 1/7/<strong>2009</strong> Cahaba GBA AL, GA, TN<br />
11 1/7/<strong>2009</strong> Palmetto GBA NC, SC, VA, WV<br />
12 10/24/2007<br />
Highmark Government<br />
Services (HGS)<br />
DE, DC, MD, NJ, PA<br />
13 3/18/2008<br />
National Government Services<br />
(NGS)<br />
CT, NY<br />
14 11/19/2008<br />
Nat’l Heritage Insurance Corp.<br />
(NHIC)<br />
ME, MA, NH, RI, VT<br />
15 1/7/<strong>2009</strong><br />
Highmark Medicare Services<br />
(HMS)<br />
KY, OH<br />
*NOTE: The awards for jurisdictions 2, 6, 7, 8, 11, and 15 are in dispute.
The Players:<br />
A/B MACs<br />
(SNFs, Hospitals, Physicians)<br />
The Centers for Medicare and Medicaid Services (CMS) – A federally<br />
mandated United States Government administration working under the<br />
Department of Health and Human Services (HHS) that administers the Medicare<br />
and Medicaid programs, and establishes and enforces standards that regulate the<br />
quality of healthcare provided in nation-wide healthcare facilities<br />
CMS Contracting Reform<br />
CMS<br />
(Division of HHS)<br />
Specialty MACs<br />
(DME, Home Health, Hospice)<br />
Under section 911 of the Medicare Prescription Drug, Improvement and<br />
Modernization Act of 2003 (MMA), Congress mandated that the Secretary<br />
of the Health and Human Services revise the current method of<br />
contracting for claims processing entities under Title XVIII of the Social<br />
Security Act. Using competitive procedures, Medicare will replace its<br />
current claims payment contractors- fiscal intermediaries and carriers-<br />
with new contract entities, Medicare Administrative Contractors (MACs).<br />
This operational integration will centralize information once held<br />
separately, creating a platform for advances in the delivery of<br />
comprehensive care to Medicare beneficiaries.<br />
The MMA 2003 requires that CMS complete and transition all work to<br />
MACs by October 2011. Central to the implementation of the contracting<br />
reform is the creation of new jurisdictions to be administered by the<br />
MACs. CMS plans to award 19 MACs through a competitive bidding<br />
process by <strong>2009</strong>. These will include 15 A/B MACs servicing the majority<br />
of all types of providers (both Part A and Part B), and four specialty<br />
MACs servicing durable medical equipment suppliers.<br />
NOTE: CMS is not procuring four specialty MACs to service home health and hospice<br />
providers. CMS will consolidate the four home health and hospice jurisdictional claims<br />
workloads into the following four A/B MAC workloads.
Functional contractors will play an essential role in<br />
the MAC Implementation Process.•<br />
• Beneficiary Contact Center (BCC) - The BCC is assuming<br />
the duties traditionally held by fiscal intermediaries and<br />
carriers. In the BCC environment, beneficiaries have a single<br />
Medicare point-of contact,a 1-800-MEDICARE call center<br />
operated by CMS that that will connect them to a seamless<br />
network of customer service entities that can answer Medicare<br />
and related questions and resolve problems.<br />
• Enterprise Data Center (EDC) - A data center is an entity<br />
that houses claims processing software systems for Medicare<br />
claims. The EDC is consolidating the large number of data<br />
centers currently servicing Medicare Fee-For-Service<br />
contractors. There are three contractors on the EDC Indefinite<br />
Delivery Indefinite Quantity contract, which was awarded in<br />
February 2006.<br />
• Healthcare Integrated General Ledger and Account System<br />
(HIGLAS) - HIGLAS is the new general ledger accounting<br />
system that will replace the Contractor Administrative Budget<br />
and Finance Management system, also know as CAFM,<br />
functions. Where possible, the transition to the HIGLAS<br />
accounting system is aligned to the MAC implementation<br />
schedule to avoid having the MAC use multiple systems in<br />
reporting/tracking financial data.<br />
• Medicare Secondary Payer Recovery Contractor (MSPRC)<br />
- The MSPRC is responsible for recovering overpayments<br />
where Medicare was not the primary payer. The MAC will<br />
continue to accept unsolicited refunds and will continue<br />
working any MSP debt currently in HIGLAS.<br />
• National Medicare Banking Contractor (NMBC) - The<br />
NMBC will provide reimbursement to MACs to cover all costs<br />
incurred in the administration of the Medicare program and for<br />
the payment of all checks/electronic funds transfer items<br />
presented to the bank for covered Medicare services.<br />
• Program Safeguard Contractors (PSCs) - The PSCs perform<br />
functions to ensure the integrity of the Medicare Program. Each<br />
MAC will interact with one PSC to handle fraud and abuse<br />
issues within their jurisdictions.<br />
• Qualified Independent Contractors (QICs) - The QICs are<br />
responsible for conducting the second level of appeals<br />
(reconsiderations of initial determinations and redeterminations<br />
of Medicare claims). The MAC is responsible for handling the
first level of appeals. The QIC task order establishing three<br />
jurisdictions (north, south, and Durable Medical Equipment) to<br />
account for MACs was awarded in September 2006.<br />
• Quality Improvement Organization (QIO) - The QIO is an<br />
organization of a group of practicing doctors and other health<br />
care experts that are paid by the federal government to review<br />
and improve the care given to Medicare patients. QIOs review<br />
complaints about the quality of health care services given to<br />
Medicare beneficiaries and certain appeals determinations of<br />
services in acute care hospitals, skilled nursing facilities,<br />
Comprehensive Outpatient Rehabilitation Facilities, and home<br />
health agencies. QIOs also review cases from acute care<br />
hospitals and long-term care hospitals to make sure the care<br />
was medically necessary, provided in the appropriate setting,<br />
and coded correctly.<br />
• Recovery Audit Contractors (RACs) - The RACs, are<br />
responsible for identifying improper Medicare payments that<br />
may have been made to healthcare providers and that were not<br />
detected through existing program integrity efforts.<br />
• Shared System Maintainers (SSMs) - Medicare requires<br />
implementation of a limited number of shared systems by all<br />
contractors for their claims process and related functions. This<br />
eliminates the need for each to repeat development of the basic<br />
system.
*Information taken from CMS Contracting Reform data.<br />
A/B MACs – Also known as Medicare Administrative Contractors, A/B<br />
MACs process both Medicare Part A and Part B medical claims at the<br />
local level, including all hospital, skilled nursing facility, physician office,<br />
and other institutional service claims.<br />
A/B MAC Responsibilities:<br />
• Claims Processing<br />
• Beneficiary and Provider Customer Service<br />
• Appeals<br />
• Provider Education<br />
• Financial Management<br />
• Provider Enrollment
• Reimbursement<br />
• Payment Safeguards<br />
• Information Systems Security<br />
You can also refer to the A/B MAP Jurisdictions map below for specific state<br />
assignments.
*Information taken from CMS Contracting Reform data.
Specialty MACs – Specialty MACs are responsible for processing all Medicare<br />
Part A and Part B medical claims related to Durable Medical Equipment (DME),<br />
Home Health, and Hospice at the local level.<br />
NOTE: There are 4 assigned Specialty MACs (Regions A-D)<br />
(Refer to the map below for individual state assignments)<br />
*Region A will be administered by the Jurisdiction 14 A/B MAC<br />
*Region B will be administered by the Jurisdiction 15 A/B MAC<br />
*Region C will be administered by the Jurisdiction 11 A/B MAC<br />
*Region D will be administered by the Jurisdiction 6 A/B MAC<br />
Specialty MACs Responsibities:<br />
• Claims Processing<br />
• Beneficiary and Provider Customer Service<br />
• Appeals<br />
• Provider Education<br />
• Financial Management<br />
• Provider Enrollment<br />
• Reimbursement<br />
• Payment Safeguards<br />
• Information Systems Security<br />
Durable Medical Equipment Coverage Criteria:<br />
o Equipment withstands repeated use<br />
o Is used primarily and customarily to serve a medical purpose
o Generally is not useful to a person in the absence of an illness<br />
or injury<br />
o Appropriate for use in the home (e.g. wheelchairs, hospital<br />
beds, home oxygen equipment, and artificial limbs)<br />
You can also refer to the Specialty MAC Jurisdictions map below for specific state<br />
assignments.<br />
*Information taken from CMS Contracting Reform data.
News Flash - March is National Colorectal Cancer Awareness Month! In conjunction with<br />
National Colorectal Cancer Awareness Month, the Centers for Medicare & Medicaid Services<br />
(CMS) reminds health care professionals that Medicare provides coverage for certain colorectal<br />
cancer screenings. Colorectal cancer affects both men and women of all racial and ethnic<br />
groups, is most often found in people age 50 and older, and the risk increases with age.<br />
Screening can help prevent and detect colorectal cancer in its earliest stages when out comes<br />
are most favorable.<br />
MLN Matters Number: SE0837 Revised Related Change Request (CR) #: N/A<br />
Related CR Release Date: N/A Effective Date: N/A<br />
Related CR Transmittal #: N/A Implementation Date: N/A<br />
Preparing for a Transition from an FI/<strong>Carrier</strong> to a Medicare Administrative<br />
Contractor (MAC)<br />
Note: This article was revised on March 11, <strong>2009</strong>, to add definitions of an outgoing and incoming<br />
contractor and the article is re-issued to remind affected providers of upcoming Medicare<br />
contractor transitions.<br />
Provider Types Affected<br />
All fee-for-service physicians, providers, and suppliers who submit claims to<br />
Fiscal Intermediaries (FIs), <strong>Carrier</strong>s or Regional Home Health Intermediaries<br />
(RHHIs) for services provided to Medicare beneficiaries. Providers already<br />
billing Medicare Administrative Contractors (MACs) have already<br />
transitioned and need not review this article.<br />
Impact on Providers<br />
This article is intended to assist all providers that will be affected by Medicare<br />
Administrative Contractor (MAC) implementations. The Centers for Medicare &<br />
Medicaid Services (CMS) is providing this information to make you aware of what<br />
to expect as your FI or carrier transitions its work to a MAC. Knowing what to<br />
expect and preparing as outlined in this article will minimize disruption in your<br />
Medicare business.<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other<br />
policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to<br />
review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents. CPT only copyright 2007 American Medical Association.<br />
Page 1 of 11
MLN Matters Number: SE0837 Related Change Request Number: N/A<br />
Background<br />
Medicare Contracting Reform (or section 911 of the Medicare Prescription Drug,<br />
Improvement, and Modernization Act of 2003) mandates that the Secretary for<br />
Health & Human Services replace the current contracting authority to administer<br />
the Medicare Part A and Part B Fee For Service (FFS) programs, contained<br />
under Sections 1816 and 1842 of the Social Security Act, with the new Medicare<br />
Administrative Contactor authority. Medicare Contracting Reform requires that<br />
CMS conduct full and open competitions, in compliance with general federal<br />
contracting rules, for the work currently handled by FIs and carriers in<br />
administering the Medicare fee-for-service program.<br />
When completed there will be 15 new MACs processing Part A and Part B<br />
claims. Each MAC will handle roughly the same volume of work. Because of<br />
this, the MACs will vary in geographic size but not necessarily in the amount of<br />
work they handle. This should result in greater consistency in the interpretation<br />
of Medicare policies.<br />
MAC Implementation Milestones/Definitions<br />
There are specific milestones in the cutover from carrier or FI work to MAC. In this<br />
article, providers are advised to be aware of, and to take specific action, relative to<br />
the milestones defined below:<br />
Award – this is the point at which a MAC is announced as having won the contract<br />
for specific FI or carrier work.<br />
Cutover – This is the date on which carrier or FI work ceases and MAC work<br />
begins. Cutover is often done in phases by State-level jurisdictions.<br />
Outgoing Contractor - A Medicare carrier or FI whose Title XVIII contract is nonrenewed<br />
as a result of Medicare Contracting Reform and whose work will transition to<br />
a MAC.<br />
Pre - Award<br />
Post- Award<br />
Incoming MAC - The entity that has won a contract under Medicare Contracting<br />
Reform and which will assume the workload that was performed by a carrier or FI.<br />
If you are in a jurisdiction where a new MAC has not yet been awarded, you can<br />
remain current with updates on Medicare contracting reform by visiting<br />
http://www.cms.hhs.gov/medicarecontractingreform/ on the CMS website.<br />
Once the award to the MAC is made, you should immediately begin to prepare<br />
for the cutover. The following are recommendations to help you in this effort:<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents. CPT only copyright 2006 American Medical Association. All rights reserved.<br />
Page 2 of 11
MLN Matters Number: SE0837 Related Change Request Number: N/A<br />
Two Month Prior to Cutover<br />
Pay attention to the mail you receive from your outgoing<br />
Medicare contractor and your new MAC--you will be<br />
receiving letters and listserv messages about the cutover<br />
from both. These letters should include discussions on what,<br />
if any, impact the cutover will have on your payment<br />
schedule, issuance of checks, impact on paper and<br />
electronic claims processing, electronic fund transfers, etc.<br />
Sign up for your new MAC’s listserv. While in many cases<br />
the list of providers that were in the jurisdiction of the<br />
outgoing Medicare contractor will be shared with the<br />
incoming MAC, that may not always be the case. Getting on<br />
the MAC listserv distribution will ensure that you receive<br />
news as it happens concerning the implementation.<br />
Access and bookmark the MAC’s website and visit it<br />
regularly. The MAC will have a new website that will have<br />
general information, news and updates, information on the<br />
MAC’s requirements of providers, copies of newsletters and<br />
information on meetings and conference calls that are being<br />
conducted by the MAC.<br />
Review the Frequently-Asked Questions (FAQs) on the<br />
MAC’s website.<br />
Participate in the MAC’s advisory groups and “Ask the<br />
Contractor” meetings. Every MAC will be conducting<br />
conference calls to give providers the opportunity to ask<br />
questions and have open discussion. Take advantage of the<br />
opportunity to communicate with the new MAC!<br />
Review the MAC’s local coverage determinations (LCDs)<br />
as they may be different from the outgoing contractor LCDs.<br />
The MAC must provide education on LCDs. Providers<br />
should monitor MAC communications and website for<br />
information regarding potential changes to the LCDs.<br />
Complete and return your Electronic Funds Transfer (EFT) agreements.<br />
CMS requires that each provider currently enrolled for EFT complete a new<br />
CMS-588 for the new MAC. (If your new MAC is the same entity as your<br />
current FI/carrier, then a new EFT agreement is not needed.) This form is a<br />
legal agreement between you and the MAC that allows funds to be deposited<br />
into your bank account. It is critical for the MAC to receive these forms before<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents. CPT only copyright 2006 American Medical Association. All rights reserved.<br />
Page 3 of 11
MLN Matters Number: SE0837 Related Change Request Number: N/A<br />
any payments are issued. Complete the CMS-588 and submit it to the MAC to<br />
ensure that there is no delay or disruption in payment. We encourage you to<br />
do this no later than 60 days prior to cutover. Contact your MAC with any<br />
questions concerning the agreement.<br />
The CMS-588 form can be found at<br />
http://www.cms.hhs.gov/cmsforms/downloads/CMS588.pdf on<br />
the CMS website.<br />
You are encouraged to submit the agreements no later than 60 days<br />
prior to the planned cutovers. To do so, you will need to note the<br />
mailing address for the form, which is available on the MAC’s<br />
website. Your contractor may also provide instructions on its website<br />
on accurately completing the form.<br />
Your new MAC may also request you to execute a new<br />
Electronic Data Interchange (EDI) Trading Partner<br />
Agreement as well. If so, be sure to complete that<br />
agreement timely. Some helpful information on such<br />
agreements is available at<br />
http://www.cms.hhs.gov/EducationMaterials/download<br />
s/TradingPartner-8.pdf on the CMS website.<br />
Some (not all) MAC contractors may assign you a new EDI<br />
submitter/receiver and logon IDs as the cutover date<br />
approaches. Review your mailings from the MAC and/or<br />
their website for information about assignment of new IDs<br />
and whether you have to do anything to get those IDs. The<br />
MAC Electronic Data Interchange (EDI) staff will send these<br />
Submitter IDs and passwords to you in hardcopy or<br />
electronically. You don’t need to do anything to get the<br />
new IDs, however, if you do receive a new ID and<br />
password, CMS strongly suggests that you contact the<br />
incoming MAC to test these IDs. Since there may be a<br />
different Electronic Data Interchange (EDI) Platform, it is<br />
critical to consider testing to minimize any disruption to your<br />
business at cutover.<br />
Contact your claims processing vendor and<br />
clearinghouse to ensure that they are aware of all<br />
changes affecting their ability to process claims with the<br />
new MAC. Ask your vendor, "Are you using the new<br />
contractor number or ID of the new MAC, submitter number<br />
and logon ID?"; "Have you tested with the MAC?"<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents. CPT only copyright 2006 American Medical Association. All rights reserved.<br />
Page 4 of 11
MLN Matters Number: SE0837 Related Change Request Number: N/A<br />
Cutover Weekend<br />
Post-Cutover<br />
Because the contractor number is changing, your EDI<br />
submissions need to reflect the new MAC number at<br />
cutover.<br />
Be aware that some MACs may offer participation in an<br />
“early boarding” process for electronic claims submission<br />
and/or Electronic Remittance Advice (ERA). This will<br />
enable submitters the ability to convert to the new MAC<br />
prior to cutover. If you are currently receiving ERAs, you<br />
will continue to do so after cutover. As mentioned<br />
previously, some MACs may assign a new<br />
submitter/receiver ID and password –watch for and<br />
document them for use after cutover to the MAC.<br />
Be aware that in certain situations, CMS will have the<br />
outgoing Medicare contractor release claims payments a<br />
few days early in preparation for implementation weekend.<br />
Providers will be notified prior to the cutover date if they will<br />
receive such payments. While the net payments are the<br />
same, providers will experience increased total payments<br />
followed by no payments for a two week period.<br />
Be aware that providers may also experience system "dark<br />
days" around cutover weekends. Providers will be notified<br />
by the MAC or outgoing contractor if a dark day(s) is<br />
planned for the MAC implementation. During a dark day,<br />
the Part A provider will have limited EDI processing and no<br />
access to Fiscal Intermediary Standard System (FISS) to<br />
conduct claim entry or claim correction, verify beneficiary<br />
eligibility and claim status. Those providers who currently<br />
bill carriers may also experience some limited access to<br />
certain functions, such as beneficiary eligibility and claims<br />
status on dark days.<br />
Be aware that some Interactive Voice Response (IVR)<br />
functionality may also be unavailable during a dark day.<br />
The first 1-2 weeks may be extremely busy at the MAC.<br />
The outgoing Medicare contractor will have the “in-process”<br />
work delivered to the new MAC shortly after cutover. It<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents. CPT only copyright 2006 American Medical Association. All rights reserved.<br />
Page 5 of 11
MLN Matters Number: SE0837 Related Change Request Number: N/A<br />
CMS Post-Cutover Monitoring<br />
takes a week in most cases to get that workload into the<br />
system and distributed to staff.<br />
The new MAC will likely have new mailing addresses and<br />
telephone numbers or will transition the outgoing contractor<br />
toll free number for use.<br />
Be prepared that you may experience longer than normal<br />
wait times for Customer Service Representatives and<br />
lengthier calls the first few weeks after implementation. The<br />
telephone lines are always very busy immediately following<br />
cutover. The MAC’s staff will carefully research and<br />
respond to new callers to be certain that there are no<br />
cutover issues that have not been discovered.<br />
Learn how to use the MAC’s IVR. The MAC IVR software<br />
and options may be different from the outgoing FI or<br />
carrier. A new IVR can take time to learn. Most calls are<br />
currently handled by IVR. If users are unfamiliar and resort<br />
to calling the Contact Center Representative (CSR) line,<br />
the result is a spike in volume of calls to (CSRs) that are<br />
difficult to accommodate.<br />
Check the MAC's outreach and education event schedule on<br />
the MAC’s and outgoing Contractor’s websites. It is<br />
recommended that you have staff attend some of the<br />
education courses that may be offered by the MAC.<br />
Be aware that there may be changes in faxing policies<br />
(e.g., for medical records).<br />
Be aware that you may experience changes in Remittance<br />
Advice (RA) coding. While the combination of codes used<br />
on the RA is often directed by CMS, there may be payment<br />
situations where the codes used on the RA are at the<br />
discretion of the contractor. In addition, some contractors<br />
may have their own informational codes that they use on<br />
paper RA for some payment situations.<br />
Post-cutover is the CMS-designated period of time beginning with the MAC's<br />
operational date. During the post-cutover period, CMS will monitor the MAC's<br />
operations and performance closely to ensure the timely and correct processing<br />
of the workload that was transferred. The post-cutover period is generally three<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents. CPT only copyright 2006 American Medical Association. All rights reserved.<br />
Page 6 of 11
MLN Matters Number: SE0837 Related Change Request Number: N/A<br />
months, but it may vary in length depending on the progress of the<br />
implementation.<br />
Additional Assistance<br />
There are three attachments at the end of this article to assist you in keeping informed<br />
of the progress of the cutover as well as documenting important information:<br />
Attachment A is a summary of what you need to do and information you will<br />
need.;<br />
Attachment B may be used to track communications offered by the MAC,<br />
such as training classes and conferences, and your staff participation; and<br />
Attachment C may be used to assist you in tracking major MAC milestones.<br />
Additional Information<br />
The following MLN Matters article provides additional information about the MAC<br />
implementation process:<br />
MM5979: "Assignment of Providers to Medicare Administrative Contractors"<br />
located at<br />
http://www.cms.hhs.gov/MLNMattersArticles/downloads/mm5979.pdf<br />
on the CMS website.<br />
If you have questions, please contact your Medicare carrier, FI,<br />
A/B MAC, and/or RHHI, at their toll-free number, which may be<br />
found at<br />
http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTol<br />
lNumDirectory.zip on the CMS website.<br />
News Flash - It’s Not Too Late to Give and Get the Flu Shot! In the United States,<br />
the peak of flu season typically occurs anywhere from late December through March;<br />
however, flu season can last as late as May. Each office visit presents an opportunity for<br />
you to talk with your patients about the importance of getting an annual flu shot and a<br />
one time pneumococcal vaccination. Protect yourself, your patients, and your family and<br />
friends by getting and giving the flu shot. Don’t Get the Flu. Don’t Give the Flu.<br />
Remember - Influenza and pneumococcal vaccinations plus their administration are<br />
covered Part B benefits. Note that influenza and pneumococcal vaccines are NOT Part<br />
D covered drugs. Health care professionals and their staff can learn more about<br />
Medicare’s Part B coverage of adult immunizations and related provider education<br />
resources, by reviewing Special Edition MLN Matters article SE0838<br />
http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0838.pdf on the CMS<br />
website.<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents. CPT only copyright 2006 American Medical Association. All rights reserved.<br />
Page 7 of 11
MLN Matters Number: SE0837 Related Change Request Number: N/A<br />
Attachment A<br />
TIMELINE AND CHECKLIST FOR PREPARING FOR MAC IMPLEMENTATION<br />
Scheduled Award Date:<br />
Actual Award Date: MAC Scheduled Dark Days<br />
MAC Contractor: MAC Website:<br />
MAC Contractor Number: MAC Contact Center Number: 1-800-<br />
MAC Mailing Address: MAC EDI Mailing Address:<br />
90 DAYS BEFORE CUTOVER<br />
1. Visit MAC website and bookmark for future use<br />
2. Join the MAC Listserv<br />
3. Monitor:<br />
LCDs Published by the new MAC; compare current LCD’s that affect your practice’s<br />
services.<br />
4. Review:<br />
Provider enrollment status for all providers, update as needed.<br />
Pay-to address information for practice/providers, update as needed.<br />
5. Contact:<br />
Your Practice Management/Billing software vendor to determine if your system will be<br />
able to send & receive data to/from the new MAC.<br />
Claims Clearinghouse (if used) to confirm they are or will be able to send and receive<br />
data to/from the new MAC.<br />
75 DAYS BEFORE CUTOVER<br />
1. Check the MAC’s website and/or Listserv for outreach programs, educational and informational<br />
events, and conference calls.<br />
2. Check your state’s Medical Society or local provider organization website for MAC transition<br />
information, MAC Coordinators.<br />
60 DAYS BEFORE CUTOVER<br />
1. Submit CMS Form 588 – EDI form(s) to the new MAC, if needed.<br />
2. Register for Electronic Remittance Advice (ERA) enrollment, if you are not already enrolled.<br />
3. Download or request a sample Remittance Advice (RA). RA codes are standard but use of<br />
codes may vary across contractors.<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents. CPT only copyright 2006 American Medical Association. All rights reserved.<br />
Page 8 of 11
MLN Matters Number: SE0837 Related Change Request Number: N/A<br />
45 DAYS BEFORE CUTOVER<br />
1. Monitor current carrier/FI claim submissions and follow-up any open or unanswered claims that<br />
are more than 30 days past submission date.<br />
2. Begin staff training on the MAC transition, covering locations, LCDs, telephone and fax<br />
numbers and other changes.<br />
3. Verify readiness of software vendor, clearinghouse(s) and other trading partners.<br />
30 DAYS BEFORE CUTOVER<br />
1. Continue to monitor current carrier/FI claim submissions and follow-up any open or<br />
unanswered claims that are more than 30 days past submission date.<br />
2. New EDI Submitter ID number and password should be received.<br />
3. New ERA enrollment confirmation should be received.<br />
4. Submit test electronic claims.<br />
5. Address and resolve any electronic claim issues within 10 business days.<br />
6. Begin daily monitoring of e-mail from the MAC Listserv.<br />
15 DAYS BEFORE CUTOVER<br />
1. Continue to monitor current carrier/FI claim submissions.<br />
2. Verify EDI and ERA connections are operational.<br />
3. Collect and record all MAC telephone and fax numbers for: General Inquiry Customer Service,<br />
Provider Enrollment, Provider Relations, EDI and ERA.<br />
4. Place test calls and become familiar with the MAC IVR query system.<br />
5. Continue daily monitoring of the MAC Listserv.<br />
10 DAYS BEFORE CUTOVER<br />
1. Address any existing open items.<br />
2. Continue daily monitoring of the MAC Listserv.<br />
5-10 DAYS AFTER CUTOVER<br />
1. Begin submitting claims to the new MAC.<br />
2. Continue daily monitoring of the MAC listserv.<br />
3. Monitor and follow up on the MAC Open Item list.<br />
30 DAYS AFTER CUTOVER<br />
1. Electronic payments should be arriving by now.<br />
2. Payments for paper claims may be arriving by now.<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents. CPT only copyright 2006 American Medical Association. All rights reserved.<br />
Page 9 of 11
MLN Matters Number: SE0837 Related Change Request Number: N/A<br />
Scheduled<br />
Date<br />
Scheduled<br />
Date<br />
Attachment B<br />
SCHEDULE OF MAC CONTRACTOR TRAINING CLASSES<br />
Title of Class Attendee<br />
SCHEDULE OF MAC CONFERENCES<br />
Conference Subject Attendee<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents. CPT only copyright 2006 American Medical Association. All rights reserved.<br />
Page 10 of 11
MLN Matters Number: SE0837 Related Change Request Number: N/A<br />
MAC Dark Days<br />
Cutoff Date for Claims<br />
Submission<br />
Last date Outgoing Contractor<br />
will make Payment<br />
Last date Outgoing Contractor<br />
will have Telephone/Customer<br />
Service<br />
Last date Outgoing Contractor<br />
will send file to Bank<br />
Date MAC will Accept<br />
Electronic Claims<br />
Date MAC will Accept Paper<br />
Claims<br />
Date Bill/Claim Cycle Begins<br />
First Anticipated MAC Payment<br />
Date<br />
Date MAC Begins Customer<br />
Service<br />
Attachment C<br />
Important MAC Implementation Dates<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents. CPT only copyright 2006 American Medical Association. All rights reserved.<br />
Page 11 of 11
1<br />
2<br />
2<br />
Future Contracting Environment:<br />
Primary A/B Jurisdictions<br />
3<br />
1<br />
5<br />
6<br />
4 7<br />
8<br />
10<br />
15<br />
9<br />
11<br />
13<br />
12<br />
14
CMS<br />
CENTERS FOR MEDICARE &MEDICAID SERVICES<br />
CARRIER/INTERMEDIARY<br />
WORKLOAD CLOSEOUT<br />
HANDBOOK<br />
MEDICARE CONTRACTOR MANAGEMENT GROUP<br />
02/22/08<br />
..
TABLE OF CONTENTS<br />
CHAPTER 1: INTRODUCTION ..................................................................................................... 1-1<br />
1.1 CARRIER/INTERMEDIARY WORKLOAD CLOSEOUT HANDBOOK ................................................ 1-1<br />
1.1.1 Chapters.................................................................................................................. 1-1<br />
1.1.2 Exhibits ................................................................................................................... 1-2<br />
1.2 TRANSITION PHASES ................................................................................................................. 1-3<br />
1.3 SEGMENT TRANSITIONS ............................................................................................................ 1-3<br />
1.4 TERMINOLOGY .......................................................................................................................... 1-4<br />
1.5 GOALS OF A SUCCESSFUL WORKLOAD TRANSITION ................................................................. 1-4<br />
CHAPTER 2: CMS ORGANIZATION........................................................................................... 2-1<br />
2.1 CMS CONTRACT ADMINISTRATION PERSONNEL –CARRIER/INTERMEDIARY CONTRACTS....... 2-1<br />
2.1.1 <strong>Carrier</strong>/Intermediary Contracting Officer.............................................................. 2-1<br />
2.1.2 <strong>Carrier</strong>/Intermediary Contractor Manager............................................................ 2-1<br />
2.1.3 CMS Segment Implementation Manager ................................................................ 2-1<br />
2.2 CMS CONTRACT ADMINISTRATION PERSONNEL –MACCONTRACTS...................................... 2-2<br />
2.2.1 MAC Contracting Officer ....................................................................................... 2-2<br />
2.2.2 MAC Project Officer............................................................................................... 2-2<br />
2.2.3 MAC Jurisdiction Implementation Lead (JIL)........................................................ 2-2<br />
2.2.4 Medicare Implementation Support Contractor (MISC).......................................... 2-3<br />
2.2.5 Business Function Lead.......................................................................................... 2-3<br />
2.2.6 Technical Monitor .................................................................................................. 2-4<br />
CHAPTER 3: INITIAL CLOSEOUT ACTIVITIES........................................................................ 3-1<br />
3.1 AWARD NOTIFICATION ............................................................................................................. 3-1<br />
3.2 CARRIER/INTERMEDIARY CONTRACT NOTIFICATION................................................................ 3-1<br />
3.3 PUBLIC ANNOUNCEMENT.......................................................................................................... 3-1<br />
3.4 INITIAL CONTACT WITH INCOMING MAC ................................................................................. 3-1<br />
3.5 EMPLOYEE NOTIFICATION......................................................................................................... 3-2<br />
3.6 CLOSEOUT PROJECT TEAM....................................................................................................... 3-2<br />
3.7 JURISDICTION KICKOFF............................................................................................................. 3-2<br />
3.7.1 Outgoing Contractor Pre-Meeting ......................................................................... 3-3<br />
3.7.2 Jurisdiction Kickoff Meeting................................................................................... 3-4<br />
3.7.3 Segment Kickoff Meeting ........................................................................................ 3-5<br />
3.8 TRANSITION WORKGROUPS ...................................................................................................... 3-7<br />
3.8.1 General ................................................................................................................... 3-8<br />
3.8.2 Participants ............................................................................................................ 3-8<br />
3.8.3 Scope....................................................................................................................... 3-8<br />
3.8.4 Functions ................................................................................................................ 3-9<br />
3.8.5 Administration ...................................................................................................... 3-10<br />
CHAPTER 4: PROJECT MANAGEMENT................................................................................... 4-1<br />
4.1 PURPOSE ................................................................................................................................... 4-1<br />
4.2 PROJECT TEAM MODIFICATIONS ............................................................................................... 4-1<br />
4.3 CLOSEOUT PROJECT PLAN ........................................................................................................ 4-1<br />
4.4 CONSULTANTS .......................................................................................................................... 4-2<br />
4.5 INTERACTION WITH THE INCOMING CONTRACTOR.................................................................... 4-3<br />
4.6 INTERNAL COMMUNICATIONS................................................................................................... 4-3<br />
4.7 ON-SITE PRESENCE ................................................................................................................... 4-3<br />
4.8 NOMENCLATURE....................................................................................................................... 4-4<br />
4.9 WAIVERS................................................................................................................................... 4-4<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook I
4.10 DOCUMENTATION ..................................................................................................................... 4-4<br />
4.10.1 Closeout Approach / Inventory Reduction.............................................................. 4-5<br />
4.10.2 Closeout Project Plan (CPP).................................................................................. 4-5<br />
4.10.3 Closeout Project Plan Update................................................................................ 4-5<br />
4.10.4 Closeout Project Status Report............................................................................... 4-5<br />
4.10.5 Workload Report..................................................................................................... 4-7<br />
4.10.6 Issues Log/Action Items .......................................................................................... 4-7<br />
4.10.7 Staffing Report........................................................................................................ 4-7<br />
4.10.8 Asset Inventory ....................................................................................................... 4-8<br />
4.10.9 File Inventory ......................................................................................................... 4-8<br />
4.10.10 File Transfer Plan................................................................................................... 4-8<br />
4.10.11 Post-Cutover Activities and Resources................................................................... 4-8<br />
4.10.12 Lessons Learned ..................................................................................................... 4-9<br />
4.11 MEETINGS ................................................................................................................................. 4-9<br />
4.11.1 Outgoing Contractor Pre-Meeting ......................................................................... 4-9<br />
4.11.2 Jurisdiction Kickoff Meeting................................................................................. 4-10<br />
4.11.3 Segment Kickoff Meeting ...................................................................................... 4-10<br />
4.11.4 Jurisdiction Project Status Meeting...................................................................... 4-10<br />
4.11.5 Segment Project Status Meeting ........................................................................... 4-10<br />
4.11.6 Transition Workgroup Meetings........................................................................... 4-11<br />
4.11.7 Cutover Meeting ................................................................................................... 4-11<br />
4.11.8 Post-Project Review Meeting (Lessons Learned)................................................. 4-11<br />
CHAPTER 5: PERSONNEL AND INFRASTRUCTURE ........................................................... 5-1<br />
5.1 PERSONNEL ACTIONS................................................................................................................ 5-1<br />
5.1.1 Employment Within the Company .......................................................................... 5-1<br />
5.1.2 MAC Employment................................................................................................... 5-1<br />
5.1.3 Termination ............................................................................................................ 5-2<br />
5.2 SEVERANCE PAYMENT .............................................................................................................. 5-3<br />
5.3 RETENTION BONUS ................................................................................................................... 5-4<br />
5.4 TERMINATING SUBCONTRACTS................................................................................................. 5-5<br />
5.5 LICENSES .................................................................................................................................. 5-5<br />
5.6 ASSET INVENTORY.................................................................................................................... 5-5<br />
5.7 SECURITY AWARENESS ............................................................................................................. 5-6<br />
CHAPTER 6: CLOSEOUT OPERATIONS AND PROVIDING INFORMATION/ASSISTANCE.. 6-1<br />
6.1 OPERATIONAL ANALYSIS.......................................................................................................... 6-1<br />
6.1.1 Streamlining Operations......................................................................................... 6-1<br />
6.1.2 Workload Assessment ............................................................................................. 6-1<br />
6.1.3 Contingencies ......................................................................................................... 6-2<br />
6.2 CLOSEOUT APPROACH .............................................................................................................. 6-2<br />
6.3 ACCESS TO INFORMATION......................................................................................................... 6-2<br />
6.4 DELIVERABLES.......................................................................................................................... 6-3<br />
6.5 MAC OPERATIONAL ASSESSMENT/DUE DILIGENCE................................................................. 6-3<br />
6.5.1 General ................................................................................................................... 6-4<br />
6.5.2 Local Coverage Determinations and Edits............................................................. 6-5<br />
6.5.3 <strong>Carrier</strong>/Intermediary Workload and Inventory ...................................................... 6-5<br />
6.5.4 <strong>Carrier</strong>/Intermediary Staffing Levels ..................................................................... 6-6<br />
6.5.5 Internal Controls .................................................................................................... 6-6<br />
6.5.6 Contractor Performance Evaluation ...................................................................... 6-6<br />
6.5.7 Functional Area Assessments ................................................................................. 6-7<br />
6.6 EDI ASSESSMENT ................................................................................................................... 6-10<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook II
6.7 PRINT/MAIL OPERATIONS ....................................................................................................... 6-10<br />
6.8 FILE INVENTORY ..................................................................................................................... 6-11<br />
6.8.1 General ................................................................................................................. 6-11<br />
6.8.2 Disposition............................................................................................................ 6-11<br />
6.8.3 Mainframe Files ................................................................................................... 6-11<br />
6.8.4 LAN/PC-Based Files............................................................................................. 6-12<br />
6.8.5 Hardcopy Files ..................................................................................................... 6-12<br />
6.9 ACCESS TO FILES AND RECORDS AFTER CUTOVER.................................................................. 6-12<br />
6.10 ASSISTING MAC COMMUNICATION EFFORTS ......................................................................... 6-12<br />
6.10.1 General ................................................................................................................. 6-13<br />
6.10.2 Provider Communication...................................................................................... 6-13<br />
6.10.3 Beneficiary Communication ................................................................................. 6-14<br />
6.11 CONTRACT COMPLIANCE ........................................................................................................ 6-14<br />
CHAPTER 7: CUTOVER AND POST-CUTOVER ACTIVITIES............................................... 7-1<br />
7.1 DEFINITIONS ............................................................................................................................. 7-1<br />
7.2 CUTOVER PLAN......................................................................................................................... 7-1<br />
7.3 CUTOVER WORKGROUP ............................................................................................................ 7-2<br />
7.4 DAILY CUTOVER MEETING ....................................................................................................... 7-2<br />
7.5 SYSTEM DARK DAYS ................................................................................................................ 7-3<br />
7.6 RELEASE OF THE PAYMENT FLOOR ........................................................................................... 7-4<br />
7.7 DATA MIGRATION..................................................................................................................... 7-5<br />
7.7.1 Final Inventory ....................................................................................................... 7-5<br />
7.7.2 File Transfer Plan................................................................................................... 7-5<br />
7.7.3 File Format............................................................................................................. 7-6<br />
7.7.4 Packing ................................................................................................................... 7-6<br />
7.7.5 Transfer of Hardcopy Files and Physical Assets.................................................... 7-7<br />
7.8 SEQUENCE OF SYSTEM CUTOVER ACTIVITIES........................................................................... 7-7<br />
7.8.1 System Closeout...................................................................................................... 7-7<br />
7.8.2 Back Up .................................................................................................................. 7-7<br />
7.8.3 Transfer and Installation ........................................................................................ 7-7<br />
7.8.4 Data Conversion..................................................................................................... 7-7<br />
7.8.5 Initial System Checkout .......................................................................................... 7-8<br />
7.8.6 Functional Validation of System............................................................................. 7-8<br />
7.8.7 First MAC Production Cycle .................................................................................. 7-8<br />
7.9 CUTOVER COMMUNICATION ..................................................................................................... 7-8<br />
7.10 ACCESS TO CMS SYSTEMS ....................................................................................................... 7-9<br />
7.11 POST-CUTOVER ACTIVITIES...................................................................................................... 7-9<br />
7.11.1 Post-Cutover Approach and Resources................................................................ 7-10<br />
7.11.2 Operations Wrap-up ............................................................................................. 7-10<br />
7.11.3 Reporting Activities .............................................................................................. 7-10<br />
7.11.4 Lessons Learned ................................................................................................... 7-11<br />
7.11.5 Post-Project Review.............................................................................................. 7-12<br />
CHAPTER 8: FINANCIAL PROCESSES .................................................................................... 8-1<br />
8.1 GENERAL .................................................................................................................................. 8-1<br />
8.2 TRANSITION COSTS ................................................................................................................... 8-1<br />
8.3 TRANSITION SUPPLEMENTAL BUDGET REQUEST....................................................................... 8-3<br />
8.4 TERMINATION COSTS ................................................................................................................ 8-3<br />
8.5 BANK ACCOUNTS AND REPORTS............................................................................................... 8-4<br />
8.6 FINANCIAL COORDINATION WITH THE MAC............................................................................. 8-5<br />
8.7 ACCOUNTS RECEIVABLE RECONCILIATION............................................................................... 8-5<br />
8.8 FINANCIAL REPORTING FOR ACCOUNTS RECEIVABLE............................................................... 8-7<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook III
8.9 PSOR/POR RECONCILIATION................................................................................................... 8-7<br />
8.10 AUDITS AND OTHER ISSUES ...................................................................................................... 8-7<br />
8.11 1099 RESPONSIBILITIES............................................................................................................. 8-8<br />
LIST OF EXHIBITS .................................................................................................................................... 1<br />
INDEX ........................................................................................................................................................... 1<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook IV
Chapter 1: Introduction<br />
Chapter 1: INTRODUCTION<br />
1.1 <strong>Carrier</strong>/Intermediary Workload Closeout Handbook<br />
This handbook was prepared by CMS to assist our carriers and fiscal intermediaries in<br />
moving Medicare data, records, and operational activities to Medicare Administrative<br />
Contractors (MACs). It contains a compilation of best practices, lessons learned, and<br />
over 25 years of CMS experience in overseeing Medicare workload transitions. The<br />
handbook describes the basic responsibilities and processes required by the carrier or<br />
intermediary to close out its Medicare contract activities and to assist the incoming MAC<br />
in its efforts to assume Medicare claims administration functions. While both the<br />
carrier/intermediary and the incoming MAC are responsible for accomplishing various<br />
activities during the transition, this handbook is intended for use by the departing<br />
carrier/intermediary. A similar MAC Workload Implementation Handbook has been<br />
developed for incoming Medicare Administrative Contractors.<br />
Every Medicare workload transition will vary depending on the unique circumstances<br />
and environment of the Medicare contractors involved. There may be activities and<br />
processes described in the handbook that will not be applicable to a specific transition.<br />
There may also be activities that will need to be performed that the handbook does not<br />
cover. The handbook cannot identify and address all of the variations that may occur<br />
during a workload transition, nor all of the tasks for which the outgoing contractor will be<br />
responsible. However, it will provide the framework for Medicare contract closeout and<br />
guidance in addressing situations as they arise.<br />
1.1.1 Chapters<br />
The handbook is comprised of 8 chapters and 11 exhibits as follows:<br />
1. Chapter 1: Introduction provides an introduction to the Handbook and the goals for<br />
a successful workload transition.<br />
2. Chapter 2: CMS Organization provides information on the duties and<br />
responsibilities of CMS’s transition oversight staff.<br />
3. Chapter 3: Initial Closeout Activities describes the activities that are necessary to<br />
start the contract closeout process. It discusses establishment of the closeout project<br />
team, project kickoff meetings, and the organization and function of transition<br />
workgroups. The chapter also addresses initial notification activities.<br />
4. Chapter 4: Project Management discusses the various tasks necessary to manage<br />
the closeout process. This includes developing the Closeout Project Plan, the use of<br />
consultants, interaction with the incoming MAC, communications, and meeting and<br />
reporting requirements.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 1-1
Chapter 1: Introduction<br />
5. Chapter 5: Personnel and Infrastructure provides information on personnel issues<br />
and CMS policy on retention bonuses and severance pay. It also discusses policy on<br />
terminating subcontracts, asset inventory and disposition, and security.<br />
6. Chapter 6: Closeout Operations and Providing Information/Assistance deals with<br />
the approach that a carrier/intermediary may take for its closeout operations and the<br />
type of information that should be provided to assist the MAC in its implementation.<br />
File transfer activities and assisting the MAC’s communication efforts are also<br />
discussed.<br />
7. Chapter 7: Cutover and Post-Cutover Activities covers the activities associated<br />
with final preparations for the operational closeout and the migration of records, files,<br />
and data. In addition, the chapter provides information on cutover plans, system dark<br />
days, lessons learned, and post-cutover reporting.<br />
8. Chapter 8: Financial Processes provides information on the development of closeout<br />
costs and the financial activities required to move the Medicare workload. It discusses<br />
the development of transition and termination costs, banking activities, the accounts<br />
receivable reconciliation, audits, and 1099 responsibilities.<br />
1.1.2 Exhibits<br />
Exhibit 1 Transition Phases and Terminology<br />
Exhibit 2 MAC Contract Administrative Structure<br />
Exhibit 3 Financial Memorandum to Outgoing Contactors<br />
Exhibit 4 Sample Closeout Project Plan<br />
Exhibit 5 Outgoing Contractor Information/Documentation<br />
Exhibit 6 Files to be Transferred to a Medicare Administrative Contractor<br />
Exhibit 7 Workload Closeout Meetings and Documentation<br />
Exhibit 8 Sample Workload Report<br />
Exhibit 9 Sample Staffing Report<br />
Exhibit 10 Glossary<br />
Exhibit 11 Acronyms<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 1-2
Chapter 1: Introduction<br />
1.2 Transition Phases<br />
A Medicare workload transition involves three major participants: the incoming<br />
contractor (MAC), the outgoing contractor (carrier or intermediary) and CMS. Each<br />
transition has three major phases. For an outgoing contractor, the three major phases of a<br />
Medicare workload transition are identified as: operations (normal Medicare activities<br />
prior to the award of a MAC contract), closeout, and post-contract.<br />
Transition activities in the operations phase are generally not extensive and are largely<br />
dependent upon whether or not the carrier/intermediary submitted a proposal for the<br />
jurisdiction in which it resides. If a proposal was submitted, there would not be<br />
significant transition activity and normal Medicare operations would continue until the<br />
MAC contract is announced. However, if the carrier/intermediary did not submit a<br />
proposal for its jurisdiction, then it may take some initial steps described in this handbook<br />
to prepare for the closeout phase.<br />
The closeout phase begins at MAC contract award and ends at the carrier/intermediary’s<br />
operational cutover to the new MAC. During this time the carrier/intermediary works<br />
with the incoming MAC to transfer Medicare data, records, and functions and to shut<br />
down its Medicare operation.<br />
The post-contract phase begins at the cutover and continues for a period of time that can<br />
range up to six months. This is the period when the carrier/intermediary closes out the<br />
financial and reporting aspects of its contract.<br />
While this handbook provides information for all three phases, its focus is on the<br />
closeout and post-contract phases of the carrier/intermediary’s transition. Exhibit 1<br />
provides a graphic representation of terminology used for the major transition<br />
participants.<br />
1.3 Segment Transitions<br />
In a MAC transition, a carrier or intermediary’s workload is known as a “segment”. Each<br />
segment transition involves the movement of all or part of a carrier or intermediary’s<br />
Medicare data, files, and functions to the MAC. The establishment of a fully operational<br />
MAC jurisdiction will involve multiple segment transitions, the number of which will<br />
depend on the number of carriers and intermediaries that currently serve the states within<br />
the jurisdiction. The length of the segment implementations and sequence of individual<br />
segment implementations will be identified in the MAC’s Jurisdiction Implementation<br />
Project Plan, which will be approved by CMS. Segment implementation periods can<br />
range from 3-8 months, depending on the size of the outgoing contractor and various<br />
other factors.<br />
The MAC will begin to perform Medicare functions after its first segment<br />
implementation has been completed. As each subsequent segment implementation of the<br />
MAC jurisdiction is completed, the MAC’s Medicare administrative responsibilities will<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 1-3
Chapter 1: Introduction<br />
expand over a wider area of its jurisdiction until the cutover of the last segment in the<br />
jurisdiction occurs. At that time, the MAC will be fully operational in all states within its<br />
jurisdiction.<br />
1.4 Terminology<br />
For purposes of this handbook, the term “outgoing contractor” refers to a carrier or<br />
fiscal intermediary (or simply intermediary) that is performing Medicare claims<br />
processing functions under a Part A agreement, Part A Plan subcontract agreement with<br />
the Blue Cross and Blue Shield Association (BCBSA), or a Part B contract. These<br />
contractors are also known as “legacy contractors.” The terms “outgoing contractor”,<br />
“carrier/ intermediary”, and “legacy contractor” are used interchangeably throughout this<br />
handbook. Legacy contractors may also be referred to as “Title XVIII contractors,” but<br />
this term should be avoided because the MAC contracts are also entered into under Title<br />
XVIII of the Social Security Act.<br />
The Medicare Administrative Contractor (MAC) who will be assuming the Medicare<br />
functions of the outgoing carrier or intermediary is referred to as the “incoming<br />
contractor.” Both “MAC” and “incoming contractor” are used interchangeably.<br />
While this handbook is written from the perspective of a carrier or intermediary<br />
transferring its Medicare functions to a MAC, it may also be used in those limited<br />
situations where a carrier or intermediary may be moving its workload to another carrier<br />
or intermediary. In those situations, “incoming carrier” or “incoming intermediary”<br />
would be used in the place of “MAC”.<br />
The term “provider” is used in the broad sense of the word, meaning anyone providing a<br />
Medicare service; i.e., institutional provider, physician, non-physician practitioner, or<br />
supplier.<br />
In this handbook, the term “closeout” is used for those transition activities performed by<br />
the carrier or intermediary. The term “implementation” is used for those transition<br />
activities performed by the MAC. The term “transition” is defined as the period of time<br />
that encompasses the movement of Medicare operations from a carrier/intermediary to a<br />
MAC. However, in general public usage, the term “transition” will often be applied to<br />
closeout activities performed by the carrier/intermediary, as well as implementation<br />
activities performed by the MAC.<br />
The term “contract” is used in a generic sense and refers to the Title XVIII Part B carrier<br />
contract, the Title XVIII Part A agreement, or the Title XVIII Part A Plan subcontract<br />
agreement with BCBSA.<br />
Any reference to days in this handbook refers to business days unless otherwise noted.<br />
1.5 Goals of a Successful Workload Transition<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 1-4
Chapter 1: Introduction<br />
All of the organizations involved in a workload transition have a responsibility to ensure<br />
that the transition is conducted properly and that their contractual obligations are met.<br />
While each participant has different roles and responsibilities during a transition, the<br />
goals remain the same:<br />
There is minimal disruption to beneficiaries;<br />
There is minimal disruption to providers, physicians and suppliers;<br />
There is no disruption of claims processing and Medicare operations;<br />
The transition is completed on schedule within the required time period;<br />
Actual costs represent effective and efficient use of resources; and,<br />
All parties with an interest in the transition (whether direct or indirect) are kept<br />
informed of the transition’s status and progress.<br />
In order to accomplish these goals, there must be proper project planning and<br />
management by the Medicare Administrative Contractor, maintenance of existing<br />
Medicare operations by the outgoing carrier or intermediary, and comprehensive<br />
oversight by CMS. All parties involved in the transition must cooperate fully and<br />
communicate constantly with all other parties at every level. This handbook will assist<br />
the carrier/intermediary in meeting its contractual obligations as it closes out its Medicare<br />
operations and help achieve the goals of a successful transition.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 1-5
Chapter 2: CMS Organization<br />
Chapter 2: CMS ORGANIZATION<br />
CMS will have a number of individuals responsible for overseeing the closeout activities<br />
of the carrier/intermediary and the implementation activities of the MAC. Listed below<br />
are the individuals that the carrier/intermediary will have ongoing contact with regarding<br />
its closeout work, along with a description of their responsibilities. Also discussed are<br />
the individuals who will be responsible for monitoring the incoming MAC’s<br />
implementation.<br />
2.1 CMS Contract Administration Personnel –<br />
<strong>Carrier</strong>/Intermediary Contracts<br />
The following are the key CMS individuals that the carrier/intermediary will have contact<br />
with for the activities related to the transfer of its Medicare operations, records, and data<br />
to the incoming MAC.<br />
2.1.1 <strong>Carrier</strong>/Intermediary Contracting Officer<br />
The carrier/intermediary Contracting Officer (CO) has the administrative responsibility<br />
for the outgoing contractor’s Title XVIII Medicare contract. The CO has overall<br />
responsibility for the carrier/intermediary’s closeout activities and negotiating<br />
termination and transition costs.<br />
2.1.2 <strong>Carrier</strong>/Intermediary Contractor Manager<br />
The Contractor Manager is the CMS individual responsible for monitoring the day-to-day<br />
operational activities of the outgoing carrier/intermediary. He/she will be responsible for<br />
ensuring that the carrier/intermediary continues to maintain its overall operation and<br />
performance during the closeout period. The Contractor Manager will work closely with<br />
the CMS Jurisdiction Implementation Lead (see Chapter 2.2.3 below) to ensure that the<br />
carrier/intermediary cooperates with the incoming MAC during the transition and that all<br />
Medicare files, records, and data are successfully transferred to the MAC.<br />
2.1.3 CMS Segment Implementation Manager<br />
There may be Segment Implementation Managers (SIMs) assigned to a jurisdiction<br />
implementation. If there are, the SIMs will be responsible for monitoring, troubleshooting,<br />
problem solving, and reporting on the individual segment implementations that<br />
occur within the jurisdiction. The SIMs will work with the Jurisdiction Implementation<br />
Lead, as well as the outgoing carrier/intermediary’s Contractor Manager, to manage and<br />
coordinate all of the segment transition activities of the MAC. He/she will also provide<br />
input on technical issues, schedules, and payment vouchers. Due to limited CMS<br />
resources, it is likely that there will be few, if any, Segment Implementation Managers.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 2-1
Chapter 2: CMS Organization<br />
2.2 CMS Contract Administration Personnel – MAC Contracts<br />
The following individuals (along with the aforementioned CMS Segment Implementation<br />
Manager) will be responsible for monitoring the implementation and/or operational<br />
activities of the MAC. They will also interact with the carrier/intermediary in various<br />
meetings and workgroups. Except for the Segment Implementation Manager, CMS<br />
MAC contract administration personnel will not normally be involved with carrier/<br />
intermediary closeout activities during the transition. A CMS administrative<br />
organizational chart for the MAC contracts is shown in Exhibit 2, MAC Contract<br />
Administrative Structure.<br />
2.2.1 MAC Contracting Officer<br />
The MAC Contracting Officer (CO) has the overall responsibility for the incoming<br />
Medicare Administrative Contractor and is the only person authorized to enter into and<br />
bind the government by contract. He/she is the individual that negotiates and prepares<br />
the MAC contract document, modifies any terms or conditions of the contract, accepts<br />
delivered services, and approves vouchers for payment. While a single person could<br />
serve as both the carrier/intermediary CO and the MAC Contracting Officer, in the<br />
present CMS organizational structure they are two different people.<br />
2.2.2 MAC Project Officer<br />
The MAC Project Officer (PO) serves as the first point of contact for the MACs. He/she<br />
is the focal point for the exchange of information and the receipt of programmatic<br />
approvals on deliverables and other work under the MAC contract. The PO is the<br />
technical representative of the MAC Contracting Officer and provides technical direction<br />
to the MAC, as necessary, for all of the business functions contained in the MAC<br />
statement of work. He/she also monitors the performance of the MAC under the contract<br />
and reviews payment vouchers. The PO may designate various Business Function<br />
Leaders (BFLs) and technical monitors (TMs) to support the administration of the MAC<br />
contract.<br />
2.2.3 MAC Jurisdiction Implementation Lead (JIL)<br />
The MAC Jurisdiction Implementation Lead, or simply Implementation Lead,<br />
(previously known as the MAC Jurisdiction Transition Coordinator) will be the PO’s<br />
representative for the overall MAC jurisdiction implementation and will serve in a<br />
specialized technical capacity to the Project Officer. The Implementation Lead will<br />
manage CMS’s oversight of the jurisdiction transition and coordinate MAC<br />
implementation activities with the carrier/intermediary Contractor Managers and the<br />
functional contractor Project Officers. He/she will also resolve issues involving the<br />
various segment transitions within the jurisdiction.<br />
The Jurisdiction Implementation Lead, as a representative of the Project Officer, will<br />
provide technical guidance and direction to the MAC and to Segment Implementation<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 2-2
Chapter 2: CMS Organization<br />
Managers (SIMs), if any are designated for the jurisdiction. If there will not be any SIMs<br />
for the jurisdiction implementation, the JIL will work with the Medicare Implementation<br />
Support Contractor (see Chapter 2.2.4 below) to oversee the segment implementations<br />
within the jurisdiction.<br />
The Implementation Lead will work with business function leads (BFLs) concerning<br />
implementation issues. He/she will also coordinate implementation activities with the<br />
Project Officers of the functional contractors involved in the MAC implementation. The<br />
JIL will also conduct problem solving/trouble shooting on a jurisdiction level and be<br />
responsible for reporting to senior management. In addition, the Implementation Lead<br />
will review vouchers for jurisdiction implementation activities and provide<br />
recommendations to the Project Officer and the MISC Government Task Leader (if<br />
applicable).<br />
2.2.4 Medicare Implementation Support Contractor (MISC)<br />
Because of the number of implementations and the limited staff available for oversight,<br />
CMS has entered into a contract with Chickasaw Nation Industries (CNI) for a Medicare<br />
Implementation Support Contractor (MISC). The MISC will provide the project<br />
management support and the oversight services needed by CMS to monitor the<br />
implementation activities of the MACs and functional contractors. The MISC will<br />
provide oversight activities for each segment within its assigned jurisdiction and will<br />
serve in a capacity similar to that of a Segment Implementation Manager (Chapter 2.1.3)<br />
if one has not been designated.<br />
There will be a MISC business analyst (BA) assigned to each jurisdiction. The business<br />
analyst’s primary responsibility will be the segment implementations. The Medicare<br />
Implementation Support Contractor will have direct access and interaction with the MAC<br />
and outgoing contractor staff involved with the implementation. The BA will be a<br />
member of transition workgroups and attend all meetings associated with those<br />
workgroups. He/she will also attend general jurisdiction status meetings and<br />
teleconferences. The BA will work closely with the Jurisdiction Implementation Lead<br />
and will be the point person for segment implementation activities.<br />
2.2.5 Business Function Lead<br />
Business Function Leads (BFLs) will assist the Project Officer and will serve as the<br />
technical representative for their specific business function within the MAC contract.<br />
They will assist the PO with specific functional inquires and technical issues. They will<br />
also monitor and analyze activities and deliverables. In addition, they will review<br />
monthly invoices and vouchers pertaining to their area and make payment<br />
recommendations to the PO. The BFL is not authorized to direct any technical changes<br />
or make any contractual commitments or changes on CMS’s behalf.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 2-3
Chapter 2: CMS Organization<br />
2.2.6 Technical Monitor<br />
Technical Monitors are CMS Regional Office personnel who may provide information on<br />
contractor performance and help the Project Officer resolve issues, particularly those<br />
from beneficiaries and providers. The TM may assist the BFL in performing technical<br />
evaluations and inspections and may also provide input to monthly and quarterly contract<br />
administration meetings. In addition, Technical Monitors may perform on-site<br />
validations of accounts receivables and debts.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 2-4
Chapter 3: Initial Activities<br />
Chapter 3: INITIAL CLOSEOUT ACTIVITIES<br />
3.1 Award Notification<br />
The CMS Contracting Officer will contact each of the carriers and intermediaries within<br />
a MAC jurisdiction immediately after the MAC is informed of its contract award for that<br />
jurisdiction. This will begin the closeout phase of the carrier/intermediary’s transition.<br />
The CO will discuss the general aspects of the incoming MAC’s proposal and the<br />
transition schedule. The CO will provide the carrier/intermediary with the MAC’s<br />
proposed implementation timeline and determine if there are any initial problems from<br />
the outgoing contractor’s perspective. The anticipated ending date of the contract will be<br />
provided, and the CO will discuss upcoming activities, the jurisdiction and segment<br />
kickoff meetings, and CMS expectations for the transition. The CO will also provide<br />
any information regarding the MAC’s proposal for utilizing any carrier/intermediary<br />
personnel should they be available for employment after contract end.<br />
3.2 <strong>Carrier</strong>/Intermediary Contract Notification<br />
After the MAC award has been made, the CO will provide official contract notification<br />
that CMS (or the Blue Cross and Blue Shield Association if the outgoing contractor is a<br />
Blue Cross Plan) is either terminating or non-renewing the outgoing contractor’s<br />
Medicare contract or Plan agreement. There will also be an initial discussion about the<br />
financial requirements for transition and termination costs. The CO will request that the<br />
carrier/intermediary begin to prepare a budget for those costs. See Chapter 8, Financial<br />
Processes.<br />
CMS will also send the outgoing contractors a letter requesting a copy of current<br />
personnel policies, including severance and related payments. The letter will include<br />
information on transition and termination costs and CMS’ policy on retention bonuses<br />
and severance pay. See Exhibit 3, Financial Information for Outgoing Contractors.<br />
3.3 Public Announcement<br />
CMS will issue a press release regarding the award of the MAC jurisdiction contract.<br />
The outgoing contractor may also wish to issue a press release regarding its departure<br />
from the Medicare program. The announcement should include assurances that the<br />
outgoing contractor will work closely with the new MAC during the transition and that<br />
service to Medicare beneficiaries and providers will not be disrupted.<br />
3.4 Initial Contact with Incoming MAC<br />
After CMS has publicly announced the contract award and implementation schedule, the<br />
incoming MAC will be placing calls to the carriers and intermediaries within its<br />
jurisdiction. These calls will normally be made by upper management and will serve as<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 3-1
Chapter 3: Initial Activities<br />
an introduction to the MAC. The MAC’s proposal may be discussed in general terms,<br />
especially if the MAC has interest in the outgoing contractor’s staff and/or facilities.<br />
Other areas of discussion may include communication, commitment of the organizations,<br />
the transition schedule, and any immediate problems or issues that need to be addressed<br />
before the kickoff meeting.<br />
3.5 Employee Notification<br />
After the carrier/intermediary is aware of the general provisions of the MAC’s proposal,<br />
it should schedule a meeting with all of its Medicare employees. The purpose of this<br />
meeting is to provide information about the transition and to inform employees about the<br />
status of their jobs.<br />
If the MAC has indicated that it would like to hire some or all of the outgoing<br />
contractor’s staff, employees should be provided with as much information as is known<br />
about the MAC’s intentions. Employees should also be informed about any jobs that<br />
may be offered in non-Medicare areas of the outgoing contractor’s organization. Should<br />
jobs not be available in other areas or if employees will not have jobs offered to them by<br />
the new contractor, information on severance pay, retention bonuses, outplacement<br />
services, and other corporate benefits should be provided as soon as possible.<br />
3.6 Closeout Project Team<br />
The outgoing contractor will need to form a project team that will be responsible for<br />
closeout activities. The team’s purpose is twofold: 1) to work directly with the MAC to<br />
accomplish the orderly transfer of Medicare data, records, and functions to the MAC; and<br />
2) if the carrier/intermediary will not be continuing as a Medicare contractor, take the<br />
necessary steps to close out the carrier/intermediary’s Medicare contract. The team<br />
should be comprised of a Closeout Project Manager and experienced personnel<br />
representing the various functional areas of the carrier/intermediary. Closeout team staff<br />
will be assigned to participate in the transition workgroups that will be formed (see<br />
Section 3.8 below).<br />
Once assignments have been made, an internal meeting with all team members should be<br />
held in order to plan and prepare for the closeout and upcoming kickoff meetings. An<br />
organization chart and contact list should be developed. Initial discussion should also<br />
take place regarding the development of the carrier/intermediary’s Closeout Project Plan.<br />
In addition, administrative details and procedures for meetings and communications<br />
should be finalized.<br />
3.7 Jurisdiction Kickoff<br />
Jurisdiction kickoff is composed of 3-5 separate meetings conducted over a several day<br />
period. Jurisdiction kickoff is intended for all parties involved in any of the segment<br />
transitions that will occur within the jurisdiction, but not all parties will attend every<br />
meeting. There will be a minimum of three meetings held at kickoff: the MAC pre-<br />
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meeting, the outgoing contractor pre-meeting, and the general jurisdiction kickoff<br />
meeting. Kickoff may also include a segment kickoff meeting if a segment<br />
implementation is scheduled to begin at contract award. In addition, the post-award<br />
orientation conference conducted by the MAC Contracting Officer may be held as part of<br />
the kickoff if it has not already been held. The outgoing contractor should attend the<br />
outgoing contractor pre-meeting and the general jurisdiction kickoff meeting. It will<br />
also attend the segment kickoff meeting if one is scheduled and it pertains to the<br />
carrier/intermediary’s segment.<br />
Jurisdiction kickoff is generally held 10-15 days after contract award. The meetings will<br />
normally be held in the Baltimore, Maryland metropolitan area. The MAC will be<br />
responsible for providing facilities for all of the jurisdiction kickoff meetings that will<br />
take place, providing toll-free phone lines for off-site participants, developing an agenda<br />
(with input from other participants), and notifying potential attendees. In the unlikely<br />
even that the meetings are held at a CMS facility, then CMS would be responsible for the<br />
facilities and telecommunications. Meeting minutes and an attendance sheet/contact list<br />
shall be prepared by the MAC and sent to all those in attendance. Generally, each of the<br />
individual meetings that are held at kickoff can be completed in a half day (3-4 hours of<br />
concentrated meeting time) or less.<br />
3.7.1 Outgoing Contractor Pre-Meeting<br />
This meeting is conducted by CMS with the outgoing contractors and is normally held<br />
prior to the general jurisdiction kickoff meeting. Since these contractors will be present<br />
for the jurisdiction kickoff meeting, it provides an opportunity for CMS to discuss issues<br />
of importance solely related to contractors who are leaving the program or losing a<br />
portion of their workload. The meeting could be conducted with all outgoing contractors<br />
or there could be individual meetings with each carrier and intermediary. The meeting<br />
will be conducted by the CMS legacy contractor Contracting Officer and attended by the<br />
CMS Contractor Management Officer, Contractor Managers, and various CMS transition<br />
staff.<br />
Topics for discussion include:<br />
Anticipated transition schedule and cutover dates<br />
Discussions regarding possible schedule modifications based on legacy<br />
contractors’ circumstances/environment<br />
MAC hiring of carrier/intermediary employees<br />
Transition/termination cost policy and advanced agreements<br />
Incentive pay/retention bonus/severance pay policy. Contractor-specific<br />
discussions could be held if there are individual carrier/intermediary meetings.<br />
Staffing issues<br />
Operational issues<br />
Performance of contractual obligations; e.g., completion of audits<br />
Waiver policy<br />
Development of a Closeout Project Plan<br />
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CMS oversight: meetings and reports<br />
Medicare Implementation Support Contractor (MISC)<br />
CMS Workload Closeout Handbook<br />
Workgroups and legacy contractor representation<br />
Accounts receivable review<br />
Workload reduction plans<br />
Upcoming jurisdiction kickoff meeting<br />
Pre-transition contractor readiness and documentation<br />
3.7.2 Jurisdiction Kickoff Meeting<br />
While the other kickoff meetings will have limited audiences, the jurisdiction kickoff<br />
meeting is intended for all parties involved in any of the segment transitions that will<br />
occur. This meeting is sometimes referred to as the general kickoff meeting.<br />
3.7.2.1 Purpose<br />
The purpose of the jurisdiction kickoff meeting is to understand, organize, and coordinate<br />
activities among all parties involved in the transition. It provides the opportunity for all<br />
parties to meet face-to-face to discuss the approach to the MAC jurisdiction transition, go<br />
over the schedule, review roles and responsibilities, and address any concerns about the<br />
upcoming segment transitions. While there may be some detailed technical discussion,<br />
the meeting is not intended to be at the level that would require all of the functional and<br />
technical project leads that the carrier/intermediary may be utilizing in its closeout<br />
efforts; those individuals would be expected to attend the segment kickoff meeting.<br />
Attendance at the jurisdiction meeting would normally include the Closeout Project<br />
Manager and a limited number of closeout project team members, such as the IT lead.<br />
3.7.2.2 Participants<br />
All parties directly involved in the jurisdiction transition should be in attendance: CMS,<br />
the MISC, appropriate MAC personnel, the outgoing carriers and intermediaries, the Blue<br />
Cross and Blue Shield Association (for fiscal intermediaries with Plan agreements),<br />
applicable data centers, any front end contractor, any organization(s) that will be moving<br />
Medicare workload to the MAC during the transition or will process some portion of the<br />
outgoing contractors’ workload, shared system maintainers, and functional contractors<br />
such as the Program Safeguard Contractor (PSC), Qualified Independent Contractor<br />
(QIC), and the Beneficiary Call Center (BCC). Attendance may be in person or via<br />
teleconference. Toll-free teleconference lines will be available for individuals or<br />
organizations that cannot attend in person.<br />
3.7.2.3 Topics of Discussion<br />
The jurisdiction kickoff meeting will give a high level overview of the transition project.<br />
The MAC will be requested to make a corporate introduction and describe its Medicare<br />
organization and operation. The MAC should also discuss its implementation team/<br />
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organization, its implementation approach, and provide an overview of its Jurisdiction<br />
Implementation Project Plan. Other entities involved in the project may also be asked to<br />
provide an overview of their transition activities and interactions with the MAC. In<br />
addition, CMS will discuss its implementation expectations, review reporting and<br />
meeting requirements, and present its transition team organization.<br />
The MAC’s due diligence review will be discussed, along with deliverables that are being<br />
requested from the outgoing contractors. Proprietary issues regarding the MAC’s<br />
interaction with the outgoing contractors will also be addressed. Any Deliverables List,<br />
action item list, or problem/issue log that is developed as a result of the kickoff meeting<br />
will be distributed as soon as possible after the meeting. The Deliverables List will serve<br />
as documentation for all of the information the outgoing contractors need to provide to<br />
the MAC (see Chapter 6.4). The coordination of communication activities will also be<br />
discussed.<br />
Transition workgroups will be a key topic of discussion at the meeting (see Chapter 3.8).<br />
The MAC will work with the outgoing contractors and other attendees to establish<br />
jurisdiction-wide transition workgroups and agree on their basic responsibilities. These<br />
jurisdiction-wide workgroups and their functions should be in place for the entire<br />
jurisdiction implementation. All outgoing contractors involved in the transition will have<br />
to structure their closeout activities utilizing the workgroups. Therefore, it is critical that<br />
agreement be reached with all of the outgoing contractors as to what workgroups will be<br />
established and the major responsibilities for each.<br />
After the jurisdiction kickoff meeting is completed, the carrier/intermediary should<br />
review its project schedule and the Closeout Project Plan and make any appropriate<br />
revisions based on the discussions that took place during the meeting.<br />
3.7.3 Segment Kickoff Meeting<br />
The segment kickoff meeting may or may not be a part of the jurisdiction kickoff. If it is,<br />
it will represent the formal start of the process of moving Medicare data, records, and<br />
operations from an outgoing carrier or intermediary to the MAC. It will be similar to the<br />
jurisdictional kickoff meeting in concept, but will be focused on the detailed technical<br />
and functional activities required for a specific segment transition.<br />
3.7.3.1 Purpose<br />
The segment kickoff meeting allows all parties involved in a segment transition to meet<br />
face-to-face to review the project expectations, discuss roles and responsibilities, and to<br />
organize and coordinate activities. The meeting will also help ensure that there is<br />
agreement among all participants regarding the tasks involved, project assumptions, and<br />
schedule. In addition, any emerging issues and/or changes that have occurred since<br />
contract award will be discussed, as will any lessons learned from prior segment<br />
transitions within the jurisdiction or other jurisdictions. Organizations that cannot attend<br />
in person may do so by teleconference.<br />
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3.7.3.2 Preparation<br />
The MAC will be responsible for setting up the kickoff meeting for each segment<br />
implementation within its jurisdiction and shall consult with CMS regarding the time and<br />
location of such meetings. Generally, the meetings will be held at the proposed<br />
operational site or the corporate headquarters of the MAC.<br />
The first segment kickoff meeting(s) normally will be held as part of jurisdiction kickoff,<br />
but there may be circumstances that dictate that the meeting(s) be held at a later time.<br />
The kickoff meetings for segments that will begin after the first round of segment kickoff<br />
meetings should take place within 10 days of the scheduled start date of that segment<br />
implementation. For segment kickoff meetings not occurring during jurisdiction kickoff,<br />
the MAC should meet with the CMS transition team prior to the meeting to discuss the<br />
agenda, materials to be handed out, and presentations that will be made.<br />
All MACs will have to conduct multiple segment implementations in order to become<br />
fully operational. It is possible that there will be more than one segment implementation<br />
starting in the same month. If this occurs, the MAC will coordinate the scheduling of the<br />
kickoff meetings with CMS and the outgoing contractors of the segments. Normally,<br />
each segment implementation will require its own kickoff meeting; however, it is<br />
possible that the integration of segments in the project plan would allow for one kickoff<br />
meeting to cover multiple segment implementations.<br />
The MAC will be responsible for setting up the facilities for the segment kickoff meeting,<br />
providing toll-free phone lines for off-site participants, developing an agenda (with CMS<br />
input), and notifying attendees. Meeting minutes and an attendance/contact list shall be<br />
prepared by the MAC and sent to all those in attendance.<br />
3.7.3.3 Participants<br />
All parties directly involved in the segment transition will be invited to attend: CMS<br />
(including the Medicare Implementation Support Contractor), appropriate technical and<br />
operational MAC personnel, the outgoing segment contractor, any organization other<br />
than the MAC that will be responsible for processing a portion of the outgoing<br />
contractor’s Medicare workload, representatives from the applicable data center(s),<br />
shared system maintainers, the Blue Cross and Blue Shield Association (for fiscal<br />
intermediaries with Plan agreements), any front end contractor, IT services companies,<br />
and functional contractors (e.g., PSC, QIC, BCC). Attendance may be in person or via<br />
teleconference. Key members of the carrier/intermediary’s closeout project team should<br />
be in attendance including anticipated workgroup heads.<br />
Since detailed information and operational procedures may be discussed, attendance at<br />
the segment kickoff meetings should include more technical and functional experts than<br />
necessarily would be in attendance at the jurisdiction kickoff meeting. The outgoing<br />
contractor must have representatives present with the authority to establish project<br />
commitments and approvals on behalf of the organization.<br />
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3.7.3.4 Topics of Discussion<br />
The MAC will be requested to make a corporate introduction, describe its Medicare<br />
organization, and discuss its implementation team and structure. This presentation would<br />
be similar to the one made at the jurisdiction kickoff meeting, but geared to the specific<br />
segment implementation. The Segment Implementation Project Plan (SIPP) should be<br />
distributed and an overview of the plan and the MAC’s implementation approach<br />
provided. Input from attendees will be used by the MAC to prepare the “baseline” SIPP<br />
that will be submitted to CMS within 30 days of the meeting. The outgoing contractor<br />
will make a presentation regarding its organization, closeout plan, and project team. The<br />
carrier/intermediary will also discuss any unique workloads or situations where there are<br />
processing regions and files contain commingled data for states in multiple jurisdictions.<br />
Other involved parties will provide an overview of their activities and participation in the<br />
transition. CMS will discuss its transition organization and team and review reporting<br />
requirements (see Chapter 4.10). The meeting should also cover areas of the transition<br />
that need immediate attention, such as human resources, connectivity, and industry/<br />
provider communications.<br />
The jurisdiction kickoff meeting will have already established the individual transition<br />
workgroups and the scope of their functions. During the segment kickoff meeting, there<br />
should be breakout sessions of the various workgroups with as many members as<br />
possible. If there are not enough workgroup members available, a date and time should<br />
be agreed upon for the group to initially meet and organize.<br />
The breakout session will provide the opportunity for workgroup members to begin<br />
brainstorming, discuss transition strategy, and address any immediate issues. The group<br />
should also review implementation documents such as the JIPP and SIPP, deliverables<br />
that have been requested, dependencies, and any action items already identified in order<br />
to better define and develop the direction of the workgroup. Members should also<br />
discuss methods for accomplishing their workgroup tasks. The group should try to reach<br />
agreement on administrative details such as each organization’s designated points of<br />
contact and workgroup meeting/teleconference dates and times, if possible.<br />
After the meeting, the carrier/intermediary should review its Closeout Project Plan and<br />
schedule to make any appropriate revisions based on the discussions that took place<br />
during the meeting. The MAC will distribute any Deliverables List, action item list or<br />
problem/issue log that is developed. The Deliverables List will serve as documentation<br />
of the information the MAC is requesting from the outgoing contractor in order to<br />
facilitate the transfer of the Medicare workload (see Chapter 6.4).<br />
3.8 Transition Workgroups<br />
Transition workgroups are the basic organizational structure for conducting the day-today<br />
activities of the transition. They have proven to be the key to a successful workload<br />
transition.<br />
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3.8.1 General<br />
Transition workgroups are established to facilitate the process of transferring the<br />
outgoing contractor’s Medicare workload to the MAC. The MAC and all of the outgoing<br />
contractors within the jurisdiction must reach agreement on what workgroups will be<br />
established and what their specific responsibilities will be. Workgroups are generally<br />
established for infrastructure activities (facilities, hardware, human resources,<br />
telecommunications, etc.), functional program areas (MSP, audit and reimbursement,<br />
medical review, etc.), and overall project administration tasks (project management,<br />
financial, etc.).<br />
3.8.2 Participants<br />
Experienced staff from the MAC, the outgoing contractor, and other involved<br />
organizations will be assigned to the various workgroups that will be formed to oversee<br />
specific transition tasks or functional areas. Of course, the outgoing contractor will only<br />
participate in a workgroup if there is some carrier/intermediary involvement in the<br />
workgroup’s function. CMS or the MISC will normally be represented on every<br />
workgroup. The MAC will be responsible for appointing the workgroup head.<br />
If the carrier/intermediary will have more than one individual on a workgroup, it should<br />
designate a lead. The lead will be responsible for updating any tasks related to the<br />
workgroup that are listed in the Closeout Project Plan. He/she will also insure that<br />
requested carrier/intermediary information and deliverables are provided to the<br />
workgroup.<br />
In general, there are three ways that an outgoing contractor (or other entity) may interact<br />
with the various workgroups: 1) it may be a part of a jurisdiction-wide workgroup,<br />
joining when its segment transition begins and leaving when its transition is completed;<br />
2) it may participate in a specific segment workgroup under the aegis of the overall<br />
jurisdiction-wide workgroup; or 3) it may not need to participate at all in certain<br />
workgroups. For example, the outgoing contractor would probably not participate in a<br />
facilities workgroup that is responsible for establishing a facility to house the MAC’s<br />
Medicare operation. However, if there was an agreement to utilize an outgoing<br />
contractor’s existing space, then the carrier/intermediary would participate in the<br />
facilities workgroup.<br />
3.8.3 Scope<br />
The scope or area of responsibility for the individual workgroups will vary depending on<br />
a number of factors such as the MAC’s organization or business structure, size of the<br />
outgoing carrier/intermediary, business processes, and workflow structure. At the<br />
Jurisdiction Kickoff Meeting, the MAC and outgoing carriers/intermediaries must reach<br />
consensus on the number and basic responsibilities of the workgroups to be established.<br />
The actual number of workgroups will vary from transition to transition, but it has been<br />
found that 8-10 workgroups generally work best. Workgroups have been established for<br />
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the areas shown below, but occasionally, more specialized workgroups have been<br />
established. Workgroups have also been combined for convenience or practicality. In<br />
addition, subgroups within a workgroup have been established to focus on specific areas<br />
or issues.<br />
Project Management<br />
Communications<br />
Systems/IT<br />
Telecommunications<br />
Beneficiary/Provider Relations<br />
Audit and Reimbursement<br />
EMC/EDI<br />
Medical Review<br />
MSP<br />
Operations/Claims Processing<br />
Provider Enrollment<br />
Hardware/Software<br />
Facilities<br />
Human Resources<br />
Financial<br />
Print/Reports<br />
Cutover<br />
3.8.4 Functions<br />
Each workgroup will identify the steps and action items necessary to successfully transfer<br />
the outgoing contractor’s Medicare records, data, and operations that relate to that<br />
specific workgroup. They will be responsible for monitoring and updating the tasks<br />
listed in the MAC’s Jurisdiction or Segment Implementation Project Plans that are<br />
applicable to their workgroup, as well as applicable tasks in the carrier/intermediary’s<br />
Closeout Project Plan. Throughout the transition period, the workgroup will report their<br />
progress to the appropriate managers, resolve policy and transition issues regarding their<br />
areas of expertise, and ensure that all specific activities and deliverables have been<br />
accomplished.<br />
Each workgroup is charged with defining the basic functions of the workgroup and<br />
establishing a work plan to address its objectives, work responsibilities, ground rules, and<br />
reporting requirements. The workgroup should maintain an issues/action item list and a<br />
deliverables log throughout the transition to insure that all items relating to the<br />
workgroup are resolved. The workgroup must have a clear understanding of the<br />
information that it must provide to other entities, as well as information and deliverables<br />
that it has requested from others. It is important that requests are precise so that time will<br />
not be lost due to misunderstanding exactly what is being asked for. The workgroups<br />
should reach an understanding of the types of issues for which they have the authority to<br />
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resolve and obtain approval from the project managers of those organizations represented<br />
in the workgroup.<br />
While some workgroup activity may start at the jurisdiction kickoff meeting, most initial<br />
activity will begin at the segment kickoff meeting. If there are not enough participants<br />
available at that meeting, the MAC must schedule an organizational meeting for the<br />
workgroup at a later date.<br />
Initial activities for the workgroups will include brainstorming, discussion of transition<br />
strategy, taking action on any immediate issues, identifying workgroup members, and<br />
reaching agreement on meeting dates and times. The workgroup should also discuss how<br />
they will accomplish their workgroup tasks. The group will review transition materials<br />
and meeting documentation, the Jurisdiction and Segment Implementation Project Plans,<br />
any deliverables that have been requested, dependencies, action items, etc. to better<br />
define and develop the direction of its workgroup. All of these activities will be<br />
coordinated through the MAC implementation project manager<br />
3.8.5 Administration<br />
Workgroups will normally meet on a weekly basis, either in person or via teleconference.<br />
It will be the responsibility of the MAC to provide toll-free teleconference capability for<br />
all participants in workgroup meetings, as well as any ad hoc teleconferences or<br />
meetings. The MAC will also develop a comprehensive workgroup meeting schedule for<br />
the segment transition. The schedule will provide a listing of all the workgroups that<br />
have been established, the workgroup leads, members, meeting days and times (normally<br />
scheduled for one hour), and the call-in numbers with corresponding pass codes.<br />
Membership of the workgroups should be finalized within a week after the segment<br />
kickoff meeting.<br />
A workgroup agenda will normally be distributed a day before the workgroup meeting.<br />
The agenda can be in a fixed format that can be used as a minutes document after<br />
conclusion of the meeting. Workgroup meeting notes or minutes will be distributed<br />
within two business days after a meeting to allow sufficient time for required decisions to<br />
be made before the next meeting. The development and distribution of the agenda and<br />
meeting minutes/notes are the responsibility of the MAC. The notes should be reviewed<br />
at the next meeting so that all parties understand the impact of any decisions.<br />
It is absolutely essential that there be communication between the various workgroups to<br />
ensure that each group knows what issues have been identified and the progress being<br />
made towards resolution. In some instances, the same issue will arise in several<br />
workgroups. Therefore, workgroup meeting notes need to be exchanged among the<br />
different groups, particularly for those that are handling similar or related issues. A<br />
project management workgroup could serve as a clearinghouse or forum for sharing<br />
information among the workgroups.<br />
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Chapter 4: PROJECT MANAGEMENT<br />
4.1 Purpose<br />
This chapter will provide general information and guidance regarding the management of<br />
carrier intermediary closeout activities. It will emphasize a number of items that the<br />
carrier/intermediary should consider and will provide the framework for completing the<br />
activities detailed in succeeding chapters so that the Medicare workload will be moved<br />
successfully into the MAC operational environment.<br />
4.2 Project Team Modifications<br />
Based on the discussions during the jurisdiction and/or segment kickoff meetings, the<br />
carrier/intermediary may need to refine its closeout project team. Staffing changes may<br />
need to be made and responsibilities modified. Once the team has been finalized, the<br />
organization chart and contact list should be submitted to CMS and the incoming MAC.<br />
It may be helpful for the project team to meet internally on a weekly basis to discuss<br />
issues and update the project plan, in addition to the regular biweekly segment status<br />
meetings (see Chapter 4.11.5).<br />
4.3 Closeout Project Plan<br />
The carrier/intermediary will be responsible for developing and maintaining a Closeout<br />
Project Plan (CPP). An accurate and complete project plan is necessary to properly close<br />
out the carrier/intermediary’s Medicare contract. CMS does not mandate any particular<br />
method or software to be used in managing the closeout; it does, however, require that<br />
project plans, reports, and materials are readable using Microsoft Project, Excel, Word, or<br />
Adobe.<br />
The CPP must provide an overall administrative plan and a description of all tasks and<br />
timeframes required to close down carrier/intermediary operations and transfer Medicare<br />
data, records, and operations to the MAC. The outgoing contractor must create a<br />
“baseline” CPP and submit it to CMS for approval within 15 days of the kickoff meeting.<br />
This will be the “master plan” for the closeout and will be used by the carrier/<br />
intermediary and CMS to monitor the overall progress of the project.<br />
A sample Closeout Project Plan is shown in Exhibit 4. The exhibit shows a breakout of<br />
the major areas of activity that are usually required for the closeout of a Medicare<br />
contract. The tasks and the level of detail may vary depending on a number of factors<br />
associated with the transition. The CPP should show a Work Breakdown Structure<br />
(WBS) to the level commensurate with the extent of the activity, depending on the major<br />
task category and the amount of detail the carrier/intermediary (or CMS) finds necessary<br />
in order to properly track the project.<br />
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CMS understands that the CPP is a dynamic document that may change throughout the<br />
life of the project. Additional tasks may need to be added and others may need to be<br />
modified or deleted if they are no longer applicable. Timeframes may also need to be<br />
revised to correlate to any transition schedule changes. Any changes to the CPP should<br />
be communicated to CMS<br />
It is imperative that the carrier/intermediary coordinates its CPP with the MAC’s<br />
Segment Implementation Project Plan (SIPP). The interrelated project activities and<br />
dates of the two contractors must not be in conflict. A great deal of outgoing contractor<br />
information is necessary for the complete development of the MAC’s SIPP. Some of this<br />
information cannot be obtained until after contract award. The MAC will need to<br />
baseline its SIPP as a result of the kickoff meeting and subsequent discussions with the<br />
carrier/ intermediary and other involved organizations. CMS expects the outgoing<br />
contractor to work with the MAC to insure that any information necessary to baseline the<br />
SIPP is provided and that both organizations work together throughout the transition to<br />
refine both the IPP and the CPP.<br />
The carrier/intermediary’s CPP must be updated on a biweekly basis with an<br />
accompanying list of tasks that were completed during the reporting period and a list of<br />
tasks that are not on schedule—either they have not started or have not been completed in<br />
accordance with the dates shown on the CPP.<br />
4.4 Consultants<br />
As the carrier/intermediary assesses its closeout activities, it may find the need for<br />
consultant services to assist in certain transition tasks and/or to provide expertise in the<br />
financial and legal issues surrounding closeout activities. Section II of the Title XVIII<br />
Medicare contract should be reviewed for requirements regarding CMS’s prior approval<br />
of consultant services. Under the Medicare contract/agreement, carriers/intermediaries<br />
must have prior written approval of the Contracting Officer if:<br />
Reimbursement for the services of any proposed consultant will exceed $400 a<br />
day or $100,000 per year, exclusive of travel costs; or<br />
Any employee of the company is to be reimbursed as a consultant.<br />
If a carrier/ intermediary expects to enter into a consultant service contract that requires<br />
CMS’s prior approval, it MUST contact its Contracting Officer. It must demonstrate the<br />
need for such consultant services and document the roles and responsibilities. It must<br />
also include the estimated costs and demonstrate the reasonableness of the fees to be<br />
paid. The carrier/intermediary must allow sufficient time for CMS to approve the<br />
consultant contract prior to execution. Failure to do so may affect reimbursement.<br />
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4.5 Interaction with the Incoming Contractor<br />
A transition is a complex undertaking involving many different organizations. It is a<br />
temporary partnership and all parties need to be working toward the common goal of a<br />
successful transition. One of the most important activities in the carrier/intermediary’s<br />
closeout period is to work with the MAC to plan, organize, and control the orderly<br />
transfer of Medicare operations, workload, and documents. It is critical that the<br />
carrier/intermediary work closely with the MAC to coordinate activities, monitor<br />
workload and staffing changes, and communicate at all levels. The meeting and<br />
reporting requirements detailed in Chapter 4.10 and 4.11 below provide a framework for<br />
that effort.<br />
In some transitions the parties have found it helpful to have regular informal<br />
teleconferences with just the project heads of all the organizations involved (e.g., MAC,<br />
outgoing contractor, data center, CMS, PSC, etc.) to keep the lines of communication<br />
open, discuss overall progress, and ease the resolution of any issues or conflicts.<br />
4.6 Internal Communications<br />
It is important that the carrier/intermediary keep its employees informed about the<br />
progress of the closeout and transition to the MAC. This can be accomplished through<br />
regularly scheduled staff meetings and employee bulletins or newsletters. If the MAC<br />
has proposed to hire outgoing contractor staff, it should work with the carrier/<br />
intermediary to provide updates and information regarding the MAC’s implementation<br />
efforts. The MAC may also have a human resources person and/or management staff<br />
available to answer employment questions and to provide general information on the<br />
progress of the implementation.<br />
4.7 On-Site Presence<br />
Depending on the circumstances of the transition, on-site presence of the MAC at the<br />
outgoing contractor’s site(s) could be beneficial. Any request for on-site presence will be<br />
communicated and discussed with carrier/intermediary to determine if it is desirable or<br />
feasible. The MAC will propose how much of an on-site presence it believes is<br />
warranted and the timing of such presence. CMS recognizes that on-site access is the<br />
sole prerogative of the carrier/Intermediary and that it may limit access to its operation or<br />
not provide any working space for the MAC.<br />
The amount of on-site presence requested will be dependent on a number of factors, but a<br />
key factor is whether or not the MAC is proposing to use any of the outgoing contractor’s<br />
staff and/or maintain a presence in the area. The carrier/intermediary will need to<br />
negotiate with the MAC regarding space and equipment needed, the number of personnel,<br />
and tentative schedules. Company policy/procedures regarding site access and security<br />
measures will also need to be discussed.<br />
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4.8 Nomenclature<br />
As the segment transition begins, the carrier/intermediary must make sure that the<br />
terminology and nomenclature used in its operation is understood by all parties involved<br />
in the project. All terms, acronyms, and files need to be well defined and clearly<br />
understood. This will help prevent project delays, duplication of effort, and unanticipated<br />
workload being transferred at cutover.<br />
4.9 Waivers<br />
It is possible that the demands associated with contract closeout and transferring the<br />
Medicare workload may result in the outgoing contractor identifying either administrative<br />
or workload functions and duties it believes it can no longer perform. If the<br />
carrier/intermediary finds itself in such a situation, it should discuss the issue with CMS.<br />
If it appears that a waiver would be appropriate, given the circumstances surrounding the<br />
transition, the carrier/intermediary should submit a request following the normal CMS<br />
waiver procedures. All waiver requests must be submitted in writing or through e-mail to<br />
CMS Central Office, CMM, Medicare Contractor Management Group (MCMG). The<br />
specific designee will be named for each transition.<br />
Each waiver request submitted must identify the specific activity for which the waiver is<br />
being requested. It must also identify any related administrative cost savings, on a full<br />
and incremental basis, and provide a rationale for each savings calculation. Full cost<br />
savings could include staff costs no longer required to perform a proposed activity to be<br />
eliminated. However, those same staff costs would be excluded from the incremental<br />
cost savings if that staff were shifted to other work, including transition activities.<br />
CMS will not review or approve any request for waiver that does not contain specific cost<br />
savings or an explanation of why no savings is anticipated. Closeout waiver requests are<br />
given priority attention in CMS; a decision will be made and notification provided as<br />
soon as possible.<br />
CMS will also work with outgoing contractors to address telephone service issues<br />
resulting from reduced staffing levels or other transition issues. CMS may choose to<br />
relax call-handling standards, re-route calls to other call center locations, or take other<br />
actions to address the service level issue on a case-by-case basis.<br />
The carrier/intermediary should be prepared to negotiate a reduced Notice of Budget<br />
Approval (NOBA) for any incremental cost savings which occur as a result of a waiver<br />
approval.<br />
4.10 Documentation<br />
CMS will closely monitor the outgoing contractor and incoming MAC during the<br />
transition to ensure that the transition occurs on schedule and that all Medicare data and<br />
operations have been properly transferred. CMS requires the carrier/intermediary to<br />
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submit the following documents during the closeout period. A comprehensive guide to<br />
all of the documentation required during a transition is found in Exhibit 7, Workload<br />
Transition Meetings and Documentation.<br />
4.10.1 Closeout Approach / Inventory Reduction<br />
The carrier/intermediary will prepare a document describing the proposed operational<br />
approach it will take for its claims processing activities and inventory reduction during<br />
the closeout period. It should include the streamlining of operations, a workload<br />
reduction plan, staffing configurations, and any proposed contingency plans. The<br />
approach should be submitted to CMS for approval no later than 15 days after the<br />
segment kickoff meeting. See Chapter 6.1 and 6.2.<br />
4.10.2 Closeout Project Plan (CPP)<br />
The Closeout Project Plan shows the tasks and schedule necessary for the transfer of<br />
Medicare files and operations to the MAC and the activities required for contract<br />
closeout. The CPP must be coordinated with the MAC’s Segment Implementation Plan.<br />
A baseline CPP should be submitted for approval to CMS no later than 15 days after the<br />
segment kickoff meeting. The CPP is a dynamic document and will be modified as<br />
events occur during the transition. The carrier/intermediary must ensure that CMS is<br />
aware of any changes made to the CPP and that those changes are reflected in the<br />
biweekly CPP update. See Chapter 4.3.<br />
4.10.3 Closeout Project Plan Update<br />
The CPP will be updated on a biweekly basis. The plan should be submitted at least two<br />
days prior to the biweekly segment project status meeting (see Chapter 4.11.5). The<br />
updated plan should be accompanied by a list of tasks that were completed during the<br />
reporting period and a list of tasks that are not on schedule—either they have not started<br />
or have not been completed in accordance with the dates shown on the CPP. When<br />
submitting an updated CPP, many contractors highlight in red those tasks that are not on<br />
schedule. Also, the update must show any new tasks that have been added to the plan<br />
and tasks that have been deleted, along with an explanation for the action.<br />
4.10.4 Closeout Project Status Report<br />
This report is prepared biweekly and contains a narrative status of the segment closeout<br />
activities. The report should describe the activities that have taken place in each major<br />
task area of the project for the two week reporting period. It should also include a<br />
discussion of outstanding issues and the status of deliverables. If there are problems or<br />
potential problems, the carrier/intermediary should provide detailed information and<br />
provide any resolution measures. The report should also discuss any schedule slippage,<br />
the impact it may have on the project and the steps that are being taken to correct the<br />
situation. The Closeout Project Status Report is due two days prior to the biweekly<br />
segment project status meeting.<br />
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Because of the number of concurrent transitions taking place over the next several years,<br />
it is necessary to standardize how MACs and carriers/intermediaries will be reporting the<br />
status of their implementation or closeout activities. While the structure of each outgoing<br />
contractor’s Closeout Project Plan is developed around its business needs, resources, and<br />
organizational structure, CMS requires that all status information that is reported be<br />
displayed under the following seven basic work elements. Because of the differing<br />
nature of their projects, the incoming and outgoing contractors will have varying degrees<br />
of activity in each of the elements; however, both should be able to utilize the same<br />
format. The work elements are as follows:<br />
Project Management<br />
This element includes organizing project staff and workgroups, preparing the various<br />
plans required by CMS, conducting meetings, monitoring and reporting progress,<br />
issue/problem resolution, managing costs, and managing risk.<br />
Communications<br />
Activities include communicating with providers, beneficiaries, medical/specialty<br />
groups, trading partners, and all other participants and stakeholders in the project.<br />
Claims Processing/Operations<br />
This element involves activities associated with closing down the business<br />
environment. Tasks include preparing operational shutdown activities, due diligence<br />
assistance, asset inventory, and interaction with other organizations involved in the<br />
transition.<br />
Systems/EDI<br />
This area involves closing down the technical environment, including EDI, voice<br />
and data telecommunications, base/non-base applications and services, local<br />
hardware/software, and interaction with the EDC.<br />
Resources/Infrastructure<br />
Activities include personnel activities and closing down facilities and associated<br />
infrastructure.<br />
Financial<br />
This element includes banking activities, accounts receivable review, and cost<br />
reporting.<br />
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Cutover/Workload Transfer<br />
This area includes file preparation, storage, and the activities associated with the<br />
actual cutover of Medicare operations and transfer of files.<br />
4.10.5 Workload Report<br />
As soon as the MAC award is made, CMS will begin monitoring each outgoing<br />
contractor’s performance on a weekly basis. Data obtained will include:<br />
receipts,<br />
claims processed,<br />
claims pending,<br />
claims pending over 30/60/90 days,<br />
claims processing timeliness,<br />
correspondence,<br />
hearings,<br />
cost reports,<br />
appeals,<br />
telephone service, and<br />
compliance reviews.<br />
The workload report with the above-mentioned items will be submitted to CMS on a<br />
weekly basis. Actual monthly workload should be cumulative on a monthly basis and<br />
displayed against the expected monthly workload goals of the inventory reduction plan<br />
that was submitted as part of the carrier/intermediary’s operational closeout approach<br />
document (see Chapter 4.10.1 above). If there are major discrepancies between the<br />
actual workload and anticipated goals, an explanation should be provided. CMS will<br />
provide carrier/intermediary workload information to the MAC on an ongoing basis,<br />
along with any operational issues that arise.<br />
4.10.6 Issues Log/Action Items<br />
The carrier/intermediary should maintain an issues log/action items list for those items<br />
identified during the closeout. The list should be for those issues that pertain solely to the<br />
carrier/intermediary and are not part of the implementation issues log maintained by the<br />
MAC. The list should provide an identification number, the date created, a description of<br />
the issue/action required, the responsible party, an update of the status, the date of<br />
resolution, and any pertinent comments. Some outgoing contractors have found it helpful<br />
to transfer closed items to a separate log, with the resolution date and an explanation of<br />
how the issue was resolved. The issues log/action item/closed list(s) should be updated<br />
weekly and submitted with the biweekly CPP update.<br />
4.10.7 Staffing Report<br />
CMS will also monitor staffing levels of the outgoing contractor by the functional areas<br />
of its Medicare operation. The outgoing contractor will provide a weekly breakout of<br />
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staffing showing staff losses by area, transfers within the Medicare operation or to other<br />
areas of the company, new hires (temporary or permanent), and staff in training. There<br />
should also be an explanation of the changes. The MAC will be provided a copy of the<br />
staffing report. Based on the workload and staffing reports, it is possible that CMS (after<br />
consultation with the carrier/intermediary and the MAC) may decide to move a particular<br />
function sooner than expected. If this occurs, the project schedule and transition/<br />
termination costs would be modified accordingly.<br />
4.10.8 Asset Inventory<br />
The outgoing contractor must develop a fixed asset inventory for all Medicare assets that<br />
were acquired in order to perform the functions of its Medicare contract. Any<br />
government furnished property (GFP) or equipment (GFE) should be listed separately<br />
and identified as such. The inventory will include all real property, hardware, software,<br />
supplies, equipment, furniture, etc. that was purchased for its Medicare operation and<br />
reimbursed by CMS. It should also show the residual value of the asset and its<br />
anticipated disposition. The inventory must be provided to the Contracting Officer as<br />
soon as possible after closeout activities have begun. See Chapter 5.6.<br />
4.10.9 File Inventory<br />
The outgoing contractor must develop an inventory of all files and records that will be<br />
transferred to the MAC. The inventory should give a description of the files, including<br />
contents, size, etc. If the outgoing contractor has more than one operational site, an<br />
inventory must be prepared for each site. CMS and the MAC will be provided with a<br />
copy of the inventory. The MAC will use the inventory to determine where files will be<br />
located when it assumes the workload. See Chapter 7.6.1<br />
4.10.10 File Transfer Plan<br />
When a final file inventory has been prepared, the outgoing contractor and the MAC<br />
must develop a file transfer plan. The plan should describe the files and records to be<br />
transferred by type, method of data transfer, transfer protocols, and destinations. A<br />
schedule for the transfer of the workload with shipping dates and times must be provided.<br />
It should also provide a description of the method of manifesting, packaging, and labeling<br />
all claims and correspondence. The file transfer plan must be developed and provided to<br />
CMS prior to the beginning of the cutover period. See Chapter 7.6.2.<br />
4.10.11 Post-Cutover Activities and Resources<br />
During the cutover period, the outgoing carrier/intermediary must assess what activities it<br />
will need to perform after cutover and the personnel it will need. Most of the postcutover<br />
activity involves the final preparation and submission of the various CMSmandated<br />
reports and the financial closeout of the contract. A document should be<br />
prepared describing the reports and functions that must be performed, an estimate of the<br />
number and availability of resources, the time commitment that will be required, and the<br />
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schedule for completing the post-cutover activities. The document should also include<br />
any additional factors that need to be considered, such as the training of staff to perform<br />
tasks that were done by employees who are no longer available. The post-cutover<br />
information should be provided to the CMS Segment Implementation Manager at the<br />
beginning of the cutover period.<br />
4.10.12 Lessons Learned<br />
CMS believes that each segment transition that takes place will provide valuable<br />
information and lessons learned for subsequent transitions. As such, CMS asks that the<br />
carrier/intermediary maintain a list of transition activities that could have been handled<br />
differently or areas that could be improved. It is hoped that after cutover, the outgoing<br />
contractor will be able to prepare a lessons learned document regarding its activities<br />
during the closeout. The document should be structured using the major tasks of the<br />
Closeout Project Plan or the major areas reported on the Closeout Project Status Report.<br />
The lessons leaned should analyze what activities were successful and why, and discuss<br />
those activities that need improvement. The document should be submitted to CMS as<br />
soon as practicable after cutover. It will be used as part of the discussion during the postproject<br />
review meeting (see Chapter 4.11.8).<br />
4.11 Meetings<br />
The carrier/intermediary will be expected to attend a variety of meetings as part of its<br />
closeout activities. These meetings will help ensure that all parties are informed of the<br />
progress of the transition, are aware of the outstanding issues, and understand what<br />
actions need to be taken on their part for the successful outcome of the project.<br />
The following are meetings that the outgoing contractor will need to attend. Unless<br />
otherwise noted, the MAC obtains facilities, provide toll-free teleconference lines, and<br />
prepare and distribute agendas and meeting minutes. Note that the term “biweekly”<br />
means every two weeks.<br />
Exhibit 7, Workload Transition Meetings and Documentation, provides a useful<br />
reference of the following meeting information in chart form.<br />
4.11.1 Outgoing Contractor Pre-Meeting<br />
As part of the jurisdiction kickoff, the CMS will conduct a pre-meeting with the outgoing<br />
contractors prior to the general jurisdiction kickoff meeting. The meeting provides an<br />
opportunity for CMS to discuss issues of importance solely related to contractors who are<br />
leaving the program or losing a portion of their workload. The meeting may be<br />
conducted jointly with all outgoing contractors or there may be individual meetings with<br />
each carrier or intermediary. The meeting will be conducted by the CMS legacy<br />
contractor Contracting Officer and attended by the CMS Contractor Management Officer,<br />
Contractor Managers, and various CMS transition staff. See Chapter 3.7.1.<br />
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4.11.2 Jurisdiction Kickoff Meeting<br />
The jurisdiction kickoff meeting is a one-time meeting that brings together all of the<br />
participants in the transition. It provides the opportunity to meet face-to-face to discuss<br />
the overall approach and organization of the project. Participants will provide an<br />
overview of their organizations and introduce their project team. The schedule will be<br />
reviewed, roles and responsibilities defined, and any concerns or issues addressed. The<br />
number and function of the transition workgroups will also be discussed and agreed upon.<br />
The kickoff meeting is usually held 10-15 days after contract award. See Chapter 3.7.2.<br />
4.11.3 Segment Kickoff Meeting<br />
The segment kickoff meeting represents the formal start of the process of moving a<br />
carrier or intermediary’s workload to the MAC. It is similar to the jurisdiction kickoff<br />
meeting in concept, but is focused on the activities surrounding an individual segment<br />
transition. The first segment kickoff meeting should take place 10-15 days after award of<br />
the MAC contract and may be held in conjunction with the jurisdiction kickoff meeting.<br />
Subsequent segment kickoff meetings should take place 10-15 days prior to the scheduled<br />
start date of that segment transition. See Chapter 3.7.3.<br />
4.11.4 Jurisdiction Project Status Meeting<br />
This is a biweekly meeting intended for the project leads of the parties involved in the<br />
transition, including the overall leads for the MAC jurisdiction, MAC segments, outgoing<br />
contractors, any jurisdiction-wide workgroup leads, EDC, standard system maintainers,<br />
and functional contractors. BCBSA will also be in attendance for those segments<br />
involving a fiscal intermediary. This meeting will review the status of the overall<br />
jurisdiction transition, ensure that tasks and schedules are coordinated properly and on<br />
schedule, and resolve issues that involve multiple segments. These meetings are<br />
normally teleconferences, but some may be in person. The MAC will prepare an agenda<br />
at least one day prior to the meeting and distribute meeting documentation (list of<br />
attendees, minutes, action items, etc.) within three days following the meeting.<br />
4.11.5 Segment Project Status Meeting<br />
This biweekly meeting is intended for all parties involved in the segment transition to<br />
obtain an update on the progress of the project. The parties will review the major tasks<br />
of the Segment Implementation Project Plan (SIPP) and receive updates from each of the<br />
workgroups. Participants will go through the deliverables and issues logs and review<br />
workgroup items. The meeting will discuss issues that have arisen and determine<br />
appropriate action on delays in task completion, deliverables, and action items. The<br />
carrier/intermediary will also provide updates to its Contract Closeout Plan (CCP) and the<br />
relevant activities of the other parties involved in the transition will be reviewed.<br />
The segment status meetings are generally held by conference call, although there may be<br />
some face-to-face meetings. The MAC will prepare an agenda at least one day prior to<br />
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the meeting and distribute meeting documentation (list of attendees, minutes, action<br />
items, etc.) within three days after the meeting.<br />
4.11.6 Transition Workgroup Meetings<br />
Workgroups may be established for individual segments, multiple segments, or for the<br />
entire jurisdiction. Transition workgroups generally meet on a weekly basis. The<br />
meetings will be used to review the transition activities applicable to its function, track<br />
deliverables, and monitor action item resolution. Problems or issues will also be raised to<br />
the appropriate project lead. Workgroup meetings are normally teleconferences, although<br />
some may be in person, especially in the beginning of the project or near cutover. See<br />
Chapter 3.8.<br />
4.11.7 Cutover Meeting<br />
Beginning approximately two weeks before the segment cutover, a daily cutover<br />
teleconference will be held. The meeting will review the cutover plan and the activities<br />
scheduled for that day and resolve outstanding issues. The calls are normally held in the<br />
morning and are brief in length. See Chapter 7.4.<br />
4.11.8 Post-Project Review Meeting (Lessons Learned)<br />
After the segment transition has been completed, the MAC will conduct a post-project<br />
review meeting. This meeting will normally be via teleconference unless CMS believes<br />
that it would be beneficial to meet face-to-face. The purpose of the meeting is to review<br />
those activities that were successful during the segment transition and those that need<br />
improvement. Attendees will review the lessons learned documents that will be prepared<br />
by all parties involved in the transition (see Chapter 4.10.12 above). The meeting will<br />
take place approximately six weeks after the segment cutover.<br />
It is extremely important for the MAC to get input from the outgoing contractor in order<br />
to improve subsequent segment transitions. It is also important for CMS to apply lessons<br />
learned to other jurisdiction transitions. Given this importance, it is hoped that the<br />
outgoing contractor will participate in the lessons learned meeting. CMS recognizes that<br />
certain key transition personnel may no longer be employed by the company. However,<br />
if individuals are still in the employ of the outgoing contractor, CMS hopes that every<br />
effort will be made to allow them to attend the meeting.<br />
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Chapter 5: PERSONNEL AND INFRASTRUCTURE<br />
5.1 Personnel Actions<br />
Employee commitment to the transition is extremely critical. <strong>Carrier</strong>/intermediary<br />
employees must continue to perform their jobs throughout the transition and maintain<br />
production levels. It is incumbent on the outgoing contractor to make every effort to<br />
keep existing employees and maintain their productivity. Rumors can run rampant<br />
during a transition, especially after the announcement of the MAC award. They can<br />
affect the work environment in numerous ways and can affect efforts to retain personnel-the<br />
longer uncertainty exists, the more attractive alternate employment becomes. It is<br />
important for the outgoing contractor to provide factual and timely information<br />
throughout the closeout period.<br />
Obviously, if employees have knowledge that they will remain with the company or that<br />
the MAC will be extending offers of employment, it will greatly facilitate the transition<br />
process and alleviate fears regarding the future. However, that will not always be the<br />
case. Even if employees are facing separation, knowledge of employee benefits and any<br />
special incentives can help keep operations running smoothly. It is important for the<br />
carrier/intermediary to provide open forums for discussion purposes and to alleviate fears<br />
regarding employees’ futures. There should be an established process for written and<br />
verbal communications regarding transition issues in order to provide ongoing<br />
information to employees. A number of outgoing contractors have also found it helpful<br />
to have a transition hotline or special section on their websites dedicated to transition<br />
information.<br />
5.1.1 Employment Within the Company<br />
<strong>Carrier</strong>/intermediary management will need to ascertain corporate intentions for its<br />
employees at the end of its Medicare contract. Management will determine if jobs in<br />
other areas of the company will be offered to Medicare employees, and if so, how many<br />
and in what areas. This information should be provided to employees as soon as<br />
possible. If personnel will be offered other positions within the company, CMS expects<br />
that the carrier/intermediary will make every effort to keep Medicare employees in place<br />
until cutover or negotiate a mutually agreeable plan with the other corporate<br />
component(s) if employees will need to be transferred prior to cutover.<br />
5.1.2 MAC Employment<br />
If the MAC is proposing to offer employment to outgoing contractor employees, MAC<br />
management staff will contact the carrier/intermediary to discuss how many positions<br />
may be offered, the location(s) of jobs, and specific individuals of interest. After the<br />
details of the MAC’s employment proposal have been obtained, employees should be<br />
notified. The outgoing contractor should hold a meeting with affected employees as soon<br />
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as possible to communicate the commitment of both organizations, allay fears, and<br />
provide information regarding the transition and future employment. The MAC may also<br />
wish to have a face-to-face meeting with potential employees to discuss its organization,<br />
benefits, and the types of jobs that will be available. If the MAC is proposing to hire a<br />
substantial number of carrier/intermediary employees, it may propose that a human<br />
resources representative be on site on a regular basis to address employee concerns and<br />
provide detailed information regarding benefits and employment.<br />
The carrier/intermediary should work with the MAC to establish communication<br />
procedures for the employees it is proposing to hire. Protocols for contacting staff,<br />
obtaining approval and release of employee information, and how job postings can be<br />
displayed will need to be agreed upon. The MAC will need specific employee<br />
information such as names and addresses, dates of service, job titles, job grades, job<br />
descriptions, current salaries, review dates, and documentation of current employee<br />
benefits. Of course, obtaining certain information will require permission from the<br />
employee.<br />
The carrier/intermediary and MAC should prepare a comparison of employee benefits<br />
showing the differences between each organization’s benefits. Meetings should be<br />
scheduled with staff to discuss the differences, provide information on what employees<br />
may expect if they become MAC employees, and how the actual employment cutover<br />
will be handled. The MAC may also ask to contribute transition related articles to the<br />
carrier/intermediary’s employee newsletter.<br />
A mutually agreed upon plan or calendar for when employees will actually transfer to the<br />
MAC’s employment will need to be developed. The plan must ensure that there is no<br />
degradation of service at the carrier/intermediary’s site due to the hiring schedule. CMS<br />
expects that the MAC will not hire any of the outgoing contractor’s staff to perform work<br />
for the MAC prior to cutover unless it has been agreed to by the outgoing contractor and<br />
CMS.<br />
5.1.3 Termination<br />
The carrier/intermediary will need to develop a strategy for: 1) retaining those employees<br />
that will not continue employment with the company or be hired by the MAC; and 2)<br />
maintaining the productivity of those employees. The strategy should be based upon<br />
CMS policy and applicable regulations, prior transitions, and internal company<br />
guidelines. Consideration may be given to items such as performance incentives,<br />
overtime, retention bonuses, compensation packages, severance pay, etc.<br />
The carrier/intermediary will need to enter into discussions with CMS as it develops its<br />
strategy and have agreement with CMS regarding those areas that will require CMS<br />
reimbursement. Employees should be informed as soon as possible about severance pay<br />
and any other type of financial arrangement that the carrier/intermediary will offer.<br />
<strong>Carrier</strong>s/intermediaries may utilize or develop an employee counseling program to<br />
provide guidance on such topics as severance pay, benefit expiration, benefit conversion<br />
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(if appropriate), vested employees retirement rights, unemployment compensation and<br />
any other entitlements. It may also make job placement services available to assist<br />
employees with employment opportunities within other areas of the company or in the<br />
local area. <strong>Carrier</strong>s/intermediaries should note that CMS will not pay for job placement<br />
services.<br />
The outgoing contractor must be cognizant of any Federal and state labor laws and<br />
requirements regarding employee notification of job loss and verify that the company<br />
policy regarding layoffs is in compliance.<br />
5.2 Severance Payment<br />
CMS’s severance payment policy was distributed to all Medicare contractors in 2000 and<br />
can be found in Exhibit 3. <strong>Carrier</strong>s and intermediaries should review their own corporate<br />
severance policies to insure that they conform with all of the conditions that are set forth<br />
in the memorandum. Failure to comply could put the carrier/intermediary at risk for<br />
reimbursement.<br />
Even though the carrier/intermediary describes its current corporate severance policy in<br />
the Financial Information Survey accompanying the annual Budget Request, a copy of<br />
the most recent severance pay policy should be submitted to the Contracting Officer.<br />
CMS will closely review any recent changes to the carrier/intermediary’s severance pay<br />
policy. Discussions will need to take place between the Contracting Officer and the<br />
carrier/ intermediary to insure that there are no issues regarding the amount of CMS’s<br />
severance payment obligation.<br />
CMS will reimburse an outgoing contractor for severance payments made to its<br />
employees in accordance with Federal Acquisition Regulations (FAR) 31.201-4(b) and<br />
FAR 31.205.6(a),(b), and (g). As provided for in the FAR, CMS is liable, in most<br />
instances, for the severance costs stemming from the established, written policy of the<br />
carrier/intermediary. The unique circumstances surrounding the termination or nonrenewal<br />
of each carrier/intermediary’s contract will determine the liability and extent of<br />
liability that CMS may have.<br />
In general, CMS will reimburse an outgoing contractor for severance payments under the<br />
following conditions:<br />
The carrier/intermediary shall have an established, written severance policy in<br />
place and it must be found to be reasonable by the Government; and<br />
Severance pay shall only be paid to employees of cost centers whose function is<br />
directly servicing the Medicare contract at the time of the non-renewal or<br />
termination notice if such cost center is eliminated or its staffing level is<br />
decreased due to the non-renewal or termination.<br />
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Severance pay normally will not be paid to carrier/intermediary employees if:<br />
The employee has been or will be hired by the MAC or another Government<br />
contractor associated with the MAC where continuity for prior length of service is<br />
preserved under substantially equal conditions of employment (FAR 31.205-<br />
6(g)(1)); or<br />
The employee has been hired by the carrier/intermediary’s private lines of<br />
business or by one of the carrier/intermediary’s subsidiaries or other member of a<br />
controlled group (see Internal Revenue Code, Section 1563); or<br />
The employee has received a written offer of employment by the MAC and has<br />
chosen to refuse that employment.<br />
5.3 Retention Bonus<br />
In certain transition situations, it may be necessary to provide retention bonuses in order<br />
to keep staff from departing prior to cutover. However, the end of a Medicare contract is<br />
not sufficient cause, in and of itself, to request retention bonus funds for work already<br />
funded in the Notice of Budget Approval (NOBA). The carrier/intermediary MUST<br />
contact the Contracting Officer if it believes that a retention bonus is warranted or<br />
necessary during the closeout period. CMS will review the retention bonus proposal and<br />
its justification. Do not inform employees about any retention bonus prior to<br />
discussions and agreement with CMS. Failure to do so may put the<br />
carrier/intermediary at risk, since it may not be reimbursed.<br />
CMS’s retention bonus policy was distributed to carriers/intermediaries in 2000 and is<br />
also found in Exhibit 3, Financial Information for Outgoing Contractors. CMS will<br />
pay retention bonuses in accordance with the FAR 31.205-6. Under the FAR, to be<br />
allowable, compensation must be reasonable for the work performed. The payments<br />
must either be paid under an agreement entered into before the services are rendered or<br />
pursuant to the carrier/intermediary’s established plan or policy. The basis for the bonus<br />
payment must be supported. There may be retention (stay on) and performance-based<br />
bonuses; a bonus may include elements of both.<br />
CMS expects the carrier/intermediary to adhere to the terms of its Title XVIII<br />
contract/agreement and FAR Part 31. It expects the outgoing contractor to perform<br />
within the funding limitations contained in the NOBA; however, it may pay for a<br />
transition retention bonus in certain situations. For a retention bonus to be reimbursable,<br />
the following conditions must be met:<br />
Funding has been approved by CMS in advance pursuant to a Supplemental<br />
Budget Request which adequately justifies the request.<br />
The cost is in compliance with the Title XVIII Medicare contract/agreement and<br />
the Intermediary and <strong>Carrier</strong> Fiscal Administration Manuals.<br />
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The amount is reasonable and is supported by documentation from the carrier/<br />
intermediary.<br />
CMS determines that the bonuses are necessary for the smooth transition of the<br />
work.<br />
The bonuses will not be paid to the designated employees until completion of the<br />
retention period.<br />
5.4 Terminating Subcontracts<br />
When the outgoing contractor is notified that its Medicare contract will be terminated or<br />
non-renewed, it will need to invoke the automatic termination clause for any lease or<br />
subcontract that contains the clause. All subcontracts that are entered into by the<br />
carrier/intermediary that require prior approval by CMS should have an automatic<br />
termination clause. The clause is described in Article III of Appendix A of the carrier/<br />
intermediary’s Medicare contract/agreement. If the carrier/intermediary finds that a<br />
subcontract does not include an automatic termination clause and the subcontractor will<br />
not abide by the provisions of the clause, the Contracting Officer must be contacted.<br />
The automatic termination clause basically states that if a carrier/intermediary’s Medicare<br />
contract is terminated or non-renewed, then any subcontract between the carrier/<br />
intermediary and another company shall be terminated unless otherwise agreed to by<br />
CMS and the carrier/intermediary. The notice of termination must be provided in writing<br />
to the subcontractor along with the date upon which the termination will become<br />
effective. If the outgoing contractor wishes to continue the subcontract relative to its own<br />
private non-Medicare business after the Medicare contract is terminated or non-renewed,<br />
it must provide CMS written assurance that CMS’s obligations will end when the<br />
Medicare contract terminates or non-renews.<br />
5.5 Licenses<br />
Licensing agreements can affect a number of contractor activities including EMC<br />
software, mail, PC software, imaging equipment, and data analysis tools. The incoming<br />
MAC may wish to assume certain licenses held by the carrier/intermediary and those<br />
licenses should be evaluated on an individual basis. Licenses may be transferred if both<br />
parties agree and the language in the agreement allows for such a transfer. If the license<br />
agreement has no provisions for a transfer, or if the parties cannot agree to transfer terms,<br />
then no transfer of the lease can be made and the MAC will have to obtain a new license.<br />
5.6 Asset Inventory<br />
The outgoing contractor will normally discontinue the acquisition of assets during its<br />
closeout unless it is absolutely essential to the success of the transition. If there is any<br />
question about acquiring assets during the closeout period, contact the Contracting<br />
Officer.<br />
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The carrier/intermediary retains legal title and control of assets that it acquired on behalf<br />
of the Medicare program. It is responsible for disposing of those assets as quickly as<br />
possible after cutover or whenever the assets are no longer needed for Medicare. Assets<br />
not specifically furnished by CMS as government furnished property (GFP) or equipment<br />
(GFE) are the property of the outgoing contractor and may be kept, sold, or disposed of in<br />
accordance with the Federal Acquisition Regulations (FAR).<br />
As part of its closeout activities, the carrier/intermediary must develop a fixed asset<br />
inventory for all Medicare related assets at all of its locations. It must reconcile the<br />
inventory with the fixed asset register that it maintains in order to assist CMS with the<br />
cost recovery of the assets. The inventory will include all real property, hardware,<br />
software, equipment, furniture, supplies, etc., that were purchased for its Medicare<br />
operation and reimbursed by CMS. It should show the residual value of the asset and its<br />
anticipated disposition. The inventory must be provided to the CMS Contracting Officer.<br />
The carrier/intermediary should also provide the incoming MAC with a list of assets and<br />
other work-related items that it will not be retaining. This should be done as early in the<br />
transition as possible so that the MAC will have time to analyze, negotiate, and transfer<br />
any asset that is available from the outgoing contractor. It is CMS’s preference that<br />
assets not being retained by the carrier/intermediary will be made available for sale<br />
or transfer to the MAC.<br />
5.7 Security Awareness<br />
The outgoing contractor should be cognizant of possible security breaches that may be<br />
caused by employees, once they are aware of their employment future. Unfortunately,<br />
some employees may resort to theft, system sabotage, or other types of disruption to the<br />
Medicare operation. The carrier/intermediary should review its existing security<br />
measures and, given the circumstances, determine if they are adequate or need to be<br />
improved.<br />
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Chapter 6: CLOSEOUT OPERATIONS AND PROVIDING<br />
INFORMATION/ASSISTANCE<br />
6.1 Operational Analysis<br />
After the award of the MAC contract, the carrier/intermediary should begin to assess its<br />
Medicare operation and develop an approach for closing out its Medicare contract.<br />
6.1.1 Streamlining Operations<br />
The carrier/intermediary should identify administrative or workload activities that it<br />
believes should be discontinued due to the demands of the transition and its contract<br />
closeout. The carrier/intermediary should look at all operational areas with the purpose<br />
of streamlining activities so that it can focus resources on claims processing and<br />
maintaining quality control safeguards. Any general activities that do not affect claims<br />
processing operation, such as meetings, travel, training, etc., should be reduced or<br />
eliminated. Activities performed solely for the purpose of Contractor Performance<br />
Evaluation (CPE), e.g., internal quality reviews, statistical compilations, document<br />
maintenance should be analyzed to see if any efforts can be reduced or eliminated. Nonessential<br />
provider/beneficiary relations activities should be reviewed to see if any can be<br />
curtailed. Any CMS special projects will need to be analyzed. Projects not past<br />
development stage should be stopped; more advanced projects will be evaluated<br />
individually by CMS to determine continuation.<br />
After analyzing activities, the number of full time employees that will become available<br />
due to the streamlining should be determined. All qualified surplus employees gained<br />
through streamlining should be reassigned to claims processing, compiling case files,<br />
documenting internal claims processing procedures, and other workload closeout<br />
activities.<br />
6.1.2 Workload Assessment<br />
The carrier/intermediary must analyze its claims workload and develop a realistic plan for<br />
reducing the claims backlog so that a minimal number of claims are transferred to the<br />
incoming MAC. This inventory reduction plan should include an estimate of the number<br />
of claims expected to be received each month by various claims categories, processing<br />
goals for each month of the closeout period, productivity and accuracy levels, and quality<br />
control safeguards. The MAC and the outgoing contractor should anticipate the<br />
likelihood of increased workloads (especially appeals) just prior to cutover. See Chapter<br />
4.10.1.<br />
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6.1.3 Contingencies<br />
The carrier/intermediary must consider contingencies in the event that staff losses affect<br />
operations or workload backlogs during the closeout. Plans should be developed to<br />
utilize overtime, keying shops for data entry, or obtaining temporary employees. The<br />
carrier/intermediary may also consider having former Medicare employees who are<br />
currently employed in other parts of the organization reassigned to Medicare for the<br />
duration of the transition. It may also try to contact former Medicare employees to see if<br />
they may want to work part time. In addition, consideration may be given to move<br />
certain functions to the MAC earlier than originally planned.<br />
6.2 Closeout Approach<br />
After assessing its operations, the carrier/intermediary should prepare a document<br />
describing its proposed approach for the closeout period. The document should discuss<br />
what activities the carrier/intermediary is proposing to streamline, the workload reduction<br />
plan with productivity and accuracy levels, maintenance of personnel through severance<br />
pay and retention bonuses, staffing configurations, and contingency plans. The<br />
carrier/intermediary should consult CMS when developing its approach, as CMS will<br />
approve the final document. The Closeout Project Plan (CPP) will incorporate the<br />
carrier/intermediary’s approach (see Section 4.3). Both the approach and the CPP should<br />
be submitted to CMS no later than 15 days after the segment kickoff meeting.<br />
6.3 Access to Information<br />
The MAC understands that any request for information from the outgoing contractor<br />
must be necessary and relevant to implementing the requirements of its statement of<br />
work. The MAC also understands that it may not receive all of the information and/or<br />
documents that it may request, especially those regarding internal operations or<br />
processes.<br />
Willingness to provide information could be dependent upon a number of factors,<br />
including whether or not the carrier/intermediary will be leaving the Medicare program<br />
by choice, if it will be entering into a partnering/subcontracting relationship, or if it will<br />
be participating in future MAC procurements. Possible legal action regarding the<br />
jurisdiction award could also affect the release of information or documents.<br />
Exhibit 5, Outgoing Contractor Information/Documentation, provides a list of some<br />
of the information and documents that incoming MACs will normally request from<br />
outgoing contractors. The exhibit shows information/documentation that is considered<br />
non-proprietary and should be released to the MAC if requested. It also shows<br />
documents that may contain proprietary or business information. Generally, CMS will<br />
not require the outgoing contractor to release those documents, but under certain<br />
circumstances, it may require that a properly redacted version be released.<br />
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The CMS Contracting Officer should be contacted if the carrier/intermediary believes<br />
that the MAC’s request for information or access to operations is not warranted, or if it<br />
considers the requested documents to be proprietary in nature. However, please note that<br />
the Rights in Data clause contained in the Medicare contract gives CMS broad rights to<br />
data acquired or utilized by the carrier/intermediary in the processing of claims or in<br />
carrying out other contract functions.<br />
6.4 Deliverables<br />
Prior to the kickoff meeting, CMS may ask carriers and intermediaries to begin gathering<br />
documents and information that the incoming MACs will need for their implementations.<br />
This will assist the MACs in their analysis of operations and expedite the transition<br />
process. Examples would include detailed information on providers, EMC,<br />
telecommunications, the physical storage of records, and assets that may be available.<br />
At the kickoff meeting, or shortly thereafter, the MAC should provide the outgoing<br />
contractor with a list of information that it believes is necessary for its implementation.<br />
This list is known as the Deliverables List and will be a formal record of information,<br />
documents, etc. that the MAC is requesting from the carrier/intermediary. At the<br />
minimum, the Deliverables List should contain a description of what is being requested<br />
from the carrier/intermediary, the date of the request, the requester’s name, when the item<br />
will be needed in the transition process (requested due date), and the actual receipt date.<br />
The MAC should prioritize the items as to their importance and be able to provide a<br />
rationale for the request if the carrier/intermediary has an issue with providing the<br />
information. During the transition, the MAC will continue to refine and add to the<br />
Deliverables List based on its operational assessment/due diligence and workgroup<br />
activities.<br />
It is important that the carrier/intermediary work with the MAC to ensure that everyone<br />
understands exactly what is being requested, that the information is applicable to the<br />
purpose of the request, that the carrier/intermediary has the resources available to fulfill<br />
the request, and that the timeframe for delivery is reasonable. Time will be of the<br />
essence, so it will be important for the carrier/intermediary to provide the information as<br />
quickly as possible, especially if certain information or documents are needed to assist in<br />
the MAC’s initial operational assessment/due diligence. .<br />
6.5 MAC Operational Assessment/Due Diligence<br />
A key activity for the carrier/intermediary during the transition will be providing<br />
information about its Medicare operations to the incoming MAC. This information<br />
gathering is known by a number of different terms: operational assessment, operational<br />
analysis, due diligence, and gap analysis. All functional areas (audit and reimbursement,<br />
medical review, claims processing, provider education, Medicare Secondary Payment,<br />
financial, appeals, customer service, etc.) and all business operations and procedures will<br />
normally be analyzed. The extent of the analysis will be dependent upon the Statement<br />
of Work for the MAC contract, the nature of the MAC’s jurisdiction proposal, and what,<br />
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if any, proprietary or business operation information the outgoing contractor is willing to<br />
provide.<br />
6.5.1 General<br />
It is important that the MAC gather as much information as possible regarding a<br />
carrier/intermediary’s Medicare operations, processes, activities, unique arrangements,<br />
assets, and documentation. This will allow the MAC to determine if changes need to be<br />
made to its implementation approach, processes, or project plan. It will also facilitate the<br />
absorption of the workload into the MAC’s operational environment, help ensure a<br />
smooth transition, and lessen any impact to beneficiary and providers. The operational<br />
assessment may also help the various workgroups in developing their issues log/action<br />
items list.<br />
The assessment and documentation of the carrier/intermediary’s operation could include<br />
policies and procedures, operational processes, functional work flow, files, and staff<br />
analysis. This will help in refining the MAC’s resource requirements. Standard<br />
operating procedures will be reviewed, along with quality assurance processes and<br />
standards. Procedural differences and/or local variations of the claims process should be<br />
made known to the MAC.<br />
Depending on the MAC’s proposal, it may also ask for workload data and inventory<br />
statistics by functional area, as well as productivity rates and production capacity. The<br />
MAC will assess workload in progress and obtain specifics on the amount of Medicare<br />
files and records in storage, both on-site and at remote locations. The MAC may request<br />
Contractor Performance Evaluation (CPE) or Report of Contractor Performance (RCP)<br />
documents, as well as any audit findings. Any internal process improvement or CMS<br />
performance improvement plan (PIP) will be reviewed to obtain information on<br />
performance or quality problems, if pertinent. The MAC will also need to know if there<br />
are any special CMS projects, initiatives, or activities and the specific time frames for<br />
completion. As previously stated, if the carrier/intermediary believes that the MAC’s<br />
request is for information or documents that it considers proprietary, the CMS<br />
Contracting Officer should be contacted. Also see Exhibit 5.<br />
The MAC will make a concerted effort to complete an initial assessment within the first<br />
month of the transition so that any changes to its implementation approach or Segment<br />
Implementation Project Plan (SIPP) can be negotiated with CMS and incorporated into its<br />
“baseline” SIPP. The carrier/intermediary should continue to assist the MAC’s<br />
operational assessment and information gathering throughout the transition period as part<br />
of the work effort of the various transition workgroups.<br />
The carrier/intermediary will be contacted by the MAC to schedule any proposed site<br />
visits. Agreement will need to be reached on such items as dates, times, frequency of<br />
visits, number of staff, and availability of any on-site working space for the visiting<br />
MAC. There should be a discussion of the types of information that the MAC hopes to<br />
obtain and the operational areas it would like to review.<br />
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The carrier/intermediary’s workload reduction plan and performance will be monitored<br />
throughout the transition period. Depending on the carrier/intermediary’s performance<br />
and the progress of the implementation, the MAC may propose to move certain functions<br />
earlier than scheduled. For example, if the carrier/intermediary suffers a severe staff loss<br />
among auditors, or if customer service deteriorates because of staff departures, the MAC<br />
may propose to take the work prior to the established cutover date. Should such a<br />
situation arise, CMS will discuss the proposal with all parties involved and reach<br />
agreement as to how to proceed.<br />
The following are some of the areas or activities that the MAC will normally analyze as<br />
part of its overall assessment/due diligence:<br />
6.5.2 Local Coverage Determinations and Edits<br />
The MAC will want to meet with the carrier/intermediary’s Medical Director and other<br />
MR staff to obtain information on current Local Coverage Determinations (LCDs),<br />
formerly known as Local Medical Review Policies (LMRPs). The historical record for<br />
each LCD should also be provided. The MAC is required to consolidate the existing<br />
LCDs of the outgoing carriers/intermediaries within its jurisdiction so that they are the<br />
same throughout the jurisdiction. The consolidation must be completed prior to the<br />
cutover of the first segment within the jurisdiction. Therefore, the MAC will need to<br />
analyze all LCDs as soon as possible to determine their applicability jurisdiction-wide.<br />
The MAC must also consolidate the existing FISS shared system edits (reason codes,<br />
local business rules, etc.) of the outgoing Part A contractors so that they will be the same<br />
for the entire jurisdiction. The consolidated edits for the jurisdiction will be implemented<br />
as each fiscal intermediary segment workload is cut over. While not required, some<br />
MACs may have proposed to consolidate the MCS Part B shared system edits for the<br />
jurisdiction. The carrier/intermediary must provide the MAC with information regarding<br />
its current edits so that the MAC can analyze and determine the appropriate edits for its<br />
jurisdiction.<br />
Any proposed changes to a segment’s edits must be analyzed by the MAC to determine if<br />
there will be any impact to the provider community. The MAC must also discuss and<br />
coordinate any edit consolidation with CMS. Any edit/processing changes that providers<br />
will experience must be clearly communicated. The MAC may request the outgoing<br />
contractor to assist it with communication to providers regarding any changes. See<br />
Chapter 6.10.<br />
6.5.3 <strong>Carrier</strong>/Intermediary Workload and Inventory<br />
As soon as the MAC award is made, CMS will begin monitoring the outgoing<br />
contractor’s performance on a weekly basis. A workload report will be submitted to<br />
CMS on a weekly basis (see Chapter 4.10.5). It will be provided to the MAC along with<br />
any outgoing contractor operational issues that arise. If necessary, the MAC will take<br />
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appropriate action to modify its implementation activities or risk mitigation/contingency<br />
plans based on workload inventory trends and progress.<br />
6.5.4 <strong>Carrier</strong>/Intermediary Staffing Levels<br />
The MAC will be monitoring the carrier/intermediary staffing report that is provided to<br />
CMS weekly. The report should provide a weekly breakout of staffing by functional<br />
area, showing staff losses, transfers, new hires (temporary or permanent), and staff in<br />
training. The MAC will also review the explanation for any changes. Based on the<br />
workload and staffing reports, it is possible that CMS (after consultation with the<br />
carrier/intermediary and the MAC) may decide to move a particular function sooner than<br />
expected. If this occurs, the project schedule and transition/termination costs would be<br />
modified accordingly. See Chapter 4.10.7.<br />
6.5.5 Internal Controls<br />
The MAC will be looking at internal controls (also known as management controls) since<br />
carriers/intermediaries must annually evaluate and report on their control and financial<br />
systems for program integrity. The MAC will be looking at controls that ensure that<br />
costs comply with applicable law, assets are properly safeguarded, and revenues (e.g.,<br />
overpayments) and expenditures are properly accounted for. The MAC will review the<br />
internal control indicators, particularly if it intends to hire the management and/or staff in<br />
a turnkey operation. The MAC will normally review Chief Financial Officer (CFO) audit<br />
reports, Statement on Auditing Standards No. 70 (SAS 70) audit reports, as well as the<br />
carrier/intermediary’s own reports on internal controls—such as the Certification<br />
Package for Internal Controls (CPIC). If these reports are not provided to the MAC<br />
because proprietary or business information is contained within, they may be able to be<br />
obtained through CMS with the appropriate business/proprietary information deleted.<br />
See Exhibit 5.<br />
6.5.6 Contractor Performance Evaluation<br />
The MAC may request to look at recent Contractor Performance Evaluation (CPE)<br />
reviews. If a Performance Improvement Plan (PIP) in place as a result of a CPE, CMS<br />
must make a determination as to its continuation during the transition.<br />
If the carrier/intermediary will have a contractual relationship with the MAC (such as a<br />
subcontractor or a partnering arrangement), or if the MAC will retain the<br />
carrier/intermediary’s staff/facilities, then the following may occur: 1) the PIP may be<br />
closed because of the incoming MAC’s processes or procedures; or 2) if it cannot be<br />
closed, the MAC will have to complete any outstanding parts of the PIP after cutover or<br />
develop an alternative PIP. If there is a deficiency, but no PIP has been submitted, CMS<br />
will meet with the carrier/intermediary and the MAC to determine if the deficiency can<br />
be eliminated prior to cutover, or if it will be necessary for the MAC to develop a postcutover<br />
PIP.<br />
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If there will be no relationship with the outgoing carrier/intermediary or its staff, there<br />
should be no need for the MAC to become involved with the PIP, other than having<br />
knowledge of its existence and determining if it will affect its own operation.<br />
6.5.7 Functional Area Assessments<br />
As part of its operational analysis, the MAC will normally assess the following functional<br />
areas of the carrier/intermediary’s operation:<br />
6.5.7.1 Claims Processing<br />
The carrier/intermediary will need to provide workload data for all claims processing<br />
areas for the current and preceding year. High volume edits, returns, and rejects should<br />
be provided, along with any contract compliance and/or service issues. Any backlogs<br />
should be identified so that the MAC can determine if it would be advantageous to move<br />
certain functions earlier than planned. Any unique processing requirements, special<br />
claims processing arrangements, or information on demonstration projects should also be<br />
provided.<br />
The MAC will be interested in obtaining claims operations documentation so that it can<br />
review claims controls, reason codes, monitoring and reporting procedures, quality<br />
assurance processes, and the compliance edit process. This will assist the MAC in<br />
determining procedural differences between its operation and the carrier/intermediary’s.<br />
The MAC may also request to review desk procedures and management reports.<br />
6.5.7.2 Customer Service<br />
The MAC should review provider service policies and procedures so that it can determine<br />
procedural variances. A listing of top reasons for inquires will be helpful, as will a listing<br />
of providers (including provider number) with high call volumes. Also, a list of<br />
challenging providers with consistent issues should be provided. The MAC should also<br />
review complaint analysis summaries for the past year, if applicable, and evaluate the<br />
number of unresolved pending complaints. In addition, the carrier/intermediary should<br />
provide a historical analysis and trending reports for the past two years.<br />
The carrier/intermediary should provide current workload data (open provider written and<br />
telephone inquiries). The MAC will analyze data on call backs, email inquires, the<br />
logging and tracking of calls and written inquiries, quality call monitoring, and any walkin<br />
activity. Copies of quality focused audits performed in past year and any CPE, OIG,<br />
or other external reviews should be provided. The MAC may also ask to examine items<br />
as automation for correspondence generation, forms, listings, and routine reports.<br />
6.5.7.3 Medicare Secondary Payer (MSP)<br />
The carrier/intermediary will need to provide MSP documentation so that current<br />
operations, desk procedures, and management reports may be analyzed. The MAC may<br />
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ask for copies of MSP reports relative to workloads and pending caseload. Also, a list of<br />
all open/active cases and correspondence may be requested. The MAC should review<br />
MSP prepayment claims processing, MSP post payment activities (pending subrogation<br />
liability cases, IRS/SSA/CMS data match files and outstanding cases, routine recovery),<br />
and MSP debt referral (DCIA process).<br />
The MAC should review the status of MSP accounts receivable and will normally<br />
observe the AR review that is conducted by CMS. The MAC will need to determine the<br />
status of the MSP accounts receivable write-off and identify and reconcile MSP accounts<br />
receivable for its 750/751 reporting. See Chapter 8.7.<br />
6.5.7.4 Medical Review<br />
Medical review (MR) policies, desk procedures, edits, automated review tools, inventory,<br />
and management reports should be provided to the incoming MAC. The MAC must<br />
review policies, articles, advisories, and mailings for compatibility and retention.<br />
Medical records storage/retrieval and privacy act compliance may also be evaluated.<br />
The carrier/intermediary should provide the MAC with MR/Local Provider Education<br />
and Training (LPET) strategy and the procedures of identifying program vulnerabilities.<br />
The MAC will also want to analyze progressive corrective action (PCA) procedures,<br />
reports, programs, data, and related activities. Data analysis methodology will need to be<br />
assessed. This includes the number and type of edits, edit effectiveness, the number and<br />
type of probes, and software for trending reports. Statistics used to determine pattern<br />
analysis and other data analysis techniques should also be reviewed by the MAC. In<br />
addition, tracking techniques for monitoring effectiveness of edits and educational<br />
activities should be analyzed.<br />
6.5.7.5 Appeals<br />
Information should be provided to the MAC regarding appeal procedures, including the<br />
status of any first level appeals (redeterminations) that are in progress. The<br />
carrier/intermediary should develop an estimate of the redeterminations that will be<br />
completed prior to cutover and those that will be forwarded to the MAC. Also, the<br />
carrier/intermediary will need to identify any redeterminations forwarded to the Qualified<br />
Independent Contractor (QIC), any outstanding requests from the QIC for reconsideration<br />
case files, and/or any effectuations that are in progress.<br />
6.5.7.6 Provider Audit<br />
The MAC will need to evaluate the intermediary’s provider audit operations. This will<br />
include all activities relating to cost report acceptance through cost report settlement. It<br />
also includes all work related to reopenings and appeals. The MAC will evaluate Cost<br />
Report acceptance, Tentative Settlement, and Cost-to-Charge Ratio policies and<br />
procedures to determine if there will be changes after cutover. Audit safeguard policies<br />
such as workload rotation policy and auditor independence may also be evaluated, as well<br />
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as the settlement and finalization process. The annual master audit plan should be<br />
provided to the MAC to assist it in developing its master audit plan for the coming year.<br />
This would include all cost reports to be received, reviewed, audited and settled during<br />
the year. It would also include recurring, time-specific activities such as the wage index.<br />
The intermediary will need to provide the location and status of desk reviews and audit<br />
reviews, as well as exception requests, reopenings, appeals and settlements, wage index<br />
reviews, hospital audits and on-site reviews. An inventory of audit data that will be<br />
finalized by cutover should also be prepared, as should an inventory of filed cost reports<br />
that will be unprocessed at cutover. In addition, the MAC will need information on<br />
provider file storage.<br />
6.5.7.7 Provider Reimbursement<br />
The MAC will need to ensure that it establishes accurate interim rates, provides key<br />
financial reporting, and collects overpayments timely. In order to do this it will need to<br />
obtain current interim rate policies and procedures. It should also obtain provider<br />
schedules for interim rate review. The year-to-date accuracy of interim payments will<br />
need to be reviewed, as should the tracking of settlements and interim payments. The<br />
MAC should also obtain an inventory of pending interim rate reviews.<br />
The MAC will need to get TEFRA, Per Resident Amount (PRA), and Ambulance rates<br />
along with an inventory log of all historical rates and supporting calculations. The MAC<br />
should obtain Sole Community Hospital (SCH) information, review cumulative target<br />
amounts for multiple years. It will also want to verify provider profile data, provider<br />
rates, and address information.<br />
The carrier/intermediary should also supply information on its debt collection and referral<br />
process. The MAC should review the demand letters/tracking process, the Provider<br />
Overpayment Report (POR)/ Physician and Supplier Overpayment Recovery (PSOR)<br />
entry and reconciliation processes, and the process for entering debts into the debt<br />
collection system. The MAC may also want to review overpayment correspondence and<br />
obtain historical settlement data. Documentation and referrals will need to be reviewed<br />
to determine the status of outstanding overpayments. Additionally, the MAC may want<br />
to review outstanding claims accounts receivables, extended repayment schedules, and<br />
outstanding accelerated payments. Internal accounting will also be evaluated by<br />
analyzing monthly reporting, payment cycles, distribution of Remittance Advices,<br />
checks, EFTs, and balancing procedures.<br />
6.5.7.8 Provider Enrollment<br />
The carrier/intermediary will provide the MAC with the current provider enrollment<br />
inventory in order to ensure that the process for enrolling providers and verifying<br />
provider ownership and qualification data will function properly at cutover. The MAC<br />
should assess enrollment procedures and provider application processing timeliness, as<br />
well as the provider application pending workload. The carrier/intermediary will<br />
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coordinate with the MAC to determine when the cutoff for requests will be and when<br />
applications will be forwarded to the MAC. The carrier/intermediary and the MAC will<br />
also coordinate the notification to providers regarding when and where applications<br />
should be mailed to the new MAC.<br />
6.5.7.9 Provider Education and Training<br />
The MAC will need to obtain training history from the outgoing contractor. This<br />
includes the locations of meetings, topics, frequency, attendee mailing information, and<br />
telephone numbers. The MAC may also wish to review training materials such as<br />
presentations, curriculum, and manuals/ handbooks. The carrier/intermediary’s provider<br />
bulletins and newsletters from the past two years may be of benefit as the MAC develops<br />
its education and training plans.<br />
6.6 EDI Assessment<br />
The carrier/intermediary must provide the MAC with a complete listing of all vendors,<br />
suppliers, providers, and trading partners who are currently submitting electronic<br />
transactions. The listing must identify whether submitters are transmitting claims via<br />
EDI or DDE and whether the format is HIPAA compliant. The outgoing contractor<br />
should also provide Electronic Remittance Notice (ERN) and Electronic Funds Transfer<br />
(EFT) information, as well as EMC submission rates.<br />
Since the carrier/intermediary’s EMC network will not continue to forward Medicare<br />
data (except in some unusual circumstance that would require agreement by all parties)<br />
the MAC must move vendors/suppliers/providers to alternate clearinghouses or to direct<br />
billing. If the carrier/intermediary’s EMC submissions come into a corporate network<br />
and are co-mingled with corporate files, those files must be separated so they can be<br />
furnished to the MAC. The MAC needs to be aware of any special carrier/intermediary<br />
claim edits and any information (other than claims) that is accepted in a paperless manner<br />
CMS has determined that EDI submitters will not have to complete new EDI enrollment<br />
forms when the new MAC assumes the workload. Existing forms will need to be<br />
inventoried and must be transferred to the MAC at cutover.<br />
6.7 Print/Mail Operations<br />
The MAC may analyze mailroom workflow and functions (control, imaging, activation,<br />
etc.) to determine how mail operations will be transferred. Analysis will be largely<br />
dependent on whether or not the MAC will assume existing space or have some presence<br />
in the outgoing contractor’s geographical area. A breakout of the types of mail received<br />
and the average volumes by day should be provided to the MAC, along with the volume<br />
of system generated and non-system generated mail.<br />
Agreement will have to be reached on how existing mail will be transferred at cutover<br />
and how mail received by the carrier/intermediary after cutover will be forwarded to the<br />
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MAC. There will also need to be an agreement on how checks that are received after<br />
cutover will be handled. A decision will have to be made on the disposition of post office<br />
boxes and whether or not any of the boxes will be transferred to the MAC. The<br />
carrier/intermediary should also provide the MAC with information on any mail services<br />
contractor that the carrier/intermediary uses for pick up, delivery, presorting, metering of<br />
letters, etc.<br />
Print job requirements, formats, and processes will be analyzed by the MAC.<br />
Information regarding usage trends for letterheads, envelopes, and internal forms should<br />
be provided. The MAC may also ask to review sample MSNs, provider remittance<br />
advices, letters, and reports.<br />
6.8 File Inventory<br />
The carrier/intermediary must identify all files that will need to be transferred to the<br />
MAC. The MAC should also be made aware of any carrier/intermediary files that will be<br />
split and moved to another MAC or organization during transition period.<br />
6.8.1 General<br />
An inventory of Medicare files (electronic data files, hardcopy, microfilm, microfiche,<br />
tape files, etc.) to be transferred must be developed as soon as possible after contract<br />
award. Files that are in a proprietary format will need to be converted to a standard or<br />
flat file format. The inventory should include the file content description, data set<br />
information, tape and file processing methods, and record information. The inventory<br />
shall be provided to the MAC with a copy to CMS. All required updates to files shall be<br />
made prior to transfer. Exhibit 6, Files to be Transferred to a Medicare<br />
Administrative Contractor, provides a sample list of the types of files that an outgoing<br />
contractor should be providing to an incoming MAC.<br />
6.8.2 Disposition<br />
As of the date of publication of this handbook, all Medicare contractors are under a<br />
Department of Justice decree not to destroy Medicare paper, electronic, and systems<br />
records regardless of the Medicare manual retention requirements. All Medicare files in<br />
the possession of the outgoing contractor must be transferred to the MAC. The only<br />
exceptions to this requirement are: 1) administrative financial files that the outgoing<br />
contractor must keep in order to prepare its final cost report, and 2) duplicates of original<br />
files that are being transferred to the MAC. Any files that are not transferred to the<br />
custody of the MAC must be destroyed by the outgoing contractor and certified as such.<br />
6.8.3 Mainframe Files<br />
The movement of mainframe files may be internal or external, depending on where the<br />
files are located. The structure of all the files will need to be provided to the MAC, along<br />
with a description of each directory. Support files such as print/mail, EDI, financial, and<br />
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ad-hoc interfaces must be included. The outgoing contractor must ensure that the details<br />
of all system interfaces are shared with the MAC. Passwords will also need to be<br />
removed from the files. The actual transfer method/process must be agreed upon with the<br />
MAC and responsibilities acknowledged.<br />
6.8.4 LAN/PC-Based Files<br />
LAN/PC-based files may need to be provided to the MAC at cutover. These files include<br />
Excel spreadsheets, access databases, and emails. The MAC will review LAN file<br />
listings and transfer protocols similar to mainframe files will be established.<br />
6.8.5 Hardcopy Files<br />
The MAC must be provided with a detailed inventory of the carrier/intermediary’s<br />
hardcopy files and an accompanying description, including general contents, size, etc.<br />
All paper files (archived and active, on and off-site) shall be inventoried. Off-site storage<br />
site information (location, type of files stored, content, volume, security, etc.) will need to<br />
be provided.<br />
Once the inventory has been prepared, the MAC must determine whether to keep existing<br />
storage arrangements or move the files to another location. A schedule with shipping<br />
dates should be developed for any files to be moved. A meeting should also be scheduled<br />
with the MAC and the storage facility to discuss transfer activities and access. If the<br />
parties agree, the existing storage site contract may be provided to the MAC in order to<br />
determine if it can assume the contract or will have to negotiate a new agreement.<br />
6.9 Access to Files and Records after Cutover<br />
There may be a need to access Medicare files and records after cutover in order to meet<br />
certain audit or reporting responsibilities or to respond to litigation that may be in<br />
process. If such is the case, the carrier/intermediary should negotiate with the incoming<br />
MAC regarding access to the Medicare files/records that were previously in its<br />
possession. A data sharing agreement should be entered into regarding the protocols and<br />
responsibilities of each party, along with the associated costs. CMS must approve the<br />
agreement that is developed and must approve any request by the former<br />
carrier/intermediary for access to Medicare files/records.<br />
6.10 Assisting MAC Communication Efforts<br />
The MAC must make sure that providers have a complete understanding of what will be<br />
required of them during the transition and the impact of any changes that will occur. It<br />
will also be responsible for communicating information regarding the progress of the<br />
implementation to beneficiaries and other stakeholders. In order to do this effectively,<br />
the MAC will need to partner with the outgoing contractor to ensure that information is<br />
transmitted clearly and frequently during the transition period.<br />
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6.10.1 General<br />
The MAC will have a communication plan that outlines the processes and procedures that<br />
it will follow to ensure that all stakeholders are provided with appropriate information<br />
regarding the transition. This plan will have been submitted with the MAC’s proposal,<br />
but after award, the MAC will work with the carrier/intermediary to refine its<br />
communication strategy and plan.<br />
The outgoing contractor will be a valuable resource to the MAC and will have detailed<br />
practical information for communicating with the various provider groups, associations,<br />
government officials, and other stakeholders within the segment. CMS expects that the<br />
carrier/intermediary will assist in providing information to beneficiaries and providers<br />
throughout the transition period in accordance with the mutually agreed upon<br />
communication plan. Methods for communicating information include using MACdeveloped<br />
language for MSNs and Remittance Advices, articles for newsletters, scripts<br />
for the ARU/IVR, and website links to the MAC’s website. It would be very beneficial<br />
for the outgoing contractor to provide the subscriber list for any listservs it maintains.<br />
6.10.2 Provider Communication<br />
Provider communication will be one of the most important activities for the MAC during<br />
the transition. Providers are affected most by the change in Medicare contractors and<br />
they have a large financial stake in the project. As such, the MAC must ensure that it<br />
makes every effort to inform and properly educate providers about the transition. CMS<br />
expects that the carrier/intermediary will assist the MAC in its provider communication<br />
efforts.<br />
6.10.2.1 Associations<br />
It is important for the MAC to establish a relationship with the major professional<br />
organizations such as hospital associations, medical societies, and specialty groups. The<br />
carrier/intermediary should discuss its working relationship with these groups and<br />
provide the MAC with contact points. When regularly scheduled provider/association/<br />
specialty group meetings are held, the MAC should be invited to attend so that it can be<br />
introduced and make a presentation. The MAC should also attend Provider <strong>Advisory</strong><br />
Group (PAG) and/or Provider Communication <strong>Advisory</strong> Group (PCOM) meetings.<br />
6.10.2.2 Providers<br />
A complete list of providers should be given the incoming MAC. The list should include<br />
such information as name, address, contact person, email address, Employer<br />
Identification Number (EIN), and EMC information. The carrier/intermediary should<br />
work with the MAC to develop articles regarding the transition for provider bulletins and<br />
other publications. Approximately two months prior to cutover, the MAC will develop<br />
language for Remittance Advices that will remind providers of the change in Medicare<br />
contractor.<br />
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6.10.2.3 Workshops<br />
The MAC may hold provider workshops or seminars to provide a more detailed<br />
discussion of how to prepare for the upcoming change of contractor. Topics will include<br />
EMC and front end changes, claims submission and address changes, dark days,<br />
edits/LCDs, and the possibility of increased suspension/rejection of claims. Depending<br />
on the segment size, the number of workshops will normally range between four and<br />
eight and are normally scheduled six to ten weeks before cutover.<br />
The carrier/intermediary can prove valuable assistance to the MAC in planning provider<br />
workshop/seminars/training sessions. It can provide input to the workshop schedule,<br />
content of the presentation, proposed meeting locations, hotels, and meeting facilities. If<br />
possible, a carrier/intermediary representative should be in attendance at each session to<br />
provide assistance to the MAC with its presentation.<br />
6.10.3 Beneficiary Communication<br />
As with providers, the carrier/intermediary should assist the MAC with its beneficiary<br />
communications. The following contacts should be provided to the MAC for its<br />
communication efforts:<br />
beneficiary associations and groups such as AARP;<br />
state and local government agencies dealing with the aged;<br />
Social Security Administration district offices;<br />
senior citizen centers;<br />
community centers/libraries/retirement centers.<br />
The carrier/intermediary should also assist the MAC in its efforts to provide transition<br />
information to beneficiaries and related groups. Any regularly scheduled beneficiary<br />
outreach and beneficiary advisory/advocacy group meetings should be attended by the<br />
MAC. The carrier/intermediary can help the MAC assess demographic and language<br />
needs and help the MAC develop language for mail stuffers or MSN messages. These<br />
messages should begin approximately two months prior to cutover.<br />
6.11 Contract Compliance<br />
<strong>Carrier</strong>s and intermediaries are reminded that full compliance with CMS requirements<br />
continues throughout the term of its contract. It is possible that a <strong>Carrier</strong> or Intermediary<br />
will be selected for review by the Office of Inspector General (OIG) encompassing a<br />
period of time prior to the cessation of contractor operations. These audits may be<br />
performed either directly by the OIG or through a subcontracting arrangement.<br />
Cooperation and compliance in providing requested documentation for any audit is<br />
mandatory. In addition, carriers/intermediaries are obligated to insure that any of their<br />
subcontractors (e.g., data center services, print mail, call center, etc.) also comply with<br />
the requirement to cooperate fully and promptly respond to any request for access to data.<br />
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Failure to fully support requests for documentation may result in a limitation of audit<br />
scope. This can result in the citation of a material weakness which could impact an<br />
opinion on the adequacy of general controls entity wide.<br />
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Chapter 7: Cutover and Post-Cutover Activities<br />
Chapter 7: CUTOVER AND POST-CUTOVER<br />
ACTIVITIES<br />
7.1 Definitions<br />
Cutover<br />
The actual point at which the carrier/intermediary ceases Medicare operations and the<br />
MAC begins to perform those functions.<br />
Cutover Period<br />
The period of time surrounding the actual cutover. It usually begins 10-14 days prior to<br />
the cutover and ends with the MAC’s Segment Operational Start Date, which is defined<br />
as the day that the MAC begins normal Medicare operations for the segment workload<br />
that it assumed at cutover. During the cutover period the carrier/intermediary makes final<br />
preparations to shut down its operation and transfer its claims workload and<br />
administrative activities. Correspondingly, the MAC makes final preparations for the<br />
receipt and utilization of Medicare files, data, and acquired assets. The activities that<br />
occur within the cutover period and shown on the cutover plan (see Chapter 7.2 below)<br />
are normally referred to as cutover tasks.<br />
Post-Contract<br />
The period of time after the actual cutover when the outgoing contractor is no longer<br />
operating as a carrier/intermediary but is performing miscellaneous wrap-up tasks and<br />
contract closeout activities.<br />
7.2 Cutover Plan<br />
The MAC will be required to submit a cutover plan for the segment workload that will be<br />
moved. The cutover plan will contain very detailed and specific information, showing<br />
tasks at a very low level, and it may be detailed to an hourly level at times. Many MAC<br />
and carriers/intermediaries use the plan as a checklist and to script events and deliverable<br />
dates during the cutover period.<br />
While the cutover plan is the responsibility of the MAC, it must be developed jointly with<br />
the outgoing carrier/intermediary. The carrier/intermediary must work with the MAC to<br />
determine a complete list of cutover activities, dates, and times. There should also be<br />
input from the data center, the PSC, and any other entity that will be playing a significant<br />
role in the actual transfer of the segment workload. The consolidated plan should show<br />
the responsible organization, any related JIPP/SIPP task number, the responsible<br />
workgroup, the task description, start and finish times, status, and comments.<br />
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All entities must agree on the schedule and tasks in order to avoid confusion about time<br />
frames, specific cutover responsibilities, items to be transferred, and terminology. The<br />
MAC will submit the cutover plan to CMS for review. The plan will be distributed to all<br />
involved parties, transition team members, and workgroups. The plan will be updated<br />
daily when the cutover period begins.<br />
7.3 Cutover Workgroup<br />
A cutover workgroup will normally be established to manage cutover activities. It should<br />
be composed of representatives from the MAC, outgoing carrier/intermediary, and other<br />
involved parties; e.g., data center, PSC, etc. The workgroup will be responsible for<br />
cutover planning and scheduling, developing the cutover plan, and facilitating the data<br />
migration. As with all workgroups, it should be established in accordance with Chapter<br />
3.8. Since the activities of the workgroup are centered on the cutover, the workgroup will<br />
not necessarily need to be established when the other workgroups are formed at the<br />
kickoff meeting. However, the MAC may find it helpful to have the workgroup lead<br />
designated at that time. The cutover workgroup will normally be formed three to four<br />
months prior to cutover.<br />
The cutover workgroup will need to be aware of all of the other workgroups and their<br />
activities. It is important that all workgroup meeting minutes and issues/deliverables logs<br />
are forwarded to the cutover workgroup lead. The group must be informed of any<br />
decisions made by the MAC Segment Project Manager, the carrier/intermediary Closeout<br />
Project Manager, or other workgroups which will impact the manner or circumstances of<br />
the transfer of the workload. The other workgroups will provide input to the cutover plan<br />
and time schedule that is developed by the cutover workgroup. They will propose<br />
additions and/or deletions to the task list and recommend any timing changes. With the<br />
input from all of the other workgroups, the cutover workgroup will coordinate the<br />
cessation of activities (file changes, mail, etc.), determine the necessary production<br />
interruptions (EMC, OSA queries), establish dark days, and schedule and monitor the<br />
actual transfer of files and assets.<br />
As with any other workgroup, cutover meetings will be held weekly and the agenda will<br />
follow the same format, including discussion of cutover issues, action items and<br />
accomplishments. Meetings should also discuss transition task progress, current<br />
inventories, risk evaluation, file transfer, and any facility or human resources updates.<br />
All issues that are identified by CMS, raised in the status reports or workgroup minutes,<br />
or raised in any other forum, must be placed on the issues log documenting cutover issues<br />
and discussed at each workgroup call.<br />
7.4 Daily Cutover Meeting<br />
Approximately 10-14 days before cutover, daily cutover teleconferences should begin.<br />
Attendees will include the outgoing carrier/intermediary, the MAC, the data center, PSC,<br />
and any other organization directly involved in the cutover. The purpose of the meeting<br />
is to go over the cutover plan and the daily events that are scheduled to occur. Calls<br />
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should be scheduled in the morning and normally will be brief in length. Participants will<br />
review the cutover plan checklist of activities scheduled for the day and determine if<br />
tasks scheduled for the prior day(s) have been accomplished. The meeting will also<br />
discuss activities for the upcoming day to ensure that everyone is in agreement as to what<br />
needs to be accomplished. In addition, the meeting should review any problem log or<br />
issues identified by any of the other workgroups that pertain to the cutover. Some<br />
incoming contractors have found it helpful to have an additional cutover meeting in the<br />
afternoon beginning several days prior to cutover in order to monitor the increasing<br />
number of activities that take place. The MAC should prepare a brief synopsis of the<br />
daily cutover meeting and highlight any issues or action items. The cutover plan should<br />
also be updated prior to the next daily meeting. Cutover meetings will continue on a<br />
daily basis through at least the first week of post-cutover operation. At that point, CMS<br />
will make a decision as to the frequency of the meetings<br />
The outgoing contractor should have a representative available throughout the cutover<br />
period and for the week after cutover, unless it is determined by CMS that his/her<br />
participation is not required. Key personnel involved in the cutover should have a<br />
backup means of communication so that they may be able to be reached in case of an<br />
emergency.<br />
7.5 System Dark Days<br />
One of the issues for discussion and resolution by the cutover workgroup will be the<br />
number of system “dark” days that will occur during cutover.<br />
During the cutover period, the outgoing carrier/intermediary must complete all billing<br />
cycles, validate payments, cut checks, and prepare required workload and financial<br />
reports prior to the actual cutover and the end of its Medicare contract. The incoming<br />
MAC must verify that all telecommunications, hardware, software, and equipment are<br />
installed, tested, and properly functioning after each segment cutover. In addition, the<br />
MAC will also need to run cycles to check out the transferred files and claims processing<br />
functions. The EDC will also be changing contractor numbers or identifiers for reports,<br />
database tables, etc.<br />
The time that it takes to accomplish the aforementioned activities will vary from one<br />
transition to another. Cutover normally occurs during a weekend at the end of the month;<br />
however, if the outgoing contractor is on HIGLAS, cutover will need to be in the middle<br />
of the month. Most of the time, two weekend days is insufficient to complete all of the<br />
cutover activities. If such is the case, then a “dark” day or days will be required.<br />
A dark day is a business day (Monday-Friday) during the cutover period when the<br />
Medicare claims processing system is not available for normal business operations.<br />
There is no online access or capability, providers cannot access the system, current claim<br />
information cannot be provided, there is no direct data entry (DDE), and claims cannot be<br />
processed. System dark days may occur between the time that the outgoing<br />
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carrier/intermediary ends its final batch cycle and the MAC begins its first day of normal<br />
business operations for the segment.<br />
The outgoing carrier/intermediary, MAC, and applicable data centers must develop a<br />
cutover schedule that provides sufficient time to accomplish all of the cutover activities.<br />
Once this is done, then the number of dark days can be determined. The number of dark<br />
days necessary at cutover will vary depending on the calendar, the size of the carrier/<br />
intermediary, the length of time required for its final cycles and closeout activities, and<br />
the various other cutover activities that have to be performed. Most cutovers will require<br />
1-2 dark days, but some cutovers may require more. CMS must be involved in the dark<br />
day discussions and will have final approval of the number of dark days for the outgoing<br />
contractor and/or the MAC. The approval will be part of CMS’s overall approval of the<br />
cutover plan. It will be based on the reasonableness of the involved parties’ proposal, as<br />
well as assurances that providers were considered in the decision.<br />
CMS expects that the outgoing contractor will post cutover information frequently on its<br />
web site and make listserv announcements to providers/suppliers regarding the cutover<br />
sequence, the number of scheduled dark days and the effect on claims submission, and<br />
the availability of IVR and CSRs for inquiries.<br />
7.6 Release of the Payment Floor<br />
Discussions regarding the need to release the payment floor usually begin in the Cutover<br />
workgroup. The release of the payment floor during the cutover period eliminates the<br />
need to transfer adjudicated claims waiting to be paid from the outgoing contractor to the<br />
MAC. Depending on the circumstances of each segment transition, the payment floor<br />
may or may not be released.<br />
CMS has determined that the payment floor will be released in the following situations:<br />
HIGLAS involvement during any Part A or Part B segment cutover.<br />
Changes to the Part B MCS system during the cutover of a segment (e.g., splits,<br />
merges).<br />
For Part A segment transitions that do not involve HIGLAS, or for Part B segment<br />
transitions that do not involve HIGLAS or any MCS changes, the floor normally will not<br />
be released.<br />
CMS must formally approve the release the payment floor. The incoming and outgoing<br />
contractors will develop a written plan for the release of the floor and its reinstatement.<br />
The plan will provide the reason for the release and describe the process and timing of the<br />
release. It should also analyze the impact that the release will have on the<br />
carrier/intermediary’s other operations (EFT, ERAs, etc). In addition, the carrier/<br />
intermediary will need to discuss how the providers will be affected and how payment<br />
information will be communicated. If the floor will not be immediately reinstated by the<br />
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MAC at cutover, there must be some description of how the payment floor will be<br />
gradually reinstated.<br />
The MAC and legacy contractor must develop a sample communication to be distributed<br />
to the provider/supplier community. The sample communication will be distributed to<br />
the provider community by listserv and other means. It will address the change in<br />
payment schedule and the impact on the issuance of ERAs, paper checks, and EFT. It<br />
also should contain an explicit reminder that during the 14-day period following cutover,<br />
providers may experience lower, or no, payment amounts because claims submitted prior<br />
to the cutover were paid earlier than normal.<br />
7.7 Data Migration<br />
During the cutover period, the carrier/intermediary will prepare and transfer all Medicare<br />
files and records to the prescribed locations detailed in its file transfer plan. This plan<br />
will be developed with the MAC and any other party who will be receiving files from the<br />
carrier/intermediary.<br />
7.7.1 Final Inventory<br />
The carrier/intermediary will provide an inventory of all files and records that will be<br />
transferred to the MAC and any other organization involved in the transition (see<br />
Chapter 6.8). During the cutover period, the inventory will be finalized and provided to<br />
CMS and the MAC. The final inventory should give a description of each file, including<br />
contents, size, etc. The inventory list will be used by the workgroups or project managers<br />
to determine where files and records will reside after cutover. If a carrier/intermediary<br />
has more than one operational site, an inventory must be prepared for each site. Any files<br />
that will be split and moved to another MAC or organization during the transition period<br />
must be identified.<br />
Once the records have been inventoried, both the carrier/intermediary and MAC should<br />
verify them to determine the quality of the inventory results. If records are not electronic,<br />
physical sampling should be performed to confirm the accuracy of the information<br />
recorded on the inventory form. The MAC may also want to verify, to the extent<br />
possible, that all required updates to records have been made by the outgoing contractor<br />
prior to transfer.<br />
7.7.2 File Transfer Plan<br />
The MAC and the outgoing contractor will develop a file and record transfer plan using<br />
the outgoing contractor’s finalized inventory. Files may be 1) transferred to the MAC’s<br />
facility (or some other Medicare contractor) for support of its operation; 2) kept at the<br />
existing operational site or existing storage facility with transfer of ownership; 3) sent to<br />
a MAC storage facility or contracted storage facility; 4) transferred to another MAC (e.g.,<br />
another MAC will have responsibility for storing and accessing co-mingled carrier/<br />
intermediary records; or 5) in the case of duplicative files, destroyed. A schedule with<br />
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shipping dates will be developed for any files to be moved. A meeting should also be<br />
scheduled with the MAC and the storage facility to discuss transfer activities and access.<br />
Certain files may be commingled with other states that are not moving to the MAC and<br />
will continue to be serviced by the carrier/intermediary. The carrier/intermediary will<br />
maintain possession of those files and the MAC and carrier/intermediary will negotiate a<br />
data access agreement.<br />
The file transfer plan should describe the files and records to be transferred by type<br />
(suspense, EMC, audit and reimbursement, MSP, etc.) and destination. It should also<br />
establish a schedule for the transfer of the workload with shipping dates and times. In<br />
addition, it should provide the cutoff dates that the outgoing contractor will stop updating<br />
or processing particular types of claims or files. The plan should also provide a<br />
description of the method of data transfer (e.g., tapes, NDM), transfer protocols,<br />
manifesting, packaging, and labeling all claims and correspondence. Workload may be<br />
transferred in phases rather than all at one time, especially if there is serious staff attrition<br />
in certain areas of the outgoing contractor’s operation. CMS must be provided a copy of<br />
the final file transfer plan at the beginning of the cutover period.<br />
The carrier/intermediary must insure that all required updates to files are made prior to<br />
transfer. A test transfer of files should be made prior to cutover and the MAC must test<br />
transferred files as part of its system checkout at cutover.<br />
7.7.3 File Format<br />
Files scheduled to be transferred to an incoming MAC in an electronic format must not<br />
be in a proprietary format which would preclude the use of the data by the MAC. Any<br />
electronic files stored in a proprietary format MUST be changed to a standard or flat file<br />
format prior to transfer to the incoming MAC. The costs associated with converting files<br />
from a proprietary format will be borne by the carrier/intermediary.<br />
7.7.4 Packing<br />
The transfer plan should provide for the early packing of as many operational files as<br />
possible without any negative impact on operations. Normally, records will not be<br />
packed and moved all at one time. While the resources are available to do so, as many<br />
operational files as possible should be packed and shipped, thereby mitigating the<br />
possibility of records being packed and/or labeled improperly.<br />
A labeling system should be used so that boxes are routed correctly to the MAC for<br />
operational use or storage. At a minimum, the label of each box of files should display<br />
the title of the record series, and the earliest and latest dates of the records in the box.<br />
CMS will be monitoring the process of packing and labeling beginning early in the<br />
transition process. CMS and incoming MAC representatives may make periodic on-site<br />
visits before files are shipped to make certain that the boxes are properly packed and<br />
labeled and that a detailed inventory has been prepared.<br />
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7.7.5 Transfer of Hardcopy Files and Physical Assets<br />
The MAC will be responsible for the shipment of files and any physical assets<br />
(equipment, supplies, furniture, etc.) that it obtains from the carrier/intermediary. The<br />
cost of conveyance will be borne by the MAC. The MAC may have a representative at<br />
each of the outgoing carrier/intermediary’s locations from which items will be shipped.<br />
These representatives will sample files to verify content and proper labeling and will<br />
ensure that they are loaded for the proper destination. They will also check assets against<br />
the acquisition list to verify that all are accounted for and in the proper condition.<br />
Invoices must be reviewed prior to shipping.<br />
7.8 Sequence of System Cutover Activities<br />
The sequence at cutover will involve the following system activities:<br />
7.8.1 System Closeout<br />
The carrier/intermediary will close out its system operations by performing its final batch<br />
cycle, final CWF queries, final payment cycle, and final weekly, monthly, quarterly, and<br />
yearly workload runs. A 1099 file will also be generated. Files shall be purged in<br />
accordance with applicable instructions regarding time requirements for the retention of<br />
Medicare records.<br />
7.8.2 Back Up<br />
The carrier/intermediary’s data center will backup and verify the final data. The MAC<br />
and data center will determine how long the backup data will be available for inquiry<br />
after cutover, should it be necessary.<br />
7.8.3 Transfer and Installation<br />
If there is a change in data centers during cutover, files will need to be transferred. This<br />
would include preparation of programs and JCL to load the files and data bases.<br />
Regardless of any data center change, the final data would be loaded and system changes<br />
(user file changes, base system changes to MCS or FISS, release changes, non-base<br />
system changes) will be made. Changes could include: MSN and remittance advices,<br />
contractor identification number, print/mail interfaces, ARU/IVR scripts, etc.<br />
7.8.4 Data Conversion<br />
The MAC may receive files that will need to be split, merged, or converted during<br />
cutover (e.g., workload or financial files). After conversion programs have been run and<br />
the production environment has been populated with converted data, the MAC will<br />
validate the conversion output.<br />
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7.8.5 Initial System Checkout<br />
An initial system verification will be performed by the MAC. It will verify on-line<br />
connectivity and that the production system can be accessed. The transfer and<br />
availability of files will be checked, as will customer interface processes. The MAC will<br />
also determine if hardware, software, and equipment is installed and operating properly.<br />
7.8.6 Functional Validation of System<br />
The MAC will run cycles over the cutover weekend to check out operational<br />
functionality. This would include on-line data entry, claims activation, file verification<br />
(files accessible, formats proper, information correct, etc.), inquiries, batch processing,<br />
and testing. The first validation cycle normally will run claims and correspondence that<br />
were pending after the carrier/intermediary’s last cycle. After the cycle data is validated,<br />
another cycle may be run to process claims entered specifically for the validation,<br />
correspondence, and backdated EMC files that were received and held during the<br />
carrier/intermediary’s cutover activities. The MAC will verify system output after each<br />
cycle and will then make a decision regarding the commencement of normal business<br />
operations for the segment workload.<br />
7.8.7 First MAC Production Cycle<br />
The first production cycle will be run after the MAC’s first day of normal business<br />
operations and the output will be validated. The cycle will include input from all<br />
functional areas (claims processing, MR/UR, MSP, audit and reimbursement, provider<br />
enrollment, etc.) and any additional EMC held from the cutover period, as well as<br />
OCR/ICR and DDE. All aspects of the system should be verified; e.g. data entry,<br />
edits/audits, suspense, correspondence, adjustments, inquiry, etc. Interfaces and data<br />
output that will be transmitted must also be verified (EFT, EMC, CWF, etc.). All<br />
print/mail functions will be validated, including checks, remittance advices, MSNs,<br />
automated correspondence, and reports.<br />
7.9 Cutover Communication<br />
Communication with providers and submitters regarding the cutover and its impact is<br />
absolutely essential. Providers must be informed constantly and by numerous methods<br />
about the cutover and how their payments will be affected.<br />
The MAC must coordinate its cutover communication efforts with the carrier/<br />
intermediary so that submitters are informed of the upcoming cutover and the change of<br />
Medicare contractor. While the MAC has the primary responsibility for communicating<br />
information regarding cutover activities, the carrier/intermediary should include as much<br />
cutover information as it can in any provider meetings, bulletins, MSNs, remittance<br />
advices, notices, stuffers, etc. ARU/IVR scripts may also be used.<br />
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The following list shows the kind of cutover information that providers and submitter<br />
will need to know:<br />
Cutoff dates for the submission of EMC and paper claims, redetermination<br />
requests, cost reports/appeals, audits, quarterly PIP data, etc., to the<br />
carrier/intermediary;<br />
Last day the carrier/intermediary will make bill/claim payment;<br />
Last date the carrier/intermediary will have telephone, lobby and contact station<br />
service for providers and beneficiaries;<br />
The first day the MAC will accept EMC claims;<br />
The first day the MAC will accept paper claims;<br />
The date when the MAC will begin the bill/claim payment cycle; and<br />
The date when the MAC will begin customer service for beneficiaries and<br />
providers and the location of these services.<br />
7.10 Access to CMS Systems<br />
The outgoing contractor has the responsibility to ensure that all employees that currently<br />
have access to CMS computer systems will have that access terminated if they will no<br />
longer be performing Medicare functions that require access. The outgoing contractor<br />
must identify two levels of current staff: 1) staff that will have their access to CMS<br />
computer systems end with the cutover to the MAC, and 2) staff that will need access to<br />
CMS computer systems for a limited period of time after cutover; e.g., staff needed to<br />
submit reports into CROWD, CAFM, etc. The staff that will need access in the postoperational<br />
period will have access ended for certain systems at cutover and retain access<br />
to other systems in order to perform the abovementioned activities.<br />
CMS will provide a form that should be used by the outgoing contactor to provide a list<br />
of employees for which access must be ended. The form includes the employee’s name,<br />
user identification, address, phone number, e-mail address, and each CMS system for<br />
which the employee will no longer have access. It will be reviewed by the Contractor<br />
Manager and submitted to the CMS Office of Information Services.<br />
If outgoing contractor employees will be employed by the incoming MAC, they still must<br />
have their access to CMS systems deleted under the outgoing contractor. The incoming<br />
MAC must then request new access to CMS computer systems for those individuals<br />
previously employed by the outgoing contractor. System access cannot be transferred<br />
from one contractor to another.<br />
7.11 Post-Cutover Activities<br />
At cutover, the outgoing contractor will no longer be responsible for performing<br />
Medicare functions. However, it must continue wrap-up activities associated with the<br />
cutover and compile, verify, and submit a number of CMS reports. In order to do this,<br />
there must be a limited number of personnel available in the post-cutover period.<br />
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Chapter 7: Cutover and Post-Cutover Activities<br />
7.11.1 Post-Cutover Approach and Resources<br />
The carrier/intermediary will need to assess what activities and responsibilities it will<br />
have after it ceases its Medicare operations. Generally, most activity centers around the<br />
preparation and submission of Medicare reports and the financial closeout of the contract.<br />
The number of resources, availability, and the time required in order to complete the<br />
activities must be determined. In addition, if personnel will not be available, then other<br />
staff must be trained in order to properly complete the required tasks. During the cutover<br />
period, the Closeout Project Manager should identify necessary post-cutover resources,<br />
tasks, and timeframes and submit the information to the CMS Segment Implementation<br />
Manager.<br />
If the MAC has hired outgoing contractor staff and is located in the vicinity, the outgoing<br />
contractor may request that some of its former employees be allowed to perform postcutover<br />
activities. Usually post-cutover assistance does not require large amounts of time<br />
and the incoming contractors have been willing to provide this help. However, a<br />
Memorandum of Understanding should be developed describing the activities to be<br />
performed, the personnel required, and the associated costs incurred by the outgoing<br />
contractor for this support.<br />
7.11.2 Operations Wrap-up<br />
After the actual cutover to the new MAC, the carrier/intermediary should review its<br />
closeout plan and the cutover plan/checklist to ensure that all tasks for which it has<br />
responsibility have been completed. It must verify that all Medicare files and documents<br />
have been transferred to the incoming MAC. It must also certify in writing that those<br />
files that were not transferred have been destroyed in accordance with CMS<br />
requirements. The carrier/intermediary will need to verify that Medicare employees are<br />
separated from corporate network systems/email and that security measures involving<br />
access to computers (internal and external) and facilities are in place, including those<br />
individuals who will need limited access to complete final reports. It should also ensure<br />
that all checks and correspondence from the final processing cycle have been released<br />
from the mailroom.<br />
Daily cutover teleconferences will continue for at least the first week. CMS will then<br />
make a determination if the daily calls will continue, or if a weekly meeting will be<br />
sufficient. A representative should be available for the calls at least for the first week<br />
after cutover, especially if there are open issues involving the former carrier/<br />
intermediary. Open issues must continue to be worked by the responsible parties until<br />
satisfactorily resolved.<br />
7.11.3 Reporting Activities<br />
The carrier/intermediary is responsible for the completion of all monthly and quarterly<br />
reports through the end of its Medicare contract. However, a number of reports cannot be<br />
completed at cutover and must be done after Medicare operations have ceased.<br />
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Therefore, the carrier/intermediary must maintain the ability to submit the reports and<br />
have personnel available to gather data and verify its accuracy.<br />
Normal CMS submission requirements will apply to the outgoing contractor, which<br />
means that most reports will be submitted during the first month after cutover. However,<br />
some banking reports will take longer, since the carrier/intermediary must keep its bank<br />
account open for 6 months after contract end to process outstanding checks.<br />
All reports through the outgoing contractor’s month of cutover (or through the day of<br />
cutover if it leaves mid-month) must be completed. The MAC will be responsible for<br />
completing all reports beginning with the first cycle run after cutover. Therefore, if<br />
cutover occurs before the end of a quarter, the outgoing carrier/intermediary must share<br />
data with the MAC so that it can produce a quarterly report. If the carrier/intermediary<br />
believes that completion of a specific report is not possible or unwarranted, it must<br />
contact the CMS Jurisdiction Implementation Lead.<br />
The following is a sample of the reports that will need to completed after cutover:<br />
Financial<br />
Other<br />
CMS 750/751 CFO Reports<br />
CMS1521 Payment Voucher Draws on Letter of Credit<br />
CMS 1522 Monthly Contractor Financial Report<br />
IER Interim Expenditure Report for final month<br />
IBPR Intermediary Benefit Payment Report<br />
FACP Final Administrative Cost Proposal<br />
CASR Contractor Audit and Settlement Report<br />
CRSL Cost Report Settlement Log<br />
ASCR Audit Selection Criteria Report<br />
IRS Form 1099 Income<br />
CMS 1565/1566 Contractor Reporting of Operational and Workload Data<br />
(CROWD) for month and quarter<br />
CMS 1563/1564 Monthly MSP Savings<br />
CMS 2591 Part B Appeals<br />
FOIA Freedom of Information Act Report<br />
CSAMS Customer Service and Management System Report<br />
SADBUS Small and Disadvantaged Business Report<br />
7.11.4 Lessons Learned<br />
CMS asks that the carrier/intermediary maintain a list of activities that went well during<br />
the transition, problems that were encountered, and suggestions for improvement. It is<br />
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hoped that the carrier/intermediary will prepare a lessons learned document regarding its<br />
activities during the transition as well as any that it might have observed from other<br />
participants in the process. Lesson learned are normally submitted 4-6 weeks after<br />
cutover. See Chapter 4.10.12.<br />
7.11.5 Post-Project Review<br />
Approximately six weeks after cutover, the MAC will hold a post-project review meeting<br />
to discuss lessons learned from the transition. The meeting may be held in person or by<br />
teleconference, depending on the circumstances of the transition. The meeting will cover<br />
each major area of the transition and focus on the actions, methods, and processes used<br />
during the transition. Activities that went well will be discussed, as well as those that<br />
need improvement. Discussion should be frank and honest, with no areas off limits.<br />
CMS understands that it may be difficult, but it hopes that every effort will be made by<br />
the former carrier/intermediary to attend the meeting. See Chapter 4.11.8.<br />
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Chapter 8: Financial Processes<br />
Chapter 8: FINANCIAL PROCESSES<br />
8.1 General<br />
The carrier/intermediary should meet with CMS as soon as possible to review policy and<br />
procedures for the financial aspects associated with closing out its operations and<br />
contract. The outgoing contractor must also coordinate activities with the incoming<br />
MAC to ensure that all financial accounts are in order and documents are properly<br />
transferred. Prior to cutover, CMS send a JSM/TDL to the contractor detailing<br />
procedures for closeout financial reporting. The carrier/intermediary will also need to<br />
estimate any additional costs that it may incur in order to maintain operations and support<br />
the MAC during the transition. In addition, termination costs must be developed so that<br />
contract closeout can be completed.<br />
8.2 Transition Costs<br />
Transition costs are those carrier/intermediary costs that relate to the transfer of its<br />
Medicare files, records, and workload to the incoming MAC. <strong>Carrier</strong>/intermediary<br />
transition costs complement the related transition costs of the incoming MAC. They<br />
include such items as overtime, temporary staff to reduce workload, retention bonuses<br />
(see Chapter 5.3), the inventorying of assets, etc. Transition costs are non-recurring in<br />
nature and are funded as a productivity investment (PI).<br />
Transition costs may be incurred at any time between the date of the carrier/<br />
intermediary’s termination/non-renewal notice to CMS (or the announcement of a<br />
replacement contractor for a portion of the carrier/intermediary’s workload) and the date<br />
that the incoming MAC assumes responsibility for the workload (cutover). While some<br />
transition costs may extend beyond the cutover date, most post-cutover costs are<br />
considered termination costs. Both the incoming MAC and the outgoing carrier/<br />
intermediary incur transition costs.<br />
<strong>Carrier</strong>s/intermediaries must request and obtain advance funding approval for all<br />
transition costs. Only those items and costs specifically approved and funded as transition<br />
costs may be charged to the transition PI. Should the cutover occur during the fiscal year<br />
(rather than at the end of the fiscal year on September 30), ongoing funding in the NOBA<br />
will be reduced for the period subsequent to the cutover.<br />
To be considered a transition cost, such costs must meet all of the following criteria:<br />
The costs are non-recurring and would not have been incurred except for<br />
the transition;<br />
The costs are incremental in nature;<br />
The costs are "used up" in the transition;<br />
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The costs are not already included in the contractor's ongoing budget; and<br />
The costs do not represent the necessary, ongoing costs of doing business.<br />
It should be noted that the direct personal service costs of current employees (excluding<br />
management and “all other costs”) may be considered as transition costs; however, they<br />
must be specifically identified and justified in the transition SBR.<br />
The following costs are NOT transition costs:<br />
General Management<br />
Even though directly engaged in the transition, these costs would have been incurred<br />
regardless and are already included in the ongoing budget. Note: If the transition is<br />
large enough to require full time project management, the personal service costs<br />
directly related to the transition may be considered as a transition activity if fully<br />
documented as to cost and purpose.<br />
Overhead and G&A<br />
These costs normally would not be considered transition costs since they are already<br />
included in the ongoing budget. However, if the transition requires additional support<br />
in overhead and G&A that can be specifically related to the transition effort, those<br />
costs may be allowable. They would be identified as Other Direct Costs.<br />
Furniture and Equipment (F&E)<br />
These are necessary, ongoing costs of doing business which are "used up" over time,<br />
not during the transition. Only the direct costs related to incoming and "setting up"<br />
the assets, if any, may be considered as transition costs. First year depreciation<br />
costs are an ongoing cost.<br />
Material and Supplies<br />
Like F&E, these are necessary, ongoing costs of doing business.<br />
Facilities and Occupancy (F&O)<br />
The costs of existing facilities should not be reallocated to transition costs, as they are<br />
already included in the ongoing budget.<br />
Budget shortfalls<br />
Outgoing contractors must identify only the incremental costs related to the transition<br />
and should not include anticipated funding shortfalls unrelated to the transition.<br />
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"All Other Costs"<br />
As defined in Medicare cost reporting, these are all non-personal service costs related<br />
to Medicare employees. These costs should not be charged as a transition cost since<br />
they are already included in the carrier/intermediary’s budget. Incremental costs<br />
associated with new employees may be considered as transition costs but must be<br />
specifically identified rather than included as part of a general allocation.<br />
8.3 Transition Supplemental Budget Request<br />
A Supplemental Budget Request (SBR) must be submitted to obtain funding as soon as<br />
the need for transition funding arises. The full amount of the request should be included<br />
in the SBR, even though the transition may span two fiscal years. Changes to closeout<br />
activities during the transition or unforeseen costs may necessitate the submission of<br />
additional transition SBRs.<br />
If corporate commitments need to be made prior to a public announcement that the<br />
carrier/intermediary is leaving the Medicare program, contact the Contracting Officer<br />
immediately. CMS will make every effort to reach an early and timely agreement<br />
regarding the commitment of funds. Failure to obtain CMS’s explicit, written agreement<br />
and commitment of funds could delay or jeopardize reimbursement of expenditures.<br />
The carrier/intermediary must reference the Medicare Financial Management Manual<br />
(Pub. 100-06), Chapter 1, Section 240 for preparation and routing of SBRs. A copy of<br />
the SBR should be sent to the same address as the latest Budget Request (BR)<br />
submission.<br />
Once funding is approved, transition costs should be included in the monthly Interim<br />
Expenditure Report (IER) and later in the Final Administrative Cost Proposal (FACP).<br />
The FACP should be submitted no later than 3 months after the contract terminates,<br />
including any negotiated extension periods.<br />
8.4 Termination Costs<br />
Termination costs differ from normal Medicare costs both as to nature and method of<br />
payment. Termination costs are only incurred by the outgoing contractor. Generally,<br />
termination costs will be incurred after cutover to the incoming MAC. Termination costs<br />
may include:<br />
Severance pay (see Chapter 5.2)<br />
Other forms of personal service compensation,<br />
Loss on disposition of Medicare assets,<br />
Direct costs for final financial and reporting activities, and<br />
Termination of leases.<br />
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Termination budgets and costs are NOT processed through the standard SBR, NOBA,<br />
IER, FACP procedure described in the Medicare Financial Management Manual (Pub.<br />
100-6). Termination budget or cost reports should not be transmitted on the Contractor<br />
Administrative Budget and Financial Management System (CAFM II). Termination<br />
costs are not to be included in the FACP; only vouchers may be used to claim<br />
reimbursement of termination costs. Once termination costs can be reasonably estimated,<br />
a hardcopy of the termination budget should be submitted to the same address used to<br />
submit a Budget Request (BR) or Supplemental Budget Request (SBR).<br />
To accurately estimate a termination budget, the carrier/intermediary will need to know<br />
the following information:<br />
The cutover date;<br />
The contract termination date, including any extensions;<br />
The number of employees that will receive severance payments considering: (1)<br />
attrition; (2) the number who transfer to the carrier/intermediary’s other lines of<br />
business; and (3) offer of employment with the incoming MAC;<br />
Assets and leases that will be transferred to the MAC or otherwise disposed of; and<br />
The number of employees and time needed for post-cutover wrap-up activities.<br />
CMS will review the termination budget and approve it in principle as to the categories of<br />
expenditures and amount. The carrier/intermediary should submit vouchers for<br />
reimbursement as costs are actually incurred and paid. All vouchers should be submitted<br />
within 7 months after cutover. These vouchers, which may include accounting extracts,<br />
must provide sufficient detail to demonstrate that the costs have been incurred and paid.<br />
CMS will review the vouchers and make payments as appropriate.<br />
CMS expects that the carrier/intermediary will take all necessary actions to mitigate<br />
termination costs. It must discontinue the acquisition of assets that will likely result in a<br />
loss on disposition after cutover, unless it is absolutely essential to a successful transition.<br />
Any acquisition of such assets should have the approval of the CMS Contracting Officer.<br />
Since the carrier/intermediary retains legal control of assets acquired on behalf of<br />
Medicare, it must dispose of those assets as quickly as possible after cutover, or<br />
whenever the assets are no longer needed for Medicare. This will limit storage costs, loss<br />
in market value, etc. CMS’s general preference is that Medicare assets be made available<br />
for sale or transfer to the incoming MAC. Other methods of disposal could include sale<br />
on the open market, transfer to private lines of business, or destruction.<br />
8.5 Bank Accounts and Reports<br />
The carrier/intermediary must inform its bank that it will be leaving the Medicare<br />
program and establish procedures for closing it Medicare bank account. The<br />
carrier/intermediary’s Medicare bank account should be kept open for at least 6 months<br />
beyond the cutover date to allow for clearance of outstanding checks. During this 6<br />
month period, the letter of credit issued to the bank will remain in effect to allow the bank<br />
to request funds to cover all outstanding checks as they are presented for payment.<br />
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Chapter 8: Financial Processes<br />
All CMS financial reports are required to be submitted on CAFM as long as there are<br />
account balances or activity on the reports. These reports include:<br />
Form CMS 1521, Payment Voucher Draws on Letter of Credit;<br />
TAA (pages 1 through 3) Time Account Adjustment Schedules and TAA1a,<br />
TAA1b, TAA1c;<br />
Form CMS-1522, Monthly Contractor Financial Report;<br />
Form CMS-456, Intermediary Benefit Payments Report;<br />
Forms CMS-750A/B, Contractor Financial Statement;<br />
Forms CMS-751A/B and MSP, Status of Accounts Receivable.<br />
8.6 Financial Coordination with the MAC<br />
The MAC will need to establish the payment dates and payment frequency for its<br />
operation. The carrier/intermediary’s payment schedule will need to be provided to the<br />
MAC, since it may influence its payment schedule decision. Periodic interim payments<br />
(PIP) to providers must also be coordinated when the cutover payment cutoff date occurs<br />
within a PIP payment period.<br />
At cutover, the carrier/intermediary must provide the MAC with a voided check register<br />
and a final listing of outstanding checks. The MAC and the outgoing contractor will need<br />
to coordinate procedures for handling stop payments, voided checks, and the reissuance<br />
of old outstanding checks.<br />
Provisions must be made for the carrier/intermediary to forward checks and other<br />
Medicare mail to the MAC after cutover. The MAC will need to determine if its bank<br />
will cash a countersigned check made out to the carrier/intermediary. If it will not, the<br />
check will be sent back to the provider for reissuance.<br />
8.7 Accounts Receivable Reconciliation<br />
Medicare accounts receivable are a significant balance on CMS’s financial statements<br />
and require special attention during the transition. The carrier/intermediary is responsible<br />
for the reconciliation of the accounts receivable for the segment that will be transferred to<br />
the incoming MAC. After the segment transition begins, CMS (or a contracted<br />
organization) will go on site to conduct an accounts receivable review of the<br />
carrier/intermediary. The on-site reviewers are responsible for selecting a sample of<br />
items to review based on the ending balances being reported on the outgoing contractor’s<br />
H751, M751, C751 and MC751 reports. From the electronic copy of the ending balance<br />
detailed reports, a sample is selected of the accounts receivable to be reviewed to justify<br />
the ending balances being reported. While the review is conducted with the<br />
carrier/intermediary, the incoming MAC may attend the review sessions to understand<br />
the process and the documentation that is prepared to support the reconciliation.<br />
A final written report will be prepared by the auditors and provided to the outgoing<br />
contractor. Prior to cutover, the Accounting Management Group in the Office of<br />
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Chapter 8: Financial Processes<br />
Financial Management will provide written instructions through a JSM/TDL on the<br />
specifics regarding the required financial reporting. The JSM/TDL will contain<br />
information on how to complete the Accounts Receivable Transmittal Document, which<br />
is the official record of the transfer and acceptance of the number and value of the<br />
accounts receivable from the closeout contractor to the MAC.<br />
The carrier/intermediary should notify the MAC in writing of all outstanding accounts<br />
receivable at least 60 days prior to the date that they will be transferred. The written<br />
notification will include a transmittal document summarizing the number and value of the<br />
accounts receivable being transferred and an acceptance statement to be signed by the<br />
MAC. In addition to this transmittal, the carrier/intermediary will include a detailed<br />
listing showing each specific account receivable being transferred. The detailed listing<br />
must agree to the summary totals reflected on the transmittal document and will include<br />
the following data elements:<br />
Debtor’s name, Medicare identification number, and EIN or TIN;<br />
Account receivable/overpayment amount being transferred that includes principal<br />
and interest;<br />
Account receivable types; e.g., Medicare Part A or B, MSP, or other;<br />
Type of account receivable; e.g., cost report overpayment - audit, medical review,<br />
duplicate payment, etc.;<br />
The current status of collection action; e.g., interim payments being offset,<br />
extended repayment schedule in effect, etc.; and,<br />
The cost report period or accounting period, if applicable.<br />
The carrier/intermediary should also send the MAC the permanent administrative file for<br />
each provider/debtor being transferred. The file must contain all relevant information to<br />
support the accounts receivable being transferred; e.g., identity of debtor, refund requests<br />
and documentation to clearly support each accounts receivable/overpayment<br />
determination. If the workload is being distributed to more than one MAC, a transmittal<br />
document and the appropriate detail listing must be sent to each one.<br />
The carrier/intermediary should keep a file copy of the transmittal document and the<br />
summary listing and send copies to the appropriate CMS Regional Office(s) and the CMS<br />
Office of Financial Management, Financial Services Group, Division of Accounting,<br />
Debt Collection Branch in Central Office.<br />
The MAC will certify the receipt of the transmittal document and return the receipt to the<br />
carrier/intermediary. The MAC will review and reconcile the accounts receivable<br />
transmittal document and the detailed listing with the administrative files transferred<br />
from the outgoing contractor. The carrier/intermediary will be contacted if the MAC<br />
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Chapter 8: Financial Processes<br />
identifies a discrepancy regarding a specific accounts receivable. If the discrepancy<br />
cannot be resolved, the MAC will transfer the accounts receivable to the CMS project<br />
officer for resolution. The MAC has one year to review and accept all transferred<br />
receivables from the carrier/intermediary.<br />
8.8 Financial Reporting for Accounts Receivable<br />
The carrier/intermediary contractor must retain copies of all documentation related to the<br />
transfer of accounts receivable, including the signed acceptance from the incoming MAC.<br />
In addition, it must report the value of receivables transferred to and accepted by the<br />
incoming MAC on the appropriate lines of the Form CMS 750 and Form CMS 751.<br />
Report on the Form CMS 750 under the Revenue and Expense sections (both interest<br />
and principal). Report the amount of accounts receivable on the line titled: “Transfers<br />
Out to Other Medicare Contractors (Interest/Principal).”<br />
Report on the Form CMS 751 under Line 5c, “Transfers Out to Other Medicare<br />
Contractors” and Section D, Transferred Receivables, Line 5c, “Transfers Out to<br />
Other Medicare Contractors.”<br />
All contractors, including those leaving the program, are subject to audit and may be<br />
required to provide supporting documentation for the values reported on the Forms CMS<br />
750/751.<br />
Also, summary data should be included in the “Remarks” section of the Form CMS 750,<br />
identifying the name of the acquiring MAC and the number and value of accounts<br />
receivable transferred as a result of transition activity. In the event accounts receivable<br />
are transferred to multiple MACs, the “Remarks” section must include the above<br />
information for each specific MAC.<br />
8.9 PSOR/POR Reconciliation<br />
The carrier/intermediary must ensure that the principal and interest identified on the<br />
detail listing for each overpayment determination are current and reconciled with the<br />
supporting files and reported on the appropriate overpayment reporting/tracking system;<br />
i.e., the Physician and Supplier Overpayment Reporting system (PSOR) and the Provider<br />
Overpayment Reporting system (POR).<br />
8.10 Audits and Other Issues<br />
An administrative cost audit will be conducted prior to the closeout of the contract.<br />
Costs for all open years, including termination costs, may be audited. Once all audits are<br />
completed, a global closing agreement will be used to close all open administrative costs.<br />
Pension, post-retirement, self-insurance or other administrative costs left open in prior<br />
closing agreements will be closed in the global closing agreement.<br />
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Chapter 8: Financial Processes<br />
The administrative cost audits will exclude certain pension, postretirement benefit and<br />
self-insurance/captive insurance costs from the scope of the review. Costs claimed for<br />
qualified defined-benefit pension plan(s) will always be covered in a separate review by a<br />
specialized OIG audit team. Furthermore, if accrual accounting has been used to claim<br />
costs of any nonqualified defined-benefit pension or post-retirement benefit plans, those<br />
costs will remain also be covered by separate review a specialized OIG audit team. Costs<br />
claimed for self-insurance/captive insurance may be subject to separate review unless the<br />
carrier/intermediary can demonstrate that the premium rates are competitively priced.<br />
The Office of Inspector General Act of 1978 as amended by the Office of Inspector<br />
General Act Amendments of 1988 and OMB Circular A-73 govern the audits of<br />
governmental organizations, programs, activities and functions, and funds received by<br />
contractors.<br />
A separate pension audit will be conducted when there is a Medicare contract closing.<br />
Because some of the information needed for the pension audit will not be available until<br />
the carrier/intermediary has received the actuarial valuation for the first period after the<br />
contract performance ends, the pension audit is normally delayed for some time.<br />
Furthermore, if a pension audit has not yet been performed by a specialized OIG audit<br />
team, the carrier/intermediary can expect the pension audit to be quite extensive. The<br />
definition of a pension segment is found in Appendix B, Paragraph XVI.B of the<br />
Medicare Contract/Agreement.<br />
The liability for costs of post-retirement benefit plans will be closed out on the cost<br />
accounting method used to determine the cost of the contract prior to termination. The<br />
termination or non-renewal of the contract does not alter the nature of the contract cost.<br />
The carrier/intermediary is reminded that changes in cost accounting method are<br />
prospective only. The amount of any claim for liability accrued for post-retirement<br />
benefits are subject to audit besides separate review concerning entitlement.<br />
The cost of self-insurance/captive insurance is limited to actual benefits payments plus<br />
reasonable administrative expenses unless the carrier/intermediary can demonstrate that<br />
premiums are competitively priced. When assessing the pricing of self-insurance<br />
premiums, the Office of the Actuary will review historical data on incurred losses,<br />
administrative expenses, retention rates and loss-ratios for groups that are similar in size,<br />
industry, benefit structure and geographic location.<br />
As soon as a carrier/intermediary knows it will be leaving the Medicare program, it<br />
should contact the CMS Office of the Actuary or OIG Pension Audit staff to begin<br />
planning for the upcoming audits.<br />
8.11 1099 Responsibilities<br />
The carrier/intermediary shall retain responsibility for preparation and submission of the<br />
1099's for the providers it serviced in the year that the cutover occurred (even if this<br />
period is less than one calendar year). This responsibility includes both the electronic<br />
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Chapter 8: Financial Processes<br />
reporting to the Internal Revenue Service (IRS) and the hard copy reporting statement for<br />
the providers. These items shall be released on the normal 1099 reporting cycle.<br />
During the transition, as part of the normal communication activities, providers must be<br />
reminded that they will receive two 1099s for the year—one from the carrier/<br />
intermediary and one from the incoming MAC—unless cutover occurs at the end of the<br />
calendar year.<br />
The outgoing carrier/intermediary should inform providers of MAC contact point for<br />
questions regarding the 1099 and any necessary restatement after the cutover date. If any<br />
provider reporting statements are returned as undeliverable mail, the former carrier/<br />
intermediary shall forward them to the MAC.<br />
At this time, it appears that the IRS will not allow the incoming MAC to correct a 1099<br />
issued by the outgoing contractor; therefore the former carrier/intermediary will be<br />
responsible for making any corrections to 1099s that it issued. As such, an agreement<br />
will need to be developed between the MAC and the former contractor. This agreement<br />
will detail the procedures for providing the necessary information to enable the former<br />
contractor to make the corrections.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 8-9
Exhibits<br />
LIST OF EXHIBITS<br />
Exhibit 1 Transition Phases and Terminology<br />
Exhibit 2 MAC Contract Administrative Structure<br />
Exhibit 3 Financial Information for Outgoing Contractors<br />
Exhibit 4 Sample Closeout Project Plan<br />
Exhibit 5 Outgoing Contractor Information/Documentation<br />
Exhibit 6 Files to be Transferred to a Medicare Administrative Contractor<br />
Exhibit 7 Workload Closeout Meetings and Documentationt<br />
Exhibit 8 Sample Workload Report<br />
Exhibit 9 Sample Staffing Report<br />
Exhibit 10 Glossary<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 1
Exhibits<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook<br />
Exhibit 1<br />
Transition Phases and Terminology<br />
2
Exhibits<br />
Exhibit 2<br />
MAC Contract Administrative Structure<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 3
Exhibits<br />
Exhibit 3<br />
Financial Information for Outgoing Contractors<br />
Due to the establishment of Medicare Administrative Contractors, all fiscal intermediary<br />
and carrier contracts will eventually end. While each Medicare contractor will have its<br />
own set of unique circumstances when ending its contract, each carrier/intermediary must<br />
adhere to CMS policy and procedures regarding transition and termination/non-renewal<br />
costs that may be incurred. For purposes of this document, the terms “termination” and<br />
“non-renewal” are used interchangeably. See the CMS Workload Closeout Handbook for<br />
detailed information regarding closeout activities and requirements.<br />
1. Outgoing Contractor Transition Costs.<br />
1.1 General<br />
Outgoing contractor transition costs may be incurred at any time after notification of<br />
MAC contract award by the Contracting Officer or after the date of the<br />
carrier/intermediary’s written termination notice to CMS through the date that the cutover<br />
of work to the incoming contractor occurs. While some transition costs may linger<br />
beyond the cutover date, most post-cutover costs are termination costs as defined in<br />
Section II below.<br />
Transition costs generally relate to or complement the transition efforts of the incoming<br />
Medicare contractor. They are non-recurring in nature and are funded as a Productivity<br />
Investment (PI). Only incremental costs are chargeable to the transition PI; all nonincremental<br />
costs continue to be charged to the ongoing budget. Ongoing funds<br />
contained in the annual Notice of Budget Approval (NOBA) may not be used for the<br />
transition. See Medicare Financial Management Manual (Pub. 100-06), Chapter 1,<br />
Section 100.6 for a discussion of PI and incremental costs.<br />
<strong>Carrier</strong>s and intermediaries must request and obtain advance funding approval for all<br />
transition costs. Only those items and costs specifically approved and funded as transition<br />
costs may be charged to the Transition PI. Should the cutover occur during the fiscal<br />
year (rather than on September 30), ongoing funding in the NOBA will be reduced for the<br />
period subsequent to the cutover. As discussed in Section 2 below, termination costs are<br />
not funded in the NOBA.<br />
A Supplemental Budget Request (SBR) must be submitted to obtain funding as soon as<br />
the need for transition funding arises. Include the full amount of the request even though<br />
the transition may span two fiscal years. Submit more than one transition SBR if<br />
necessary. If commitments need to be made prior to a public announcement of<br />
termination, discuss this with responsible CMS personnel immediately. CMS will make<br />
every effort to reach an early and timely agreement regarding the commitment of funds.<br />
Failure to obtain CMS’s explicit, written agreement and commitment of funds could<br />
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Exhibits<br />
Exhibit 3<br />
Financial Information for Outgoing Contractors (Cont.)<br />
delay or jeopardize reimbursement of expenditures. See Medicare Financial<br />
Management Manual (Pub. 100-06), Chapter 1, Section 240 for preparation and routing<br />
of SBRs. Send a copy of the SBR to the same address that you sent your latest Budget<br />
Request (BR).<br />
Once funding is approved, include the costs in the monthly Interim Expenditure Report<br />
(IER) and later in the Final Administrative Cost Proposal (FACP). Submit the FACP no<br />
later than 3 months after the contract terminates including any negotiated extension<br />
periods.<br />
1.2 Retention Bonuses:<br />
CMS’s requirements regarding retention bonuses are provided in the following<br />
Attachment 1. Review and conform to these requirements if it appears that bonuses may<br />
be appropriate and take into consideration at least the following circumstances in<br />
determining whether or not the bonus is reasonable and prudent for the work performed:<br />
The nature and timing of the transition to the incoming contractor, including whether<br />
or not employees may be retained by the outgoing contractor or employed by the<br />
incoming contractor.<br />
Geographic area and industry employment rates.<br />
Industry practices.<br />
Corporate severance policy and other elements of personal compensation.<br />
Note that the bonus period shall not begin before the date on which announcement of<br />
termination is given to employees or extend beyond the cutover date. Retention bonuses<br />
are a transition expense and qualify as Compensation for Personal Services. It is the<br />
contractor’s responsibility to demonstrate that this compensation is reasonable under the<br />
circumstances. See FAR 31.205-6.<br />
It is essential that contractors obtain CMS’s prior written approval of any and all potential<br />
commitments that could result in additional charges to the Medicare program. This<br />
emphatically applies to changes in compensation for personal services including the<br />
payment of retention bonuses. Contact CMS immediately with any questions regarding<br />
these requirements.<br />
2. Termination/Non-Renewal Costs.<br />
Termination costs are incurred by the outgoing contractor only, and generally after the<br />
cutover date. Termination costs do not pertain to the incoming contractor. Termination<br />
costs could include:<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 5
Exhibits<br />
Exhibit 3<br />
Financial Information for Outgoing Contractors (Cont.)<br />
Severance pay. (See Attachment 2.)<br />
Other forms of personal service compensation.<br />
Loss on disposition of Medicare assets.<br />
Direct costs of continuing operations<br />
Termination of leases.<br />
Contact CMS as soon as possible to discuss the nature and applicability of these and<br />
possibly other termination costs to your situation. CMS expects that the<br />
carrier/intermediary will take all necessary, deliberate and diligent actions to mitigate<br />
termination costs. For example:<br />
The contractor retains legal control of assets acquired on behalf of the Medicare<br />
program and is responsible for disposing of the assets as quickly as possible after<br />
cutover or whenever the assets are no longer needed for Medicare. This will limit<br />
storage costs, loss in market value, etc. CMS’s general preference is that these assets<br />
first be made available for sale or transfer to the incoming contractor. Other disposal<br />
actions could include sale on the open market or absorption in private lines of<br />
business.<br />
The contractor should discontinue the acquisition of assets, which will likely result in<br />
a loss on disposition after the cutover occurs, unless it is absolutely essential to a<br />
successful transition.<br />
The contractor should not enhance its established severance pay policy, once the<br />
termination is known, which may serve to increase rather than mitigate termination<br />
costs.<br />
CMS will discuss these and other expectations with the contractor prior to cutover.<br />
Termination budgets and costs are not processed through the standard SBR, NOBA, IER,<br />
FACP procedure described in the Medicare Financial Management Manual (Pub. 100-6).<br />
Do not transmit a termination budget or cost reports on the Contractor Administrative<br />
Budget and Financial Management System (CAFM II). Once termination costs can be<br />
reasonably estimated, submit a hardcopy of the termination budget to the same address<br />
used to submit a Budget Request (BR) or Supplemental Budget Request (SBR).<br />
To reasonably estimate a termination budget, an outgoing contractor will need to know<br />
the answers to at least some of the following:<br />
What will the cutover date be and when will the contract, including any extensions,<br />
terminate?<br />
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Exhibits<br />
Exhibit 3<br />
Financial Information for Outgoing Contractors (Cont.)<br />
How many employees may receive severance payments considering: (1) the number<br />
who transfer to the outgoing contractor’s other lines of business; (2) attrition; and (3)<br />
offer of employment with the incoming contractor?<br />
What assets and leases may be transferred to the incoming contractor or otherwise<br />
disposed of?<br />
Who will be responsible for financial and miscellaneous wrap-up activities after<br />
operations end and for how long?<br />
CMS will review the termination budget and approve it in principle as to the categories of<br />
expenditure and amount. The contractor should then submit one or more vouchers for<br />
reimbursement as costs are actually incurred and paid but all vouchers should be<br />
submitted within 7 months after cutover. These vouchers, which may include accounting<br />
extracts, must provide sufficient detail to demonstrate that the costs have been incurred<br />
and paid. CMS will review the vouchers and make payments as appropriate.<br />
Termination costs are not to be included in the FACP; only vouchers may be used to<br />
claim reimbursement of termination costs.<br />
3. Audits and Other Issues<br />
3.1 Administrative Cost Audit<br />
An administrative cost audit will be conducted prior to close out of the contract. All<br />
open years, including termination costs, may be audited. However, the closing agreement<br />
will be conditional, leaving the pension costs to be audited for the segment closing.<br />
The Office of Inspector General Act of 1978 as amended by the Office of Inspector<br />
General Act Amendments of 1988 and OMB Circular A-73 govern the audits of<br />
governmental organizations, programs, activities and functions, and funds received by<br />
contractors.<br />
3.2 Pension audit A separate pension audit will be conducted if there is a Medicare<br />
pension segmentation closing. Because some of the information needed for the pension<br />
audit will not be available until the contractor has received the actuarial valuation for the<br />
first period after the contract performance ends, the pension audit is normally delayed for<br />
some time. Furthermore, if a pension segmentation audit has not yet been performed, the<br />
contractor can expect the pension audit to be quite extensive. See Appendix B,<br />
Paragraph XVI.B of the Contract/Agreement for a definition of the pension segment.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 7
Exhibits<br />
Exhibit 3<br />
Financial Information for Outgoing Contractors (Cont.)<br />
3.3 Services of Consultants<br />
Review Section II of the Contract/Agreement regarding the services of consultants which<br />
require CMS’s prior contractual approval. Since these contracts require CMS’s prior<br />
approval, allow sufficient time to submit them and to obtain CMS’s approval prior to<br />
executing the contract, receiving services or otherwise incurring an obligation. Include<br />
sufficient justification in your request to demonstrate the need for all outside services.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 8
Exhibits<br />
Exhibit 3<br />
Financial Information for Outgoing Contractors (Cont.)<br />
CMS Retention Bonus Policy<br />
Attachment 1<br />
This attachment clarifies CMS’s policy regarding reimbursement to Medicare contractors<br />
for retention bonuses paid to employees where the current Medicare contract/agreement<br />
is not renewed or is terminated. It applies to retention ("stay on") and performance-based<br />
bonuses, recognizing that a bonus may include elements of each.<br />
HCFA will pay costs in accordance with the Federal Acquisition Regulation (FAR).<br />
Under FAR 31.205-6, to be allowable, compensation must be reasonable for the work<br />
performed. To be allowable, these payments must either be paid under an agreement<br />
entered into in good faith before the services are rendered or pursuant to an established<br />
plan or policy followed by the contractor so consistently as to imply, in effect, an<br />
agreement to make such payment and the basis for the award is supported.<br />
CMS requires that contractors adhere to the terms of the contract/agreement, the FAR<br />
Part 31, and to perform within the funding limitations contained in the Notice of Budget<br />
Approval (NOBA). Expiration of the contract is not sufficient cause, in and of itself, to<br />
request retention bonus funds to perform work already funded in the NOBA under the<br />
terms of the contract/agreement. However, CMS may pay a retention bonus adopted for<br />
the transition of work from one contractor to another and paid by the outgoing contractor,<br />
to be reimbursable if:<br />
Funding has been approved by CMS in advance pursuant to a Supplemental Budget<br />
Request which adequately justifies the request. For funding to be approved, the<br />
following conditions must be met:<br />
The cost is in compliance with the contract/agreement and the Intermediary and<br />
<strong>Carrier</strong> Fiscal Administration Manuals.<br />
The amount is reasonable and is supported by documentation from the contractor.<br />
(See also Attachment 1, Section I above.)<br />
CMS determines that the bonus is necessary for the smooth transition of the work.<br />
The bonus will not be paid to the designated employees until completion of the<br />
retention period.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 9
Exhibits<br />
Exhibit 3<br />
Financial Information for Outgoing Contractors (Cont.)<br />
HCFA Severance Payment Policy<br />
Attachment 2<br />
Contractors should review their own policies for conformance with ALL conditions<br />
described below. Failure to conform could put you at risk for reimbursement even if the<br />
current corporate severance policy is adequately presented in the Financial Information<br />
Survey accompanying the annual Budget Request.<br />
The purpose of this document is to define those general conditions under which CMS will<br />
reimburse an outgoing contractor for severance payments made to that contractor’s<br />
employees. It is based on authority contained in FAR 31.201-4(b) and FAR 31.205.6(a),<br />
(b), and (g) which also requires that, in most instances, CMS is liable for the severance<br />
costs stemming from the established, written policy of the contractor. The conditions<br />
surrounding the non-renewal or termination of the contract will, of course, differ and will<br />
determine the liability and extent of liability which CMS may have in that situation.<br />
Generally, CMS will reimburse a contractor for severance payments under the following<br />
conditions:<br />
The contractor shall have an established, written severance policy in place and it must<br />
be found to be reasonable by the Government.<br />
Severance pay shall only be paid to employees of cost centers whose function is<br />
directly servicing the Medicare contract at the time of the non-renewal or termination<br />
notice if such cost center is eliminated or its staffing level is decreased due to the nonrenewal<br />
or termination.<br />
Generally, severance pay will not be paid to employees under the following conditions:<br />
The employee has been hired by the incoming contractor or another Government<br />
contractor associated with the replacement contract “where continuity for prior length<br />
of service is preserved under substantially equal conditions of employment.” FAR<br />
31.205-6(g)(1), or<br />
The employee has been hired by the outgoing contractor’s private lines of business or<br />
by one of the contractor’s subsidiaries or other member of a controlled group. (See<br />
Internal Revenue Code, Section 1563.), or<br />
The employee has received a written offer of employment by the incoming contractor<br />
and has chosen to refuse that employment.<br />
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Exhibits<br />
Exhibit 4<br />
Sample Closeout Plan<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 11
Exhibits<br />
Exhibit 4<br />
Sample Closeout Plan<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 12
Exhibits<br />
Exhibit 4<br />
Sample Closeout Plan<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 13
Exhibits<br />
Exhibit 4<br />
Sample Closeout Plan<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 14
Exhibits<br />
Exhibit 4<br />
Sample Closeout Plan<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 15
Exhibits<br />
Exhibit 4<br />
Sample Closeout Plan<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 16
Exhibits<br />
Exhibit 4<br />
Sample Closeout Plan<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 17
Exhibits<br />
Exhibit 5<br />
Outgoing Contractor Information/Documentation<br />
The following is a sample of Medicare information and documentation that is normally<br />
requested by the incoming contractor and must be provided in its entirety by the outgoing<br />
contractor:<br />
Copies of MSNs, Remittance Advices<br />
Copies of all notices and bulletins<br />
Outgoing contractor closeout plan<br />
Copies of fee schedules and payment schedules<br />
List of providers on 100% review, under investigation (including issues involved),<br />
and referrals to the Department of Justice<br />
Information on providers:<br />
o Name, telephone number, address, EIN of provider<br />
o List of providers on PIP/off PIP, with effective dates<br />
o Date of last interim rate payment review<br />
o EMC status<br />
o Current provider payment rates<br />
o Waiver of liability information, if applicable<br />
o Current program integrity information<br />
o Summary PS&R data<br />
Listing of historical provider issues and problems<br />
Unique procedure information<br />
Complete EMC information on all providers and submitters including:<br />
o Standard formats used<br />
o Vendors/billing houses/software used<br />
o Status of EDI agreements/contracts<br />
o EMC submission rates<br />
o Use of ERN and EFT<br />
A list of all special claims handling circumstances<br />
Beneficiary State Tape (BEST) or the <strong>Carrier</strong> Alphabetical State File (CASF).<br />
Inventory of all program materials and procedures that are available to the MAC,<br />
including any government owned property (equipment and supplies).<br />
List of assets available for purchase from the outgoing contractor.<br />
Key contacts: beneficiary, providers, Congress, specialty groups, associations.<br />
Staff attrition reports<br />
Storage information<br />
Status of key workload volumes<br />
Accounts receivable<br />
Enrollment inventory<br />
Status of cost Reports<br />
STAR databases<br />
Audit trails for Provider debt<br />
Workshop schedule<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 18
Exhibits<br />
Exhibit 5<br />
Outgoing Contractor Information/Documentation (Cont.)<br />
The following is a sample of Medicare information/documentation that may contain<br />
certain proprietary or business information. CMS will generally not require the outgoing<br />
contractor to release this information. However, if CMS believes that the information is<br />
critical to the success of the implementation and has the authority to do so, it will direct<br />
the release of a redacted version of the information:<br />
Annual Internal Audit Plan<br />
Business Continuity Plan<br />
Interim Expenditure Report/Notice of Budget Authorization<br />
Risk Assessment<br />
Lease agreements<br />
Subcontracts<br />
Off-site storage contract<br />
Personnel information<br />
Medicare organizational chart<br />
Disaster Recovery test results<br />
Production standards and performance requirements by functional area<br />
Internal controls/process manuals<br />
Training manuals and materials<br />
Claims processing guidelines<br />
The following are public documents that are releasable specifically by statute or under<br />
the Freedom of Information Act (FOIA). However, these documents may contain some<br />
proprietary business information and/or financial data that is not releasable. CMS<br />
expects that outgoing contractors will normally release properly redacted copies of such<br />
documents to the incoming contractor:<br />
List of CAPs/PIPs/CPE findings<br />
CMS Regional Office Memorandum/Letters<br />
Certification Package of Internal Controls<br />
SAS 70 final report<br />
CFO Audit final report<br />
NOTE: This exhibit (including the categorizations and examples contained within<br />
it) does not supersede CMS’s rights under the Rights in Data clause contained in the<br />
Medicare carrier contract, intermediary agreement, or Plan agreement under the<br />
Blue Cross and Blue Shield Association.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 19
Exhibits<br />
Exhibit 6<br />
Files to be Transferred to a Medicare Administrative Contractor<br />
This list is provides a sample of the types of files that will be transferred to an incoming<br />
Medicare contractor. It is not all-inclusive. Files to be transferred will vary depending<br />
on functions currently performed by the outgoing contractor and the functions that will be<br />
performed by the MAC.<br />
Provider File<br />
Data File<br />
Index File<br />
Provider Mnemonic File<br />
Provider Overflow File<br />
Reasonable Charge File<br />
Physician ID File<br />
Customary File<br />
Current Year File<br />
Previous Year File<br />
Prevailing File<br />
Current Year File<br />
Previous Year File<br />
Profile Procedure/Pricing Files<br />
Current Year File<br />
Previous Year File<br />
Lowest Charge Level File<br />
Limiting Charge Monitoring File<br />
Beneficiary File<br />
On-line History Data Base File<br />
Off-line History Data Base File<br />
Index File<br />
Soundex File<br />
Claim History/Conversion File<br />
Data File<br />
Beneficiary Inverted File<br />
Provider Inverted File<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 20
Exhibits<br />
Exhibit 6<br />
Files to be Transferred to a Medicare Administrative Contractor<br />
(Cont.)<br />
Activity/Pended File<br />
Data File<br />
Master Pending File<br />
Index File<br />
Beneficiary Inverted File<br />
Provider Inverted File<br />
Financial Files<br />
Accounting Master File<br />
Bank Reconciliation/Accounts Receivable File<br />
Inverted File<br />
DME Files (DME MACs only)<br />
Eligibility File<br />
QA Files<br />
<strong>Carrier</strong> Option File<br />
Pending/ Finalized Audit and Reimbursement File<br />
Personnel File<br />
Correspondence Files<br />
On-line Correspondence History Data Base File<br />
Index File<br />
Inverted File<br />
Inverted Index File<br />
Utilization (Post Payment) Review Files<br />
Provider Development Systems (PDS) Files<br />
PDS Option File<br />
Base Year File<br />
Maximum Allowable Prevailing Charge File<br />
No Rollback File<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 21
Exhibits<br />
Exhibit 6<br />
Files to be Transferred to a Medicare Administrative Contractor<br />
(Cont.)<br />
MSP Files<br />
Savings File<br />
Insurer File<br />
Data Match File<br />
Government File<br />
Coordination of Benefits File<br />
HCPCS File<br />
Pacemaster File<br />
Miscellaneous Files<br />
SCC Files<br />
On-line and Update Reference Files<br />
Rolling Transaction File<br />
RPTTOTAL File<br />
OBFNEW File<br />
Batch Control File<br />
CICS Table Files<br />
Miscellaneous Transaction File<br />
Statistics File<br />
Replies Restart File<br />
Beneficiary Restart File<br />
HIC Restart File<br />
Procedure Frequency File<br />
PVSELECT File<br />
Provider Log File<br />
Procedure Diagnosis File<br />
Activity Restart File<br />
Daily/Weekly Check Number Files<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 22
Exhibits<br />
Exhibit 7<br />
Workload Closeout Meetings and Documentation<br />
Blue shaded activities indicate required <strong>Carrier</strong>/Intermediary face-to-face meetings or teleconferences.<br />
Red shaded activities indicate required <strong>Carrier</strong>/Intermediary closeout documentation. Red is darker shading in black & white.<br />
Non-shaded activities indicate documentation distributed to <strong>Carrier</strong>/Intermediary for information purposes.<br />
Abbreviations:<br />
CMS: CO—Contracting Officer; PO—Project Officer; JIL—Jurisdiction Implementation Lead; SIM/MISC—Segment Implementation Manager/Medicare<br />
Implementation Support Contractor; CM—Contractor Manger; MAC: PM—Project Manager; SPM—Segment Project Manager; Other: BCBSA—Blue<br />
Cross and Blue Shield Association; PSC—Program Safeguard Contractor; EDC—Enterprise Data Center; BCC—Beneficiary Contact Center; QIC—Qualified<br />
Independent Contractor; SSM—Shared System Maintainer; HIGLAS—Healthcare Integrated General Ledger Accounting System.<br />
No. Activity Description Purpose Frequency Media Audience Responsibility Ref.<br />
CMS. 3.7.1<br />
CMS: CO,CM,JIL;<br />
SIM/MISC; <strong>Carrier</strong>/<br />
Intermediary.<br />
Face-to-face<br />
meeting.<br />
One-time<br />
meeting usually<br />
held prior to the<br />
Jurisdiction<br />
Kickoff Meeting.<br />
Due 3 days<br />
prior to meeting.<br />
2-3 hour meeting. To discuss closeout activities,<br />
contractor-specific<br />
financial issues, CMS project<br />
expectations, and Ju-<br />
1. Outgoing Contractor<br />
Pre-Meeting.<br />
3.7<br />
MAC with<br />
CMS input.<br />
CMS: COs, PO, Project<br />
Team, CM, SIM/MISC;<br />
MAC; <strong>Carrier</strong>/Intermediary;<br />
EDC; SSM;<br />
BCC; PSC; QIC;<br />
BCBSA etc.<br />
CMS: COs, PO, JIL,<br />
SIM/MISC, CM, Project<br />
Team; MAC and<br />
Project Team; <strong>Carrier</strong>/<br />
Intermediary Closeout<br />
Team; EDC; PSC;<br />
SSM; BCC; QIC; etc.<br />
Memo via<br />
email.<br />
risdiction Kickoff Meeting.<br />
To provide participants<br />
with an outline of topics to<br />
be discussed with estimated<br />
times.<br />
Outline of meeting<br />
topics with dial-in<br />
teleconference<br />
number.<br />
2. Jurisdiction Kickoff<br />
Meeting Agenda.<br />
MAC. 3.7.2<br />
Face-to-face<br />
meeting with<br />
teleconference<br />
capability.<br />
One-time<br />
meeting<br />
scheduled 10-15<br />
days after<br />
contract award.<br />
1 day meeting. To review the upcoming<br />
MAC implementation<br />
activities and associated<br />
carrier/intermediary<br />
closeout activities.<br />
3. Jurisdiction Kickoff<br />
Meeting.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 23
Exhibits<br />
No. Activity Description Purpose Frequency Media Audience Responsibility Ref.<br />
All attendees. MAC. 3.7<br />
Memo via<br />
electronic<br />
mail.<br />
Spread-<br />
3 days following<br />
meeting.<br />
To document the issues and<br />
action items from the Jurisdiction<br />
Kickoff Meeting.<br />
To ensure that appropriate<br />
transition personnel can be<br />
reached as needed<br />
throughout the transition.<br />
Minutes, record of<br />
discussion, issues/<br />
action items.<br />
List of Jurisdiction<br />
Kickoff meeting<br />
attendees and<br />
others involved in<br />
the project.<br />
4. Jurisdiction Kickoff<br />
Meeting<br />
Documentation.<br />
MAC. 3.7<br />
All Jurisdiction Kickoff<br />
Meeting attendees and<br />
others identified to be<br />
involved in the<br />
transition.<br />
MAC; CMS; <strong>Carrier</strong>/<br />
Intermediary.<br />
sheet via<br />
Update and<br />
distribute as<br />
changes are<br />
made.<br />
5. Transition Contact<br />
List.<br />
electronic<br />
mail.<br />
6.4<br />
MAC Project<br />
Manager.<br />
Memo via<br />
electronic<br />
mail.<br />
Development<br />
begins at<br />
contract award.<br />
Maintained and<br />
updated<br />
throughout the<br />
implementation.<br />
One-time meeting<br />
for each<br />
segment implementation.<br />
Due<br />
3 days prior to<br />
meeting.<br />
To facilitate the transition<br />
from the outgoing<br />
contractor to the incoming<br />
contractor.<br />
3.7.3.2<br />
MAC Project<br />
Manager<br />
with input<br />
from CMS.<br />
Memo via<br />
electronic<br />
mail.<br />
To provide participants<br />
with a description of topics<br />
to be discussed during the<br />
Segment Kickoff Meeting.<br />
6. Deliverables List. List of items,<br />
information, files,<br />
etc. requested by<br />
MAC to be<br />
provided by the<br />
carrier/intermediary.<br />
7. MAC Segment Kickoff List of meeting<br />
Meeting Agenda. topics with<br />
estimated times<br />
and dial-in<br />
teleconference<br />
number.<br />
3.7.3<br />
MAC Project<br />
Manager.<br />
CMS: CO, PO, JIL,<br />
SIM/MISC; MAC: PM,<br />
Project Team leads;<br />
Outgoing Contractor;<br />
BCBSA; PSC; EDC; 1-<br />
800-MEDICARE; QIC,<br />
etc.<br />
CMS: CO, PO, JIL,<br />
SIM/MISC, workgroup<br />
heads; MAC: PM,<br />
workgroup leads; Outgoing<br />
Contractor; PSC;<br />
EDC; BCBSA; BCC ;<br />
Face-to-face<br />
meeting with<br />
teleconference<br />
capability.<br />
One-time<br />
meeting for each<br />
segment<br />
implementation.<br />
1 day meeting. To review the upcoming<br />
segment implementation<br />
and carrier/intermediary<br />
closeout activities.<br />
8. MAC Segment Kickoff<br />
Meeting.<br />
3.7.3.2<br />
QIC, etc.<br />
All attendees. MAC Project<br />
Manager.<br />
Memo via<br />
electronic<br />
mail.<br />
3 days following<br />
meeting.<br />
To document the discussion<br />
and issues/action items<br />
from the Segment Kickoff<br />
Meeting.<br />
Minutes, record of<br />
discussion, and<br />
issues/action<br />
items.<br />
9. MAC Segment Kickoff<br />
Meeting<br />
Documentation.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 24
Exhibits<br />
No. Activity Description Purpose Frequency Media Audience Responsibility Ref.<br />
3.7.3.2<br />
MAC Project<br />
Manager.<br />
All attendees and<br />
workgroup members<br />
and others identified to<br />
be involved in the<br />
transition.<br />
Spreadsheet<br />
via<br />
electronic<br />
mail.<br />
Update and<br />
distribute as any<br />
changes are<br />
made.<br />
To ensure that appropriate<br />
segment transition<br />
personnel can be reached<br />
as needed throughout the<br />
transition.<br />
Contact list of<br />
Segment Kickoff<br />
Meeting attendees<br />
and others to be<br />
involved in the<br />
project.<br />
Document in<br />
calendar format<br />
showing all workgroups,<br />
heads,<br />
members, meeting<br />
times, and dial-in<br />
teleconference<br />
numbers.<br />
Standardized<br />
outline of workgroup<br />
topics with<br />
dial-in telecomference<br />
number.<br />
Meetings for the<br />
various functional<br />
workgroups.<br />
10. Segment Transition<br />
Contact List.<br />
3.8.5<br />
MAC Project<br />
Manager.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary; all<br />
workgroup members.<br />
Calendar<br />
format via<br />
electronic<br />
mail.<br />
Update and<br />
distribute as any<br />
changes are<br />
made.<br />
To provide a reference<br />
calendar of all workgroup<br />
meetings and information.<br />
11. Comprehensive<br />
Transition Workgroup<br />
Schedule/Calendar/<br />
Contact List.<br />
3.8.5<br />
Workgroup<br />
Head.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary; all<br />
workgroup members.<br />
Memo via<br />
electronic<br />
mail.<br />
One day prior to<br />
the meeting.<br />
To provide participants<br />
with topics to be covered in<br />
the workgroup meeting.<br />
12. Transition Workgroup<br />
Agenda.<br />
3.8.5<br />
Workgroup<br />
Head.<br />
All workgroup<br />
members.<br />
Teleconference.<br />
Weekly meetings<br />
throughout the<br />
transition.<br />
To monitor transition tasks<br />
and issues of the functional<br />
area for which the workgroup<br />
has responsibility.<br />
To provide a record and<br />
document issues and action<br />
items pertaining to the<br />
13. Transition Workgroup<br />
Meetings.<br />
3.8.5<br />
Workgroup<br />
Head.<br />
All workgroup<br />
members; all other<br />
workgroup heads;<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary.<br />
Memo via<br />
electronic<br />
mail.<br />
Two days after<br />
each meeting.<br />
Concise<br />
description of the<br />
workgroup<br />
meeting, issues,<br />
and action items.<br />
14. Transition Workgroup<br />
Meeting<br />
Documentation.<br />
workgroup.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 25
Exhibits<br />
No. Activity Description Purpose Frequency Media Audience Responsibility Ref.<br />
MAC Project<br />
Manager.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary; workgroup<br />
heads; all others<br />
listed on Jurisdiction<br />
Kickoff Meeting/<br />
Contact List.<br />
Memo via<br />
electronic<br />
mail.<br />
Biweekly at least<br />
2 days prior to<br />
the Jurisdiction<br />
Project Status<br />
Meeting.<br />
To communicate progress<br />
and performance against<br />
the MAC implementation<br />
project schedule, highlight<br />
issues, concerns, action<br />
items, etc. regarding the<br />
implementation.<br />
To communicate progress<br />
and performance against<br />
the closeout plan and<br />
provide workload and<br />
staffing information.<br />
Narrative of MAC<br />
accomplishments<br />
by major tasks,<br />
issues/concerns,<br />
action items, upcoming<br />
activities.<br />
15. Jurisdiction Implementation<br />
Project Status<br />
Report.<br />
4.10.4<br />
<strong>Carrier</strong>/Inter<br />
-mediary<br />
Closeout<br />
Project<br />
Manager.<br />
CMS; <strong>Carrier</strong>/Intermediary;<br />
MAC;<br />
workgroup heads.<br />
Memo via<br />
electronic<br />
mail.<br />
Biweekly at least<br />
2 days prior to<br />
the Jurisdiction<br />
Project Status<br />
Meeting.<br />
Narrative description<br />
of carrier/<br />
intermediary accomplishments,<br />
issues, action<br />
items, upcoming<br />
activities.<br />
Outline of meeting<br />
topics with dial-in<br />
teleconference<br />
16. Closeout Project Status<br />
Report.<br />
4.11.3<br />
MAC Project<br />
Manager.<br />
CMS; MAC; <strong>Carrier</strong>-<br />
Intermediary; workgroup<br />
heads; all others<br />
listed on Kickoff<br />
Meeting/ Contact List.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary; workgroup<br />
leads; EDC;<br />
PSC; QIC; BCBSA; etc.<br />
Memo via<br />
electronic<br />
mail.<br />
Biweekly at least<br />
1 day before<br />
meeting.<br />
To provide participants<br />
with a description of topics<br />
to be discussed with<br />
estimated times.<br />
17. Transition Project<br />
Status Meeting<br />
Agenda.<br />
number.<br />
4.11.3<br />
MAC Project<br />
Manager.<br />
Biweekly Conference<br />
call.<br />
Possible<br />
face-to-face<br />
meeting<br />
with teleconference<br />
capability.<br />
1-2 hour general<br />
status meeting.<br />
18. Transition Project<br />
Status Meeting.<br />
4.11.3<br />
All attendees. MAC Project<br />
Manager.<br />
Memo via<br />
electronic<br />
mail.<br />
3 days after<br />
meeting.<br />
To keep all parties involved<br />
in the transition informed<br />
about the overall transition<br />
status, to discuss progress<br />
and issues, track action<br />
items and deliverables, and<br />
to review the Implementation<br />
Project Plan and<br />
Closeout Plan.<br />
To document the issues and<br />
action items from the biweekly<br />
project status<br />
meeting.<br />
List of attendees,<br />
discussion items,<br />
action items.<br />
19. Transition Project<br />
Status Meeting<br />
Documentation.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 26
Exhibits<br />
No. Activity Description Purpose Frequency Media Audience Responsibility Ref.<br />
MAC Project<br />
Manager.<br />
Input from all<br />
in-volved<br />
entities<br />
necessary for<br />
baseline.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary; EDC;<br />
PSC; QIC; BCBSA, etc.<br />
Electronic.<br />
Project<br />
management<br />
software in,<br />
or convertible<br />
to, MS<br />
Project, MS<br />
Excel, or<br />
PDF format.<br />
Submitted with<br />
proposal. Baseline<br />
working<br />
document developed<br />
within 30<br />
days after<br />
kickoff meeting.<br />
To document all actions<br />
required for the implementation,<br />
identify dependencies,<br />
and establish start/<br />
completion dates in order<br />
to monitor progress and to<br />
facilitate the<br />
communication process<br />
among the parties involved<br />
in the transition.<br />
Coordinated with CPP.<br />
To provide up-to-date<br />
information regarding all<br />
project tasks. This will<br />
allow the DME MAC and<br />
all involved parties to<br />
effectively monitor and<br />
manage the overall project<br />
to ensure completion as<br />
Project plan listing<br />
major tasks/subtasks<br />
required for<br />
the DME MAC<br />
implementation,<br />
along with dates,<br />
duration, dependencies,<br />
and<br />
responsible<br />
parties.<br />
20. MAC Segment<br />
Implementation Project<br />
Plan (SIPP).<br />
MAC Project<br />
Manager.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary; EDC;<br />
PSC; QIC; BCBSA, etc.<br />
Electronic.<br />
Project<br />
management<br />
software in,<br />
or convertible<br />
to, MS<br />
Project, MS<br />
Excel, or<br />
PDF format.<br />
Biweekly. Submitted<br />
with the<br />
Implementation<br />
Project Status<br />
Report.<br />
21. Segment<br />
Implementation Project<br />
Plan Update.<br />
scheduled.<br />
6.1<br />
6.2<br />
<strong>Carrier</strong>/Inter<br />
-mediary<br />
Close-out<br />
Project<br />
Manager.<br />
CMS: CO,CM,SIM;<br />
MAC.<br />
Distributed<br />
by electronic<br />
mail.<br />
Submitted within<br />
15 days after<br />
kickoff meeting.<br />
To provide a plan for<br />
streamlining operations,<br />
reducing workload, maintaining<br />
staff and productivity,<br />
and establishing<br />
contingency plans for the<br />
closeout period. Inventory<br />
reduction plan will assist<br />
MAC in planning for<br />
workload volumes at<br />
cutover.<br />
Current information<br />
on the SIPP<br />
regarding tasks,<br />
start/finish dates,<br />
dependencies, and<br />
completion<br />
percentage,<br />
including a list of<br />
tasks completed<br />
and off schedule.<br />
Document describing<br />
operational<br />
approach for<br />
carrier/intermediary<br />
claims<br />
processing during<br />
closeout with<br />
weekly workload<br />
reduction goals for<br />
various claim<br />
areas.<br />
22. Closeout Approach/<br />
Inventory Reduction<br />
Plan.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 27
Exhibits<br />
No. Activity Description Purpose Frequency Media Audience Responsibility Ref.<br />
4.3<br />
4.10.2<br />
<strong>Carrier</strong>/Inter<br />
-mediary<br />
Close- out<br />
Project<br />
Manager.<br />
CMS; <strong>Carrier</strong>/Intermediary;<br />
MAC.<br />
Electronic.<br />
Project<br />
management<br />
software in,<br />
or convertible<br />
to, MS<br />
Project, MS<br />
Excel, or<br />
PDF format.<br />
Electronic.<br />
Project<br />
management<br />
software in,<br />
or convertible<br />
to, MS<br />
Project, MS<br />
Excel, or<br />
PDF format.<br />
Submitted within<br />
15 days after<br />
kickoff meeting.<br />
To document all actions<br />
required for closing out the<br />
outgoing contractor’s contract<br />
with start/end dates<br />
and dependencies in order<br />
to monitor progress and<br />
ensure completion of all<br />
closeout activities.<br />
Coordinated with IPP.<br />
To provide up-to-date infomation<br />
regarding all project<br />
tasks. This will allow<br />
CMS to effectively monitor<br />
and manage closeout<br />
activities to ensure<br />
completion as scheduled.<br />
Project Plan<br />
listing major tasks/<br />
subtasks required<br />
for contract<br />
closeout activities.<br />
23. Closeout Project Plan<br />
(CPP).<br />
4.10.3<br />
<strong>Carrier</strong>/Inter<br />
-mediary<br />
Close-out<br />
Project<br />
Manager.<br />
CMS; <strong>Carrier</strong>/Intermediary;<br />
MAC.<br />
Biweekly. Submitted<br />
with the<br />
Closeout Project<br />
Status Report.<br />
Current information<br />
on the project<br />
plan regarding<br />
tasks, start/finish<br />
dates, dependencies,<br />
and completion<br />
percentage,<br />
including a list of<br />
tasks completed<br />
and off schedule.<br />
Comprehensive list<br />
that documents<br />
issues/action items<br />
for each including<br />
ID, date created,<br />
description,<br />
responsible party,<br />
status, date of<br />
resolution. Accumulated<br />
from<br />
various work-<br />
24. Closeout Project Plan<br />
Update.<br />
MAC Project<br />
Manager.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
intermediary; workgroup<br />
heads.<br />
Distributed<br />
by electronic<br />
mail.<br />
Reviewed weekly<br />
and updated as<br />
required.<br />
Submitted with<br />
the biweekly<br />
MAC Implementation<br />
Project<br />
Status Report.<br />
To track transition issues<br />
and action items related to<br />
the project. Will be<br />
reviewed during the<br />
transition project status<br />
meetings.<br />
25. Master List of Issues<br />
Log/Action Items.<br />
groups.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 28
Exhibits<br />
No. Activity Description Purpose Frequency Media Audience Responsibility Ref.<br />
4.10.6<br />
<strong>Carrier</strong>/Inter<br />
-mediary<br />
Close-out<br />
Project<br />
Manager.<br />
CMS; <strong>Carrier</strong>/ Intermediary.<br />
Distributed<br />
by electronic<br />
mail.<br />
Reviewed weekly<br />
and updated as<br />
required.<br />
Submitted with<br />
the biweekly<br />
Closeout Project<br />
Status Report.<br />
To track any closeout<br />
issues related solely to the<br />
<strong>Carrier</strong>/Intermediary that<br />
are not monitored through<br />
the MAC issues/action<br />
items list.<br />
List of issues/<br />
action items that<br />
pertain solely to<br />
<strong>Carrier</strong>/Intermediary<br />
closeout<br />
activities.<br />
26. <strong>Carrier</strong>/Intermediary<br />
Issues Log/Action<br />
Items.<br />
MAC Project<br />
Manager<br />
with input<br />
from<br />
<strong>Carrier</strong>/Inter<br />
-mediary.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary.<br />
Distributed<br />
by electronic<br />
mail.<br />
Developed<br />
within 30 days<br />
of kickoff<br />
meeting.<br />
To monitor communication<br />
activities and schedules.<br />
27. Communication Plan. A general description<br />
and detailed<br />
schedule of how<br />
the MAC will<br />
educate and keep<br />
all transition<br />
stakeholders<br />
informed of the<br />
progress of the implementation<br />
and<br />
how any changes<br />
MAC Project<br />
Manager.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary.<br />
Distributed<br />
by electronic<br />
mail.<br />
Biweekly. Submitted<br />
with the<br />
Implementation<br />
Project Status<br />
Report.<br />
Baseline test<br />
plan developed<br />
within 30 days<br />
of kickoff<br />
meeting.<br />
To provide CMS with<br />
current information on<br />
communication activities<br />
and schedules.<br />
may affect them.<br />
Update on<br />
communication<br />
activities and<br />
schedules.<br />
28. Communication Plan.<br />
Update.<br />
MAC Project<br />
Manger.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary; appropriate<br />
workgroup<br />
heads.<br />
Distributed<br />
by electronic<br />
mail.<br />
To monitor the testing of<br />
the MAC’s claims<br />
processing system and<br />
operational environment<br />
prior to cutover.<br />
29. Test Plan. A specific and<br />
detailed description<br />
of the<br />
resources, types of<br />
tests and schedule.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 29
Exhibits<br />
No. Activity Description Purpose Frequency Media Audience Responsibility Ref.<br />
MAC Project<br />
Manager.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary; appropriate<br />
workgroup<br />
heads.<br />
Distributed<br />
by electronic<br />
mail.<br />
Updated on a biweekly<br />
basis and<br />
submitted with<br />
the Implementation<br />
Project<br />
Status Report.<br />
Weekly with<br />
monthly totals<br />
shown against<br />
estimated<br />
monthly<br />
reduction goals.<br />
To track schedule progress<br />
and provide current<br />
information on testing.<br />
30. Test Plan Update. Update on testing<br />
activities and<br />
schedules.<br />
4.10.5<br />
<strong>Carrier</strong>/Inter<br />
-mediary<br />
Close-out<br />
Project<br />
Manager.<br />
CMS; <strong>Carrier</strong>/Intermediary;<br />
DME MAC.<br />
Distributed<br />
by electronic<br />
mail.<br />
To assist the CMS,<br />
<strong>Carrier</strong>/Intermediary, and<br />
MAC in assessing progress<br />
and to allocate resources<br />
or modify transition<br />
activities if necessary.<br />
Meeting workload goals.<br />
Operational statistics<br />
from various<br />
functional areas.<br />
Actual monthly<br />
totals will be<br />
displayed against<br />
estimated monthly<br />
goals of the<br />
Inventory<br />
Reduction Plan.<br />
A report of <strong>Carrier</strong>/<br />
Intermediary staffing<br />
levels by<br />
function with any<br />
changes and<br />
reasons for<br />
31. <strong>Carrier</strong>/Intermediary<br />
Workload Report.<br />
4.10.7<br />
<strong>Carrier</strong>/Inter<br />
-mediary<br />
Close-out<br />
Project<br />
Manager.<br />
CMS; <strong>Carrier</strong>/Intermediary;<br />
MAC.<br />
Weekly. Distributed<br />
by electronic<br />
mail.<br />
To allow CMS to monitor<br />
staff attrition of the<br />
<strong>Carrier</strong>/Intermediary and<br />
take any necessary actions<br />
based on staff losses.<br />
32. <strong>Carrier</strong>/Intermediary<br />
Staffing Report.<br />
5.6<br />
4.10.8<br />
<strong>Carrier</strong>/Inter<br />
-mediary<br />
Close-out<br />
Project<br />
Manager.<br />
CMS; <strong>Carrier</strong>/Intermediary;<br />
MAC.<br />
Distributed<br />
by electronic<br />
mail.<br />
As soon as<br />
possible after<br />
notice of<br />
termination.<br />
To inventory assets for the<br />
purpose of determining<br />
disposition so that the<br />
financial closeout of the<br />
Medicare contract can be<br />
accomplished. Assets may<br />
be kept, offered to the<br />
MAC, sold, or destroyed.<br />
changes.<br />
33. Asset Inventory. A list of <strong>Carrier</strong>/<br />
Intermediary<br />
assets acquired to<br />
perform Medicare<br />
functions.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 30
Exhibits<br />
No. Activity Description Purpose Frequency Media Audience Responsibility Ref.<br />
7.2<br />
MAC Project<br />
Manager.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary; EDC;<br />
PSC; QIC; BCBSA ;<br />
etc.<br />
Distributed<br />
by electronic<br />
mail.<br />
7.2<br />
MAC Project<br />
Manager.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary; EDC;<br />
PSC; QIC; BCBSA; etc.<br />
Distributed<br />
by electronic<br />
mail.<br />
Submitted at<br />
least 30 days<br />
prior to the proposed<br />
cutover<br />
period start<br />
date.<br />
Daily during the<br />
cutover period.<br />
To assure that all tasks<br />
required for the transfer of<br />
Medicare files, records,<br />
equipment, etc., from the<br />
outgoing contractor are<br />
captured and tracked.<br />
To provide an up-to-date<br />
status of tasks required for<br />
cutover.<br />
7.4<br />
MAC Project<br />
Manager.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary; EDC;<br />
PSC; QIC; BCBSA; etc.<br />
Teleconference.<br />
Daily beginning<br />
7-10 days before<br />
cutover and<br />
continuing at<br />
least one week<br />
after cutover.<br />
Prior to next<br />
daily meeting.<br />
To review the Cutover Plan<br />
and progress of activities,<br />
including action items,<br />
concerns, risks, and<br />
contingencies.<br />
34. Cutover Plan. Day-by-day checklist<br />
of activities<br />
that need to be<br />
accomplished<br />
during the cutover<br />
period.<br />
35. Cutover Plan Update. Updates to the<br />
cutover plan<br />
reflecting tasks<br />
completed.<br />
36. Cutover Meeting. Status meeting<br />
generally one-half<br />
to one hour in<br />
length.<br />
7.4<br />
MAC Project<br />
Manager.<br />
All attendees of the<br />
Cutover meeting.<br />
Memo via<br />
electronic<br />
mail.<br />
To document cutover<br />
meeting conference calls.<br />
Brief synopsis of<br />
attendees,<br />
discussion items,<br />
and action items.<br />
37. Cutover Meeting<br />
Documentation.<br />
7.6.1<br />
4.10.9<br />
<strong>Carrier</strong>/Inter<br />
-mediary<br />
Close-out<br />
Project<br />
Manager.<br />
Joint responsibility:<br />
MAC<br />
Project Manager<br />
and<br />
<strong>Carrier</strong>/Inter<br />
- mediary<br />
Close-out<br />
Project<br />
Manager.<br />
CMS; <strong>Carrier</strong>/Intermediary;<br />
MAC.<br />
Distributed<br />
by electronic<br />
mail.<br />
Prior to the start<br />
of the Cutover<br />
period.<br />
Used for CMS review and<br />
to develop the file transfer<br />
plan.<br />
7.6<br />
4.10.10<br />
CMS; <strong>Carrier</strong>/Intermediary;<br />
MAC.<br />
Distributed<br />
by electronic<br />
mail.<br />
Must be submitted<br />
to CMS at<br />
the start of the<br />
Cutover period.<br />
To provide the logistics for<br />
actual transfer of files and<br />
to assist CMS in monitoring<br />
file preparations and the<br />
relocation of files.<br />
38. File Inventory. An inventory of all<br />
files to be transferred<br />
to the MAC<br />
with a description<br />
and location.<br />
39. File Transfer Plan. Description of<br />
Medicare files and<br />
records to be<br />
transferred by<br />
type, how and<br />
where they will be<br />
moved, and<br />
schedule.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 31
Exhibits<br />
No. Activity Description Purpose Frequency Media Audience Responsibility Ref.<br />
4.10.11<br />
<strong>Carrier</strong>/Inter<br />
-mediary<br />
Close- out<br />
Project<br />
Manager.<br />
CMS; <strong>Carrier</strong>/<br />
Intermediary.<br />
Distributed<br />
by electronic<br />
mail.<br />
One-time due at<br />
the beginning of<br />
the Cutover<br />
period.<br />
To provide CMS with an<br />
estimate of resources to<br />
perform <strong>Carrier</strong>/Intermediary<br />
contract wrap-up<br />
activities.<br />
A document listing<br />
the functions to be<br />
performed after<br />
contract end,<br />
resources,<br />
schedule and<br />
estimated level of<br />
effort.<br />
A discussion of<br />
transition<br />
successes and<br />
areas that could be<br />
improved.<br />
40. Post-Cutover Activities<br />
and Resources.<br />
7.9.4<br />
MAC Project<br />
Manager<br />
with input<br />
from project<br />
leads of all<br />
parties<br />
involved in<br />
the<br />
transition.<br />
CMS; MAC; <strong>Carrier</strong>/<br />
Intermediary; EDC;<br />
PSC; QIC; BCBSA; etc.<br />
Distributed<br />
by electronic<br />
mail.<br />
One-time. Due<br />
4-6 weeks after<br />
cutover. The<br />
MAC will<br />
compile lessons<br />
learned from<br />
other involved<br />
parties into a<br />
single document<br />
and distribute 1<br />
week prior to the<br />
Post-Project<br />
Review Meeting.<br />
To document lessons leaned<br />
and improvements to the<br />
transition process. A<br />
compilation of lessons<br />
learned from all parties<br />
involved in the transition<br />
will be used as the basis for<br />
the Post-Project Review<br />
Meeting.<br />
41. Post Project Review<br />
(Lessons Learned).<br />
7.9.5<br />
MAC Project<br />
Manager.<br />
CMS; DME MAC;<br />
<strong>Carrier</strong>/Intermediary;<br />
EDC; PSC; QIC;<br />
BCBSA, etc.<br />
Teleconference<br />
or<br />
possible<br />
face-to-face<br />
meeting.<br />
One-time.<br />
Approximately<br />
4- 6 weeks<br />
following<br />
cutover.<br />
2-3 hour meeting. To discuss transition<br />
practices that worked well<br />
and areas for improvement<br />
for future transitions.<br />
42. Post-Project Review<br />
Meeting (Lessons<br />
Learned).<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 32
Exhibits<br />
Exhibit 8<br />
Sample Workload Report<br />
CMS Weekly Report<br />
Customer Service Report<br />
Week Ending<br />
(Saturday)<br />
Total<br />
Correspondence<br />
Pending Correspondence Correspondence Ending<br />
Pending Over 45<br />
Correspondence Received Processed Correspondence Days<br />
59 0<br />
59 9 26 42 0<br />
42 43 57 28 0<br />
28 32 13 47 0<br />
47 24 42 29 0<br />
29 37 37 29 0<br />
29 27 30 26 0<br />
26 34 55 5 0<br />
5 26 27 4 0<br />
4 33 35 2 0<br />
2 27 24 5 0<br />
5 32 27 10 0<br />
10 22 24 8 0<br />
8 26 27 7 0<br />
8 29 25 12 0<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 33
Exhibits<br />
Exhibit 8<br />
Sample Workload Report (Cont.)<br />
CMS Weekly Report<br />
Claims Workload Report<br />
(1566 Workload Report 308)<br />
Claims Open<br />
Pending End of Pending over 30 Pending over 60<br />
Pending Claims Received Total Processed Week<br />
days<br />
days<br />
24,310 42,700 42,834 23,384 2,722 1,614<br />
23,384 42,908 44,206 21,245 1,653 996<br />
21,245 37,804 34,163 24,423 4,130 1,553<br />
24,423 45,223 46,249 22,613 2,837 1,293<br />
22,613 45,085 45,782 21,188 2,009 1,084<br />
21,188 43,465 42,737 21,454 1,500 908<br />
21,454 42,467 41,851 21,339 8,353 1,329<br />
21,339 38,226 31,667 27,600 3,339 1,252<br />
27,600 42,846 34,675 35,310 2,292 1,092<br />
35,310 43,212 55,067 22,501 1,261 477<br />
22,501 43,401 44,407 20,762 1,013 381<br />
20,762 42,174 42,204 20,084 2,736 871<br />
20,084 45,595 45,335 19,948 1,915 807<br />
19,948 40,551 41,571 18,312 1,495 675<br />
18,312 41,639 40,447 18,812 967 498<br />
18,812 40,742 41,049 18,096 3,187 771<br />
Week Ending<br />
(Saturday)<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 34
Exhibits<br />
Exhibit 8<br />
Sample Workload Report (Cont.)<br />
CMS Weekly Report<br />
MSP Workload<br />
Week Ending<br />
(Saturday)<br />
Total Pending Cases Cases Ending<br />
Cases Received Closed Cases<br />
11,757 133 -163 11,727<br />
11,727 127 -100 11,754<br />
11,754 162 -217 11,699<br />
11,699 147 -182 11,664<br />
11,664 150 -235 11,579<br />
11,579 126 -62 11,643<br />
11,643 106 -160 11,589<br />
Report unavailable this week<br />
11,589 129 -211 11,507<br />
11,507 76 -89 11,494<br />
11,494 117 -192 11,419<br />
11,419 85 -249 11,255<br />
11,255 225 -260 11,220<br />
11,220 319 -226 11,313<br />
11,313 131 -229 11,215<br />
11,215 88 -112 11,191<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 35
Exhibits<br />
Exhibit 8<br />
Sample Workload Report (Cont.)<br />
CMS Weekly Report<br />
CMS Weekly Report<br />
Appeals Workload Report Medical Review Report<br />
Week Ending<br />
(Saturday)<br />
Appeals<br />
Regular<br />
Appeals Appeals Reviews Appeals Over Part B Part B FH Part B FH Part B Part B ALJ Part B ALJ Part A Recon Part A Recon Part A Recon Part A ALJ Part A ALJ Part A ALJ FTE's Working Lab Appeals Appeals Appeals Rec'd<br />
Received Completed Pending 45 Days FH Rec'd Completed Pending ALJ Rec'd Completed Pending Rec'd Completed Pending Rec'd Completed Pending Appeals Received Received No Records<br />
101 124 236 66 3 64 37 12<br />
4 172 71 6 3 0 4 1<br />
32 24 102 0 0 1 8 0 0 35 1 1 5 0 0 5 3 Note: No longer reporting these items<br />
39 39 102 0 0 1 7 0 1 34 0 1 4 0 0 5 3<br />
37 27 112 0 1 0 8 0 0 34 0 0 4 0 0 5 2.5<br />
36 22 126 0 1 0 9 0 0 34 0 2 2 0 0 5 2.5<br />
37 14 149 0 0 0 9 0 0 34 2 0 4 0 0 5 2.5<br />
23 77 95 0 8 5 12 1 0 35 1 2 3 0 0 5 2.5<br />
15 53 57 0 1 0 13 0 1 34 1 1 3 0 0 5 2.5<br />
41 30 68 0 2 0 15 1 5 30 0 1 2 0 0 5 2.5<br />
50 0 118 0 0 0 15 0 0 30 0 0 2 0 0 5 0.5<br />
37 30 125 0 10 2 23 0 2 28 0 0 2 0 0 5 2.0<br />
45 30 136 0 0 1 22 0 1 27 0 1 1 0 0 5 2.5<br />
18 56 98 0 6 9 15 0 0 27 0 0 1 0 0 5 Note: No longer reporting these items<br />
24 32 90 0 5 0 20 0 0 27 2 0 3 0 1 4<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 36
Exhibits<br />
Medicare Contractor Staffing Changes:<br />
Date: Week Ending<br />
Exhibit 9<br />
Sample Staffing Report<br />
1st week 2nd week 3rd week 4th week<br />
Head Count Head Count Head Count Head Count<br />
Claims/EDI<br />
Staffing Level<br />
Permanent 15 15 15 0<br />
Temp/Contractor 0<br />
Customer Service<br />
Staffing Level<br />
Permanent 10 9 9 0<br />
Temp/Contractor 0 4 5 0<br />
Provider Communication<br />
Staffing Level<br />
Permanent 1 1 1 0<br />
Temp/Contractor 0<br />
Medical Review<br />
Staffing Level<br />
Permanent 8 8 8 0<br />
Temp/Contractor 0<br />
Medical Appeals<br />
Staffing Level<br />
Permanent 2 2 1 0<br />
Temp/Contractor 0<br />
MSP<br />
Staffing Level<br />
Permanent 17 17 17 0<br />
Temp/Contractor 1 1 2 0<br />
Audit<br />
Staffing Level<br />
Permanent 18 18 17 0<br />
Temp/Contractor 1 1 1 0<br />
Reimbursement<br />
Staffing Level<br />
Permanent 9 9 9 0<br />
Temp/Contractor 0<br />
Provider Enrollment<br />
Staffing Level<br />
Permanent 1 1 1 0<br />
Temp/Contractor 0<br />
Administration<br />
Staffing Level<br />
Permanent 10 10 10 0<br />
Temp/Contractor<br />
TOTAL<br />
Staffing Level 93 96 96 0<br />
Comments<br />
Date Comment/Explanation<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 37
Exhibits<br />
Exhibit 10<br />
Glossary<br />
Closeout: The period of time from the MAC’s contract award to the end of the outgoing<br />
contractor’s Medicare business operations during which the carrier/intermediary carries<br />
out its plan to close operations and transfer Medicare functions to the MAC.<br />
Cutover: The actual point at which the outgoing Medicare carrier/intermediary ceases<br />
Medicare operations and the MAC begins to perform Medicare business functions.<br />
Cutover Period: The period of time surrounding the actual cutover. The cutover period<br />
normally begins 10-14 days prior to the cutover and ends with the MAC’s segment<br />
operational date; i.e., when the MAC begins normal business operations for the segment<br />
workload that it assumed at cutover. During the cutover period the outgoing contractor<br />
makes final preparations to shut down its operation and transfer its claims workload and<br />
administrative activities to the MAC. Correspondingly, the MAC makes final<br />
preparations for the receipt and utilization of Medicare files, data, and acquired assets.<br />
Dark Day: A business day during the cutover period when the Medicare claims<br />
processing system is not available for normal business operations. System dark days may<br />
occur between the time the outgoing contractor ends its regular claims processing<br />
activities and the MAC begins its first day of normal business operations for the segment.<br />
Deliverable: Information and documents that are requested from the outgoing contractor<br />
or other parties involved in a transition as part of the MAC’s due diligence.<br />
Implementation: The period of time beginning with the award of the MAC contract and<br />
ending with the segment operational date of the MAC. During this period, the MAC<br />
performs all of the activities specified in its implementation plan to ensure the effective<br />
transfer of Medicare functions from the outgoing carrier or intermediary.<br />
Jurisdiction: The territory in which the Medicare Administrative Contractor will<br />
contractually perform its Medicare functions.<br />
Legacy Contractor: A Medicare Part A fiscal intermediary or a Part B carrier.<br />
Medicare Administrative Contractor (MAC): The incoming contractor that will<br />
assume the Medicare Part A and B functions from a carrier or fiscal intermediary.<br />
Medicare Claims Processor: A Part A fiscal intermediary, Part B carrier, or Medicare<br />
Administrative Contractor.<br />
Medicare Data: Any representation of information, in electronic or physical form,<br />
pertaining to Medicare beneficiaries, providers, physicians, or suppliers, or necessary for<br />
the contractual administration thereof, that is received, maintained, processed,<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 38
Exhibits<br />
Exhibit 10<br />
Glossary (Cont.)<br />
manipulated, stored, or provided to others in the performance of functions described in a<br />
Medicare contract.<br />
Medicare Record: A collection of related items of Medicare data treated as a unit.<br />
Medicare File: A set or collection of related Medicare records treated as a unit.<br />
Operational Date: The date that the MAC assumes all Medicare functions from an<br />
outgoing Medicare carrier or fiscal intermediary and is capable of processing Medicare<br />
claims.<br />
Outgoing Contractor: The Medicare carrier or fiscal intermediary whose functions will<br />
be assumed by the MAC.<br />
Post-Operational Period: A six month period of time beginning with the end of the<br />
outgoing carrier or intermediary’s Medicare operations. During this time, the outgoing<br />
contractor maintains the Federal Health Insurance Benefits account, completes financial<br />
reporting, and performs related closeout business activities.<br />
Provider: An organization or individual who is providing a Medicare service; i.e., an<br />
institutional provider, physician, non-physician practitioner, or supplier.<br />
Segment: The Medicare Part A or Part B workload which a carrier or intermediary<br />
processes and which will be transferred to the MAC. There may be multiple Part A/Part<br />
B workloads in one segment.<br />
Segment Operational Date: The date that the MAC assumes all Medicare functions<br />
from an outgoing Medicare carrier or fiscal intermediary.<br />
Transition: The entire scope of activities associated with moving the functions of<br />
Medicare fee-for-service carriers and intermediaries to the Medicare Administrative<br />
Contractors. It includes implementation activities of the MAC, closeout activities of the<br />
outgoing contractor, and the activities of other parties involved in the transition.<br />
Transition Monitoring: A responsibility of CMS to ensure that Medicare functions are<br />
properly transferred from each outgoing Medicare carrier or fiscal intermediary to the<br />
MAC. Transition monitoring begins with the award of the MAC contract and generally<br />
ends three months after the MAC’s segment operational date.<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 39
Exhibits<br />
Exhibit 11<br />
Acronyms<br />
ASCR Audit Selection Criteria Report<br />
ASPEN Automated Survey Processing Environment<br />
ACD Automated Call Distributor<br />
ACH Automated Clearing House<br />
AdQIC Administrative Qualified Independent Contractor<br />
ART Analysis, Reporting, and Tracking System<br />
BCBSA Blue Cross and Blue Shield Association<br />
BCC Beneficiary Contact Center<br />
BESS Part B Extract and Summary System<br />
BFE Business Function Expert<br />
BFL Business Function Lead<br />
CAFM Contractor Administrative Budget and Financial Management<br />
CAT Contract Administration Team<br />
CERT Comprehensive Error Rate Testing<br />
CICS Customer Interface Communications System<br />
CMIS Contractor Management Information System<br />
CMM Center for Medicare Management<br />
CMS Centers for Medicare and Medicaid Services<br />
CNI Chickasaw Nation Industries<br />
CO Central Office<br />
CO Contracting Officer<br />
COB Coordination of Benefits<br />
COBA Coordination of Benefits Administrator<br />
COBC Coordination of Benefits Contractor<br />
COI Conflict of Interest<br />
COTS Commercial Off-the-Shelf<br />
CPE Contractor Performance Evaluation<br />
CR Change Request<br />
CROWD Contractor Reporting of Operational and Workload Data<br />
CRSL Cost Report Settlement Log<br />
CSAMS Customer Service Assessment and Management System<br />
CSR Customer Service Representative<br />
CTA Cooperative Transition Agreement<br />
CWF Common Working File<br />
DASD Data Access Storage Device<br />
DCN Document Control Number<br />
DCS Delinquent Debt Collection System<br />
DDE Direct Data Entry<br />
DNF Do Not Forward<br />
DHHS Department of Health and Human Services<br />
DMERC Durable Medical Equipment Regional <strong>Carrier</strong><br />
DNF Do Not Forward<br />
ECRS Electronic Correspondence Referral System<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 40
Exhibits<br />
Exhibit 11<br />
Acronyms (Cont.)<br />
EDC Enterprise Data Center<br />
EDI Electronic Data Interchange<br />
EFT Electronic Funds Transfer<br />
EMC Electronic Media Claims<br />
ERA Electronic Remittance Advice<br />
ERN Electronic Remittance Notice<br />
FACP Final Administrative Cost Proposal<br />
FAQ Frequently Asked Question<br />
FAR Federal Acquisition Regulations<br />
FFS Fee-for-Service<br />
FI Fiscal Intermediary<br />
FOIA Freedom of Information Act<br />
FISS Fiscal Intermediary Standard System<br />
FQHC Federally Qualified Health Clinic<br />
GAO Government Accountability Office<br />
GFE Government Furnished Equipment<br />
GFP Government Furnished Property<br />
GTL Government Task Leader<br />
HHH Home Health and Hospice<br />
HGTS Harkin Grantee Tracking System<br />
HIGLAS Healthcare Integrated General Ledger Accounting System<br />
HIPAA Health Insurance Portability and Accountability Act<br />
IACS Individuals Authorized to Access CMS Systems<br />
IBPR Intermediary Benefit Payment Report<br />
ICOR Interactive Correspondence Online Reporting<br />
IDIQ Indefinite Delivery/Indefinite Quantity<br />
IER Interim Expenditure Report<br />
IOM Internet Only Manual<br />
ISO International Organization for Standardization<br />
IT Information Technology<br />
IVR Interactive Voice Response<br />
JIL Jurisdiction Implementation Lead<br />
JIPP Jurisdiction Implementation Project Plan<br />
JOA Joint Operating Agreement<br />
JOSD Jurisdiction Operational Start Date<br />
JSM/TDL Joint Signature Memorandum/Technical Direction Letter<br />
LAN Local Area Network<br />
LCD Local Coverage Determination<br />
LOLA Limited On Line Access<br />
MAC Medicare Administrative Contractor<br />
MCMG Medicare Contractor Management Group<br />
MCR Medicare Contracting Reform<br />
MCS Multi-<strong>Carrier</strong> System<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 41
Exhibits<br />
Exhibit 11<br />
Acronyms (Cont.)<br />
MDCN Medicare Data Communications Network<br />
MED Medicare Exclusion Database<br />
MISC Medicare Implementation Support Contractor<br />
MMA Medicare Prescription Drug, Improvement and Modernization Act of 2003<br />
MOU Memorandum of Understanding<br />
MPaRTS Mistaken Payment Recovery Tracking System<br />
MR Medical Review<br />
MSN Medicare Summary Notice<br />
MSP Medicare Secondary Payer<br />
NARA National Archive and Record Administration<br />
NGD Next Generation Desktop<br />
NIH National Institutes of Health<br />
NOBA Notice of Budget Authorization<br />
OAGM Office of Acquisition and Grants Management<br />
ODIE Online Data Input and Edit<br />
OFM Office of Financial Management<br />
OIS Office of Information Services<br />
OIG Office of the Inspector General<br />
OSCAR Online Survey Certification and Reporting System<br />
PECOS Provider Enrollment, Chain and Ownership System<br />
PI Program Integrity<br />
PIES Provider Inquiry Evaluation System<br />
PIMR Program Integrity Medical Review<br />
PO Project Officer<br />
POC Point of Contact<br />
POR Provider Overpayment Reporting<br />
PSC Program Safeguard Contractor<br />
PSOR Physician and Supplier Overpayment Report<br />
PTS Provider Tracking System<br />
QASP Quality Assurance Surveillance Plan<br />
QCM Quality Call Monitoring<br />
QWCM Quality Written Correspondence Monitoring<br />
QIO Quality Improvement Organization<br />
QIC Qualified Independent Contractor<br />
RAC Recovery Audit Contractor<br />
RACF Resource Access Control Facility<br />
RCP Report of Contractor Performance<br />
ReMAS Recovery Management and Accounting System<br />
RFC Request for Contract<br />
RFP Request for Proposals<br />
RHC Rural Health Clinic<br />
RHHI Regional Home Health Intermediary<br />
RO Regional Office<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 42
Exhibits<br />
Exhibit 11<br />
Acronyms (Cont.)<br />
SADBUS Small and Disadvantaged Business<br />
SAS 70 Statement on Auditing Standard, Number 70<br />
SBR Supplemental Budget Request<br />
SIPP Segment Implementation Project Plan<br />
SMART System for MSP Automated Recovery and Tracking<br />
SOSD Segment Operational Start Date<br />
SOW Statement of Work<br />
SSA Social Security Administration<br />
SSM Shared System Maintainer<br />
SIM Segment Implementation Manager<br />
STAR System Tracking Audit and Reimbursement System<br />
STC Single Testing Contractor<br />
TM Technical Monitor<br />
UAT User Acceptance Testing<br />
VMS ViPS Medicare System<br />
WAN Wide Area Network<br />
WBS Work Breakdown Structure<br />
WIC Western Integrity Center<br />
ZPIC Zone Program Integrity Contractor (PSC)<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 43
Exhibits<br />
-A-<br />
Access to CMS systems, 7-9<br />
Access to files after cutover, 6-12<br />
Access to Medicare information, 6-2<br />
Accounts receivable review, 8-5<br />
Acronyms, Exhibit 10<br />
Administrative cost audit, 8-7<br />
Appeals, 6-8<br />
Asset inventory, 4-8, 5-5<br />
Assisting MAC communications, 6-12<br />
Audit, 8-7<br />
Award notification, 3-1<br />
-B-<br />
Bank account, 8-4<br />
Business function lead, 2-3<br />
-C-<br />
<strong>Carrier</strong>, see outgoing contractor<br />
Claims processing, 6-7<br />
Closeout:<br />
approach, 6-2<br />
project plan, 4-1, Exhibit 4<br />
project status report, 4-5<br />
project team, 3-2<br />
CMS project organization, 2-1<br />
Communications:<br />
assisting MAC, 6-12<br />
cutover, 7-8<br />
internal, 4-3<br />
with MAC, 4-3<br />
Consultants, 4-2<br />
Contract compliance, 6-14<br />
Contract notification, 3-1<br />
Contracting Officer:<br />
<strong>Carrier</strong>/Intermediary, 2-1<br />
MAC, 2-2<br />
Contractor manager, 2-1<br />
Contractor Performance Evaluation<br />
(CPE), 6-6<br />
Cost audit, 8-7<br />
Customer service, 6-7<br />
Cutover (also see Post-cutover):<br />
communication with providers, 7-8<br />
cutover plan, 7-1<br />
Index<br />
Cutover (cont.):<br />
daily meetings, 7-2<br />
dark day, 7-3<br />
data migration, 7-5<br />
definitions, 7-1<br />
file format, 7-6<br />
file transfer plan, 4-8, 7-5<br />
final inventory, 7-5<br />
packing, 7-6<br />
release of the payment floor, 7-4<br />
sequence of cutover activities, 7-7<br />
transfer of files and assets, 7-7<br />
workgroup, 7-2<br />
-D-<br />
Dark days, 7-3<br />
Data migration, 7-5<br />
Definitions:<br />
closeout, 1-4<br />
contract, 1-4<br />
cutover, 7-1<br />
cutover period, 7-1<br />
implementation, 1-4<br />
incoming contractor, 1-4<br />
legacy contractor, 1-4<br />
outgoing contractor, 1-4<br />
post-contract, 7-1<br />
post-operational, 7-1<br />
provider, 1-4<br />
transition, 1-4<br />
Deliverables list, 6-3<br />
Documentation (also see Exhibit 5 and<br />
Exhibit 7):<br />
asset inventory, 4-8<br />
closeout approach, 4-5, 6-1, 6-2<br />
Closeout Project Plan, 4-5<br />
Closeout Project Plan update, 4-5<br />
closeout project status report, 4-5<br />
file transfer plan, 7-5<br />
inventory reduction plan, 4-5, 6-1<br />
issues log/action items, 4-7<br />
lessons learned, 4-9<br />
post-cutover activities/resources, 4-8<br />
staffing report, 4-7<br />
workload report, 4-7<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 44
Exhibits<br />
Due diligence, see providing<br />
information/assistance to MAC.<br />
-E-<br />
Edits, 6-5<br />
EDI vendor list, 6-10<br />
EDI enrollment forms, 6-10<br />
Employee:<br />
employment with MAC, 5-1<br />
notification, 3-2<br />
termination, 5-2<br />
severance, 5-3<br />
retention bonus, 5-4<br />
-F-<br />
Files:<br />
disposition, 6-11<br />
format, 7-6<br />
file transfer plan, 4-8, 7-5<br />
inventory, 6-11, 7-5<br />
packing, 7-6<br />
transfer, 7-7, Exhibit 6<br />
Financial reports, 8-4, 8-7<br />
Form IRS-1099, 8-8<br />
-G-<br />
Goals of a successful transition, 1-5<br />
Glossary, Exhibit 10<br />
-H-<br />
Hiring of carrier/intermediary<br />
employees, 5-1<br />
-I-<br />
Incoming contractor, see Medicare<br />
Administrative Contractor.<br />
Initial closeout activities, 3-1<br />
Initial contact with incoming MAC, 3-1<br />
Interaction with incoming MAC, 4-3<br />
Intermediary, see outgoing contractor<br />
Internal controls, 6-6<br />
Inventory reduction plan, 4-5, 6-1<br />
IRS Form 1099, 8-8<br />
Issues log/action items, 4-7<br />
-J-<br />
Jurisdiction Implementation Lead, 2-2<br />
Jurisdiction kickoff: 3-2<br />
jurisdiction kickoff meeting, 3-4, 4-10<br />
outgoing contractor pre-meeting, 3-3<br />
segment kickoff meeting, 3-5<br />
Jurisdiction project status meeting, 4-10<br />
Jurisdiction Transition Coordinator, see<br />
Jurisdiction Implementation Lead.<br />
-K-<br />
Kickoff, see jurisdiction kickoff<br />
-L-<br />
Legacy contractor, 1-4<br />
Lessons learned, 4-9, 7-11<br />
Licenses, 5-5<br />
Local Coverage Determinations (LCD),<br />
6-5<br />
-M-<br />
Medical review, 6-8<br />
Medicare Administrative Contractor:<br />
access to outgoing contractor<br />
information, 6-2<br />
contact with/interaction, 3-1, 4-3<br />
due diligence, 6-3<br />
on-site presence, 4-3<br />
providing information to, 6-1, 6-3<br />
recruitment of outgoing contractor<br />
staff, 5-1<br />
terminology, 1-4<br />
Medicare Implementation Support<br />
Contractor (MISC), 2-3<br />
Medicare Secondary Payer (MSP), 6-7<br />
Meetings (also see Exhibit 7):<br />
cutover, 4-11, 7-2<br />
jurisdiction kickoff, 3-4, 4-10<br />
jurisdiction project status, 4-10<br />
outgoing contractor pre-meeting, 3-3,<br />
4-9<br />
post-project review (lessons learned),<br />
04-11<br />
segment kickoff, 3-5, 4-10<br />
segment project status, 4-10<br />
workgroup, 3-10, 4-11<br />
-O-<br />
On-site presence of MAC, 4-3<br />
Operational assessment, see providing<br />
information/assistance to MAC.<br />
Outgoing Contractor:<br />
access to files after cutover, 6-12<br />
asset inventory, 4-8, 5-5<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 45
Exhibits<br />
Outgoing contractor (cont.):<br />
completion of financial reports, 8-4,<br />
8-7<br />
Contractor Performance Evaluation<br />
(CPE), 6-6<br />
cooperation with MAC, 4-3<br />
documentation, 4-4, Exhibit 5<br />
file inventory, 6-11, 7-5<br />
hiring of staff, 3-2, 5-1<br />
internal controls, 6-6<br />
operational analysis, 6-1<br />
performance evaluation, 6-6<br />
performance waiver, 4-4<br />
personnel, see Personnel<br />
pre-meeting (kickoff), 3-3, 4-9<br />
providing information to MAC, see<br />
Providing Information/Assistance to<br />
MAC.<br />
staffing report, 4-7<br />
workload, 4-7, 6-1<br />
-P-<br />
Payment cycle, 8-5<br />
Payment floor, 7-4<br />
Performance Improvement Plan, 6-6<br />
Performance waiver, 4-4<br />
Periodic interim payment coordination,<br />
8-5<br />
Personnel:<br />
continued employment, 5-1<br />
MAC employment, 5-1<br />
retention bonus, 5-4<br />
severance, 5-3<br />
termination, 5-2<br />
Post-cutover:<br />
approach, 7-10<br />
completion of financial reports, 7-10,<br />
8-4, 8-5<br />
lessons learned, 7-11<br />
operations wrap-up, 7-10<br />
post-project review, 7-12<br />
reports, 7-10, 8-4, 8-5<br />
resources, 7-10<br />
Post-project review meeting, 4-11, 7-12<br />
Print/mail operations, 6-10<br />
Project Officer , 2-2<br />
Project plan, see Closeout Project Plan.<br />
Provider:<br />
audit, 6-8<br />
communication, 6-12<br />
definition, 1-4<br />
education/training, 6-10<br />
enrollment, 6-9<br />
reimbursement, 6-9<br />
Providing Information/Assistance to<br />
MAC:<br />
access to information, 6-2<br />
appeals, 6-8<br />
beneficiary communication, 6-14<br />
claims processing, 6-7<br />
communications, 6-12<br />
Contractor Performance Evaluation, 6-6<br />
customer service, 6-7<br />
due diligence, 6-3<br />
edits, 6-5<br />
internal controls, 6-6<br />
Local Coverage Determinations, 6-5<br />
medical review, 6-8<br />
Medicare Secondary Payer, 6-7<br />
operational assessment, 6-3<br />
Performance Improvement Plan, 6-6<br />
performance waiver, 4-4<br />
print/mail operations, 6-10<br />
provider audit, 6-8<br />
provider communication, 6-13<br />
provider education/training, 6-10<br />
provider enrollment, 6-9<br />
provider reimbursement, 6-9<br />
staffing levels, 6-6<br />
workload, 6-5<br />
PSOR/POR Reconciliation, 8-7<br />
-R-<br />
Record retention, 6-11, 6-12<br />
Release of the payment floor, 7-4<br />
Reports, 7-10, 8-4. also see<br />
documentation.<br />
Requests for information, 6-2<br />
-S-<br />
Segment implementation manager, 2-1<br />
Segment kickoff meeting, 3-5, 4-10<br />
Segment project status meeting, 4-10<br />
Segment transition, 1-3<br />
Severance pay, 5-3<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 46
Exhibits<br />
Staffing report, 4-7<br />
Streamlining operations, 6-1<br />
Subcontract termination, 5-5<br />
Supplemental Budget Request, 8-3<br />
-T-<br />
Technical monitor, 2-4<br />
Termination:<br />
costs, 8-3<br />
employee, 5-2<br />
subcontracts, 5-5<br />
Termination of access to CMS systems, 7-9<br />
Terminology, 1-4<br />
Transition:<br />
costs, 8-1<br />
definition, 1-4<br />
Supplemental Budget Request, 8-3<br />
workgroup, 3-7<br />
workgroup meeting, 4-11<br />
-W-<br />
Waivers, 4-4<br />
Workgroups: 3-7<br />
Administration, 3-10<br />
Functions, 3-9<br />
Meetings, 4-11<br />
Participants, 3-8<br />
Scope, 3-9<br />
Workload assessment, 6-1<br />
Workload report, 4-7<br />
<strong>Carrier</strong>/Intermediary Workload Closeout Handbook 47
ASCO MAC <strong>Advisory</strong> Group Conference Call Meeting Minutes<br />
Thursday, February 19, <strong>2009</strong><br />
Participants:<br />
CPC Leadership State Society Presidents<br />
Charles Penley, MD, Chair Dan Curtis, MD (J1- NV)<br />
Michael Neuss, MD Joseph Muscato, MD (J5 – MO)<br />
Therese Mulvey, MD John Poggi, MD (J13 – NY)<br />
Arthur Skarin, MD (J14 – MA)<br />
<strong>CAC</strong> Members/Alternates State Society Executive Directors<br />
Pat Tyler, MD (J1 – CA North) Jose Luis Gonzalez (J1 – CA North)<br />
Richard McGee, MD (J2 – WA) Rise Cleland (J2 – WA)<br />
John Cox, DO (J4 – TX) Mary Malloy, CAE (J8 – MI)<br />
Barbara McAneny, MD (J4- NM) Dorothy Phillips (J9 – FL)<br />
Burton Schwartz, MD (J6 – MN) Debbie Faesel (J12 – PA)<br />
Keith Logie, MD (J8 – IN) Dawn Holcombe (J13 – CT)<br />
Tom Marsland, MD (J9 – FL) Dave Dillahunt, CAE (J15 – OH)<br />
Charles McKay, MD (J10 – TN) Marci Cali, RHIT (Multiple – MD)<br />
Eric Seifter, MD (J12 – MD)<br />
Daniel Hayes, MD (J14 – ME) ASCO Staff & Counsel<br />
Charles Rosenbaum, MD (J14 – MA) Laura Cathro<br />
Stan Forston, MD, MPH (J15 – OH) Bela Sastry, MPH<br />
Julia Tomkins<br />
Terry Coleman, Esq.<br />
I. Introductory Remarks (Charles Penley, MD)<br />
ASCO Clinical Practice <strong>Committee</strong> (CPC) Chair, Charles Penley, MD, called the meeting<br />
to order at approximately 5:07 PM (EST), and welcomed all of the conference call<br />
participants. He reminded all group members to review the conference call agenda and<br />
related materials sent out by e-mail earlier in the week by Laura Cathro, ASCO staff. He<br />
also gave an update on the A/B MAC contracts to date, and stated that all of the CMS<br />
contracts have now been awarded, but a few of the awards have been disputed.<br />
II. Open Discussion (Charles Penley, MD moderated)<br />
A. Transition Experience of Awarded MAC Jurisdictions<br />
Jurisdiction 1 (CA, HI, NV American Samoa, Guam, Northern Mariana Islands) –<br />
Dan Curtis, MD, the State Society President and <strong>Oncology</strong> <strong>CAC</strong> Representative for the<br />
state of Nevada, stated that the MAC J1 transition is going relatively smoothly. The new<br />
J1 contractor, Palmetto Government Benefit Administrators, has had some problems with<br />
their electronic billing software, as well as provider access to their system. Some<br />
1
providers are experiencing major delays, and have not been paid in months, whereas<br />
other providers have had little or no problems. Dr. Curtis stated that Palmetto did not<br />
initially have the infrastructure in place to handle the transition, but they have been<br />
diligently working to resolve these issues, and they have also opened up lines for<br />
communication now they have more personnel in place to be better-able to handle the<br />
volume. Their goal is to address complaints and respond to problems.<br />
Jurisdiction 2 (Alaska, Idaho, Oregon, and Washington) –<br />
Rick McGee, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Washington, stated that Noridian<br />
Administrative Services, their carrier, is currently processing their claims. The contract<br />
awarded to National Heritage Insurance Corporation (NHIC) was disputed, but the<br />
protests have recently been withdrawn. The Government Accountability Office (GAO)<br />
will be making their formal decision on April 1 st , and it is likely that, once the final<br />
decision is made, and assuming no further protests, that the transition will move forward.<br />
A 6-month cutover is anticipated starting April 1 st .<br />
Dr. McGee also stated that, once the contract for Jurisdiction 2 was protested,<br />
communications from the NHIC went dead. Providers in J2 have been relying on<br />
Noridian to provide them with updates and the current award status.<br />
Jurisdiction 3 (Arizona, Montana, North Dakota, South Dakota, Utah, and Wyoming –<br />
No representative was on the call to report.<br />
Jurisdiction 4 (Colorado, New Mexico, Oklahoma, and Texas) –<br />
John Cox, DO, MBA, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Texas, stated that<br />
Jurisdiction 4, awarded to Trailblazer Health Enterprises, is a more mature MAC in terms<br />
of getting transitioned. Overall, things are going relatively smoothly. Trailblazer<br />
consolidated all of the local coverage policies for Colorado, New Mexico, Oklahoma, and<br />
Texas down to about 100 LCDs in total for the entire J4 MAC, but many of the LCDs<br />
may come back. Trailblazer is starting to revise policies and put more edits in place.<br />
Their goal is to try to mobilize the coverage policies for the four states, and they realize<br />
that they are going to have to limit coverage in certain areas.<br />
Dr. Cox stated that the Trailblazer edits have not really impacted the practice of<br />
oncology, but they did revise the echocardiogram LCD, which does affect oncologists<br />
minimally.<br />
Jurisdiction 5 (Iowa, Kansas, Missouri, and Nebraska)<br />
Joseph Muscato, MD, the State Society President and <strong>Oncology</strong> <strong>CAC</strong> Representative for<br />
Missouri, stated that Jurisdiction 5, under Wisconsin Physician Services (WPS), has had<br />
very few problems with their transition. The payment systems were held up temporarily<br />
in Eastern Missouri, but all other areas in their region have experienced very few<br />
problems.<br />
Dr. Muscato also stated that Kenneth Bussan, MD, their Contractor Medical Director<br />
(CMD), has mainly been homing in on limiting coverage for air ambulances and air<br />
2
transports, which are very costly, and have apparently been significantly over-utilized in<br />
that region.<br />
Jurisdiction 6 (Illinois, Minnesota, and Wisconsin) –<br />
Burton Schwartz, MD, the <strong>Oncology</strong> <strong>CAC</strong> representative for Minnesota, stated that<br />
Wisconsin Physician Services (WPS) has protested the CMS contract for Jurisdiction 6<br />
awarded to Noridian Administrative Services (NAS), and everything is currently on hold.<br />
There is nothing further to report at this time.<br />
Jurisdiction 7 (Arkansas, Louisiana, and Mississippi) –<br />
No representative was on the call to report.<br />
Jurisdiction 8 (Indiana and Michigan) –<br />
Keith Logie, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Indiana, stated that National<br />
Government Services (NGS) Local Coverage Determinations (LCDs) tend to come from<br />
out-of-state, mainly from the New York region.<br />
Jurisdiction 9 (Florida, Puerto Rico, and the Virgin Islands) –<br />
Thomas Marsland, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Florida, commented that<br />
their transition is going smoothly mainly because First Coast Service Options (FCSO)<br />
was their former Medicare carrier. Their jurisdiction is still in transition, and will be for<br />
another month. Most of the local coverage policies are Florida’s former policies under<br />
the carrier. Overall, there is relatively little disruption.<br />
There is an issue with the coverage for Neulasta and Neupogen within a 2 week/24 hour<br />
period, but First Coast will be unable to review and make changes to any of these policies<br />
until they are fully transitioned.<br />
Jurisdiction 10 (Alabama, Georgia, and Tennessee) –<br />
Charles McKay, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Tennessee, stated that there<br />
is nothing to report yet, but it does not appear that CIGNA will be appealing the contract<br />
awarded to Cahaba Government Benefit Administrators.<br />
Jurisdiction 11 (North Carolina, South Carolina, Virginia, and West Virginia) –<br />
No representative was on the call to report, but the contract awarded to Palmetto GBA<br />
was disputed, and the Government Accountability Office (GAO) is currently handling<br />
their protest.<br />
Jurisdiction 12 (Delaware, District of Columbia, Maryland, New Jersey, and<br />
Pennsylvania) –<br />
Eric Seifter, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Maryland, stated that the<br />
Highmark Government Services (HGS) transition for Jurisdiction 12 went very smoothly,<br />
overall. Coverage under their new contractor has improved, especially in regards to the<br />
new coverage policy for chemotherapeutic drugs.<br />
3
Jurisdiction 13 (Connecticut and New York) –<br />
John Poggi, MD, the State Society President for New York, and Dawn Holcombe, the<br />
State Society Executive Director for Connecticut, stated that the transition, overall, has<br />
been going well, but National Government Services has introduced coverage policies that<br />
many people do not agree with. These individuals and organizations are currently<br />
working on appealing these issues, and hope that their efforts will be successful.<br />
Jurisdiction 14 (Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont)<br />
Charles Rosenbaum, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Massachusetts, stated<br />
that the Jurisdiction 14 MAC transition under the National Heritage Insurance<br />
Corporation (NHIC) is going relatively smoothly. The official cutover is September 9,<br />
<strong>2009</strong>, and NHIC will be continuing all of the former carrier coverage policies up until<br />
that time. In the meantime, they will work on revising and consolidating all of the state<br />
policies that will be applicable to the new MAC.<br />
Dr. Rosenbaum mentioned that providers in his region have some concerns with the<br />
policy for Erythropoietin Stimulating Agents (ESAs), but he will now also carefully<br />
review NHIC’s other coverage policies related to those mentioned during this call.<br />
Jurisdiction 15 (Kentucky and Ohio) –<br />
Stan Forston, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Ohio, stated that Highmark<br />
Government Services (HGS) was awarded the contract for A/B MAC Jurisdiction 15, and<br />
feedback from the Pittsburgh representatives about Highmark was very positive. There is<br />
no additional information to report, however, because everything is so new.<br />
Dave Dillahunt, the State Society Executive Director for Ohio, stated that the contract for<br />
Jurisdiction 15 was disputed, and is currently under review by the Government<br />
Accountability Office (GAO). Mr. Dillahunt also stated that the Jurisdiction 15 states,<br />
Kentucky and Ohio, are also working to change the NGS antiemetics and iron deficiency<br />
policies, and they are trying to see if these local coverage policy issues are tied to any<br />
national issues, or even issues faced by other MAC jurisdictions.<br />
Debbie Faesel, the State Society Executive Director for Pennsylvania, confirmed Dave<br />
Dillahunt’s statement that the J15 contract was currently in dispute because Andrew<br />
Bloschichak, MD, one of the Contractor Medical Directors for Highmark, shared this<br />
information at their last <strong>CAC</strong> meeting for Jurisdiction 12.<br />
B. Local Coverage Policy Issues<br />
IV Iron and ESA Use<br />
John Cox, the <strong>Oncology</strong> <strong>CAC</strong> representative for Texas (Jurisdiction 4), stated that he and<br />
his colleagues feel strongly about the ability for oncologists to give IV iron in<br />
conjunction with Erythropoietin Stimulating Agents (ESAs), but Trailblazer will not<br />
allow for this. There are edits currently in place that enforce this policy. If one codes for<br />
iron deficiency, however, then one cannot bill for ESAs.<br />
4
Eric Seifter, MD, the <strong>Oncology</strong> <strong>CAC</strong> representative from Maryland, stated that <strong>Oncology</strong><br />
<strong>CAC</strong> representatives in Jurisdiction 12 have requested that Highmark, their MAC<br />
contractor, approve coverage for IV iron along with the use of ESAs.<br />
To address this situation, CMS may need to issue a formal statement allowing for<br />
coverage of IV iron in conjunction with ESAs. ASCO staff and counsel will investigate<br />
this issue further and report back to the group on a future call.<br />
Vitamin B12 and Alimta<br />
Dr. Cox also commented about Trailblazer’s B12 and Alimta (pemetrexed for injection)<br />
policies. According to their policy, Trailblazer does not cover B12 without the<br />
appropriate diagnosis, and chemotherapy is not considered appropriate.<br />
Dr. McGee asked Dr. Cox how Trailblazer responded to complaints regarding this issue.<br />
Dr. Cox said that the J4 CMDs informed him that the claim denials are based on the way<br />
their edits are set up, even though providers may be using and reporting for the drug<br />
according to the FDA label. Providers are hoping that Trailblazer will revise their system<br />
edits based on the FDA label, and expect that this will even happen at some point.<br />
Dr. McAneny stated that she had sent Charles Haley, MD, and Debra Patterson, MD, the<br />
two Trailblazer CMDs, an e-mail awhile back, and was going to also bring this up at their<br />
next <strong>CAC</strong> Meeting.<br />
Chemotherapeutic Drugs<br />
Eric Seifter, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Maryland, informed the group<br />
members on the call that his new contractor, Highmark Government Services (HGS),<br />
currently has no edits in place for chemotherapy agents, but providers must have either<br />
compendia back-up, or the actual paper on which the medical necessity is based on, and<br />
put it in the various patient charts. Other than the Highmark requirement for providers to<br />
put a KX modifier on the chemotherapeutic code, there are no further system edits in<br />
place. However, Highmark is carefully reviewing these claims, especially those that are<br />
considered “outliers”, in efforts to prevent fraud and abuse.<br />
IV Versus Oral Antiemetic Drugs<br />
Keith Logie, MD, <strong>Oncology</strong> <strong>CAC</strong> Representative for Indiana, stated that National<br />
Government Services (NGS) has recently changed their policy for drugs that are available<br />
in both an oral and intravenous form. The newly revised NGS policy, Drugs and<br />
Biologicals, Coverage of, for Label and Off-Label Uses, L25820, and Supplemental<br />
Instruction Article, A44930, states that, for medications that are available in both an oral<br />
and intravenous form, the oral form must be administered first, and the intravenous form<br />
will not be covered/reimbursed unless patient fails the oral therapy. Dr. Logie expressed<br />
his concerns about the huge inconvenience and increased side effects to a debilitated<br />
population, the fact that most provider offices do not have a pharmacy on-site, and also<br />
the overall increased costs to practice.<br />
5
Julia Tomkins, ASCO staff, stated that NGS claims to base this position on the Medicare<br />
Benefit Policy Manual, CMS Publication 100-2, Chapter 15, Section 50.2 & 50.5.4, the<br />
most recent revision back in 2005. The provision in Section 50.5.4 of the CMS Manual<br />
relates to Part B coverage of oral antiemetics when they are a “full replacement” for<br />
intravenous antiemetics, and provides that, notwithstanding the “full replacement”<br />
requirement, Medicare will cover supplemental intravenous antiemetics if the oral<br />
antiemetics were ineffective.<br />
Section 50.2.A, K of the Manual, also cited by NGS, provides that the route of<br />
administration must be medically reasonable and necessary. It states further that “if a<br />
drug is available in both oral and injectable forms, the injectable form of the drug must be<br />
reasonable and necessary as compared to using the oral form.”<br />
In response to the NGS policy clarification, ASCO sent a letter to Dr. Barry Straube at<br />
CMS requesting that CMS have NGS rescind its policy. ASCO has not heard back yet<br />
from CMS regarding the letter, but will be sure to keep everybody informed as to their<br />
response. ASCO sees no basis for the new NGS policy, and no other contractor has<br />
interpreted the Manual in this manner. ASCO does not believe that the CMS manual<br />
language was intended to deny coverage to injectable drugs whenever an oral version<br />
exists. In the case of antiemetics administered in conjunction with anticancer<br />
chemotherapy, the standard practice is to use intravenous antiemetics, although oral<br />
antiemetics may sometimes be used instead.<br />
Furthermore, in the case of oral antiemetics that do not meet the conditions for Part B<br />
coverage, patients will be subject to the prior authorization and quantity limits that the<br />
Medicare Part D plans may impose. These requirements could be highly disruptive to the<br />
care of cancer patients.<br />
Barbara McAneny, the <strong>Oncology</strong> <strong>CAC</strong> Representative for New Mexico, stated that this<br />
type of policy change is not occurring in MAC Jurisdiction 4, as that is not the standard<br />
of care.<br />
John Poggi, the State Society President for New York, agreed with Dr. McAneny that the<br />
availability of these medications in practices in the 1970’s finally allowed for outpatient<br />
treatment instead of more costly inpatient treatment. He also stated that his local<br />
oncology society has been trying to communicate this to the NY CMDs. Though they are<br />
standing firm on this issue, they are at least in communication with the provider<br />
community. He also clarified that NGS’s position is not only must a patient fail an oral<br />
antiemetic drug before the IV form is covered, they must exhaust and fail on a sequence<br />
of oral antiemetic drugs before the IV form is covered. Furthermore, auditors may<br />
demand payback for IV administrations dating clear back to 2005, which was when CMS<br />
addressed their policy in the CMS manual.<br />
Dawn Holcombe, the State Society Executive Director for Connecticut, added that these<br />
audits could apply to the Office of Inspector General (OIG), Recovery Audit Contractors<br />
6
(RACs), and others who have authoritative oversight. Because this policy applies to all<br />
drugs and biologicals, and not just antiemetics, these may big targets for an audit.<br />
Ms. Holcombe also stated that this problem is being appealed by all 3 state societies in<br />
their MAC jurisdiction, and though there have not been any denials yet, the policy will<br />
start to be enforced by NGS on March 1, <strong>2009</strong>. NGS apparently will require that certain<br />
specified codes be itemized each time a claim is billed to indicate medical necessity.<br />
Dr. Penley asked who the Medicare CMD handling this issue was. Ms. Holcombe said<br />
that Michael Constantino, MD, was the first person to propose the policy and is the lead<br />
CMD heading up this change effort, but Richard Baer, MD and Paul Deutsch, MD are<br />
also heavily involved.<br />
Joseph Muscato, MD, the State Society President and <strong>Oncology</strong> <strong>CAC</strong> Representative for<br />
Missouri, asked if there is data out there that proves that, when a patient gets repeatedly<br />
sick, and has increased nausea and vomiting, it is very harmful to them and their<br />
recovery? Dr. McAneny confirmed that there is a significant amount of data to support<br />
this.<br />
A suggestion made by Dr. Muscato is that a solution is for providers to state their<br />
argument in terms of relative effectiveness, as this issue is getting heard broadly. Stan<br />
Forston, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Ohio, suggested that, since the NGS<br />
policy is referencing CMS manual language, it may be beneficial to have somebody look<br />
at the CMS manual language very carefully, and work on trying to tie CMS’s hands<br />
based on their own language found in their Benefit Policy Manual. Many providers and<br />
other stakeholders feel that NGS is over-interpreting and overreaching, and CMS should<br />
listen carefully to the clinical arguments.<br />
Julia Tomkins, ASCO staff, stated that ASCO did address the specific manual language<br />
in their letter sent to Barry Straube at CMS, and the NGS policy revision is based on the<br />
CMS manual language, not a Medicare National Coverage Determination (NCD).<br />
Dan Hayes, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Maine, stated that it may be<br />
beneficial to explore the literature of chemotherapy, which places the IV form as the<br />
standard of care. The general assumption is IV, and there should be plenty of literature<br />
out there to form the basis of a logical and cohesive argument. Dr. Poggi also<br />
commented that ASCO had two related Journal of Clinical <strong>Oncology</strong> (JCO) articles<br />
specific to this issue that could be used.<br />
Dr. Penley, due to limited time, indicated that the group discussion would have to move<br />
on to the other agenda discussion items. He asked that the group members copy Julia<br />
Tomkins on any communications concerning this policy so that ASCO can continue to<br />
work on this and advocate on the behalf of oncologists.<br />
Vitamin D Assay Testing<br />
Dawn Holcombe, the State Society Executive Director for Connecicut, stated that their<br />
A/B MAC contractor for Jurisdiction 13, National Government Services, is currently<br />
7
introducing a coverage policy for Vitamin D Assay Testing, and many of their physicians<br />
disagree, as they feel that it is very important to test breast cancer patients on aromatase<br />
inhibitor medications. Furthermore, they are shocked at the number of patients with<br />
Vitamin D deficiency. The Connecticut physicians also told Ms. Holcombe that they feel<br />
that Vitamin D testing is one of the most cost-effective treatments, and instead of NGS<br />
denying coverage, they feel that NGS should be promoting it.<br />
Rick McGee, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Washington, commented that the<br />
actual test is over $250.00, but the treatment itself is relatively inexpensive.<br />
Joseph Muscato, MD, the State Society President and <strong>Oncology</strong> <strong>CAC</strong> Representative for<br />
Missouri, stated that he actually sent a copy of a press release from the American Cancer<br />
Society (ACS) regarding this issue to his Contractor Medical Director (CMD) for<br />
Jurisdiction 5, Kenneth Bussan, MD. Dr. Muscato stated that he fully disagrees with the<br />
NGS policy, and he wants to prevent a similar policy from being adopted by his<br />
contractor, Wisconsin Physician Services. He also stated that breast cancer patients<br />
especially need to be screened.<br />
Laura Cathro, ASCO staff, stated that ASCO is aware of the NGS proposed policy, and<br />
ASCO has drafted a comment letter that will be sent to the NGS Contractor Medical<br />
Director (CMD), Paul Deutsch, MD, by the next day, February 20, <strong>2009</strong>, which is the<br />
official end date of the comment period.<br />
C. Leucovorin Shortage<br />
Laura Cathro, ASCO staff, stated that currently, both Teva and Bedford are<br />
manufacturing and releasing leucovorin. It will take several weeks to fill all backorders,<br />
however. Mid-March appears to be the timeframe when supplies are anticipated to meet<br />
historical demand. Teva’s shortage was caused by “increased demand”, but Teva is<br />
currently manufacturing at full capacity. Bedford is still experiencing manufacturing<br />
delays, however, and there is no information as to the reason for the Bedford shortage.<br />
She asked providers on the call to contact her directly if they were interested in ordering<br />
medication from Bedford’s emergency supply.<br />
Dawn Holcombe, the State Society Executive Director for Connecticut, asked if a<br />
shortage is what happens when drug prices get so low that the manufacturers stop<br />
producing drug because they cannot afford the losses. Dr Penley stated that Teva is a<br />
generic manufacture in Israel, and based on information shared with him by people who<br />
actually work at the plant, he does not believe the shortage was initiated by the<br />
manufacturer. He believes this to be a legitimate manufacturing problem that has finally<br />
been resolved.<br />
Dan Hayes, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Maine, stated that the lack of FDA<br />
oversight for generic manufacturers off-shore is a real problem, and he was curious what<br />
could be done about it. Dr Penley informed Dr. Hayes that ASCO is currently working to<br />
address these issues. He informed the group that Deborah Kamin, PhD, the Senior<br />
8
Director for the ASCO Cancer Policy & Clinical Affairs Department, has been working<br />
very closely with the FDA to try to get some additional information, and to encourage<br />
them to make it more of a priority to improve their communication efforts and oversight<br />
for off-shore drugs.<br />
D. Status of Recovery Audit Contractors (RACs)<br />
Julia Tomkins, ASCO staff, stated that the Tax Relief and Health Care Act of 2006,<br />
Section 302, requires a permanent and nationwide RAC program no later than 2010.<br />
There are a total of four RACs nationwide, which were announced back in October 2008.<br />
On November 2, 2008, however, two of the RAC contracts were disputed, and the<br />
Government and Accountability Office (GAO) issued a “Stay of Work”, or hold on the<br />
implementation of the four RACs.<br />
On February 2, <strong>2009</strong>, however, the companies involved in the dispute reached an<br />
agreement, and finally settled the dispute. On February 4, <strong>2009</strong>, the “Stay of Work” was<br />
lifted, and CMS updated their schedule of implementation online. The states of Texas<br />
and California will be added on March 1, <strong>2009</strong>, whereas the additional states will be<br />
added on August 9, <strong>2009</strong>.<br />
The two unsuccessful protesters, PRG Schultz and Viant Payment Systems, agreed to the<br />
following settlement: PRG Schultz will be a subcontractor for RACs A, B, and D, and<br />
Viant Payment Systems will be a subcontractor for Connolly Consulting, Region C. The<br />
details of the specific subcontractor arrangement are still proprietary.<br />
III. Wrap-Up & Next Steps (Charles Penley, MD)<br />
Dr. Penley thanked all members of the MAC <strong>Advisory</strong> Group for their participation in<br />
the 3 rd ASCO MAC <strong>Advisory</strong> Group Conference Call. He asked that the group members<br />
send Laura Cathro their agenda suggestions for the <strong>2009</strong> ASCO/ASH <strong>Hematology</strong>/<br />
<strong>Oncology</strong> <strong>CAC</strong> Network Meeting. Michael Neuss, MD, the CPC Chair-Elect for <strong>2009</strong>-<br />
2010, added that Charles Rosenbaum, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for<br />
Massachusetts, would be the ASCO Co-Chair for the <strong>2009</strong> <strong>CAC</strong> Network Meeting.<br />
Dr. Penley asked the call participants if they had any other comments or parting words<br />
for the group members. John Poggi, MD, the State Society President for New York,<br />
asked if Medicare Administrative Contractors (MACs) work on a commission or bonus<br />
basis, based on cost-savings, or if it is based on a fixed price. Terry Coleman, Esq.,<br />
ASCO’s counsel, informed Dr. Poggi that all MAC contracts are based on a fixed price,<br />
whereas the old carrier contracts were based on costs incurred.<br />
Laura Cathro informed the group members about the Encore listening session of the call<br />
that would be available for the next 5 business days, and said that she would send out an<br />
9
e-mail with the dial-in information. She also asked that the call participants share this<br />
information with the other group members who were unable to participate in the call.<br />
The next steps for the MAC <strong>Advisory</strong> Group are as follows:<br />
MAC <strong>Advisory</strong> Group members are encouraged to inform other <strong>CAC</strong> members in<br />
their local regions/states of all ASCO MAC <strong>Advisory</strong> Group discussions, and to keep<br />
them updated on the status and roll-outs of the various MAC jurisdictions, Local<br />
Coverage Determination (LCD) changes, etc.<br />
Contact Laura Cathro at (703) 519-2907 or laura.cathro@asco.org with any questions.<br />
10
ASCO MAC <strong>Advisory</strong> Group Conference Call Meeting Minutes<br />
Wednesday, May 20, <strong>2009</strong><br />
Participants:<br />
CPC Leadership State Society Executive Directors<br />
Charles Penley, MD, Chair Jose Luis Gonzalez (J1 – CA North)<br />
Michael Neuss, MD Mariana Lamb (J1 – CA South)<br />
Mary Malloy, CAE (J8 – MI)<br />
<strong>CAC</strong> Members/Alternates Dorothy Phillips (J9 – FL)<br />
John Cox, DO (J4 – TX) Karen Beard (J10 – GA)<br />
Burton Schwartz, MD (J6 – MN) Debbie Faesel (J12 – PA)<br />
Charles McKay, MD (J10 – TN) Dave Dillahunt, CAE (J15 – OH)<br />
Eric Seifter, MD (J12 – MD) Marci Cali, RHIT (Multiple – MD)<br />
Charles Rosenbaum, MD (J14 – MA)<br />
Stan Forston, MD, MPH (J15 – OH) ASCO Staff & Counsel<br />
Laura Cathro<br />
State Society Presidents Julia Tomkins<br />
John Poggi, MD (J13 – NY) Terry Coleman, Esq.<br />
I. Introductory Remarks (Charles Penley, MD)<br />
ASCO Clinical Practice <strong>Committee</strong> (CPC) Chair, Charles Penley, MD, called the meeting<br />
to order at approximately 5:05 PM (EST), and welcomed all of the conference call<br />
participants. He reminded all group members to review the conference call agenda and<br />
related materials sent out by e-mail earlier in the week by Laura Cathro, ASCO staff.<br />
II. Open Discussion (Charles Penley, MD moderated)<br />
A. Transition Experience of Awarded MAC Jurisdictions<br />
Jurisdiction 1 (CA, HI, NV American Samoa, Guam, Northern Mariana Islands) –<br />
Jose Gonzalez, the State Society Executive Director for ANCO, stated that there is<br />
nothing new to report. Palmetto had early transition problems in terms of enrollment and<br />
delayed payment, but these issues are mostly resolved. The LCDs have been<br />
consolidated satisfactorily. The <strong>CAC</strong> process seems to be working for any new or<br />
revised LCDs.<br />
Jurisdiction 2 (Alaska, Idaho, Oregon, and Washington) –<br />
No representative was on the call to report.<br />
Jurisdiction 3 (Arizona, Montana, North Dakota, South Dakota, Utah, and Wyoming –<br />
No representative was on the call to report.<br />
Jurisdiction 4 (Colorado, New Mexico, Oklahoma, and Texas) –<br />
1
John Cox, DO, MBA, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Texas, stated that<br />
Jurisdiction 4, awarded to Trailblazer Health Enterprises, has had a relatively smooth<br />
transition, and there is nothing new to report.<br />
Jurisdiction 5 (Iowa, Kansas, Missouri, and Nebraska)<br />
No representative on the call to report.<br />
Jurisdiction 6 (Illinois, Minnesota, and Wisconsin) –<br />
Burton Schwartz, MD, the <strong>Oncology</strong> <strong>CAC</strong> representative for Minnesota, stated that<br />
Wisconsin Physician Services (WPS) has protested the CMS contract for Jurisdiction 6<br />
awarded to Noridian Administrative Services (NAS), and everything is currently on hold.<br />
There is nothing further to report at this time.<br />
Jurisdiction 7 (Arkansas, Louisiana, and Mississippi) –<br />
No representative was on the call to report.<br />
Jurisdiction 8 (Indiana and Michigan) –<br />
No representative was on the call to report.<br />
Jurisdiction 9 (Florida, Puerto Rico, and the Virgin Islands) –<br />
Dorothy Green Phillips, the State Society Executive Director for FLASCO, stated that the<br />
Jurisdiction 9 MAC transition has gone very smoothly, mainly since First Coast Service<br />
Options was their former Medicare carrier.<br />
Jurisdiction 10 (Alabama, Georgia, and Tennessee) –<br />
Karen Beard, the State Society Executive Director for GASCO, stated that Georgia and<br />
Alabama were already under Cahaba as their Medicare carrier, so the MAC transition for<br />
these states have been going relatively smoothly. Tennessee, on the other hand, will have<br />
a lot of work in their LCD consolidations. Their former Medicare carrier was CIGNA.<br />
Jurisdiction 11 (North Carolina, South Carolina, Virginia, and West Virginia) –<br />
No representative was on the call to report.<br />
Jurisdiction 12 (Delaware, District of Columbia, Maryland, New Jersey, and<br />
Pennsylvania) –<br />
Eric Seifter, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Maryland, stated that the<br />
Highmark Government Services (HGS) transition for Jurisdiction 12 went very smoothly.<br />
Jurisdiction 13 (Connecticut and New York) –<br />
John Poggi, MD, the State Society President for New York, stated that the transition,<br />
overall, has been going well, but National Government Services has introduced coverage<br />
policies that many people do not agree with. These will be discussed later on in this call.<br />
Jurisdiction 14 (Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont)<br />
2
Charles Rosenbaum, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Massachusetts, stated<br />
that the Jurisdiction 14 MAC transition under the National Heritage Insurance<br />
Corporation (NHIC) is going relatively smoothly.<br />
Jurisdiction 15 (Kentucky and Ohio) –<br />
Dave Dillahunt, the State Society Executive Director for Ohio, stated that the contract for<br />
Jurisdiction 15 was disputed, but his state society has heard that the appeal has been<br />
sustained. There is still uncertainty about whether the contract awarded to Highmark was<br />
upheld. Nobody seems to have more information at this time.<br />
B. Local Coverage Policy Issues<br />
IV Versus Oral Antiemetic Drugs<br />
National Government Services (NGS) has recently changed their policy for drugs that are<br />
available in both an oral and intravenous form. The newly revised NGS policy, Drugs<br />
and Biologicals, Coverage of, for Label and Off-Label Uses, L25820, and Supplemental<br />
Instruction Article, A44930, states that, for medications that are available in both an oral<br />
and intravenous form, the oral form must be administered first, and the intravenous form<br />
will not be covered/reimbursed unless patient fails the oral therapy.<br />
Julia Tomkins, ASCO staff, stated that ASCO sent a letter to Dr. Barry Straube at CMS<br />
requesting that CMS have NGS rescind its policy. ASCO has not heard back yet from<br />
CMS regarding the letter, but CMS told ASCO that they are currently working on a<br />
response. Other things, such as the Swine Flu pandemic have taken priority, which was<br />
the cause of their delayed response.<br />
Ms. Tomkins also stated that ASCO has been hearing from providers within the NGS<br />
area about this policy and that the interpretation is being applied to all categories of<br />
drugs, not just antiemetics. ASCO was informed that NGS would be publishing a<br />
questions and answers document on their website soon regarding this policy. First Coast<br />
Service Options (FCSO) has also posted a policy and position similar to NGS.<br />
Dorothy Green Phillips, the Executive Director for FLASCO, stated that First Coast<br />
always does what CMS tells them. She has also heard complaints from Florida members<br />
about First Coast’s new policy and position on the oral versus IV antiemetic drugs.<br />
Dr. Poggi stated that New York providers are still able to use IV palonosetron HC1<br />
(Aloxi®) since it does not have an oral counterpart, and as long as it is used for the<br />
appropriate indications. Many providers have been using oral dexamethasone<br />
(Decadron®) instead of IV dexamethasone (Decadron®) for antiemetic indications.<br />
Some practices do not use IV palonosetron HC1 (Aloxi®), however, so they are more<br />
affected in being forced to use oral antiemetic drugs. If, however, IV palonosetron HC1<br />
(Aloxi®) is discontinued, then there will be some real problems.<br />
3
Charles Penley, MD, ASCO’s Clinical Practice <strong>Committee</strong> Chair, stated that the<br />
Massachusetts Medicaid program currently has a restrictive formulary that requires the<br />
use of oral antiemetic drugs over IV, and they do not cover IV palonosetron HC1<br />
(Aloxi®). The majority of these patients remain very sick. Despite this, there is not a lot<br />
of clinical data to draw upon. It will be very difficult to overturn this policy and<br />
interpretation without clinical evidence.<br />
Dr. Neuss asked Dorothy Green Phillips if FLASCO doctors are having trouble with IV<br />
palonosetron HC1 (Aloxi®). She responded that there have been no complaints, but<br />
providers have made general complaints about non-payment for IV medications.<br />
Dr. Neuss commented that there is a significant access issue for patients in regards to this<br />
issue. Providers must go through a DMERC distributor or supplier, and many providers<br />
are not set up for this. Also, many providers have experienced delays when trying to bill<br />
DMERCs. Also, with Part D, there are coverage tiers, limited coverage, and out-ofpocket<br />
expenses.<br />
Dr. Poggi stated that he was informed by the NGS CMDs in one of their meetings that<br />
their intention is that if a patient fails an oral antiemetic drug, providers cannot<br />
automatically use the IV version of that drug. They must try other oral drugs from the<br />
same class until they have exhausted all of their options before any of the IV drugs are<br />
covered. Dr. Poggi also stated that the NGS CMDs will be meeting again with the New<br />
York State <strong>Oncology</strong> Society in June. They hope to discuss this matter further.<br />
Dr. Penley suggested that we involve patient advocacy groups, such as NCCS, because he<br />
is concerned that the recent policy changes will put us back 20 years when we did not<br />
have this type of treatment available. There was very severe nausea surrounding<br />
chemotherapy, much more than patients experience currently.<br />
Dr. Neuss asked that the representatives on the call document and share any information<br />
that helps defend and justify our position, which will provide support for being able to<br />
obtain the support of advocacy groups. He also stated that the issue of patient access may<br />
ultimately be more important than the science of this issue.<br />
Dr. Poggi suggested that we have a roundtable discussion at the <strong>CAC</strong> Network Meeting<br />
in July with the Medicare Contractor Medical Directors (CMDs). He also stated that we<br />
need to protect the coverage of IV palonosetron HC1 (Aloxi®). It is likely that CMS will<br />
limit use of this drug as their next move.<br />
Charles Rosenbaum, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Massachusetts, stated<br />
that if there is an increase in hospital admission (similar to the distant past), there may be<br />
a cost impact that CMS will have to incur, which may cause then to pay more attention to<br />
the issue. Dr. Penley added that if providers cannot get approval for IV antiemetics, and<br />
patients are uncontrolled and getting admitted for chemotherapy, ASCO should be<br />
informed immediately. Dr. Poggi also suggested that ASCO be notified if patients are<br />
even coming back for IV hydration or other drug administration.<br />
4
Dorothy Green stated that Blue Cross Blue Shield of Florida has recently issued a<br />
revision to their guideline on IV palonosetron HC1 (Aloxi®) consisting of removing<br />
criteria for failure of other agents for highly emetogenic chemotherapy and adding<br />
maximum dosage per cycle. She will send more information to ASCO staff concerning<br />
this issue. Dr. Penley asked that all other state society representatives also send these<br />
types of examples of policy changes to ASCO staff.<br />
Dr. Penley, due to limited time, indicated that the group discussion would have to move<br />
on to the other agenda discussion items. He asked that the group members copy Julia<br />
Tomkins on any communications concerning this policy.<br />
Hepatitis B Testing<br />
Dr. Penley gave some background information and an overview on a recent<br />
recommendation made by the Centers for Disease Control and Prevention (CDC) that all<br />
patients about to undergo chemotherapy and other immunosuppressive therapy be tested<br />
for chronic Hepatitis B. Certain medications require this for high-risk patients, such as<br />
Rituxumab.<br />
Dr. Penley informed the group that Deborah Kamin, PhD, Senior Director of ASCO’s<br />
Cancer Policy & Clinical Affairs Department, has communicated with CDC staff, and<br />
ASCO staff and CPC representatives have participated in a few conference calls<br />
concerning this issue. Infection can be found in a significant percentage of the immigrant<br />
population living in the larger U.S. cities, such as New York, Washington, D.C., and Los<br />
Angeles. He asked if providers on the call have been required to do routine testing, and<br />
whether or not they are having coverage issues related to the ordering of these screening<br />
tests.<br />
Eric Seifter, MD, the <strong>Oncology</strong> <strong>CAC</strong> Representative for Maryland, stated that this is not<br />
a standard of practice in Maryland. He related this current situation and requirement to<br />
the PPD testing requirements back in the 1980s, due to fear that providers could be<br />
reactivating tuberculosis with any chemotherapy treatment.<br />
Terry Coleman, Esq. commented that there are two legal issues from the Medicare<br />
perspective, whether the testing is part of treatment versus screening. If the testing is part<br />
of the patient’s treatment, which is what CDC is saying, Medicare should cover the<br />
testing. If it is not part of a patient’s treatment, then Medicare would not be required to<br />
cover the test.<br />
Mr. Coleman also stated that there is an existing National Coverage Determination<br />
(NCD) for Hepatitis B panel testing. Medicare put out a string of NCDs for lab tests, and<br />
the NCD for the hepatitis panel says that, before the treatment is covered, a patient must<br />
have abnormal liver function tests. Mr. Coleman also commented that his understanding<br />
from the CDC recommendations is that a patient can be vulnerable, even if they do not<br />
have an abnormal liver function test.<br />
5
Dr. Penley also stated that the real concern is about coverage for this. He asked that the<br />
group members let ASCO know if they are getting coverage push-back. He feels that if<br />
one government agency recommends the test as a routine measure, the payment arm of<br />
the government should accept the claims for it. Terry Coleman commented that the<br />
current NCD on Hepatitis B panels precludes testing unless there has been an abnormal<br />
liver function result, which is rare.<br />
Dr. Poggi asked what the CDC recommends as far as management goes, such as if a<br />
patient who needs chemotherapy comes back positive. Dr. Penley noted that antiviral<br />
prophylaxis is the recommended course for those patients. Dr. Neuss added that<br />
lamivudine is the CDC recommendation.<br />
Dr. Penley informed the group that he can send the set of slides from Memorial Sloan<br />
Kettering, who has implemented a Hepatitis B screening program, which discusses this in<br />
more detail. Dr. Neuss reiterated that ASCO is going to try to make more people aware<br />
that this recommendation exists. ASCO is also concerned should anybody receive<br />
payment for the tests because of coding that works within local claims data that may be<br />
different from the national coverage determination. ASCO will be publishing some<br />
information in an upcoming JOP article. Other electronic communications will also be<br />
shared in the near future.<br />
C. Drug Shortage Updates<br />
Laura Cathro, ASCO staff, stated that, on April 27, the Food and Drug Administration<br />
(FDA) declared that the Leucovorin shortage, which was first announced on January 8, is<br />
over. However, FDA is now reporting shortages of Morphine Sulfate Oral Solution and<br />
Methotrexate injection.<br />
Currently, Roxane Laboratories has Morphine Sulfate Oral Solution available, and APP<br />
Pharmaceuticals has the 25 mg/mL (with preservative) 10 mL vial (NDC 63323-123-10)<br />
Methotrexate injection available.<br />
Julia Tomkins, ASCO staff, added that mytomycin and oxycodone are also currently on<br />
the FDA shortage list. More information about the shortages is available on the FDA<br />
website. AHFS is also a good source of information. Dr. Neuss also stated that the FDA<br />
site says that dexrazoxane (Zinecard ®) is in limited supply, and that cisplatin (Platinol<br />
®) is becoming hard to come by. He asked if other group members have had trouble<br />
getting cisplatin (Platinol ®).<br />
Dr. Penley asked the group members to let ASCO know if they come across any drug<br />
shortages. He informed the group that ASCO has pretty good connections now with the<br />
FDA, and can help to resolve issues and get out information.<br />
6
D. <strong>CAC</strong> Network Meeting Updates and Requests<br />
Laura Cathro asked if the group members could send her any coverage or reference<br />
materials that can be put into the July <strong>2009</strong> <strong>CAC</strong> Network Meeting E-Binder. She also<br />
stated that she will put the MAC Transition Survey results into the e-binder.<br />
Dr. Poggi asked the group which formulary is currently recognized by CMS. Terry<br />
Coleman, Esq., ASCO’s legal counsel, responded that the four compendia are the<br />
American Hospital Formulary Service (AHFS), Clinical Pharmacology, Drugdex (by<br />
Thomson Micromedex), and the National Comprehensive Cancer Network (NCCN). He<br />
also stated that if an off-label use is accepted by any of the four compendia and a use is<br />
not identified as “not accepted” in any of the compendia, it should be enough to require<br />
Medicare coverage.<br />
III. Wrap-Up & Next Steps (Charles Penley, MD)<br />
Dr. Penley thanked all members of the MAC <strong>Advisory</strong> Group for their participation in<br />
the 4 th ASCO MAC <strong>Advisory</strong> Group Conference Call.<br />
Laura Cathro informed the group members about the Encore listening session of the call<br />
that would be available for the next 5 business days, and said that she would send out an<br />
e-mail with the dial-in information. She also asked that the call participants share this<br />
information with the other group members who were unable to participate in the call.<br />
The next steps for the MAC <strong>Advisory</strong> Group are as follows:<br />
• MAC <strong>Advisory</strong> Group members are encouraged to inform other <strong>CAC</strong> members in<br />
their local regions/states of all ASCO MAC <strong>Advisory</strong> Group discussions, and to keep<br />
them updated on the status and roll-outs of the various MAC jurisdictions, Local<br />
Coverage Determination (LCD) changes, etc.<br />
• Contact Laura Cathro at (571) 483-1642 or laura.cathro@asco.org with any questions.<br />
7
ANNUAL MEETING OF THE HEMATOLOGY/ONCOLOGY<br />
CARRIER ADVISORY COMMITTEE NETWORK<br />
JULY 24, <strong>2009</strong> ♦ ASCO HEADQUARTERS ♦ ALEXANDRIA, VA<br />
RECOVERY AUDIT CONTRACTORS<br />
American Society of <strong>Hematology</strong><br />
www.hematology.org<br />
LT GIA LAWRENCE, RN<br />
Centers for Medicare and Medicaid Services<br />
PAMELA DURBIN<br />
Centers for Medicare and Medicaid Services<br />
Ms. Lawrence will be providing an overview of Medicare’s Recovery Audit<br />
Contractors (RACs), including CMS instructions and requirements, the RAC<br />
structure, and the current transition and implementation status.<br />
Included in this tab are the following:<br />
• Presentation slides, “Recovery Audit Contractors”<br />
• ASCO-ASH RAC Sign-On Letter<br />
• RAC Expansion Schedule and Map<br />
• Summary of RAC Medical Record Limits for FY <strong>2009</strong><br />
• MedLearn Matters article, “CMS Recovery Audit Contractor Initiative”<br />
• RAC Provider Outreach Schedule<br />
American Society of Clinical <strong>Oncology</strong><br />
www.asco.org
LT Gia Lawrence<br />
LT Gia Lawrence began her career with the United States Public Health Service (USPHS) Commissioned<br />
Corps as a Junior COSTEP (Commissioned Officer Student Training and Extern Program) at the National<br />
Institutes of Health (NIH) in 1993 and then as a Senior COSTEP with the Federal Bureau of Prisons in<br />
2000. After mastering a broad range of skills at Kaiser Permanente and the George Washington<br />
University Hospital, beginning in 2001 where she held various positions in Internal Medicine, Nurse<br />
Advice/Triage and also on Kaiser’s 24 hr Hospital Hotline, she accepted a position with the NIH as a<br />
Clinical Research Nurse in 2004. She continued her career with the USPHS at the Division of Immigration<br />
Health in 2006 as a Managed Care Coordinator for the Central US where she functioned as a Nurse Case<br />
Manager and first level reviewer for medical requests for illegal immigrants.<br />
Gia joined CMS in May 2008, as a Health Insurance Specialist, in the Division of Demonstrations<br />
Management for the Recovery Audit Contractor (RAC) program, now known as the Division of Recovery<br />
Audit Operations (DRAO). During her 1 st month on duty, she completed “Project Officer” training and<br />
looks forward to the oversight and guidance of the new contractors for the RAC program which will be<br />
forthcoming.<br />
She holds a Bachelors of Science Degree in Nursing, obtained from Howard University in 2001. She<br />
received certification as a Case Manager/Delegating Nurse for the State of Maryland in 2003 and<br />
certification as a Utilization Review Specialist from the McKesson Corporation in 2006.
Pamela Durbin<br />
Pam graduated from Old Dominion University School of Nursing in 1991 with a<br />
Bachelor of Science in Nursing Degree. She is also a Certified Medical Surgical RN.<br />
Pam joined CMS in August of 2008, as a Nurse Consultant for the RAC Program. Before<br />
joining CMS, Pam was a Clinical Documentation Specialist for Carroll Hospital Center<br />
in Westminster, MD. She started the Clinical Documentation Improvement Program at<br />
CHC. Pam has given presentations for AHIMA and WRG (World Research Group)<br />
regarding clinical documentation improvement. Pam has clinical experience in the ED,<br />
CCU/ICU, Home Health and Medical/Surgical setting.
ANNUAL MEETING OF THE HEMATOLOGY/ONCOLOGY<br />
CARRIER ADVISORY COMMITTEE NETWORK<br />
JULY 24, <strong>2009</strong> ♦ ASCO HEADQUARTERS ♦ ALEXANDRIA, VA<br />
SUPPLEMENTAL MATERIALS<br />
Included in this tab are the following:<br />
1) Medicare <strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong><br />
o Chapter 13, Medicare Program Integrity Manual<br />
o PIM 83, Exhibit 3 <strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong><br />
o Model LCD Document<br />
2) General Coverage Updates<br />
o ASCO Letter to CMS - NGS Oral Vs. Intravenous Drug Policy<br />
o Coverage for Hepatitis B Testing<br />
o Genetic Testing as a Screening Modality<br />
o PharmaGen CMS Med<strong>CAC</strong> Presentation, 02.25.09<br />
o CMS Gets Advice on Genetic Testing<br />
3) Medicare Off-Label Coverage<br />
o CMS Transmittal, Change Request 6191<br />
o NCCN Drugs & Biologics, CAG 00389<br />
o Thomson Micromedex Drugdex®, CAG 00391<br />
o Clinical Pharmacology, CAG 00392<br />
o Medicare Benefit Policy Manual, Chapter 15, Section 50.4.5.1<br />
o ASCO Letter to Medicare Contractor Medical Directors<br />
4) <strong>2009</strong> HHS Updates and Final Rules<br />
o Overview – HIPAA Code Sets and Electronic Transaction<br />
Standards<br />
o Final Rule – Modifications to Medical Data Code Set Standards<br />
o Final Rule – HIPAA Electronic Transaction Standards<br />
o HHS Secretary Sebelius Confirmed<br />
5) ASCO Monthly <strong>CAC</strong> Network E-Newsletters (January–June <strong>2009</strong>)<br />
American Society of <strong>Hematology</strong><br />
www.hematology.org<br />
(Continued on Next Page)<br />
American Society of Clinical <strong>Oncology</strong><br />
www.asco.org
ANNUAL MEETING OF THE HEMATOLOGY/ONCOLOGY<br />
CARRIER ADVISORY COMMITTEE NETWORK<br />
JULY 24, <strong>2009</strong> ♦ ASCO HEADQUARTERS ♦ ALEXANDRIA, VA<br />
SUPPLEMENTAL MATERIALS<br />
(CONTINUED)<br />
6) ASH Local Advocacy<br />
o Update on ASH Advocacy with Local Medicare Contractors<br />
o ASH’ Model Policy: Indications for ESA Treatment for Patients with<br />
Myelodysplastic Syndromes (MDS)<br />
o ASH Letter to National Government Services Re: LCD for<br />
Erythropoetin Stimulating Agents (ESA) (L25211) Reconsideration<br />
o ASH Letter to National Government Services Re: Draft LCD for<br />
Irradiated Blood Products (DL28533)<br />
o ASH Letter to National Government Services (NGS) Regarding<br />
Intravenous Palonosetron (Aloxi)<br />
o ASH Letter to the National Heritage Insurance Corporation (NHIC)<br />
Re: LCD on Erythropoetin Analogs Unrelated to ESRD or Cancer<br />
7) ASH Federal Advocacy<br />
o Sign-On Letter to House and Senate Re: Access to Specialists<br />
o ASH Letter on Senate Finance <strong>Committee</strong> Re: Policy Options<br />
o ASH Comments on Proposed Changes to ABMS Standards for<br />
Maintenance of Certification<br />
o ASH Sponsored Webinar on PQRI & E-Prescribing – Slide Set<br />
American Society of <strong>Hematology</strong><br />
www.hematology.org<br />
American Society of Clinical <strong>Oncology</strong><br />
www.asco.org
RRecovery Audit A dit Contractors<br />
C t t<br />
(RACs) and Medicare<br />
The Who, What, When, Where,<br />
How and Why? y<br />
1
Agenda<br />
What is a RAC?<br />
Will the RACs affect me?<br />
Why RACs?<br />
What h does d a RAC do? d<br />
What are the providers’ options?<br />
What can providers do to get ready?<br />
2
What is a RAC?<br />
The RAC Program Mission<br />
The RACs detect and correct past<br />
improper p p payments p y so that CMS and<br />
<strong>Carrier</strong>s, FIs, and MACs can implement<br />
actions that will prevent future<br />
iimproper payments t<br />
Providers can avoid submitting claims<br />
that do not comply with Medicare rules<br />
CMS can lower its error rate<br />
Taxpayers and future Medicare<br />
beneficiaries are protected<br />
3
Will the RACs affect me?<br />
Yes, if you bill fee-for-service programs,<br />
your claims will be subject to review by<br />
the RACs<br />
If so so, when?<br />
4
Timeframes<br />
D<br />
B<br />
A<br />
*RACs may not begin<br />
C reviewing until there is<br />
provider outreach in<br />
the state<br />
Claims Available for Analysis Provider Outreach Earliest Correspondence<br />
March 1, <strong>2009</strong> March 1, <strong>2009</strong> March 1, <strong>2009</strong><br />
March 1, <strong>2009</strong> March 1, <strong>2009</strong> March 1, <strong>2009</strong><br />
August 1, <strong>2009</strong> August 1, <strong>2009</strong> August 1, <strong>2009</strong><br />
5
Why y do we have RACs?<br />
Top Federal Programs with Improper Payments 2008<br />
(Billion Dollars)<br />
Medicare Advantage<br />
$6.8<br />
*2008 Error Rate for FFS decreased<br />
from 3.9% to 3.6% and CMS<br />
estimates to have saved over $400<br />
million in the last FY<br />
Unemployment Insurance<br />
$3.9<br />
Supplemental Security<br />
Income<br />
$4.6<br />
*Medicare FFS<br />
$10.4<br />
Other Programs g<br />
$12.1<br />
Old Age, Survivors, and<br />
Disability Insurance<br />
$2.0<br />
Food Stamps<br />
$1 $1.6 6<br />
Medicaid<br />
$18.6<br />
Earned Income<br />
Tax Credit<br />
$12 $12.1 1<br />
Of all agencies that reported to<br />
OMB in 2008, these 8 make up<br />
83% of the improper payments.<br />
Medicare receives over 1.2<br />
billi billion claims l i per year.<br />
This equates to:<br />
•4.5 million claims per work day<br />
6
RAC Legislation<br />
Medicare Modernization Act, Section 306<br />
Required the 3-year RAC demonstration<br />
Tax Relief and Healthcare Act of 2006,<br />
Section 302<br />
Requires a permanent and nationwide RAC<br />
program by January 1, 2010<br />
Both of these statutes gave CMS the<br />
authority to pay the RACs on a contingency<br />
fee basis<br />
7
What does a RAC do?<br />
RAC Review Process<br />
RACs review claims on a post-payment basis<br />
RACs use the same Medicare policies as <strong>Carrier</strong>s, FIs<br />
and MACs<br />
NCDs, LCDs, CMS Manuals<br />
Two types of review:<br />
Automated (no medical record needed)<br />
Complex (medical record required)<br />
RACs will not be able to review claims paid prior to<br />
October 1, , 2007<br />
RACs will be able to look back three years from the date the<br />
claim was paid<br />
RACs are required to employ a staff consisting of<br />
nurses or therapists, h i certified ifi d coders, d and d a physician h i i<br />
CMD<br />
8
The Collection Process<br />
Same as for <strong>Carrier</strong>, FI and MAC<br />
identified overpayments p y<br />
<strong>Carrier</strong>s, FIs and MACs issue<br />
Remittance Advice<br />
Remark Code N432: “Adjustment Based on<br />
Recovery Audit”<br />
<strong>Carrier</strong> <strong>Carrier</strong>, FI, FI MAC recoups by offset unless<br />
provider has submitted a check or a valid<br />
appeal pp<br />
9
What is different?<br />
Demand letter is issued by the RAC<br />
RAC will offer an opportunity pp y for the provider p<br />
to discuss the improper payment<br />
determination with the RAC (this is outside<br />
the normal appeal process)<br />
Issues reviewed by the RAC will be approved<br />
bby CMS prior i to widespread id d review i<br />
Approved issues will be posted to a RAC<br />
website bitbefore bf widespread id dreview i<br />
10
What are Providers’ Options<br />
Pay by check<br />
Allow recoupment from future payments<br />
RRequest t or apply l for f extended t d d repayment t<br />
plan<br />
Appeal<br />
Appeal Timeframes<br />
http://www.cms.hhs.gov/OrgMedFFSAppeals/Downloads/<br />
AppealsprocessflowchartAB.pdf<br />
pp p p<br />
935 MLN Matters<br />
http://www.cms.hhs.gov/MLNMattersArticles/downloads/<br />
MM6183.pdf<br />
11
RAC Program’s g Three Keys y to<br />
Success<br />
Minimize Provider Burden<br />
Ensure Accuracy<br />
Maximize Transparency<br />
12
Minimize Provider Burden<br />
Limit the RAC “look back period” to<br />
three years<br />
Maximum look back date is October 1,<br />
2007<br />
RACs will accept imaged medical<br />
records on CD/DVD<br />
Limit the number of additional<br />
documentation requests<br />
13
Summary of Additional<br />
Documentation Request Limits<br />
(for FY <strong>2009</strong>)<br />
Inpatient Hospital, IRF, SNF, Hospice<br />
10% of the average monthly Medicare<br />
claims (max 200) per 45 days per NPI<br />
Other Part A Billers (HH)<br />
1% of the average monthly Medicare<br />
episodes of care (max 200) per 45 days<br />
per NPI<br />
14
Summary of Additional<br />
Documentation Request Limits<br />
(for FY <strong>2009</strong>)<br />
CContinued… ti d<br />
Physicians (including podiatrists, chiropractors)<br />
Sole Practitioner: 10 medical records per 45 days per<br />
group NPI<br />
Partnership 2-5 individuals: 20 medical records per 45<br />
days per group NPI<br />
Group 6-15 individuals: 30 medical records per 45 days<br />
per group NPI<br />
LLarge Group G 16 16+ iindividuals: di id l 50 medical di l records d per 45<br />
days per group NPI<br />
Other Part B Billers (DME, Lab, Outpatient<br />
hospitals)<br />
1% of the average monthly Medicare services (max 200)<br />
per NPI per 45 days<br />
15
Additional Documentation<br />
Limit Example<br />
Outpatient Hospital<br />
360 360,000 000 Medicare paid services in 2007<br />
Divided by 12 = average 30,000 Medicare<br />
paid services per month<br />
x .01 = 300<br />
Limit = 200 records/45 days (hit the max)<br />
16
Ensure Accuracy<br />
Each RAC employs:<br />
Certified coders<br />
Nurses and/or Therapists<br />
A physician CMD<br />
CMS’ New Issue Review Board provides p<br />
greater oversight<br />
RAC Validation Contractor provides annual<br />
accuracy scores for each RAC<br />
If a RAC loses at any level of appeal, the RAC<br />
must return the contingency fee<br />
17
Maximize Transparency<br />
New issues are posted to the web<br />
Major Findings are posted to the web<br />
RAC claim status website (2010)<br />
Detailed l d review results l letter l following f ll<br />
all complex reviews<br />
18
New Issue Review Process for<br />
RAC sends<br />
New Issue<br />
Review<br />
Request<br />
to CMS<br />
AUTOMATED<br />
CMS<br />
reviews i<br />
and<br />
decides<br />
If approved,<br />
Issue is posted to<br />
RAC website and<br />
RAC may begin<br />
widespread review<br />
NOTE NOTE: All<br />
demand letters<br />
are sent AFTER<br />
CMS has<br />
approved the<br />
New Issue for<br />
Review<br />
19
New Issue Review Process for<br />
RAC issues<br />
limited number<br />
of additional<br />
documentation<br />
requests to<br />
providers<br />
(These requests are<br />
included in the<br />
provider additional<br />
documentation limits)<br />
Providers send<br />
additional<br />
documentation<br />
COMPLEX<br />
RAC reviews<br />
additional<br />
documentation<br />
RAC<br />
sends<br />
New<br />
Issue<br />
Review<br />
Request q<br />
to CMS<br />
CMS<br />
reviews<br />
and<br />
decides<br />
If approved,<br />
Issue is<br />
posted to<br />
RAC website<br />
and RAC<br />
may begin<br />
widespread<br />
review<br />
20
What can providers do to get<br />
ready?<br />
Know where previous improper<br />
payments have been found<br />
Know if you are submitting claims with<br />
improper payments<br />
Prepare to respond to RAC additional<br />
documentation requests<br />
21
Know Where Previous Improper<br />
Payments Have Been Found<br />
Look to see what improper payments were<br />
found by the RACs:<br />
Demonstration findings: www.cms.hhs.gov/rac<br />
Permanent RAC findings: will be listed on the<br />
RAC RACs’ ’ websites b it<br />
Look to see what improper payments have<br />
been found in OIG and CERT reports<br />
OIG reports: www.oig.hhs.gov/reports.asp<br />
CERT reports: www.cms.hhs.gov/cert<br />
22
Know if you y are submitting g claims<br />
with improper payments<br />
Conduct an internal assessment to<br />
identify if you are in compliance with<br />
Medicare rules<br />
Identify corrective actions to implement<br />
for compliance<br />
23
Prepare to Respond to RAC<br />
Additional Documentation Requests<br />
Tell your RAC the precise address<br />
and contact person they should use<br />
when h sending di additional dditi l<br />
documentation request letters<br />
Call RAC<br />
No later 1/1/2010: use RAC websites<br />
When necessary, check on the<br />
status of your additional<br />
documentation (Did the RAC<br />
receive it?)<br />
Call RAC<br />
No later 1/1/2010: use RAC websites<br />
Who will be in<br />
charge of<br />
responding to<br />
RAC additional<br />
documentation<br />
requests?<br />
What address will<br />
we use?<br />
Who will be in<br />
charge of<br />
tracking our RAC<br />
additional<br />
ddocumentation t ti<br />
requests?<br />
24
Appeal When Necessary<br />
The appeal process for RAC denials<br />
is the same as the appeal process<br />
for <strong>Carrier</strong>/FI/MAC denials<br />
Do not confuse the “RAC Discussion<br />
Period” with the Appeals process<br />
If you disagree with the RAC<br />
determination<br />
determination…<br />
Do not stop with sending a discussion<br />
letter<br />
h<br />
File an appeal before the 120th day after<br />
the Demand letter<br />
Who will be in<br />
charge of<br />
deciding whether<br />
to appeal a RAC<br />
denial?<br />
How will we keep<br />
track of what we<br />
want to appeal,<br />
what we have<br />
appealed, what<br />
our overturn rate<br />
is, etc.?<br />
25
NO<br />
RAC decides<br />
whether additional<br />
documentation is<br />
required to make a<br />
determination<br />
YES<br />
Automated<br />
Review<br />
RAC<br />
Complex requests<br />
additional<br />
Re Review ie documentation<br />
RAC Process<br />
Provider has 45<br />
days plus 10<br />
calendar days y mail<br />
time to submit.<br />
RAC has up to<br />
60 days to<br />
review<br />
additional<br />
documentation<br />
RAC makes a<br />
claim<br />
determination<br />
RAC issues Review<br />
Results Letter<br />
to provider<br />
RAC makes (does NOT<br />
a claim<br />
communicate<br />
determination improper amount or<br />
appeal rights<br />
including “no<br />
findings”)<br />
If no<br />
findings<br />
STOP<br />
26
RAC sends<br />
claim info to<br />
<strong>Carrier</strong>/FI/MAC<br />
<strong>Carrier</strong>/FI/MAC<br />
adjusts & issues<br />
Remittance<br />
Advice (RA) to<br />
provider.<br />
Code “N432”<br />
Complex Review Discussion Period<br />
Day 1<br />
RAC issues Demand<br />
Letter which includes<br />
amount and appeal<br />
rights.<br />
Automated Review<br />
Discussion Period<br />
On Day 41,<br />
<strong>Carrier</strong>/FI/MAC recoups<br />
by offset.<br />
27
Learn from Your Past Experiences<br />
Keep track of denied<br />
claims<br />
Look for patterns<br />
Determine what corrective<br />
actions you need to take<br />
to avoid improper<br />
payments p y<br />
Who will be in<br />
charge of<br />
tracking our RAC<br />
denials, looking<br />
for patterns?<br />
How will we<br />
avoid making<br />
similar improper<br />
payment claims<br />
iin the th ffuture? t ?<br />
28
Contacts<br />
RAC Website: www.cms.hhs.gov/RAC<br />
RAC Email: RAC@cms RAC@cms.hhs.gov hhs gov<br />
29
RAC Contacts at CMS<br />
RAC<br />
CMS Contact<br />
Person<br />
Email<br />
A Ebony Brandon Ebony.Brandon@<br />
CMS.hhs.gov g<br />
B Scott Wakefield Scott.Wakefield@<br />
CMS.hhs.gov<br />
C Amy Reese Amy.Reese@CMS.<br />
hhs.gov<br />
D Kathleen Wallace Kathleen Kathleen.Wallace Wallace<br />
@CMS.hhs.gov<br />
30
March 9, <strong>2009</strong><br />
Ms. Charlene Frizzera<br />
Acting Administrator<br />
Centers for Medicare and Medicaid Services<br />
Department of Health and Human Services<br />
Room 445-G, Hubert H. Humphrey Building<br />
200 Independence Avenue, SW<br />
Washington, DC 20201<br />
Dear Acting Administrator Frizzera:<br />
The undersigned organizations are writing to share our ongoing concerns about the Recovery<br />
Audit Contractor (RAC) program, which has been expanded nationwide. We want to reiterate<br />
our concerns now that the contested contract award decisions have been resolved, and the<br />
program is moving forward.<br />
While we are pleased that throughout the program, physicians have been able to work in<br />
cooperation with the Centers for Medicare and Medicaid Services (CMS) on several issues of<br />
concern to the physician community, we believe the program is an enormous burden on the<br />
affected physicians and has failed to further the worthy goal of eradicating frequent billing<br />
mistakes. We strongly believe that problems with over and/or underpayments of Medicare<br />
claims would be most effectively resolved through physician outreach and education.<br />
We remain concerned with the prospect of the RACs reviewing Evaluation and Management<br />
(E&M) services. We do not believe that E&M services are appropriate for RAC review as the<br />
broad parameters for reporting E & M codes do not lend themselves to basic review. The various<br />
levels of E&M services pertain to wide variations in skill, effort, time, responsibility, and medical<br />
knowledge, applied to the prevention or diagnosis and treatment of illness or injury, and the<br />
promotion of optimal health. A review of E&M codes requires that all factors, including mixed<br />
diagnoses, variations in age, and decision-making, are considered and carefully evaluated.<br />
Despite detailed Medicare guidelines that specify the documentation required for each level of<br />
E&M service, knowledgeable individuals often reach different conclusions regarding the E&M<br />
level of service justified by the documentation. 1 These problems are further exacerbated by the<br />
fact that the people performing the audits are not physicians of the same specialty and state as the<br />
physicians being audited.<br />
CMS has acknowledged the legitimate differences of opinion in determining how documentation<br />
aligns with the E&M level of service billed in other review programs. The discussion of the<br />
“incorrect coding” errors in the November 2007 “Improper Fee-for-Service Payments Report”<br />
makes this clear:<br />
1 King MS, Lipsky MS, Sharp L., Expert Agreement in Current Procedural Terminology Evaluation and<br />
Management Coding, Arch Int Med 162:316-320, 2002; Chao J et al. Billing for Physician Services: a<br />
Comparison of Actual Billing with CPT Codes Assigned by Direct Observation, J Fam Pract 47:28-32,<br />
1998; Kikano GE, Goodwin MA, Stange KC, Evaluation and Management Services: A Comparison of<br />
Medical Record Documentation with Actual Billing in a Community Family Practice, Arch Fam Med 9:68-<br />
71, 2000; Zuber TJ et al., Variability in Code Selection Using the 1995 and 1998 HCFA Documentation<br />
Guidelines for Office Services, J Fam Pract 49:642-645, 2000.
A common error involved is overcoding or undercoding E&M codes by one level on a<br />
scale of five code levels. Published studies suggest that under certain circumstances,<br />
experienced reviewers may disagree on the most appropriate code to describe a<br />
particular service. This may explain some of the incorrect coding errors in this report.<br />
CMS is investigating procedures to minimize the occurrence of this type of error in the<br />
future.<br />
Congress and CMS have also addressed the related compounding problem of extrapolating results<br />
from a limited medical review of E&M services to a broader universe of claims billed.<br />
CMS instituted the Progressive Corrective Action (PCA) program in 2002 to govern<br />
Medicare medical review. The PCA program’s guiding principle is that medical review<br />
activities be proportional to the extent of the perceived problem.<br />
Congress, through the Medicare Prescription Drug and Modernization Act of 2003<br />
(MMA), limited the agency’s use of extrapolation to cases where a physician has a<br />
sustained payment error level or when documented educational intervention has failed to<br />
correct the error.<br />
CMS considers the complexity associated with validating E&M levels of service in<br />
determining the results derived from its agency’s Comprehensive Error Rate Testing<br />
(CERT) program, which the agency employs to determine the extent to which its<br />
contractors are accurately making fee-for-service payments.<br />
E&M services are already subject to medical review by the Medicare Administrative Contractors<br />
(MACs), who are able to refer cases to Program Safeguard Contractors (PSCs), and they are<br />
included in the CERT program. These programs have evolved because of the well-documented,<br />
widely-acknowledged imprecision associated with determining the extent to which<br />
documentation aligns with the level of service billed. Allowing the RAC program to review<br />
E&M service claims—including enabling them to extrapolate their findings—will upset this<br />
balance. It will recreate the same problem—large unsubstantiated overpayments that are<br />
minimized or overturned after additional review of complex E&M scenarios, at great cost to all<br />
parties—that initially led Congress and CMS to make improvements through the PCA program<br />
and the MMA.<br />
Moreover, auditing E&M services threatens to overburden physicians at a time when many<br />
specialties are in increasingly short supply and impending baby boomer retirements will<br />
exacerbate existing shortages. While audits of E&M services will create yet another unfunded<br />
mandate for all physicians, the burden will be particularly heavy for primary care physicians<br />
because nearly all primary care services fall into the E&M category and the majority of these<br />
practices are solo or small practices with little ability to deal with the administrative burden<br />
imposed by a RAC audit. Currently, almost 30 percent of patients seeking a new primary care<br />
physician have trouble finding one, 30 percent of group practices already limit Medicare patients,<br />
and by 2020 there will be an estimated 85,000 physician shortage in this country. Inflicting<br />
audits of E&M services would come at the very time an aging population is putting additional<br />
strains on the health care system and physician office visits are up. Thus, we strongly urge<br />
CMS not to allow RACs to perform E&M audits.<br />
The shifting Medicare rules pertaining to the billing of one specific type of E&M service,<br />
consultations, is particularly concerning. Our significant, ongoing concerns with the<br />
consultations policy have been brought to CMS’ attention and, while we continue to work with<br />
them the problems have yet to been resolved. Specifically, CMS’ current policies on split-shared<br />
billing, transfer of care, and documentation for consultations are unclear and physicians remain
confused about their implementation. Therefore, we believe it is unreasonable for CMS to<br />
allow the RACs to review consultations. Allowing contractors to perform audits on<br />
consultations would exploit physician confusion over these policies.<br />
Finally, we continue to be concerned that resources are not being put toward educating physicians<br />
on billing mistakes. We firmly believe that the best way to reduce common billing and coding<br />
mistakes is through targeted education and outreach, rather than onerous audits performed by<br />
outside contractors with incentives to deny claims. Thus far, we have been extremely<br />
disappointed by the focus on punitive measures instead of physician education and<br />
communication. This is particularly egregious given that the funding provided to the new MACs<br />
is insufficient to sustain the level of outreach that has existed under the carrier contracts. It is our<br />
understanding that in some cases funding is as much as 30 percent less than what was previously<br />
provided. We have already received numerous reports from physicians that they are unable to get<br />
through to a customer service representative at the MAC unless they remain on hold for hours. In<br />
addition, we have heard from several physicians that their efforts to bill correctly are often<br />
thwarted by inconsistent and/or incorrect coding advice from the carriers and MACs. Educating<br />
physicians and providing them with accurate information regarding common coding and billing<br />
mistakes is critical to reducing onerous RAC audits of physicians and is consistent with numerous<br />
CMS comments stressing their preference for ensuring that initial payments are correct rather<br />
than trying to collect overpayments after the fact. Therefore, we strongly urge CMS to ensure<br />
that physicians are sufficiently educated regarding Medicare billing policies.<br />
While we remain concerned by these issues, we are grateful that CMS has made a number of<br />
changes, including limiting the number of medical records that can be requested by a RAC,<br />
installing RAC Medical Directors, and implementing a validation process. We request, however,<br />
that CMS consider the recommendation by the Practicing Physicians <strong>Advisory</strong> Council (PPAC)<br />
on December 8, 2008, that CMS revise the request for records limits established for solo<br />
practitioners from 10 requests to three requests per 45 days. This revision would, as noted by<br />
PPAC, make the number of records requests more “linear relative to the number of physicians in<br />
a practice, and not skewed toward small groups and solo practitioners bearing a heavier burden."<br />
Thus, we urge CMS to limit medical record requests to three in a 45 day period for solo<br />
practitioners.<br />
Similarly, we appreciate CMS’ willingness to increase the minimum claim amount from 10<br />
dollars to 25; however, additional input from physicians suggests this amount is still too low.<br />
Given the administrative burden RAC audits pose on physicians, we believe that the<br />
minimum claim amount should be raised to at least 100 dollars. Finally, we are pleased that<br />
CMS is considering reimbursing physicians for the costs associated with copying records in<br />
response to audits. We strongly urge CMS to implement a provision requiring RACs to<br />
reimburse physicians for copies of requested medical records prior to the commencement of<br />
the RAC audits.<br />
The undersigned organizations continue to believe that the RAC program is not the appropriate<br />
vehicle for achieving payment accuracy and will continue to advocate for its elimination and the<br />
redirection of incentive payments to physician outreach and education. Given that expansion of<br />
the program is underway, however, we urge CMS to address our concerns and resolve these<br />
issues before the RACs begin to audit physicians. We look forward to working with CMS on<br />
efforts to improve the RAC program.<br />
American Academy of Dermatology Association<br />
American Academy of Facial Plastic and Reconstructive Surgery
American Academy of Family Physicians<br />
American Academy of Home Care Physicians<br />
American Academy of Hospice and Palliative Medicine<br />
American Academy of Neurology Professional Association<br />
American Academy of Otolaryngology – Head and Neck Surgery<br />
American Academy of Ophthalmology<br />
American Academy of Physical Medicine and Rehabilitation<br />
American Association of Clinical Endocrinologists<br />
American Association of Clinical Urologists<br />
American Association of Neurological Surgeons<br />
American Association of Orthopaedic Surgeons<br />
American College of Cardiology<br />
American College of Chest Physicians<br />
American College of Emergency Physicians<br />
American College of Gastroenterology<br />
American College of Mohs Surgery<br />
American College of Obstetricians and Gynecologists<br />
American College of Osteopathic Surgeons<br />
American College of Physicians<br />
American College of Radiology<br />
American College of Rheumatology<br />
American College of Surgeons<br />
American Gastroenterological Association<br />
American Geriatrics Society<br />
American Medical Association<br />
American Osteopathic Academy of Orthopedics<br />
American Osteopathic Association<br />
American Psychiatric Association<br />
American Society for Gastrointestinal Endoscopy<br />
American Society for Radiation <strong>Oncology</strong><br />
American Society of Anesthesiologists<br />
American Society of Cataract and Refractive Surgery<br />
American Society of Clinical <strong>Oncology</strong><br />
American Society of <strong>Hematology</strong><br />
American Society of Nephrology<br />
American Society of Plastic Surgeons<br />
American Society of Transplant Surgeons<br />
American Thoracic Society<br />
American Urological Association<br />
Association of American Medical Colleges<br />
Congress of Neurological Surgeons<br />
Heart Rhythm Society<br />
Infectious Diseases Society of America<br />
Joint Council of Allergy, Asthma and Immunology<br />
Medical Group Management Association<br />
Renal Physicians Association<br />
Society for Cardiovascular Angiography and Interventions<br />
Society of Hospital Medicine<br />
The Endocrine Society<br />
Medical Association of the State of Alabama
Alaska State Medical Association<br />
Arizona Medical Association<br />
Arkansas Medical Society<br />
California Medical Association<br />
Colorado Medical Society<br />
Connecticut State Medical Society<br />
Medical Society of Delaware<br />
Medical Society of the District of Columbia<br />
Florida Medical Association Inc<br />
Medical Association of Georgia<br />
Hawaii Medical Association<br />
Idaho Medical Association<br />
Illinois State Medical Society<br />
Indiana State Medical Association<br />
Iowa Medical Society<br />
Kansas Medical Society<br />
Kentucky Medical Association<br />
Louisiana State Medical Society<br />
Maine Medical Association<br />
MedChi, The Maryland State Medical Society<br />
Massachusetts Medical Society<br />
Michigan State Medical Society<br />
Minnesota Medical Association<br />
Mississippi State Medical Association<br />
Missouri State Medical Association<br />
Montana Medical Association<br />
Nebraska Medical Association<br />
Nevada State Medical Association<br />
New Hampshire Medical Society<br />
Medical Society of New Jersey<br />
New Mexico Medical Society<br />
Medical Society of the State of New York<br />
North Carolina Medical Society<br />
North Dakota Medical Association<br />
Ohio State Medical Association<br />
Oklahoma State Medical Association<br />
Oregon Medical Association<br />
Pennsylvania Medical Society<br />
Rhode Island Medical Society<br />
South Carolina Medical Association<br />
South Dakota State Medical Association<br />
Tennessee Medical Association<br />
Texas Medical Association<br />
Utah Medical Association<br />
Vermont Medical Society<br />
Medical Society of Virginia<br />
Washington State Medical Association<br />
West Virginia State Medical Association<br />
Wisconsin Medical Society<br />
Wyoming Medical Society
RAC Phase In Schedule<br />
D<br />
*VT, NH, ME, MA, RI, CT (J14) Part A claims (including Part<br />
B of A) will not be available for RAC review until August<br />
<strong>2009</strong> due to the MAC transition. Part B claims in RI will not<br />
be available for RAC review until August <strong>2009</strong> due to the<br />
MAC transition. All other Part B claims are available for<br />
RAC review beginning March 1, <strong>2009</strong>.<br />
C<br />
B<br />
A<br />
*<br />
March 1,<br />
<strong>2009</strong><br />
March 1,<br />
<strong>2009</strong><br />
August 1,<br />
<strong>2009</strong> or later
RAC Medical Record Request Limits<br />
Summary of Medical Record Limits (for FY <strong>2009</strong>)<br />
• Inpatient Hospital, IRF, SNF, Hospice<br />
– 10% of avg mthly Medicare claims (max of 200) per 45 days<br />
Other Part A Billers (Outpatient Hospital, HH)<br />
– 1% of average monthly Medicare services (max of 200) per 45 days<br />
Physicians<br />
– Solo Practitioner: 10 medical records per 45 days<br />
– Partnership of 2-5 individuals: 20 medical records per 45 days<br />
– Group of 6-15 individuals: 30 medical records per 45 days<br />
– Large Group (16+ individuals): 50 medical records per 45 days<br />
Other Part B Billers (DME, Lab)<br />
– 1% of average monthly Medicare services per 45 days<br />
Inpatient Hospital, IRF, SNF, Hospice by NPI<br />
10% of average monthly Medicare paid claims per 45 days<br />
Maximum of 200 medical records per 45 days<br />
Example 1: Local Community Hospital<br />
– 1,200 Medicare paid claims in 2007<br />
– Divided by 12 = average 100 Medicare paid claims per month<br />
– x 10% = 10<br />
– Limit = 10 medical records per 45 days<br />
Example 2: Major Medical Center<br />
– 12,000 Medicare paid claims in 2007<br />
– Divided by 12 = avg 1,000 Medicare paid claims per month<br />
– x 10% = 100<br />
– Limit = 100 medical records per 45 days<br />
Other Part A Billers (Outpatient Hospital, Home Health, etc) by NPI<br />
1% of average monthly Medicare paid services per 45 days<br />
Maximum of 200 medical records per 45 days<br />
Example 1:<br />
– 1,500 Medicare paid services in 2007
– Divided by 12 = avg 125 Medicare paid services per month<br />
– x 1% = 1.25<br />
– Limit = 2 records/45 days<br />
Example 2:<br />
– 360,000 Medicare paid services in 2007<br />
– Divided by 12 = avg 30,000 Medicare paid services per month<br />
– x 1% = 300<br />
– Limit = 200 records/45 days (capped at the maximum)<br />
Physicians (by NPI)<br />
Solo Practitioner<br />
– Limit = 10 medical records/45 days<br />
Partnership of 2-5 individuals<br />
– Limit = 20 medical records/45 days<br />
Group of 6-15 individuals<br />
– Limit = 30 medical records/45 days<br />
Large Group (16+ individuals)<br />
– Limit = 50 medical records/45 days<br />
Other Part B Billers (DME, Ambulance. Lab) by NPI<br />
1% of average monthly Medicare paid services per 45 days<br />
Maximum of 200 medical records per 45 days<br />
Example 1:<br />
– 1,500 Medicare paid services in 2007<br />
– Divided by 12 = avg 125 Medicare paid services per month<br />
– x 1% = 1.25<br />
– Limit = 2 records/45 days<br />
Example 2:<br />
– 360,000 Medicare paid services in 2007<br />
– Divided by 12 = avg 30,000 Medicare paid services per month<br />
– x 1% = 300<br />
– Limit = 200 records/45 days (capped at the maximum)
Related Medlearn Matters Article #: SE0565<br />
Date Posted: January 20, 2006<br />
Related CR #: N/A<br />
MMA – The Centers for Medicare & Medicaid Services (CMS) Recovery Audit Contract<br />
(RAC) Initiative<br />
Key Words<br />
SE0565, SEO469, RAC, Initiative, Demonstration, MMA, Project, Contractor, Process, Audit, Recovery,<br />
Pilot<br />
Provider Types Affected<br />
Physicians, providers, and suppliers, especially in California, Florida, and New York<br />
Key Points<br />
This article was revised on December 28, 2005, to clarify that HealthData Insights will also perform<br />
reviews for durable medical equipment claims for beneficiaries who reside in Florida.<br />
On January 11, 2005, CMS announced the recovery audit contractor demonstration project.<br />
This demonstration, mandated by the Medicare Prescription Drug Improvement and Modernization Act<br />
of 2003 (MMA), will evaluate the use of recovery audit contractors in identifying Medicare<br />
underpayments and overpayments and recouping overpayments<br />
On March 28, 2005, CMS awarded five RACs and officially announced the beginning of the recovery<br />
audit contractor demonstration.<br />
Three of the five recovery audit contractors will perform post-payment medical review in the states of<br />
California, Florida, and New York.<br />
The firms and the state they are responsible for are as follows:<br />
Connolly Consulting will perform claim reviews for providers who are serviced by an FI or carrier in<br />
New York and for durable medical equipment claims for Medicare beneficiaries who reside in New<br />
York.<br />
PRG Schultz and its subcontractor, Concentra Preferred Systems, will perform claim reviews for<br />
providers who are serviced by a FI or carrier in California. PRG Schultz will also perform reviews<br />
for durable medical equipment claims for beneficiaries who reside in California.<br />
Page 1 of 2
Page 2 of 2<br />
Related Medlearn Matters Number: N/A<br />
HealthData Insights will perform claim reviews for providers who are serviced by a fiscal<br />
intermediary or carrier in Florida. Both HealthData Insights and Connolly Consulting will perform<br />
reviews for durable medical equipment claims for beneficiaries who reside in Florida.<br />
The recovery audit contractors have a three-tiered process:<br />
The first level involves Part A Diagnosis Related Group (DRG) reviews.<br />
The second level involves overpayments determined by the recovery audit contractor’s proprietary<br />
data mining systems. These overpayments may be for a Part A or Part B service.<br />
The last level involves the actual request of medical records for Part B services.<br />
Questions concerning the recovery audit contractor demonstration may be directed to the email<br />
address cmsrecoveryauditdemo@cms.hhs.gov.<br />
Important Links<br />
http://www.cms.hhs.gov/MedlearnMattersArticles/downloads/SE0565.pdf<br />
http://www.cms.hhs.gov/MedlearnMattersArticles/downloads/SE0469.pdf
Date & Time (EST.) Conference Name Primary Attendee Location Presenters<br />
March 30, <strong>2009</strong> 2:00-5:00<br />
p.m.<br />
Greater New York Hospital Association Hospitals New York CMS & DCS<br />
March 31, <strong>2009</strong> 1:00-4:00<br />
p.m.<br />
Healthcare Association of New York State Hospitals New York CMS & DCS<br />
April 1, <strong>2009</strong> 11:00 a.m. New York Medical Society Physicians CMS CMS & DCS<br />
April 15, <strong>2009</strong> 2:00-4:00<br />
p.m.<br />
DME Webinar-New England Medical<br />
Equipment Dealers Association (NEMED)<br />
Hospitals CMS CMS & DCS<br />
May 19, <strong>2009</strong> 11:00am Southern New York Association (SNYA) Hospitals CMS CMS & DCS<br />
June 2, <strong>2009</strong> 2:00 p.m. -<br />
3:00 p.m.<br />
AHCA RAC Webinar AHCA Providers CMS DCS<br />
July 16, <strong>2009</strong> 1:00pm New Jersey Hospital Association Hospitals New Jersey CMS & DCS<br />
Date & Time (EST.) Conference Name Primary Attendee Location Presenters<br />
April 2, <strong>2009</strong> 1:00 p.m. Michigan Hospital Association Hospitals<br />
April 3, <strong>2009</strong> 2:00- 4:00<br />
p.m.<br />
April 7, <strong>2009</strong> 9:00 a.m.-<br />
12:30 p.m.<br />
Provider Outreach-Region A<br />
Provider Outreach-Region B<br />
Lansing,<br />
Michigan<br />
CMS & CGI<br />
Minnesota VHA Hospitals CMS CMS & CGI<br />
Minnesota Hospital Association Hospitals<br />
Minneapolis,<br />
Minnesota<br />
CMS & CGI<br />
K:\stellent\idcrefinery\work\idcm1-main\cms1221094.xls
CMS & CGI<br />
Minneapolis,<br />
Minnesota<br />
Physicians<br />
Minnesota Medical Association and the<br />
Minnesota Medical Group Management<br />
Association<br />
April 7, <strong>2009</strong><br />
Michigan State Medical Society Physicians CMS CMS & CGI<br />
April 10, <strong>2009</strong> 9:00 a.m-<br />
12:00 p.m.<br />
RAC Question & Answer Session Sava Senior Care CMS CMS & CGI<br />
April 28, <strong>2009</strong> 10:00 a.m. -<br />
11:00 a.m.<br />
CMS & CGI<br />
Lebanon,<br />
Ohio<br />
Southwestern Ohio Chapter of HFMA<br />
May 14, <strong>2009</strong> 10 a.m - 12<br />
p.m.<br />
CMS & CGI<br />
Chicago,<br />
Illinois<br />
Region V Hospital Association Hospitals Association<br />
RAC Question & Answer Session AHCA Providers CMS CMS & CGI<br />
May 19, <strong>2009</strong> 1 p.m. - 3<br />
p.m. (CST)<br />
May 27, <strong>2009</strong> 2:00 p.m. -<br />
3:30 p.m.<br />
CMS CMS & CGI<br />
Kentucky Association for Healthcare<br />
Quality Webinar<br />
August 21, <strong>2009</strong> 1:30 p.m.<br />
- 4:30 p.m.<br />
CMS & CGI<br />
Chicago,<br />
Illinois<br />
August 26, <strong>2009</strong> Metro Chicago Healthcare Council Hospitals<br />
Provider Outreach Region C<br />
K:\stellent\idcrefinery\work\idcm1-main\cms1221094.xls
Date & Time (EST.) Conference Name Primary Attendee Location Presenters<br />
CMS & Connolly<br />
Columbia,<br />
South<br />
Carolina<br />
Columbia,<br />
South<br />
Carolina<br />
Orlando,<br />
Florida<br />
Ft.<br />
Lauderdale,<br />
Florida<br />
St. Simons<br />
Island,<br />
Georgia<br />
March 20, <strong>2009</strong> South Carolina Medical Association Physicians<br />
CMS & Connolly<br />
March 20, <strong>2009</strong> South Carolina Hospital Association Hospitals<br />
CMS & Connolly<br />
March 26, <strong>2009</strong> a.m. Florida Hospital Association Hospitals<br />
CMS & Connolly<br />
March 27, <strong>2009</strong> South Florida Hospital Association Hospitals<br />
CMS & Connolly<br />
April 21, <strong>2009</strong> Hometown Health Spring Conference Rural Hospitals<br />
CMS & Connolly<br />
Orlando,<br />
Florida<br />
Physicians<br />
Florida Medical Association & Orange<br />
County Medical Society<br />
April 29, <strong>2009</strong> 6:00-8:00<br />
p.m.<br />
Hospitals CMS CMS & Connolly<br />
Texas Hospital Association Conference<br />
Call<br />
May 6, <strong>2009</strong> 2:00 p.m.<br />
CMS & Connolly<br />
Oklahoma<br />
City,<br />
Oklahoma<br />
May 11, <strong>2009</strong> 1:30 p.m. Oklahoma Hospital Association Hospitals<br />
K:\stellent\idcrefinery\work\idcm1-main\cms1221094.xls
CMS & Connolly<br />
Oklahoma<br />
City,<br />
Oklahoma<br />
Physicians<br />
Oklahoma State Medical Association &<br />
Oklahoma Osteopathic Association<br />
May 11, <strong>2009</strong> 5:30 p.m.<br />
May 13, <strong>2009</strong> Texas Hospital Association Hospitals Dallas, Texas CMS & Connolly<br />
CMS & Connolly<br />
San Antonio,<br />
Texas<br />
Houston,<br />
Texas<br />
Grand<br />
Junction,<br />
Colorado<br />
Grand<br />
Junction, CO<br />
Denver,<br />
Colorado<br />
Denver,<br />
Colorado<br />
Regional<br />
Office<br />
May 14, <strong>2009</strong> Texas Hospital Association Hospitals<br />
CMS & Connolly<br />
May 15, <strong>2009</strong> Texas Hospital Association Hospitals<br />
CMS & Connolly<br />
May 18, <strong>2009</strong> a.m. Colorado Hospital Association Hospitals<br />
CMS & Connolly<br />
May 18, <strong>2009</strong> p.m. Colorado Medical Society Physicians<br />
CMS & Connolly<br />
May 20, <strong>2009</strong> a.m. Colorado Hospital Association Hospitals<br />
CMS & Connolly<br />
May 20, <strong>2009</strong> p.m. Colorado Medical Society Physicians<br />
AHCA &<br />
Connolly<br />
June 1, <strong>2009</strong> 2:00 p.m. AHCA RAC Webinar AHCA Providers CMS<br />
October 23, <strong>2009</strong> Puerto Rico Hospital Association Hospitals Puerto Rico CMS & Connolly<br />
Provider Outreach Region D<br />
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Date & Time (EST.) Conference Name Primary Attendee Location Presenters<br />
CMS & HDI<br />
Salt Lake<br />
City, Utah<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
March 16, <strong>2009</strong> Utah Hospital Association<br />
CMS & HDI<br />
Salt Lake<br />
City, Utah<br />
March 17, <strong>2009</strong> Utah Hospital Association<br />
CMS & HDI<br />
Phoenix,<br />
Arizona<br />
Arizona Hospital Association<br />
March 24, <strong>2009</strong> 2:00-5:00<br />
p.m.<br />
CMS & HDI<br />
Las Vegas,<br />
Nevada<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
Nevada Osteopathic Medical Association<br />
May 1, <strong>2009</strong> 3:45-4:30<br />
p.m.<br />
CMS & HDI<br />
San<br />
Francisco,<br />
California<br />
Regional<br />
Office<br />
San<br />
Francisco,<br />
California<br />
Regional<br />
Office<br />
San<br />
Francisco,<br />
California<br />
Regional<br />
Office<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
California Outreach<br />
May 4, <strong>2009</strong> 9:30 a.m.-<br />
12:30 p.m. & 2:00 p.m. -<br />
5:00 p.m.<br />
CMS & HDI<br />
Medical<br />
Association/Providers<br />
California Outreach<br />
May 4, <strong>2009</strong> 5:00 p.m.-<br />
6:00 p.m.<br />
CMS & HDI<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
California Outreach<br />
May 5, <strong>2009</strong> 9:30 a.m.-<br />
12:30 p.m.<br />
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CMS & HDI<br />
Honolulu,<br />
Hawaii<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
May 7, <strong>2009</strong> Healthcare Association of Hawaii<br />
Hawaii CMS & HDI<br />
May 8, <strong>2009</strong> Healthcare Association of Hawaii<br />
Hawaii CMS & HDI<br />
Medical<br />
Association/Providers<br />
May 9, <strong>2009</strong> Hawaii Outreach<br />
CMS & HDI<br />
Good<br />
Samaritan<br />
Hospital, LA,<br />
California<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
California Hospital Association<br />
May 11, 2008 9:30 a.m. –<br />
12:30 p.m. & 2:00 p.m. –<br />
5:00 p.m.<br />
CMS & HDI<br />
Cheyenne,<br />
Wyoming<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
Hospitals/Physicians/<br />
SNF/Home<br />
Health/DME<br />
Wyoming Outreach<br />
May 18, <strong>2009</strong> 9:00 a.m.-<br />
12:00 p.m.<br />
CMS & HDI<br />
Sioux Falls,<br />
South Dakota<br />
South Dakota Outreach<br />
May 21, <strong>2009</strong> 9:00 a.m.-<br />
12:00 p.m.<br />
CMS & HDI<br />
Bismarck,<br />
North Dakota<br />
North Dakota Outreach<br />
May 27, <strong>2009</strong> 9:00 a.m.-<br />
12:00 p.m.<br />
CMS & HDI<br />
Helena,<br />
Montana<br />
Montana Outreach<br />
May 28, <strong>2009</strong> 1:00-4:00<br />
p.m.<br />
Other Provider Outreach<br />
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Date & Time (EST.) Conference Name Primary Attendee Location Presenters<br />
CMS CMS<br />
Skilled Nursing<br />
Facilities<br />
Region IV State SNF Provider Forum*<br />
April 28, <strong>2009</strong> 1:30 p.m. -<br />
2:30 p.m.<br />
Region IV State Physician Forum* Physicians CMS CMS<br />
May 1, <strong>2009</strong> 9:30 a.m. -<br />
10:30 a.m.<br />
Region IV State Hospital Provider Forum* Hospitals CMS CMS<br />
May 5, <strong>2009</strong> 9:30 a.m. -<br />
10:30 a.m.<br />
May 20, <strong>2009</strong> 11 a.m. - 12<br />
Atlanta RO-Provider Forum-Hospice Hospice CMS CMS<br />
p.m.<br />
*These meetings are being hosted by the Atlanta Regional Office. The Recovery Audit Contractor Program is just one item on t<br />
in addition to RAC outreach that will occur in Region C and in the state of Georgia.<br />
K:\stellent\idcrefinery\work\idcm1-main\cms1221094.xls
ANNUAL MEETING OF THE HEMATOLOGY/ONCOLOGY<br />
CARRIER ADVISORY COMMITTEE NETWORK<br />
JULY 24, <strong>2009</strong> ♦ ASCO HEADQUARTERS ♦ ALEXANDRIA, VA<br />
CLINICAL TRIALS &<br />
COMPARATIVE EFFECTIVENESS<br />
American Society of <strong>Hematology</strong><br />
www.hematology.org<br />
LESLYE FITTERMAN, PHD<br />
Center for Medical Technology Policy<br />
ANDREA DENICOFF<br />
National Cancer Institute<br />
Dr. Fitterman will be presenting on the Medicare Clinical Trials Policy, including<br />
Medicare requirements for participation and coverage, the discretion that the<br />
Medicare CMDs have in applying the policy, and the role of clinical trials in<br />
comparative effectiveness research. Ms. Denicoff will present on the role of<br />
clinical trials in cancer treatment, the types of clinical trials conducted by the NCI,<br />
how to find information on NCI trials, and how CMS and NCI collaborated to<br />
provide Medicare coverage for off-label trials for colorectal cancer.<br />
Included in this tab are the following:<br />
• Presentation slides, “Medicare Clinical Trials Policy”<br />
• Presentation slides, “Role of Clinical Trials in Cancer Treatment”<br />
• CMS MedLearn Matters article, SE0822 - Coverage of Routine Costs<br />
• CMS Physician Tools for the NCD, Final<br />
• CMS Billing Overview<br />
• C80405 CMS Reimbursement Matrix<br />
• CMS Clinical Trials Brochure<br />
• Sign-on Letter to Senate Regarding Comparative Effectiveness Research<br />
• ASH Comment Letter to Federal Coordinating Council on Comparative<br />
Effectiveness Research (CER)<br />
American Society of Clinical <strong>Oncology</strong><br />
www.asco.org
BioSketch<br />
Leslye K. Fitterman, PhD is currently the Senior Research Director at the Center<br />
for Medical Technology Policy (CMTP). Prior to joining CMTP she worked at the<br />
Centers for Medicare & Medicaid Services (CMS) on the development and<br />
implementation of coverage decisions that require as a condition of Medicare<br />
coverage a clinical trial and or registry and was the lead analyst on the<br />
reconsideration of the clinical trial policy. Prior to joining CMS, she worked in the<br />
pharmaceutical industry in increasingly senior roles in Health Economics and<br />
Outcomes Research in the development and marketing of products at Merck &<br />
Co., Inc, AstraZeneca LP, and MedImmune, Inc. Ms. Fitterman received her<br />
PhD, in pharmacoepidemiology from the University of Maryland at Baltimore.<br />
In all of these positions she planned and led meetings with multiple stakeholders<br />
as well as participated in many such meetings that developed clinical trials<br />
protocols, registries for Phase IV studies and for Medicare coverage with<br />
evidence development (CED) coverage determinations. She worked with the<br />
American College of Cardiology and the Heart Rhythm Society along with<br />
implantable cardioverter defibrillator (ICD) device manufacturers to develop the<br />
ICD Registry. She also worked to develop the National Oncologic PET Registry,<br />
another registry required under CED. These projects involved overcoming legal,<br />
funding, and privacy issues as well as identifying the data elements of particular<br />
interest to the Medicare program. In her position at CMS she met with a variety<br />
of devices manufactures and physicians, including those responsible for joint<br />
replacement devices, to provide guidance on study designs and registries to<br />
potentially meet the criteria for Medicare coverage. Additional responsibilities<br />
included convening Federal Agency Workgroups and the Medicare Evidence<br />
Development Coverage and <strong>Advisory</strong> <strong>Committee</strong> (MED<strong>CAC</strong>) to address the<br />
Medicare Clinical Trial Policy reconsideration and to develop a list of research<br />
priorities to inform researchers of gaps in evidence of the effectiveness of<br />
technologies in the care of Medicare beneficiaries.
Clinical Trials And Comparative<br />
Effectiveness<br />
The Medicare Clinical Trial Policy<br />
<strong>Oncology</strong>/<strong>Hematology</strong> <strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong><br />
Network Meeting g<br />
Leslye K. Fitterman, PhD.<br />
Senior Research Director<br />
July 24, <strong>2009</strong><br />
1
Goals of the Clinical Trial Policy<br />
Allow Medicare beneficiaries to participate in research studies;<br />
Encourage the conduct of research studies that add to the knowledge base<br />
about the efficient,, appropriate, effective, and cost‐effective use of<br />
products and technologies in the Medicare population;<br />
Allow Medicare beneficiaries to receive care that may have health benefit,<br />
but for which evidence for the effectiveness of the treatment or service<br />
is insufficient to allow for full, unrestricted coverage;<br />
Limiting coverage of clinical study investigational costs to only those few<br />
studies that have the greatest likelihood of<br />
Answering questions of importance to CMS and its beneficiary<br />
g q p y<br />
population, and Developing evidence that will optimize resource use.
Medicare Clinical Trial Policy: Phase I<br />
and d Phase h II <strong>Oncology</strong> l Studies d<br />
• Deemed Status Stat s<br />
Controversial Issues<br />
– Qualified to meet the seven desirable characteristics of trials<br />
• Funded by NIH<br />
• CConducted d t dunder d and d IND<br />
• Three Requirements<br />
– Must fall within a Medicare benefit category and not statutorily excluded<br />
from coverage<br />
– The trial must not be designed exclusively to test toxicity or disease<br />
pathophysiology. It must have therapeutic intent.<br />
– Trials of therapeutic interventions must enroll patients with diagnosed<br />
disease rather than healthy volunteers. Trials of diagnostic interventions may<br />
enroll healthy patients in order to have a proper control group
Medicare Clinical Trial Policy: MAC<br />
Medical d lDirectors Role l<br />
EXAMPLE<br />
Phase I Cancer Clinical Trial (NCI sponsored at an academic medical center)<br />
– Medical Director denied coverage<br />
• Does not have therapeutic intent<br />
– Letter to Study Site Medical Director<br />
• From the Presidents of the American Association for Cancer Research,<br />
Association of American Cancer Institutes, and American Society of<br />
Clinical <strong>Oncology</strong><br />
• Citing the NCI Investigator Handbook and the FDA definition of<br />
“therapeutic intent” in Phase I cancer trials<br />
– Ltt Letter from f professional f i lorganizations i ti sent t tto MMedical di lDi Director t<br />
– Medical Director denied coverage
The Potential for Updates to the<br />
Medicare Clinical Trial Policy<br />
???????
Comparative Effectiveness Research<br />
What does the CER initiative mean to the Medicare<br />
program?<br />
– Coverage<br />
– Reimbursement<br />
– Clinical Trial Policy<br />
– CCoverage with ith Evidence Eid DDevelopment l t
IOM <strong>Committee</strong> Definition of CER<br />
The generation and synthesis of evidence that<br />
compares the benefits and harms of alternative<br />
methods to prevent, diagnose, treat, and<br />
monitor i a clinical li i l condition di i or to iimprove the h<br />
delivery of care. The purpose of CER is to assist<br />
consumers, clinicians, purchasers, and policy<br />
makers to make informed decisions that will<br />
improve health care at both the individual and<br />
population lti levels.<br />
l l
Great Expectations<br />
“At At the core of both the stimulus bill and Obama’s Obama s budget is<br />
Orszag’s belief that a government empowered with research<br />
on the most effective medical treatments can, using the<br />
proper iincentives, ti persuade d doctors d t tto bbecome<br />
more<br />
efficient health care providers, thus saving billions of dollars.<br />
Obama is in effect betting his Presidency on Orszag’s thesis.”<br />
– The New Yorker. May 4, <strong>2009</strong>.<br />
8
• The paradox p<br />
Critical Knowledge Gaps<br />
– 18,000 RCTs published each year<br />
– “Available evidence is limited or poor quality”<br />
• Patients, settings, comparators, outcomes, timing<br />
often not aligned with decision makers<br />
– Patients, clinicians, payers, policy makers<br />
• Decision makers have limited traction<br />
– “didn’t invite CMS because it’s a scientific meeting”
Why so many gaps?<br />
Th The gaps, as seen by b decision d i i makers: k<br />
– Patients are highly selected<br />
– Research settings are not typical of community<br />
– Missing or incorrect comparators<br />
– Physiologic or surrogate outcomes, not function<br />
– Results are not available when decisions made
Tools and Strategies for CER<br />
• Coverage with evidence development (CED)<br />
• Methodological guidance<br />
• Pragmatic i clinical li i l trials il ( (PCTs) C )<br />
11
Coverage with Evidence Development<br />
• Links payment to requirement for prospective data<br />
collection<br />
• Intent is to guide g clinical research to address<br />
questions of interest to Medicare<br />
– Medicare must approve study design<br />
• Goal to support evidence and rapid access<br />
– Lower evidence threshold with commitment to generate<br />
better info later<br />
12
Coverage with Evidence Development<br />
CMS National Coverage Decision (NCD)<br />
Anticancer Chemotherapy<br />
for Colorectal Cancer<br />
14
Contact Information<br />
Leslye.fitterman@cmtpnet.org<br />
443‐759‐3197 (Office)<br />
443‐562‐1710 (Cell) ( )<br />
15
CMTP Project Categories<br />
IMPROVE THE QUALITY AND EFFICIENCY OF<br />
RESEARCH FOR DECISION MAKING<br />
PRIORITIES<br />
for<br />
Evidence Development<br />
Trial DESIGN and<br />
IMPLEMENTATION<br />
Applied POLICY and METHODS Projects<br />
Effectiveness<br />
GUIDANCE Documents
Andrea M. Denicoff, RN, MS, ANP<br />
Nurse Consultant, Clinical Trials<br />
Methodology, QOL Specialist<br />
Andrea Denicoff is a Nurse Consultant in the Clinical Investigations<br />
Branch within the Cancer Therapy Evaluation Program (CTEP) in the<br />
Division of Cancer Treatment & Diagnosis at the National Cancer<br />
Institute (NCI). She directs, manages, and coordinates several projects<br />
within CTEP’s Clinical Trials Cooperative Group Program, including<br />
components of the Cancer Trials Support Unit (CTSU). She serves as<br />
the lead clinical trials advisor to NCI’s pilot National Community<br />
Cancer Centers Program (NCCCP) that has a major goal of increasing<br />
underrepresented populations and minorities onto trials. Provides<br />
leadership and coordination for health-related quality of life (HRQoL)<br />
research in cancer treatment studies, serves on NCI’s Symptom<br />
Management and HRQoL Scientific Steering <strong>Committee</strong>, and is a<br />
CTEP reviewer of health-related quality of life endpoints and patient<br />
reported outcomes in cancer trials. In addition, she coordinates<br />
palliative care initiatives at the NCI and chairs the NCI’s Palliative Care Working Group. Before<br />
coming to the NCI, she was on the faculty at Georgetown University in the Department of<br />
Medicine, Division of <strong>Hematology</strong>/ <strong>Oncology</strong>. Prior to that, she was the research nurse<br />
coordinating early phase breast cancer trials for the Medical Breast Cancer Section in NCI’s<br />
intramural program.<br />
Contact Information:<br />
National Cancer Institute<br />
6130 Executive Blvd., Suite 7025<br />
Bethesda, MD 20892-7436<br />
Phone: 301-496-2522<br />
E-mail: denicofa@mail.nih.gov
CMS-NCI <strong>Oncology</strong> Pilot Project<br />
CMS National Coverage Decision (NCD)<br />
Anticancer Chemotherapy<br />
for Colorectal Cancer<br />
Andrea M. Denicoff, RN, MS, ANP<br />
Clinical Investigations Branch<br />
CTEP, DCTD, NCI<br />
ASCO-ASH <strong>CAC</strong> Network Meeting – July 24, <strong>2009</strong>
CMS-NCI <strong>Oncology</strong> Pilot Project<br />
• Background / Rationale for the Pilot Project<br />
• Trials Selected & Dissemination of Information<br />
• Update p on trial accrual and Medicare beneficiary y<br />
participation<br />
• NCI Clinical Trial Information & Resources
CMS-NCI <strong>Oncology</strong> Pilot Project<br />
• Anti-cancer Anti cancer chemotherapeutic agents are eligible for<br />
coverage by CMS:<br />
– Used in accordance with FDA-approved labeling (section<br />
1861(t)(2)(B) of the Social Security Act)<br />
– Off-label use in authoritative drug compendia listed in<br />
section 1861(t)(2)(B)(ii)(I) of the Social Security Act<br />
– Medicare contractor determines an off-label use is<br />
medically accepted based on guidance provided by the<br />
Secretary (section 1861(t)(2)(B)(ii)(II)
CMS Coverage of Clinical Trials<br />
What kinds of<br />
costs are<br />
covered?<br />
Does the policy<br />
pay for off-label<br />
use of anti anti-cancer cancer<br />
drugs?<br />
CMS 2000 Clinical CMS 2005 Anti-<br />
Trials Policy Cancer NCD<br />
Routine costs associated with<br />
the patients’ patients medical care in<br />
the clinical trial.*<br />
Maybe. Coverage of off-label<br />
use varies depending on<br />
whether the trial in question<br />
meets the policy’s<br />
requirements.<br />
Both routine and non-<br />
routine costs associated with<br />
the patients’ care in any of the<br />
nine trials are covered.<br />
Yes, off-label use is covered<br />
for the anticancer drugs in all<br />
nine trials.<br />
* More info at: www.cms.hhs.gov/ClinicalTrialPolicies
CMS-NCI Pilot: Inception of the Project<br />
CMS and NCI entered into discussions to explore p how the 2 agencies g<br />
could align their resources & agency-specific goals to accelerate<br />
development of evidence for emerging cancer treatment regimens:<br />
CMS can collect data to see if reasonable and necessary criteria are met<br />
for off-label use of agents (data collected to inform payment decisions)<br />
NCI sponsors trials as part of its research agenda to evaluate use of new<br />
agents in off-label indications in order to determine safety & efficacy<br />
Through discussions, proposed approach linking coverage to participants<br />
in specific trials developed
CMS-NCI Pilot: Goals of the Project<br />
• Offer consistent national coverage for these trials<br />
• Ensure advancement in knowledge for these agents<br />
• Accelerate development evidence for new / emerging<br />
cancer ttreatments t t<br />
• Ensure beneficiaries rapid access to promising new<br />
uses of technologies under controlled clinical trial<br />
conditions<br />
• Serve as potential model for additional coverage<br />
expansions in clinical trials for other anti-cancer agents<br />
by both CMS & other insurance carriers<br />
• Encourage industry to invest in clinical studies that will<br />
expand knowledge base
CMS-NCI Pilot: Why these Trials?<br />
• CMS asked NCI to identify trials studying off-label off label uses<br />
of 4 agents important in CRC per the existing NCD for<br />
Anticancer Chemotherapy for Colorectal Cancer<br />
– 4 agents: oxaliplatin, irinotecan, bevacizumab, cetuximab<br />
– Trials with any of these agents in CRC & other cancers<br />
– Mi Mix of f Phase Ph 1, 1 2, 2 and d 3 ti trials l<br />
– Trials addressing questions likely to lead to important<br />
changes in therapy<br />
– Trials that were close to activating
CMS-NCI Pilot: 9 Selected Trials<br />
9 Trials Selected: 6 Colorectal and 3 Non-Colorectal<br />
Phase 1/2 7325: 1 st Line Metastatic CRC (CWRU)<br />
Phase 2 E4203: 1st Phase 2 E4203: 1 Line Metastatic CRC<br />
st Line Metastatic CRC<br />
Phase 3 E5202: High-Risk Stage II Colon Cancer<br />
C80405: 1st C80405: 1 Line Metastatic CRC<br />
NSABP R-04: Rectal Ca Adjuvant (Oxaliplatin Amend)<br />
E5204: Rectal Ca Adjuvant<br />
Phase 2 E2204: Pancreatic Ca Adjuvant<br />
Phase 3 RTOG RTOG-0522: 0522: Stage III/IV Head & Neck Cancer<br />
S0502: Metastatic / Unresectable GIST
CMS-NCI Pilot: Dissemination of<br />
Information<br />
• Web page g updates of trial information on a regular g basis<br />
• Increasing awareness of these trials in conjunction with<br />
effort on promoting clinical trials awareness and<br />
understanding, d t di including i l di partnering t i with ith national ti l<br />
colorectal cancer advocacy groups<br />
– Colon Cancer Alliance (CCA)<br />
– Colorectal Cancer Coalition (C3)<br />
• Using various publications to highlight this pilot project<br />
and enhance participation of people > 65 years of age<br />
into these trials
CMS-NCI Pilot: Study Reimbursement<br />
Matrix Example (copy in handouts)
CMS-NCI Trial Accrual Data (all 9 trials)<br />
Trial activation dates 1st trial activated July 2004 and<br />
9th trial in April 2008<br />
Maximum planned accrual as 11,271<br />
described in each trial<br />
Total accrual as of April 1, <strong>2009</strong> 6,059 (54% of total accrual)<br />
Accrual of patients age >64<br />
(Medicare eligible)<br />
Medicare eligible using Medicare<br />
as a Method of Payment<br />
Medicare eligible using Medicare<br />
for payment in trials<br />
1,873 (31%)<br />
1,405 (23%)<br />
75% (1,405 of 1,873)
Clinical Trial Enrollment (as of 3/31/09)<br />
NCI Trial # Total Accrual Total Accrual<br />
(Cancer Type) (Planned) > age 64 (%)<br />
7325 (CRC) 11 (50) 4 (36%)<br />
C80405 (CRC) 1484 (2016) 510 (34%)<br />
E2204 (Pancreatic) 137 (126) 45 (33%)<br />
E4203 (CRC) 126 (246) 46 (37%)<br />
E5202 (CRC) 1808 (3610) 669 (37%)<br />
E5204 (Rectal) 344 (2100) 56 (16%)<br />
NSABP-R-04 (Rectal) 1201 (1606) 349 (29%)<br />
RTOG-0522 RTOG 0522 (H & N) 942 (945) 193 (20%)<br />
S0502* (GI Stromal) 6 (572) 1 (17%)<br />
* Trial activated April 2008 Trials in blue are open to accrual
CMS-NCI Pilot: Information on Project<br />
• CMS website information on the project p j for ppublic<br />
– http://www.cms.hhs.gov/mcd/index_list.asp?list_type=ncd<br />
– NCD for Anti-Cancer Chemotherapy for Colorectal Cancer<br />
(110.17)<br />
• CMS website information on project for Medicare Providers<br />
(MedLearn Mattters)<br />
– http://www http://www.cms.hhs.gov/MedlearnMattersArticles/downloads/MM3742.pdf<br />
cms hhs gov/MedlearnMattersArticles/downloads/MM3742 pdf<br />
• CMS website information on business requirements for<br />
billing offices (Change Request 3742 in Transmittal 588 of<br />
Medicare Pub Pub. 100 100-04, 04 Medicare Claims Processing):<br />
– http://www.cms.hhs.gov/transmittals/downloads/R588CP.pdf<br />
• NCI web page pg with information on this pproject: j<br />
– http://www.cancer.gov/clinicaltrials/developments/NCD179N
NCI Clinical Trials Information & Resources<br />
• Search NCI’s clinical trials database at:<br />
– http://www.cancer.gov/clinicaltrials/search<br />
• Clinical trial information, education, & results:<br />
– http://www.cancer.gov/clinicaltrials<br />
• Get live, online assistance from the NCI's LiveHelp<br />
service for clinical trials or cancer information:<br />
– https://cissecure.nci.nih.gov/livehelp/welcome.asp<br />
• Toll-free phone assistance for clinical trials and cancer<br />
information via NCI’s Cancer Information Service at:<br />
– 1-800-4-CANCER (1-800-422-6237)<br />
– http://www http://www.cancer.gov/help<br />
cancer gov/help
NCI Clinical Trial Training<br />
• Provided clinical trials training g to DoD TRICARE<br />
contractors to help them search NCI trials database and<br />
better understand cancer trials as their health care<br />
benefits provide prospective coverage of NCI-sponsored<br />
NCI sponsored<br />
cancer prevention and treatment trials for TRICARE<br />
beneficiaries.<br />
• Future training planned for DoD TRICARE contractors -<br />
date not set yet yet, so if Medicare contractors wish to send<br />
staff to free NCI training, please send email to:<br />
– Andrea Denicoff, RN, MS, ANP at the NCI at<br />
– Email: denicofa@mail.nih.gov<br />
– Phone: 301-496-2522
References<br />
• Murthy, y, VH, , et al ( (2004). ) Participation p in Cancer Clinical<br />
Trials: Race, Sex, and Age-Based Disparities. JAMA,<br />
291 (22), 2720-2726.<br />
• Gross, CP, et al (2005). Enrollment of Older Persons in<br />
Cancer Trials After the Medicare Reimbursement Policy y<br />
Change. Arch Intern Med, 165, 1514-1520.<br />
• U Unger, JM JM, et t al l (2006) (2006). IImpact t of f the th Year Y 2000<br />
Medicare Policy Change on Older Patient Enrollment to<br />
Cancer Clinical Trials. JCO, 24 (1), ()<br />
141-144.
NCD for Routine Costs in CLINICAL TRIALS (310.1)<br />
Publication Number<br />
100-3<br />
Manual Section Number<br />
310.1<br />
Version Number<br />
2<br />
Effective Date of this Version<br />
7/9/2007<br />
Implementation Date<br />
10/9/2007<br />
Benefit Category<br />
Ambulance Services<br />
Ambulatory Surgical Center Facility Services<br />
Antigens<br />
Artificial Legs, Arms, and Eyes<br />
Audiology Services<br />
Blood Clotting Factors for Hemophilia Patients<br />
Bone Mass Measurement<br />
Certified Nurse-Midwife Services<br />
Certified Registered Nurse Anesthetist Services<br />
Chiropractor Services<br />
Clinical Nurse Specialist Services<br />
Clinical Social Worker Services<br />
Colorectal Cancer Screening Tests<br />
Comprehensive Outpatient Rehabilitation Facility (CORF) Services<br />
Critical Access Hospital Services<br />
Dentist Services<br />
Diabetes Outpatient Self-Management Training<br />
Diagnostic Laboratory Tests<br />
Diagnostic Services in Outpatient Hospital<br />
Diagnostic Tests (other)<br />
Diagnostic X-Ray Tests<br />
Drugs and Biologicals<br />
Durable Medical Equipment
Erythropoietin for Dialysis Patients<br />
Extended Care Services<br />
Eyeglasses After Cataract Surgery<br />
Federally Qualified Health Center Services<br />
Hepatitis B Vaccine and Administration<br />
Home Dialysis Supplies and Equipment<br />
Home Health Services<br />
Hospice Care<br />
Immunosuppressive Drugs<br />
Incident to a physician's professional Service<br />
Influenza Vaccine and Administration<br />
Inpatient Hospital Services<br />
Inpatient Psychiatric Hospital Services<br />
Institutional Dialysis Services and Supplies<br />
Leg, Arm, Back, and Neck Braces (orthotics)<br />
Medical Nutrition Therapy Services<br />
Nurse Practitioner Services<br />
Optometrist Services<br />
Oral Anticancer Drugs<br />
Oral Antiemetic Drugs<br />
Orthotics and Prosthetics<br />
Osteoporosis Drug<br />
Outpatient Hospital Services Incident to a Physician's Service<br />
Outpatient Occupational Therapy Services<br />
Outpatient Physical Therapy Services<br />
Outpatient Speech Language Pathology Services<br />
Partial Hospitalization Services<br />
Physician Assistant Services<br />
Physicians' Services<br />
Pneumococcal Vaccine and Administration<br />
Podiatrist Services<br />
Post-Hospital Extended Care Services<br />
Post-Institutional Home Health Services<br />
Prostate Cancer Screening Tests<br />
Prosthetic Devices<br />
Qualified Psychologist Services<br />
Religious NonMedical Health Care Institution<br />
Rural Health Clinic Services<br />
Screening for Glaucoma<br />
Screening Mammography<br />
Screening Pap Smear<br />
Screening Pelvic Exam<br />
Self-Care Home Dialysis Support Services<br />
Shoes for Patients with Diabetes<br />
Skilled Nursing Facility<br />
Splints, Casts, Other Devices Used for Reduction of Fractures and Dislocations
Surgical Dressings<br />
Transplantation Services for ESRD-Entitled Beneficiaries<br />
X-ray, Radium, and Radioactive Isotope Therapy<br />
Note: This may not be an exhaustive list of all applicable Medicare benefit categories for<br />
this item or service.<br />
Indications and Limitations of Coverage<br />
Effective for items and services furnished on or after July 9, 2007, Medicare covers the<br />
routine costs of qualifying clinical trials, as such costs are defined below, as well as<br />
reasonable and necessary items and services used to diagnose and treat complications<br />
arising from participation in all clinical trials. All other Medicare rules apply.<br />
Routine costs of a clinical trial include all items and services that are otherwise generally<br />
available to Medicare beneficiaries (i.e., there exists a benefit category, it is not<br />
statutorily excluded, and there is not a national non-coverage decision) that are provided<br />
in either the experimental or the control arms of a clinical trial except:<br />
• The investigational item or service, itself unless otherwise covered outside of the<br />
clinical trial;<br />
• Items and services provided solely to satisfy data collection and analysis needs<br />
and that are not used in the direct clinical management of the patient (e.g.,<br />
monthly CT scans for a condition usually requiring only a single scan); and<br />
• Items and services customarily provided by the research sponsors free of charge<br />
for any enrollee in the trial.<br />
Routine costs in clinical trials include:<br />
• Items or services that are typically provided absent a clinical trial (e.g.,<br />
conventional care);<br />
• Items or services required solely for the provision of the investigational item or<br />
service (e.g., administration of a noncovered chemotherapeutic agent), the<br />
clinically appropriate monitoring of the effects of the item or service, or the<br />
prevention of complications; and<br />
• Items or services needed for reasonable and necessary care arising from the<br />
provision of an investigational item or service--in particular, for the diagnosis or<br />
treatment of complications.<br />
This policy does not withdraw Medicare coverage for items and services that may be<br />
covered according to local medical review policies (LMRPs) or the regulations on<br />
category B investigational device exemptions (IDE) found in 42 CFR 405.201-405.215,<br />
411.15, and 411.406. For information about LMRPs, refer to www.lmrp.net, a searchable<br />
database of Medicare contractors' local policies.<br />
For noncovered items and services, including items and services for which Medicare
payment is statutorily prohibited, Medicare only covers the treatment of complications<br />
arising from the delivery of the noncovered item or service and unrelated reasonable and<br />
necessary care. However, if the item or service is not covered by virtue of a national<br />
noncoverage policy in Pub. 100-03, NCD Manual and is the focus of a qualifying clinical<br />
trial, the routine costs of the clinical trial (as defined above) will be covered by Medicare<br />
but the noncovered item or service, itself, will not.<br />
A. Requirements for Medicare Coverage of Routine Costs<br />
Any clinical trial receiving Medicare coverage of routine costs must meet the following<br />
three requirements:<br />
• The subject or purpose of the trial must be the evaluation of an item or service<br />
that falls within a Medicare benefit category (e.g., physicians' service, durable<br />
medical equipment, diagnostic test) and is not statutorily excluded from coverage<br />
(e.g., cosmetic surgery, hearing aids).<br />
• The trial must not be designed exclusively to test toxicity or disease<br />
pathophysiology. It must have therapeutic intent.<br />
• Trials of therapeutic interventions must enroll patients with diagnosed disease<br />
rather than healthy volunteers. Trials of diagnostic interventions may enroll<br />
healthy patients in order to have a proper control group.<br />
The three requirements above are insufficient by themselves to qualify a clinical trial for<br />
Medicare coverage of routine costs. Clinical trials also should have the following<br />
desirable characteristics; however, some trials, as described below, are presumed to meet<br />
these characteristics and are automatically qualified to receive Medicare coverage:<br />
1. The principal purpose of the trial is to test whether the intervention potentially<br />
improves the participants' health outcomes;<br />
2. The trial is well-supported by available scientific and medical information or it is<br />
intended to clarify or establish the health outcomes of interventions already in<br />
common clinical use;<br />
3. The trial does not unjustifiably duplicate existing studies;<br />
4. The trial design is appropriate to answer the research question being asked in the<br />
trial;<br />
5. The trial is sponsored by a credible organization or individual capable of<br />
executing the proposed trial successfully;<br />
6. The trial is in compliance with Federal regulations relating to the protection of<br />
human subjects; and<br />
7. All aspects of the trial are conducted according to the appropriate standards of<br />
scientific integrity.<br />
B. Qualification Process for Clinical Trials<br />
Using the authority found in §1142 of the Act (cross-referenced in §1862(a)(1)(E) of the<br />
Act), the Agency for Healthcare Research and Quality (AHRQ) will convene a multi-
agency Federal panel (the "panel") composed of representatives of the Department of<br />
Health and Human Services research agencies (National Institutes of Health (NIH),<br />
Centers for Disease Control and Prevention (CDC), the Food and Drug Administration<br />
(FDA), AHRQ, and the Office of Human Research Protection), and the research arms of<br />
the Department of Defense (DOD) and the Department of Veterans Affairs (VA) to<br />
develop qualifying criteria that will indicate a strong probability that a trial exhibits the<br />
desirable characteristics listed above. These criteria will be easily verifiable, and where<br />
possible, dichotomous. Trials that meet these qualifying criteria will receive Medicare<br />
coverage of their associated routine costs. This panel is not reviewing or approving<br />
individual trials. The multi-agency panel will meet periodically to review and evaluate<br />
the program and recommend any necessary refinements to CMS.<br />
Clinical trials that meet the qualifying criteria will receive Medicare coverage of routine<br />
costs after the trial's lead principal investigator certifies that the trial meets the criteria.<br />
This process will require the principal investigator to enroll the trial in a Medicare<br />
clinical trials registry, currently under development.<br />
Some clinical trials are automatically qualified to receive Medicare coverage of their<br />
routine costs because they have been deemed by AHRQ, in consultation with the other<br />
agencies represented on the multi-agency panel to be highly likely to have the abovelisted<br />
seven desirable characteristics of clinical trials. The principal investigators of these<br />
automatically qualified trials do not need to certify that the trials meet the qualifying<br />
criteria, but must enroll the trials in the Medicare clinical trials registry for administrative<br />
purposes, once the registry is established.<br />
Effective September 19, 2000, clinical trials that are deemed to be automatically qualified<br />
are:<br />
1. Trials funded by NIH, CDC, AHRQ, CMS, DOD, and VA;<br />
2. Trials supported by centers or cooperative groups that are funded by the NIH,<br />
CDC, AHRQ, CMS, DOD and VA;<br />
3. Trials conducted under an investigational new drug application (IND) reviewed<br />
by the FDA; and<br />
4. Drug trials that are exempt from having an IND under 21 CFR 312.2(b)(1) will be<br />
deemed automatically qualified until the qualifying criteria are developed and the<br />
certification process is in place. At that time the principal investigators of these<br />
trials must certify that the trials meet the qualifying criteria in order to maintain<br />
Medicare coverage of routine costs. This certification process will only affect the<br />
future status of the trial and will not be used to retroactively change the earlier<br />
deemed status.<br />
The CMS, through the national coverage determination (NCD) process, through an<br />
individualized assessment of benefits, risks, and research potential, may determine that<br />
certain items and services for which there is some evidence of significant medical benefit,<br />
but for which there is insufficient evidence to support a “reasonable and necessary”<br />
determination, are only reasonable and necessary when provided in a clinical trial that
meets the requirements defined in that NCD.<br />
Medicare will cover the routine costs of qualifying trials that either have been deemed to<br />
be automatically qualified, have certified that they meet the qualifying criteria, or are<br />
required through the NCD process, unless CMS's Chief Clinical Officer subsequently<br />
finds that a clinical trial does not meet the qualifying criteria or jeopardizes the safety or<br />
welfare of Medicare beneficiaries.<br />
Should CMS find that a trial's principal investigator misrepresented that the trial met the<br />
necessary qualifying criteria in order to gain Medicare coverage of routine costs,<br />
Medicare coverage of the routine costs would be denied under §1862(a)(1)(E) of the Act.<br />
In the case of such a denial, the Medicare beneficiaries enrolled in the trial would not be<br />
held liable (i.e., would be held harmless from collection) for the costs consistent with the<br />
provisions of §§1879, 1842(l), or 1834(j)(4) of the Act, as applicable. Where appropriate,<br />
the billing providers would be held liable for the costs and fraud investigations of the<br />
billing providers and the trial's principal investigator may be pursued.<br />
Medicare regulations require Medicare+Choice (M+C) organizations to follow CMS's<br />
national coverage decisions. This NCD raises special issues that require some<br />
modification of most M+C organizations' rules governing provision of items and services<br />
in and out of network. The items and services covered under this NCD are inextricably<br />
linked to the clinical trials with which they are associated and cannot be covered outside<br />
of the context of those clinical trials. M+C organizations therefore must cover these<br />
services regardless of whether they are available through in-network providers. M+C<br />
organizations may have reporting requirements when enrollees participate in clinical<br />
trials, in order to track and coordinate their members' care, but cannot require prior<br />
authorization or approval.<br />
(This NCD last reviewed July 2007.)<br />
Transmittal Number<br />
74<br />
Transmittal Link<br />
http://www.cms.hhs.gov/transmittals/downloads/R74NCD.pdf<br />
Revision History<br />
09/2000 - Implemented new policy covering routine costs in clinical trials. Effective and<br />
implementation dates 09/19/2000. (TN 126 ) (CR 1241)<br />
09/2007 - Effective Date: 07/09/2007. Implementation Date: 10/09/2007. (TN 74 )<br />
(CR5719)
Claims Processing Instructions<br />
• TN 1418 (Medicare Claims Processing)<br />
• TN 310 (One Time Notification)<br />
• MM5805 (MLN Matters Articles 5805)<br />
• MM5790 (MLN Matters Articles 5790)<br />
National Coverage Analyses (NCAs)<br />
This NCD has been or is currently being reviewed under the National Coverage<br />
Determination process. The following are existing associations with NCAs, from the<br />
National Coverage Analyses database.<br />
• First reconsideration for Clinical Trial Policy (CAG-00071R)<br />
• Second reconsideration for Clinical Trial Policy (CAG-00071R2)<br />
Other Versions<br />
Routine Costs in Clinical Trials - Version 1, Effective between 09/19/2000 - 07/09/2007
News Flash - The Centers for Medicare & Medicaid Services (CMS) recently announced the<br />
postponement of the <strong>2009</strong> Medicare Part B Competitive Acquisition Program (CAP). The program will<br />
continue through December 31, 2008. Earlier this year, CMS accepted bids for vendor contracts for the<br />
<strong>2009</strong>-11 CAP. While CMS received several qualified bids, contractual issues with the successful bidders<br />
resulted in CMS postponing the <strong>2009</strong> program. As a result, CAP physician election for participation in<br />
the CAP in <strong>2009</strong> will not be held, and CAP drugs will not be available from an approved CAP vendor for<br />
dates of service after December 31, 2008. Later this fall, CMS will provide additional guidance for<br />
participating CAP physicians on how to transition out of the program. This information will be posted on<br />
the CMS CAP physician’s page at:<br />
http://www.cms.hhs.gov/CompetitiveAcquisforBios/02_infophys.asp on the CMS website. CMS<br />
also plans to seek feedback on the CAP from participating physicians, potential vendors, and other<br />
interested parties. Information about how to submit comments will be available at<br />
http://www.cms.hhs.gov/CompetitiveAcquisforBios/ on the CMS website.<br />
MLN Matters Number: SE0822 Revised Related Change Request (CR) #: N/A<br />
Related CR Release Date: N/A Effective Date: N/A<br />
Related CR Transmittal #: N/A Implementation Date: N/A<br />
Clarification of Medicare Payment for Routine Costs in a Clinical Trial<br />
Note: This article was revised on January 7, <strong>2009</strong>, to delete the first question and answer that was<br />
previously on page 2. All other information remains the same.<br />
Provider Types Affected<br />
Provider Action Needed<br />
All physicians, providers, and suppliers who submit claims to Medicare contractors<br />
(carriers, Medicare Administrative Contractors (A/B MACs), durable medical<br />
equipment Medicare Administrative Contractors (DME MACs), fiscal<br />
intermediaries (FIs), and regional home health intermediaries (RHHIs)) for<br />
services provided to Medicare beneficiaries in clinical trials.<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other<br />
policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to<br />
review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.<br />
Page 1 of 4
MLN Matters Number: SE0822 Related Change Request Number: N/A<br />
Background<br />
Key Points of SE0822<br />
This Special Edition article provides clarification regarding Medicare payment of<br />
routine costs associated with clinical trials. Be sure your billing staff is aware of<br />
this information.<br />
The Centers for Medicare & Medicaid Services (CMS) reminds providers that the<br />
policies for payment of the routine costs of the clinical trial are outlined in chapter<br />
16, section 40 of the Medicare Benefit Policy Manual. The policy in the manual<br />
states:<br />
“40 No Legal Obligation to Pay for or Provide Services<br />
Program payment may not be made for items or services which neither the<br />
beneficiary nor any other person or organization has a legal obligation to pay for or<br />
provide. This exclusion applies where items and services are furnished<br />
gratuitously without regard to the beneficiary’s ability to pay and without<br />
expectation of payment from any source, such as free x-rays or immunizations<br />
provided by health organizations. However, Medicare reimbursement is not<br />
precluded merely because a provider, physician, or supplier waives the charge in<br />
the case of a particular patient or group or class of patients, as the waiver of<br />
charges for some patients does not impair the right to charge others, including<br />
Medicare patients. The determinative factor in applying this exclusion is the reason<br />
the particular individual is not charged.”<br />
There are two concerns addressed in this article regarding “Payment for Routine<br />
Costs in a Clinical Trial” and they are addressed in the following questions and<br />
answers:<br />
1. Question: If the research sponsor pays for the routine costs provided to an<br />
indigent non-Medicare patient (the provider has determined that the patient is<br />
indigent due to a valid financial hardship) may Medicare payment be made for<br />
Medicare beneficiaries?<br />
Answer: If the routine costs of the clinical trial are not billed to indigent non-<br />
Medicare patients because of their inability to pay (but are being billed to all<br />
the other patients in the clinical trial who have the financial means to pay even<br />
when his/her private insurer denies payment for the routine costs), then a legal<br />
obligation to pay exists. Therefore, Medicare payment may be made and the<br />
beneficiary (who is not indigent) will be responsible for the applicable<br />
Medicare deductible and coinsurance amounts. As noted at<br />
http://www.cms.hhs.gov/AcuteInpatientPPS/downloads/FAQ_Uninsured.pdf,<br />
“nothing in the Centers for Medicare & Medicaid Services’ (CMS’) regulations<br />
or Program Instructions prohibit a hospital from waiving collection of charges<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents.<br />
Page 2 of 4
MLN Matters Number: SE0822 Related Change Request Number: N/A<br />
Additional Information<br />
to any patients, Medicare or non-Medicare, including low-income, uninsured or<br />
medically indigent individuals, if it is done as part of the hospital’s indigency<br />
policy. By “indigency policy” we mean a policy developed and utilized by a<br />
hospital to determine patients’ financial ability to pay for services. By<br />
“medically indigent,” we mean patients whose health insurance coverage, if<br />
any, does not provide full coverage for all of their medical expenses and that<br />
their medical expenses, in relationship to their income, would make them<br />
indigent if they were forced to pay full charges for their medical expenses. In<br />
addition to CMS’ policy, the Office of Inspector General (OIG) advises that<br />
nothing in OIG rules or regulations under the Federal anti-kickback statute<br />
prohibits hospitals from waiving collection of charges to uninsured patients of<br />
limited means, so long as the waiver is not linked in any manner to the<br />
generation of business payable by a Federal health care program – a highly<br />
unlikely circumstance<br />
Thus, the provider of services should bill the beneficiary for co-payments and<br />
deductible, but may waive that payment for beneficiaries who have a valid<br />
financial hardship.<br />
2. Question: May a research sponsor pay Medicare copays for beneficiaries<br />
in a clinical trial.<br />
Answer: If a research sponsor offers to pay cost-sharing amounts owed by<br />
the beneficiary, this could be a fraud and abuse problem. In addition to CMS’<br />
policy, the Office of Inspector General (OIG) advises that nothing in OIG rules<br />
or regulations under the Federal anti-kickback statute prohibits hospitals from<br />
waiving collection of charges to uninsured patients of limited means, so long<br />
as the waiver is not linked in any manner to the generation of business<br />
payable by a Federal health care program.<br />
The citations include 42 U.S.C. 1320a-7(a)(i)(6); OIG Special <strong>Advisory</strong> Bulletin<br />
on Offering Gifts to Beneficiaries<br />
(http://oig.hhs.gov/fraud/docs/alertsandbulletins/SABGiftsandInducements.pdf)<br />
and OIG Special Fraud Alert on Routine Waivers of Copayments and<br />
Deductibles (http://oig.hhs.gov/fraud/docs/alertsandbulletins/121994.html).<br />
Chapter 16, Section 40 of the Medicare Benefit Policy Manual is available at<br />
http://www.cms.hhs.gov/manuals/Downloads/bp102c16.pdf on the CMS<br />
website.<br />
If you have any questions, please contact your Medicare contractor at their tollfree<br />
number, which may be found at<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents.<br />
Page 3 of 4
MLN Matters Number: SE0822 Related Change Request Number: N/A<br />
http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.zip<br />
on the CMS website.<br />
News Flash - Flu Season Is Coming! It’s not too early to start vaccinating as soon as you receive<br />
vaccine. Encourage your patients to get a flu shot as it is still their best defense against the influenza<br />
virus. (Medicare provides coverage of the flu vaccine without any out-of-pocket costs to the Medicare<br />
patient. No deductible or copayment/coinsurance applies.) And don’t forget, health care workers also<br />
need to protect themselves. Get Your Flu Shot. – Not the Flu. Remember - Influenza vaccine plus its<br />
administration are covered Part B benefits. Note that influenza vaccine is NOT a Part D covered drug.<br />
For information about Medicare’s coverage of the influenza virus vaccine and its administration as well<br />
as related educational resources for health care professionals and their staff, please go to<br />
http://www.cms.hhs.gov/MLNProducts/Downloads/flu_products.pdf on the CMS website. To<br />
download the Medicare Part B Immunization Billing quick reference chart, go to<br />
http://www.cms.hhs.gov/MLNProducts/downloads/qr_immun_bill.pdf on the CMS website.<br />
Disclaimer<br />
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to<br />
statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either<br />
the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement<br />
of their contents.<br />
Page 4 of 4
Physician Tools to Facilitate Medicare Billing for Patients<br />
Enrolled in Specific Cancer Clinical Trials under the<br />
National Coverage Determination No. CAG-00179N<br />
On 1/28/05, the Centers for Medicare and Medicaid Services (CMS) issued a National Coverage<br />
Determination (NCD) covering the off-label use of certain anti-cancer drugs in identified clinical trials of<br />
colorectal cancer and other cancer types. Coverage is provided for clinical care associated with study<br />
participation for Medicare patients enrolled in 9 specific National Cancer Institute-Sponsored Cooperative<br />
Group clinical trials under this NCD, No. CAG-00179N. These clinical trials are: C80405, E2204, E4203,<br />
E5202, E5204, NSABP R-04 with Amendment #2, RTOG-0522, S0502, and 7325. This new NCD<br />
provides the following advantages with respect to coverage for Medicare patients enrolled in these 9<br />
specific trials:<br />
• Regional variation in interpretation of what constitutes "routine" costs associated with care<br />
provided per protocol is replaced by this NCD’s definition for coverage, providing one consistent<br />
interpretation for sites across the US<br />
• Coverage is provided for the study's investigational item(s) or agent(s)<br />
• "Non-routine" costs of the care provided per protocol are covered under this NCD – this includes<br />
items such as CT scans or PET scans obtained per the protocol's study calendar to evaluate the<br />
study treatment even if the scans are not required as part of routine clinical monitoring<br />
• Special code modifiers have been created for both routine and non-routine costs to facilitate<br />
claims processing under this NCD<br />
Specific informational tools have been created to help explain to physicians and sites participating in<br />
these trials the goals of this NCD and to help facilitate billing of care for Medicare patients enrolled on the<br />
trials. These tools are provided for each trial under this NCD and will be made available on the Members<br />
section of the Cooperative Group's website that is leading a particular trial and on the Cancer Trials<br />
Support Unit (CTSU) website. In addition, questions on this NCD from physicians participating in these<br />
trials may be directed to the CTSU at the following email address: ctsucontact@westat.com or via the<br />
CTSU Help Desk at 1-888-823-5923. Any suggestion or recommendation regarding these tools and/or<br />
the need for other information on the NCD may also be directed to this email address. The information<br />
tools available are briefly described below:<br />
(1) General overview sheet explaining this NCD<br />
(2) Trial-specific information sheet describing general coverage for each study<br />
(3) Summary reimbursement matrix that outlines the specific study items that are covered by<br />
Medicare (as well as those not covered by Medicare such as research tests funded by the<br />
study sponsor)<br />
(4) Information sheets explaining Medicare coverage under this NCD that can be provided<br />
when patients are receiving protocol specified tests/procedures by other<br />
physicians/health care providers (e.g., CT scan at a stand-alone radiology imaging center)<br />
Please Note: The information tools provided above emphasizes those items that cannot be covered by<br />
Medicare per government regulations (e.g., co-pays and deductibles cannot be waived by Medicare;<br />
coverage cannot be provided if the items/services are not specified as benefit categories; coverage<br />
cannot be provided for items/services that are being provided free-of-charge to non-Medicare patients<br />
enrolled in the study, etc). In addition, patients must have Medicare B to receive coverage for<br />
items/services that are only covered by Part B. With respect to the new Medicare Part D coverage,<br />
this NCD and the associated special code modifiers do not apply to this new benefit. Since<br />
Medicare Part D coverage is structured in a very different manner, these special code modifiers are not<br />
applicable and cannot be used for prescription medications that are covered under Medicare Part D.<br />
Final 2.3.06 1
Overview: Medicare Coverage of Anti-Cancer Drugs<br />
In Specific Clinical Trials, NCD, No. CAG-00179N<br />
Medicare is covering 9 NCI-Sponsored clinical trials of certain anti-cancer drugs.<br />
On 1/28/05, the Centers for Medicare and Medicaid Services (CMS) issued a National Coverage<br />
Determination (NCD), No. CAG-00179N, covering the off-label use of certain anti-cancer drugs<br />
in 9 identified National Cancer Institute (NCI) sponsored clinical trials of colorectal cancer and<br />
other cancer types. Medicare is providing coverage for these trials because they provide<br />
sufficient assurance that the administration of these anti-cancer drugs in these trials is reasonable<br />
and necessary for the care of Medicare beneficiaries. The best way to learn about drugs that are<br />
currently approved for one disease setting, such as advanced colon cancer, and may possibly<br />
work in either an earlier stage of the same disease (such as early stage colon cancer) or in a<br />
entirely different disease (such as head and neck cancer) is to conduct a clinical trial. The drugs<br />
used to treat cancer today were found to work because they were tested in previous clinical trials.<br />
Which 9 NCI-sponsored clinical trials are included in this NCD?<br />
• The identifying numbers for these trials are listed here and include one or more of the<br />
following anti-cancer drugs: oxaliplatin (Eloxatin), irinotecan (Camptosar®),<br />
cetuximab (Erbitux), or bevacizumab (Avastin). A link to the full trial name is<br />
located in the “More Information” section.<br />
1. C80405 4. E5202 7. RTOG-0522<br />
2. E2204 5. E5204 8. S0502<br />
3. E4203 6. NSABP R-04 (As of Amend #2 – 9. 7325<br />
Protocol Version: 10/27/05)<br />
What are the billing instructions for these 9 trials?<br />
These instructions must be followed each time a Medicare recipient is enrolled, evaluated or<br />
provided care for during one of these trials. In order to obtain payment:<br />
1. Use these special Medicare codes for every patient visit:<br />
• Use the ICD-9-CM diagnosis code of V70.7 in the second diagnosis code position to<br />
show the claim involves a clinical trial<br />
• Use the “QV” modifier with the applicable procedure for routine clinical costs (those<br />
paid for usual care, if no study is involved)<br />
• Use the “QR” modifier with the procedure code for non-routine clinical costs (study<br />
related costs)<br />
2. Send a copy of this information sheet to every billing office that issues a bill<br />
What costs ARE covered by Medicare for these trials?<br />
• This coverage includes:<br />
o Lab tests, X-rays and IVs<br />
o Physician visits and surgery, if needed<br />
o Outpatient and inpatient visits, if needed<br />
o Tests and treatments for side effects, if needed<br />
• All required treatments and clinical tests, including most pre-treatment tests for<br />
eligibility, in concordance with the protocol’s specifications and study calendar unless<br />
excluded as explained in the next section entitled “What costs are NOT covered.”<br />
FINAL 2/3/06 1
What costs are NOT covered by Medicare?<br />
• Coinsurance and deductibles --- individual patients will need to check with their<br />
physician and health plan(s) about the costs of coinsurance and deductibles related to<br />
their participation in this trial<br />
• Those provided free-of-charge by the research sponsors for any patient enrolled in the<br />
study (For example, some study drugs may be provided without charge for all patients in<br />
the study by one of the research sponsors)<br />
• Those that do not fall into a Medicare benefit category (For example, a trial may require<br />
a quality of life questionnaire which does not fall into a benefit category; however,<br />
doctor visits that involve administration of these may be billed)<br />
• Those that are statutorily excluded from Medicare coverage (For example, cosmetic<br />
surgery and hearing aids)<br />
• Data collection not used in the direct care or management of patients<br />
What if people are not on Medicare, will other insurers provide this same<br />
coverage?<br />
• This coverage decision applies only to Medicare plans. This includes “ordinary”<br />
Medicare as well as Medicare plans provided via Health Maintenance Organizations<br />
(HMOs), Preferred Provider Organizations (PPOs), etc.<br />
• Some states (see web site link below) have passed laws requiring that Blue Cross/Blue<br />
Shield plans, HMOs, PPOs, and other insurance companies pay, at least in part, for<br />
cancer clinical trials. States with such laws are listed on NCI’s web site at:<br />
http://www.cancer.gov/clinicaltrials/developments/laws-about-clinical-trial-costs<br />
• If no law exists, some private insurers frequently “follow the lead” of Medicare in their<br />
decisions about paying for clinical trials. Your billing office may wish to call or e-mail<br />
their contact at the particular insurer, telling them that Medicare has made a special<br />
decision. Sending this Medicare coverage information will inform them of this CMS<br />
determination and may help impact their decision on coverage.<br />
For More Information:<br />
• Billing offices should learn about Medicare’s National Coverage Determination No.<br />
CAG-00179N. The procedures are described in a CMS Medlearn Matters Article No.<br />
MM3742:<br />
http://www.cms.hhs.gov/MedlearnMattersArticles/downloads/MM3742.pdf<br />
• Billing offices may also wish to look at Change Request 3742 dated 6/17/05, found in<br />
Transmittal 588 of Medicare Pub. 100-04, Medicare Claims Processing,<br />
http://www.cms.hhs.gov/transmittals/downloads/R588CP.pdf<br />
• List of the NCI-Sponsored trials that are activated for accrual under this NCD with links<br />
to information about the trial description, eligibility and participating sites:<br />
http://www.cancer.gov/clinicaltrials/developments/NCD179N<br />
FINAL 2/3/06 2
SUMMARY REIMBURSEMENT MATRIX FOR:<br />
C80405 - A Phase III Trial of FOLFIRI or FOLFOX with Bevacizumab, Cetuximab, or with the Combination of Bevacizumab Cetuximab for Patients with Metastatic<br />
Colorectal Cancer (Matrix Version: 2/28/06)<br />
Study Agents<br />
Agent Distribution<br />
& Timing of Test<br />
Pharmaceutical/<br />
Biotechnology<br />
Sponsor<br />
Study<br />
Coverage<br />
Medicare Coverage<br />
Cetuximab (IV) By Bristol-Myers Squibb (BMS) Yes (100% by BMS) N/A No (funded by study)<br />
Bevacizumab (IV) Commercial N/A N/A Yes<br />
Oxaliplatin (IV) Commercial N/A N/A Yes<br />
Irinotecan (IV) Commercial N/A N/A Yes<br />
5-fluorouracil (IV) and Leucovorin (IV) Commercial N/A N/A Yes<br />
Miscellaneous drugs - treatment support - IV medications Commercial N/A N/A Yes<br />
Miscellaneous drugs - oral antiemetic agents given per Medicare Part B<br />
regulations only or oral agents given during an in-patient hospitalization<br />
Commercial N/A N/A Yes (per Medicare Part B only)<br />
Miscellaneous drugs - oral prescription drugs per Medicare Part D regulations<br />
only<br />
Commercial N/A N/A<br />
Yes (per patient's Medicare Part D plan only -- special billing<br />
codes for this NCD do not apply to Medicare Part D)<br />
Pre-treatment and Randomization Tests<br />
History / Physical Exam with Body Surface Area, Weight, Height, and<br />
Performance Status<br />
With or prior to initial registration N/A N/A Yes<br />
Histologic or cytologic confirmation of metastatic CRC If required by protocol for initial registration N/A N/A Yes<br />
CBC with differential and platelets; total bilirubin (plus direct and indirect<br />
bilirubin, if needed); serum creatinine; BUN; Electrolytes (Na, K, Cl, bicarb);<br />
Magnesium, AST, ALT, alkaline phosphatase; PT, (INR); PTT; LDH; albumin;<br />
C-reactive protein; CEA; pregnancy test; urinalysis with 24-hour collection if<br />
urine protein is 2+ or greater<br />
With initial registration N/A N/A Yes<br />
Radiographic imaging for staging and tumor measurements (CXR and CT<br />
and/or MRI)<br />
With or prior to initial registration N/A N/A Yes<br />
Surgical evaluation for resectability<br />
Preparation of required sample of resected primary tumor (or metastatic<br />
With or prior to initial registration N/A N/A Yes<br />
tissue) & Shipping - Formalin-fixed, paraffin embedded tissue block -<br />
Pathologic Preparation and Review<br />
With initial registration No Yes No (funded by study)<br />
Baseline QOL Assessments and Diet & Lifestyle questionnaires<br />
Research Tests<br />
Prior to Randomization<br />
(Baseline Questionnaires ONLY)<br />
No Yes No (funded by study)<br />
Research tests on tissue and blood for pharmacogenomic and other research<br />
studies at Central Labs (non-routine)<br />
Treatment Tests and Physician Visits<br />
(including Follow-Up Tests / Visits)<br />
Multiple Research Tests<br />
performed at Central Labs<br />
N/A Yes No (funded by study)<br />
Collection and preparation of blood samples & shipping Prior to initial treatment No Yes No (funded by study)<br />
History / Physical Exam with drug toxicity & AE assessment and blood<br />
pressure assessment<br />
Per Study Calendar N/A N/A Yes<br />
CBC with differential and platelets; total bilirubin (plus direct and indirect<br />
bilirubin, if needed); serum creatinine; BUN; Electrolytes (Na, K, Cl, bicarb);<br />
Magnesium, AST, ALT, alkaline phosphatase; PT, (INR); PTT; pregnancy test;<br />
urinalysis with 24-hour collection if urine protein is 2+ or greater<br />
IV administration of study agents & all other clinical care, including laboratory<br />
tests and imaging studies, needed to provide study treatment per protocol<br />
specifications as well as to treat adverse events related to study treatment,<br />
including hospitalizations.<br />
Per Study Calendar N/A N/A Yes<br />
Per Treatment Schedule/Study Calendar<br />
and as clinically indicated<br />
N/A N/A Yes<br />
Radiographic imaging for disease progression (e.g., CT, MRI, etc.) Per Study Calendar N/A N/A Yes<br />
Page 1 of 1
If You Have Cancer and<br />
Have Medicare...<br />
You Should Know<br />
About Clinical Trials<br />
Medicare now covers some costs<br />
of clinical trials. If you have cancer,<br />
you may have more choices for your<br />
cancer treatment.<br />
What are cancer clinical trials?<br />
Cancer treatment<br />
clinical trials are<br />
research studies to<br />
find better ways<br />
to treat cancer.<br />
Clinical trials<br />
often compare<br />
the most accepted<br />
cancer treatment<br />
(standard treatment)<br />
with a new treatment that doctors<br />
hope will be better. What doctors<br />
learn in these trials will help people<br />
with cancer—now and in the future.<br />
It is important that men and women<br />
of all ages and backgrounds take<br />
part in clinical trials. Each trial<br />
has rules about who can and cannot<br />
participate; for example, people who<br />
have the same type of cancer. Think<br />
about asking your doctor if you can<br />
take part in a clinical trial.<br />
What kind of information will I get<br />
if I want to take part in a clinical trial?<br />
Before you join a clinical trial, a<br />
doctor, nurse, or another person on<br />
the research team will explain why<br />
the trial is being done and what will<br />
happen during the clinical trial. You<br />
will be given a consent form to read.<br />
© Cover photo by Susie Fitzhugh
The consent form will explain:<br />
• The exact plan for each step in<br />
the clinical trial<br />
• What side effects you may have<br />
• How the trial may affect your<br />
daily life<br />
You should ask questions about any<br />
part of the clinical trial or consent<br />
form you do not understand. If you<br />
decide to take part in the trial, you<br />
will be asked to sign the consent<br />
form. Even if you sign the consent<br />
form, you can still change your<br />
mind and stop participating at<br />
any time.<br />
Who makes sure my rights are protected?<br />
National and local<br />
groups of experts<br />
approve clinical trials<br />
before they<br />
begin. One of the<br />
most important<br />
groups is called an<br />
institutional review<br />
board (IRB). Each<br />
hospital or cancer<br />
center has an<br />
IRB, which includes doctors, nurses,<br />
and people from the community.<br />
The IRB’s job is to review clinical<br />
trials and make sure they are run<br />
safely and fairly.<br />
What cancer treatment will I get?<br />
If you join a clinical trial that compares<br />
treatments, you will<br />
get either:<br />
• The best accepted treatment for<br />
the kind of cancer you have<br />
(called standard treatment)<br />
• A new treatment that doctors<br />
hope will be better than the standard<br />
treatment<br />
Why do some people choose not to<br />
be part of a clinical trial?<br />
• It is not known for sure if the<br />
new treatment will help you more<br />
or less than the standard treatment.<br />
• Treatments in clinical trials may<br />
have side effects.<br />
• You may have to pay some of the<br />
costs of the trial that Medicare<br />
does not cover. It’s important to<br />
talk about these costs with your<br />
health care provider.<br />
Do I have to take part in a clinical<br />
trial?<br />
No. Taking part in a clinical trial is<br />
up to you. It is important to look at<br />
all of your treatment options. You<br />
and your family should ask questions<br />
before you decide to take part. Be<br />
sure to get all the information you<br />
need before making your decision.
What cancer clinical trials does<br />
Medicare pay for?<br />
Medicare will pay<br />
for most cancer<br />
treatment clinical<br />
trials that are<br />
funded by:<br />
• The National<br />
Cancer Institute<br />
(NCI)<br />
• Another part of<br />
the Federal<br />
Government<br />
If I decide to take part in a clinical<br />
trial, what will Medicare pay for?<br />
Medicare will pay for all routine<br />
costs that are part of a clinical trial.<br />
Medicare will pay for:<br />
• Visits to your doctor’s office<br />
• All tests that you will need for<br />
your medical care<br />
• Your hospital stay(s), if you<br />
need it<br />
• Surgery, if you need it<br />
• Tests and treatments for side<br />
effects, if you have them<br />
It is important to know that<br />
Medicare will not pay for all<br />
your costs.<br />
Medicare will not pay for:<br />
• Some clinical trial treatments<br />
• Tests that collect information<br />
only for the trial, but are not<br />
needed for your medical care<br />
• Coinsurance and deductibles<br />
If I’m in a Medicare + Choice Plan,<br />
can I still take part in a clinical trial?<br />
Yes. Medicare covers the costs<br />
of participating in many cancer<br />
treatment trials, whether you are<br />
in a Medicare + Choice Plan or in<br />
the Original Medicare Plan.<br />
You may take part in a trial outside<br />
of your Medicare + Choice Plan.<br />
Before you start treatment in a<br />
clinical trial, tell your plan. This<br />
way, your plan can still keep track<br />
of your cancer treatment.<br />
If you have more questions about<br />
what costs Medicare will pay<br />
for, call Medicare toll-free at<br />
1-800-MEDICARE<br />
(1-800-633-4227).<br />
TTY/TDD users, call<br />
1-877-486-2048.
Questions to ask<br />
Here are some questions to ask<br />
before you agree to take part in a<br />
clinical trial:<br />
• Why is the clinical trial being<br />
done?<br />
• How will it help me?<br />
• What kinds of tests and treatments<br />
are part of the trial?<br />
• How could the clinical trial<br />
change what I do every day?<br />
• What will happen to my cancer<br />
with or without this treatment?<br />
• What treatments could I get<br />
if I don’t take part in the<br />
clinical trial?<br />
• What are possible short- and<br />
long-term side effects for me and<br />
my family to think about?<br />
• How do the risks and side effects<br />
of the standard treatment compare<br />
with the new treatment?<br />
• How long will the clinical trial<br />
last?<br />
• Will I have to stay in the hospital<br />
during the clinical trial? If so,<br />
how often and for how long?<br />
• Will I have check-ups after the<br />
clinical trial?<br />
• How long do I have to make up<br />
my mind about joining this trial?<br />
Tip: Write out a list of your questions<br />
and concerns to<br />
ask your doctor<br />
For more information<br />
About cancer clinical trials<br />
• Ask your doctor<br />
• Visit the clinical trials section of<br />
the National Cancer Institute’s<br />
(NCI) Web site at<br />
www.cancer.gov<br />
• Call NCI’s Cancer Information<br />
Service toll-free at 1-800-4-CAN-<br />
CER (toll-free TTY for people<br />
who are deaf or hard of hearing:<br />
1-800-332-8615)<br />
About Medicare<br />
• Visit Medicare’s Web site at<br />
www.medicare.gov<br />
• Call toll-free 1-800-MEDICARE<br />
(1-800-633-4227). TTY/TDD<br />
users, call 1-877-486-2048<br />
Medicare is a health insurance<br />
program for people who are age<br />
65 or older, some people with disabilities<br />
under age 65, and<br />
people with end-stage renal disease<br />
(permanent kidney failure requiring<br />
dialysis or a kidney transplant).<br />
Public Health Service<br />
National Institutes of Health<br />
NIH Publication No. 02-5132<br />
Printed March 2002
June 25, <strong>2009</strong><br />
Dear Senator:<br />
On behalf of the sixty-two undersigned organizations, we are writing to commend you for<br />
your significant investment in comparative effectiveness research under the American<br />
Recovery and Reinvestment Act of <strong>2009</strong>, and to urge you to continue to advance this<br />
important initiative as a key component of any strategy designed to reform health care.<br />
Physicians are bound by a social contract to act in the best interests of individual patients<br />
and society. However, as medical science continues to advance, treatment options<br />
multiply, and studies proliferate across a multitude of journals, practicing physicians are<br />
severely challenged to keep up with, evaluate and apply the tsunami of information to the<br />
personalized treatment of individual patients. To be assured that we are always<br />
delivering the most effective and appropriate care to our patients, we need an ongoing<br />
and trusted source of current, evidence-based information about what works best for a<br />
given condition in a given patient population. A robust, federally sponsored, independent<br />
Comparative Effectiveness Research (CER) enterprise—one that emphasizes real-life<br />
study populations, head-to-head treatment comparisons, and identifying treatments most<br />
likely to benefit specific groups of patients – would enable physicians and patients<br />
together to make informed decisions.<br />
Timely and reliable CER information is vitally important to the millions of patients and<br />
consumers who are taking a more active role in researching their own diagnosed or<br />
suspected conditions and available treatments. Without credible information about the<br />
comparative effectiveness of management options, consumers are unable to effectively<br />
partner with their physicians to make informed choices about their care.<br />
Some claim that comparative effectiveness research will inevitably lead to “cookbook”<br />
medicine or rationing of expensive forms of care, but that is not its purpose. Its purpose<br />
is to help physicians and patients make smart choices based on the clinical value of<br />
varying treatments and interventions, the unique needs and preferences of individual<br />
patients, and our societal commitment to reduce disparities in care. Unlike much<br />
traditional clinical research, comparative effectiveness results can inform health care<br />
decisions at both the patient and population levels. And while CER may identify some<br />
low-cost treatments that yield better outcomes than high-cost alternatives, the reverse is<br />
also true: CER analyses might persuade cost-conscious payers, purchasers and patients<br />
that an expensive new medical innovation offers better value than current therapies.<br />
Most important to patients is that the information be from an independent, authoritative<br />
and trusted source.<br />
The medical profession commits to continue its work with researchers and consumers to<br />
provide input into and help to shape the nation’s newly invigorated CER enterprise.
Patients, physicians and other stakeholders must be engaged in the governance and<br />
oversight of comparative effectiveness research in a transparent process that ensures<br />
adherence to rigorous methodological standards and that areas for inquiry are prioritized<br />
based on disease burden and opportunity for improvement.<br />
Much remains to be learned about how to best translate comparative effectiveness<br />
research into practice, and physicians, patients and other stakeholders need to actively<br />
participate in these deliberations. But there is no question about the urgency of our<br />
nation’s need for ready access to objective, clearly understandable evidence to support<br />
physicians and patients in their clinical decision-making.<br />
Sincerely,<br />
American Academy of Allergy, Asthma & Immunology<br />
American Academy of Dermatology Association<br />
American Academy of Family Physicians<br />
American Academy of Home Care Physicians<br />
American Academy of Hospice and Palliative Medicine<br />
American Academy of Ophthalmology<br />
American Academy of Otolaryngology- Head and Neck Surgery<br />
American Academy of Pediatrics<br />
American Academy of Physical Medicine and Rehabilitation<br />
American Association of Neurological Surgeons<br />
American Board of Allergy and Immunology<br />
American Board of Anesthesiology<br />
American Board of Colon and Rectal Surgery<br />
American Board of Family Medicine<br />
American Board of Internal Medicine<br />
American Board of Medical Specialties<br />
American Board of Neurological Surgery<br />
American Board of Nuclear Medicine<br />
American Board of Otolaryngology<br />
American Board of Physical Medicine and Rehabilitation<br />
American Board of Preventive Medicine<br />
American Board of Psychiatry and Neurology<br />
American Board of Radiology<br />
American Board of Thoracic Surgery<br />
American College of Cardiology<br />
American College of Emergency Physicians<br />
American College of Occupational and Environmental Medicine<br />
American College of Osteopathic Surgeons<br />
American College of Physicians<br />
American College of Radiation <strong>Oncology</strong><br />
American College of Radiology<br />
American College of Rheumatology<br />
American College of Surgeons<br />
2
American Gastroenterological Association<br />
American Geriatrics Society<br />
American Medical Association<br />
American Osteopathic Academy of Orthopedics<br />
American Psychiatric Association<br />
American Society for Gastrointestinal Endoscopy<br />
American Society for Radiation <strong>Oncology</strong><br />
American Society for Reproductive Medicine<br />
American Society of Anesthesiologists<br />
American Society of Clinical <strong>Oncology</strong><br />
American Society of <strong>Hematology</strong><br />
American Society of Plastic Surgeons<br />
American Thoracic Society<br />
American Urological Association<br />
College of American Pathologists<br />
Congress of Neurological Surgeons<br />
Council of Medical Specialty Societies<br />
Heart Rhythm Society<br />
Infectious Diseases Society of America<br />
Medical Group Management Association<br />
North American Spine Society<br />
Society for Cardiovascular Angiography and Interventions<br />
Society for Vascular Surgery<br />
Society of Critical Care Medicine<br />
Society of Gynecologic Oncologists<br />
Society of Hospital Medicine<br />
Society of Neurological Surgeons<br />
The Endocrine Society<br />
The Society of Thoracic Surgeons<br />
3
American Society of <strong>Hematology</strong> comments to the Federal Coordinating Council on Comparative<br />
Effectiveness Research<br />
June 10, <strong>2009</strong><br />
Page 1 of 5<br />
To: Federal Coordinating Council on Comparative Effectiveness Research<br />
June 10, <strong>2009</strong><br />
Submitted electronically at http://www.hhs.gov/recovery and via e-mail to<br />
CoordinatingCouncil@blseamon.com<br />
The American Society of <strong>Hematology</strong> (ASH) appreciates the opportunity to comment<br />
on Comparative Effectiveness Research (CER) to the Federal Coordinating Council<br />
(Council). ASH represents over 16,000 clinicians and scientists committed to the study<br />
and treatment of malignant and non-malignant blood and blood-related diseases such as<br />
leukemia, lymphoma, sickle cell disease, anemia and hemophilia.<br />
ASH commends the Council for creating a public forum that underscores the importance<br />
of input from a broad range of stakeholders interested in priorities for CER. The<br />
Council’s charge is consistent with ASH’s mission to promote the understanding,<br />
prevention and treatment of blood disorders, and improve healthcare and patient<br />
outcomes with hematologic disease.<br />
ASH believes that timely CER on the following topics will have the highest impact in<br />
hematology based on prevalence, disease burden, variability in outcomes in diverse<br />
populations and costs of care. Research in these areas has the potential to address the<br />
gaps in knowledge and uncertainty within the clinical and public health communities,<br />
ultimately leading to improved quality of care, outcomes and cost-effectiveness.<br />
I. Management of Patients with Sickle Cell Disease (SCD).<br />
The survival of children with SCD has improved with early identification of<br />
affected infants and enrollment in comprehensive pediatric hematology<br />
programs. However, there is a paucity of comparable adult-oriented<br />
programs and the growing young adult sickle cell populations face ongoing<br />
challenges in obtaining effective and comprehensive care. CER should<br />
evaluate health care transition training programs for adolescent patients.<br />
Many adult patients do not have access to physicians with expertise in sickle<br />
cell disease on an ongoing basis. There is a need to evaluate alternative<br />
medical care models for patients in the community setting. Examples<br />
include co-management with primary care physicians and utilization of<br />
telemedicine.
American Society of <strong>Hematology</strong> comments to the Federal Coordinating Council on Comparative<br />
Effectiveness Research<br />
June 10, <strong>2009</strong><br />
Page 2 of 5<br />
The few randomized clinical studies that have been performed addressing<br />
management of patients with SCD have had high impact on improving outcomes.<br />
Observational studies have also had major influence on clinical practice (e.g.,<br />
treatment of acute chest syndrome). There are opportunities to use CER to<br />
identify optimal approaches to encourage the adherence to proven preventive and<br />
treatment interventions. Administrative and clinical data sets such as state<br />
Medicaid claim and hospital discharge files would provide useful resources to<br />
assess current practices and measure outcomes of interventions. The following<br />
topics are examples to be considered:<br />
A. Pain management. The utility of clinical pathways in the outpatient,<br />
emergency department, and inpatient settings needs to be addressed.<br />
CER analysis of multidisciplinary and multimodality approaches to<br />
pain management for patients with SCD compared with conventional<br />
pharmacological therapies would provide opportunities to identify<br />
treatments resulting in improved patient quality of life and costeffectiveness.<br />
B. Hydroxyurea therapy. Hydroxyurea therapy is underutilized in the<br />
management of symptomatic adult patients. CER can be employed to<br />
evaluate programmatic interventions at the patient, provider, and<br />
health care system levels to enhance appropriate use of hydroxyurea<br />
therapy.<br />
C. Red blood cell transfusions. Guidelines are available for the use of<br />
transfusions in the management of sickle cell complications but they<br />
are based on limited data. CER can be used to address questions such<br />
as the extent of phenotype matching of red cells used for chronic<br />
transfusion and techniques of transfusion administration (simple vs.<br />
exchange) for specific acute indications.<br />
D. Clinical decision support tools. Adults often receive their care from<br />
physicians with few sickle cell patients in their practices (e.g.,<br />
community based hematology/oncology and primary care physicians).<br />
Management of sickle cell-related issues such as hydroxyurea therapy<br />
and health maintenance (e.g., screening for pulmonary hypertension,<br />
renal disease, ophthalmologic complications) can be challenging in<br />
these settings. CER can be employed to address the utility of clinical<br />
assessment tools, electronic health record reminder systems, and other<br />
approaches to optimizing receipt of appropriate intervention.<br />
II. Specialized Challenges in Thrombosis.<br />
Insertion of inferior vena cava filters (IVCF) is widely performed in patients with,<br />
or at risk of, venous thromboembolism. IVCF likely prevent pulmonary<br />
embolism (PE) in highly selected patients with acute venous thromboembolism<br />
(VTE) who have absolute contraindications to therapeutic dose anticoagulation.<br />
However, the majority of IVCF are placed in patients with either no active VTE
American Society of <strong>Hematology</strong> comments to the Federal Coordinating Council on Comparative<br />
Effectiveness Research<br />
June 10, <strong>2009</strong><br />
Page 3 of 5<br />
(“prophylactic IVCF”) or those with acute VTE who do not have an absolute<br />
contraindication to anticoagulation.<br />
However, there is little evidence to guide the use of IVCF. Only one randomized<br />
trial has been performed in which patients with acute VTE were randomized to<br />
anticoagulation with or without IVCF. The study demonstrated an acute<br />
reduction in PE, with no impact on mortality and an increase in VTE over 8 years<br />
of follow-up, leading the authors to recommend against routine use of filters in<br />
patients who can be anticoagulated. There have been no randomized controlled<br />
trials examining the use of retrievable filters or the use of filters for the prevention<br />
of pulmonary embolism in patients who do not have acute venous<br />
thromboembolism. Evidence-based guidelines have recommended against the use<br />
of IVCF for the prevention of pulmonary embolism in patients who do not have<br />
acute DVT. Despite this guideline recommendation, the majority of IVCF in the<br />
United States are placed for this indication. For example, IVCF use is routine in<br />
some trauma centers. This practice occurs despite the fact that insertion of IVCF<br />
is expensive (estimated to cost in excess of US$5000 per use), that IVCF cause<br />
otherwise avoidable deep vein thrombosis (at an estimated US$5000 to<br />
US$10,000 per event) and that IVCF may provide physicians with an excuse to<br />
neglect the administration of a pharmacologic prophylaxis, which is proven to be<br />
the most effective and cost-effective treatment for patients at high risk of VTE.<br />
Data on insertion of IVCF should be easily accessible. Indications and<br />
complications of their use should be discernible. Comparison of event rates in<br />
patients with and without IVCF matched for other co-morbidities should also be<br />
available. Such an analysis would likely establish definitively that IVCF use is<br />
both more expensive and more toxic than alternate, effective therapies currently<br />
recommended by consensus guidelines.<br />
III. Management of Patients with Myelodysplastic Syndrome.<br />
Myelodysplastic syndromes (MDS) affect older adults with a rapidly rising<br />
national disease burden owing to the aging of the American population. Patients<br />
with MDS have a chronic bone marrow failure disorder often associated with<br />
other co-morbidities, and are cared for by primary care and hematology<br />
subspecialists. Patients and health care providers must address complications<br />
related to the disease process itself that include cytopenia-associated risks for<br />
infection or bleeding, the risk for evolution to acute myeloid leukemia (AML),<br />
and secondary organ complications arising from red blood cell transfusions and<br />
iron overload.<br />
Although evidence-based guidelines provide management pathways for<br />
physicians that utilize an array of FDA approved therapeutics, the impact of these<br />
costly treatments on the disease natural history and co-morbidities remains largely<br />
undefined. Large prospectively randomized therapeutic trials represent the
American Society of <strong>Hematology</strong> comments to the Federal Coordinating Council on Comparative<br />
Effectiveness Research<br />
June 10, <strong>2009</strong><br />
Page 4 of 5<br />
benchmark to define the benefit for most interventions, but size and the ethical<br />
challenge of non-treatment arms prohibits such definitive studies. Important<br />
insight into the clinical benefit of interventions could be obtained from the<br />
analysis of large federal health claims databases such as the Medicare Standard<br />
Analytic File. Data from patients diagnosed in a given year can be mined for<br />
subsequent billings for acquired co-morbidities such as diabetes mellitus, cardiac<br />
and liver complications, survival and red blood cell transfusions.<br />
Given the large size of the database, important insight can be gathered regarding<br />
the success of health care delivery strategies in the U.S. that is applicable to the<br />
population of patients at large, rather than to those that meet the restrictive<br />
eligibility of registration trials. CER comparing usual supportive care versus care<br />
by protocol-driven community-based, advanced health practitioners and teams<br />
may lead to a reduction of variability of care, costs, and improved quality of life.<br />
Examples of CER that would have an impact on care and provide insight as to the<br />
cost benefit of treatments include those related to current management practices<br />
for iron loading and disease modifying therapies:<br />
1. Does the use of an iron chelator delay or prevent end-organ comorbidities,<br />
or extend survival in lower risk transfusion-dependent<br />
patients?<br />
2. If so, what proportion of patients that may benefit have access to<br />
such treatment?<br />
3. Using current practice regimens for hypomethylating agents such as<br />
azacitidine or decitabine, is there a demonstrable survival benefit or<br />
difference in resource utilization in patients with higher risk disease?<br />
4. How often is the use of an erythropoietic stimulating agent (ESA)<br />
effective in preventing the need for transfusion in the lower risk<br />
MDS population? What is the impact of ESA response on the<br />
natural history of low risk MDS?<br />
Information from an analysis of the latter may support prior ASH<br />
recommendations to the CMS against the restriction of ESA access to those<br />
individuals with the greatest potential for benefit. Such CER analyses would<br />
provide critical information as to the best management strategy for the MDS<br />
population at large to modify disease natural history, the magnitude of benefit to<br />
patients, and cost-effectiveness.<br />
IV. Use of Transfusions.<br />
Transfusion therapy remains essential to the successful treatment of oncologic and<br />
hematologic disorders, many surgical procedures, and traumatic injuries.<br />
However, the appropriate threshold for transfusions in various clinical situations<br />
as well as the appropriate dose of the blood component transfused remains<br />
unclear. Modification of blood components by procedures such as irradiation or
American Society of <strong>Hematology</strong> comments to the Federal Coordinating Council on Comparative<br />
Effectiveness Research<br />
June 10, <strong>2009</strong><br />
Page 5 of 5<br />
leukocyte reduction have an important role in improving transfusion safety;<br />
however the indications for such procedures are unclear in many patient<br />
populations and are applied heterogeneously. The risks of transfusion beyond that<br />
of transfusion-transmitted infection and transfusion reaction remain controversial.<br />
For example, there continues to be considerable debate about whether transfusion<br />
is associated with an increased rate of cardiac morbidity and multiorgan failure.<br />
CER comparing outcomes with different red blood cell transfusion thresholds in<br />
patients with cardiac disease, hematologic malignancy or surgery will help to<br />
most effectively manage a blood supply that frequently must address shortages.<br />
A better understanding of adverse outcomes related to transfusion will allow<br />
physicians to better weigh the risks and effectiveness of transfusion therapy.<br />
Thank you for the opportunity to submit these comments. Please contact ASH Scientific<br />
Affairs Manager, Ulyana Vjugina, PhD, at (202) 776-0544 or uvjugina@hematology.org<br />
for any additional information.<br />
Sincerely,<br />
Nancy Berliner, MD<br />
President
ANNUAL MEETING OF THE HEMATOLOGY/ONCOLOGY<br />
CARRIER ADVISORY COMMITTEE NETWORK<br />
JULY 24, <strong>2009</strong> ♦ ASCO HEADQUARTERS ♦ ALEXANDRIA, VA<br />
SUPPLEMENTAL MATERIALS<br />
Included in this tab are the following:<br />
1) Medicare <strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong><br />
o Chapter 13, Medicare Program Integrity Manual<br />
o PIM 83, Exhibit 3 <strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong><br />
o Model LCD Document<br />
2) General Coverage Updates<br />
o ASCO Letter to CMS - NGS Oral Vs. Intravenous Drug Policy<br />
o Coverage for Hepatitis B Testing<br />
o Genetic Testing as a Screening Modality<br />
o PharmaGen CMS Med<strong>CAC</strong> Presentation, 02.25.09<br />
o CMS Gets Advice on Genetic Testing<br />
3) Medicare Off-Label Coverage<br />
o CMS Transmittal, Change Request 6191<br />
o NCCN Drugs & Biologics, CAG 00389<br />
o Thomson Micromedex Drugdex®, CAG 00391<br />
o Clinical Pharmacology, CAG 00392<br />
o Medicare Benefit Policy Manual, Chapter 15, Section 50.4.5.1<br />
o ASCO Letter to Medicare Contractor Medical Directors<br />
4) <strong>2009</strong> HHS Updates and Final Rules<br />
o Overview – HIPAA Code Sets and Electronic Transaction<br />
Standards<br />
o Final Rule – Modifications to Medical Data Code Set Standards<br />
o Final Rule – HIPAA Electronic Transaction Standards<br />
o HHS Secretary Sebelius Confirmed<br />
5) ASCO Monthly <strong>CAC</strong> Network E-Newsletters (January–June <strong>2009</strong>)<br />
American Society of <strong>Hematology</strong><br />
www.hematology.org<br />
(Continued on Next Page)<br />
American Society of Clinical <strong>Oncology</strong><br />
www.asco.org
ANNUAL MEETING OF THE HEMATOLOGY/ONCOLOGY<br />
CARRIER ADVISORY COMMITTEE NETWORK<br />
JULY 24, <strong>2009</strong> ♦ ASCO HEADQUARTERS ♦ ALEXANDRIA, VA<br />
SUPPLEMENTAL MATERIALS<br />
(CONTINUED)<br />
6) ASH Local Advocacy<br />
o Update on ASH Advocacy with Local Medicare Contractors<br />
o ASH’ Model Policy: Indications for ESA Treatment for Patients with<br />
Myelodysplastic Syndromes (MDS)<br />
o ASH Letter to the National Heritage Insurance Corporation (NHIC)<br />
Re: LCD on Erythropoetin Analogs Unrelated to ESRD or Cancer<br />
o ASH Letter to National Government Services (NGS) Regarding<br />
Intravenous Palonosetron (Aloxi)<br />
o ASH Letter to National Government Services Re: LCD for<br />
Erythropoetin Stimulating Agents (ESA) (L25211) Reconsideration<br />
o ASH Letter to National Government Services Re: Draft LCD for<br />
Irradiated Blood Products (DL28533)<br />
7) ASH Federal Advocacy<br />
o Sign-On Letter to House and Senate Re: Access to Specialists<br />
o ASH Letter to Senate Finance <strong>Committee</strong> Re: Policy Options<br />
o ASH Comments on Proposed Changes to ABMS Standards for<br />
Maintenance of Certification<br />
o ASH Sponsored Webinar on PQRI & E-Prescribing – Handouts<br />
American Society of <strong>Hematology</strong><br />
www.hematology.org<br />
American Society of Clinical <strong>Oncology</strong><br />
www.asco.org
Medicare Program Integrity Manual<br />
Chapter 13 – Local Coverage Determinations<br />
Transmittals for Chapter 13<br />
Table of Contents<br />
(Rev. 253, 04-25-08)<br />
13.1 - Medicare Policy<br />
13.1.1 - National Coverage Determinations (NCDs)<br />
13.1.2 - Coverage Provisions in Interpretive Manuals<br />
13.1.3 - Local Coverage Determinations (LCDs)<br />
13.1.4 - Durable Medical Equipment Medicare Administrative Contractors (DME MACs)<br />
Adoption or Rejection of LCDs Recommended by Durable Medical Equipment Program<br />
Safeguard Contractors (DME PSCs)<br />
13.3 - Individual Claim Determinations<br />
13.4 - When to Develop New/Revised LCDs<br />
13.5 - Content of an LCD<br />
13.5.1 – Reasonable and Necessary Provisions in LCDs<br />
13.5.2 - Coding Provisions in LCDs<br />
13.5.3 - Use of Absolute Words in LCDs<br />
13.5.4 - LCD Requirements That Alternative Service Be Tried First<br />
13.6 - LCD Format<br />
13.6.1 - AMA Current Procedural Terminology (CPT) Copyright Agreement<br />
13.7 - LCD Development Process<br />
13.7.1 - Evidence Supporting LCDs<br />
13.7.2 - LCDs That Require A Comment and Notice Period<br />
13.7.3 - LCDs That Do Not Require A Comment and Notice Period<br />
13.7.4 - LCD Comment and Notice Process<br />
13.7.4.1 - The Comment Period<br />
13.7.4.2 - Draft LCD Web Site Requirements<br />
13.7.4.3 - The Notice Period<br />
13.7.4.4 - Final LCD Web Site Requirements<br />
13.8 - The LCD <strong>Advisory</strong> Process<br />
13.8.1 - The <strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong><br />
13.8.1.1 - Purpose of the <strong>CAC</strong><br />
13.8.1.2 - Membership on the <strong>CAC</strong><br />
13.8.1.3 - Role of <strong>CAC</strong> Members<br />
13.8.1.4 - <strong>CAC</strong> Structure and Process<br />
13.8.2 - Durable Medical Equipment Regional <strong>Carrier</strong> (DMERC) <strong>Advisory</strong> Process<br />
(DAP)<br />
13.9 - Provider Education Regarding LCDs<br />
13.10 - Application of LCD<br />
13.11 - Local Coverage Determination (LCD) Reconsideration Process<br />
13.12 - Retired LCDs and The LCD Record<br />
13.13 - Challenge of an LCD<br />
13.13.1 - The Challenge
13.13.2 - The LCD Record<br />
13.13.3 - Ex Parte Contacts<br />
13.13.4 - Discovery<br />
13.13.5 - Subpoenas<br />
13.13.6 - Evidence<br />
13.13.7 - Dismissals for Cause<br />
13.13.8 - New Evidence<br />
13.13.9 - Contractor Options<br />
13.13.10 - The ALJ Decision<br />
13.13.11 - Effectuating the Decision<br />
13.13.12 - Appeals<br />
13.13.13 - Board Review of an ALJ Decision<br />
13.13.14 - Effect of a Board Decision<br />
13.13.15 - Future New or Revised LCDs<br />
13.14 - Evaluation of Local Coverage Determination (LCD) Topics for National Coverage<br />
Determination (NCD) Consideration
13.1 - Medicare Policies<br />
(Rev. 71, 04-09-04)<br />
The primary authority for all coverage provisions and subsequent policies is the Social Security<br />
Act (the Act). Contractors use Medicare policies in the form of regulations, NCDs, coverage<br />
provisions in interpretive manuals, and LCDs to apply the provisions of the Act.<br />
13.1.1 - National Coverage Determinations (NCDs)<br />
(Rev. 71, 04-09-04)<br />
The NCDs are developed by CMS to describe the circumstances for Medicare coverage<br />
nationwide for a specific medical service procedure or device. NCDs generally outline the<br />
conditions for which a service is considered to be covered (or not covered) under §1862(a)(1) of<br />
the Act or other applicable provisions of the Act. NCDs are usually issued as a program<br />
instruction. Once published in a CMS program instruction, an NCD is binding on all Medicare<br />
carriers/DMERCS, FIs, Quality Improvement Organizations (QIOs, formerly known as Peer<br />
Review Organizations or PROs), Program Safeguard Contractors (PSCs) and beginning 10/1/01<br />
are binding for Medicare+Choice organizations. NCDs made under §1862(a)(1) of the Act are<br />
binding on Administrative Law Judges (ALJ) during the claim appeal process. (See 42 CFR<br />
405.732 and 42 CFR 405.860). An example of a NCD can be found at<br />
http://cms.hhs.gov/pubforms/06_cim/ci50.htm#_1_56.<br />
When a new NCD is published, the contractor shall notify the provider community as soon as<br />
possible of the change and corresponding effective date. This is a Provider Communications<br />
(PCOM) activity. Within 30 calendar days after an NCD is issued by CMS, contractors shall<br />
either publish the NCD on the contractor Web site or link to the MCD from the contractor Web<br />
site. The contractor shall not solicit comments on national coverage decisions. Contractors shall<br />
amend affected LCDs in accordance with §13.4C of this chapter. Since ALJs are bound by<br />
NCDs but not LCDs, simply repeating an NCD as an LCD will cause confusion as to the<br />
standing of the policy. If a contractor is clarifying a national “reasonable and necessary” policy,<br />
the contractor shall reference that national policy in the “CMS National Coverage Policy”<br />
section of the LCD.<br />
The contractor shall apply NCDs when reviewing claims for services addressed by NCDs. When<br />
making individual claim determinations, contractors have no authority to deviate from NCD if<br />
absolute words such as "never" or "only if" are used in the policy.<br />
National Coverage Determinations should not be confused with "National Coverage Requests"<br />
or "Coverage Decision Memoranda".<br />
National Coverage Request -- A national coverage request is a request from any party,<br />
including contractors and CMS staff, for CMS to consider an issue for a national<br />
coverage decision. The information CMS requires prior to accepting a national coverage<br />
request is described in the “Federal Register” (FR) Notice entitled "Revised Process for<br />
Making Medicare National Coverage Determinations" and is located<br />
http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2003/p<br />
df/03-24361.pdf. If CMS decides to accept the request, information is posted on the<br />
coverage Web site at http://cms.hhs.gov/coverage. National Coverage Requests may<br />
contain Technology Assessments. Contractors should submit national coverage requests
to Coverage and Analysis Group, Office of Clinical Standards and Quality, S3-02-01,<br />
7500 Security Boulevard, Baltimore, Maryland 21244 and provide a copy to<br />
MROperations@cms.hhs.gov and the appropriate RO. State "National Coverage<br />
Request" in the subject line.<br />
Coverage Decision Memorandum - CMS prepares a decision memorandum before<br />
preparing the national coverage decision. The decision memorandum is posted on the<br />
CMS Web site, that tells interested parties that CMS has concluded its analysis, describes<br />
the clinical position, which CMS intends to implement, and provides background on how<br />
CMS reached that stance. Coverage Decision Memos are not binding on contractors or<br />
ALJs. However, in order to expend MR funds wisely, contractors should consider<br />
Coverage Decision Memo posted on the CMS Web site. The decision outlined in the<br />
Coverage Decision Memo will be implemented in a CMS-issued program instruction<br />
within 180 days of the end of the calendar quarter in which the memo was posted on the<br />
Web site. (An example of a Coverage Decision Memo can be found at<br />
http://cms.hhs.gov/coverage/8b3-a1.htm.<br />
National Coverage Decisions should not be confused with coverage provisions in interpretive<br />
manuals.<br />
13.1.2 - Coverage Provisions in Interpretive Manuals<br />
(Rev. 71, 04-09-04)<br />
Coverage provisions in interpretive manuals are instructions that are used to further define when<br />
and under what circumstances services may be covered (or not covered). The contractor shall not<br />
solicit comments on coverage provisions in interpretive manuals. Contractors shall amend<br />
affected LCDs in accordance with §13.4C of this chapter.<br />
The contractor shall apply coverage provisions in interpretive manuals to claims that are selected<br />
for review. When making claim determinations, contractors shall not deviate from these<br />
coverage provisions if absolute words such as "never" or "only if" are used. Requirements for<br />
prerequisite therapies listed in coverage provisions in interpretive manuals (e.g., "conservative<br />
treatment has been tried, but failed") shall be followed when deciding whether to cover a service.<br />
13.1.3 - Local Coverage Determinations (LCDs)<br />
(Rev. 165, Issued: 10-06-06, Effective: 09-11-06, Implementation: 10-26-06)<br />
Section 522 of the Benefits Improvement and Protection Act (BIPA) created the term “local<br />
coverage determination” (LCD). An LCD is a decision by a Medicare administrative contractor<br />
(MAC), fiscal intermediary or carrier whether to cover a particular service on a MAC-wide,<br />
intermediary wide or carrier-wide basis in accordance with Section 1862(a)(1)(A) of the Social<br />
Security Act (i.e., a determination as to whether the service is reasonable and necessary). The<br />
difference between LMRPs and LCDs is that LCDs consist of only “reasonable and necessary”<br />
information, while LMRPs may also contain benefit category and statutory exclusion provisions.<br />
The final rule establishing LCDs was published November 11, 2003. Beginning December 7,<br />
2003, local policies will be referred to as LCDs with the understanding of the relative standing of<br />
both LCDs and LMRPs. Effective December 7, 2003, contractors will issue LCDs instead of<br />
LMRPs. Additionally, over a 2 year period, contractors converted all existing LMRPs into
LCDs. Until that conversion was complete, the term LCD, for the purpose of section 522<br />
challenges, will refer to both:<br />
1) Reasonable and necessary provisions of an LMRP and,<br />
2) An LCD that contains only reasonable and necessary language.<br />
The CMS has developed an application within the Medicare coverage database back-end that<br />
will facilitate this conversion. This application was made available to contractors on or about<br />
December 3, 2003. The contractor converted the pertinent LMRP information into an LCD and<br />
place the remaining information (benefit category, statutory exclusion, and coding provisions) in<br />
an article or delete it. Statutory exclusion and benefit category provisions in LMRPs existing<br />
before December 7, 2003, remained in effect until that policy is converted into an LCD.<br />
Effective December 7, 2003, contractors directed to no longer create new LMRPs and shall<br />
instead create LCDs. All LMRP were converted to LCDs no later than December 2005. Any<br />
non-reasonable and necessary language a contractor wishes to communicate to providers were<br />
published through an article. Any draft LMRPS that are in the notice period before December 7,<br />
2003, were entered into the MCD as a draft LCD. The draft LCD will then be released as a final<br />
LCD on the scheduled effective date. Additionally, when making the conversion from LMRP to<br />
LCD, contractors shall also research and revise their manual references in order to ensure their<br />
accuracy. Until all CMS manuals are revised, LMRPs will have the same effect as LCDs.<br />
Codes describing what is covered and what is not covered can be part of the LCD. This includes,<br />
for example, lists of HCPCs codes that spell out which services the LCD applies to, lists of ICD-<br />
9-CM codes for which the service is covered, lists of ICD-9 codes for which the service is not<br />
considered reasonable and necessary, etc. These coding descriptions should only be included if<br />
they are integral to the discussion of medical necessity.<br />
Coding guidelines are not elements of LCDs and should be published in articles or deleted.<br />
Inclusion in LCDs may mislead the public that they can be challenged under the 522 provision.<br />
The following are examples of coding guidelines:<br />
A provision stating that a 4-inch thick mattress should be billed using code XXYYZ.<br />
A statement that in order to be correctly coded a level X visit shall include complex<br />
medical decision making and a review of systems.<br />
The LCDs specify under what clinical circumstances a service is considered to be reasonable and<br />
necessary. They are administrative and educational tools to assist providers in submitting correct<br />
claims for payment. Contractors publish LCDs to provide guidance to the public and medical<br />
community within their jurisdictions. Contractors develop LCDs by considering medical<br />
literature, the advice of local medical societies and medical consultants, public comments, and<br />
comments from the provider community. (See section 13.7.1 of this chapter.)<br />
The contractor should adopt LCDs that have been developed individually or collaboratively with<br />
other contractors. The contractor shall ensure that all LCDs are consistent with all statutes,<br />
rulings, regulations, and national coverage, payment, and coding policies.
Any policy developed between February 1, 2001 and December 7, 2003, that has not been<br />
converted to an LCD shall be in the format described in PIM Exhibit 6. Additional information<br />
on the LCD format is available on the Fu & Associates Web page.<br />
Contractors shall ensure that LCDs present an objective and positive statement and do not malign<br />
any segment of the medical community. LCDs do not address fraud and contractors should not<br />
use terms such as "fraud" and "fraudulent" in their LCDs. For example, the following sentence<br />
would be inappropriate in an LCD. "If, on postpay review this carrier finds that XYZ procedure<br />
was billed to Medicare after the effective date of this LCD, it will consider that billing<br />
fraudulent." This sentence would be more accurate and less inflammatory if the word<br />
"fraudulent" were replaced with the phrase "not reasonable and necessary".<br />
13.1.4 - Durable Medical Equipment Medicare Administrative Contractors<br />
(DME MACs) Adoption or Rejection of LCDs Recommended by Durable<br />
Medical Equipment Program Safeguard Contractors (DME PSCs)<br />
(Rev. 253; Issued: 04-25-08; Effective Date: 11-02-07; Implementation Date: 05-27-08)<br />
The DME PSCs shall ensure that the LCDs they recommend to the DME MACs are developed<br />
and revised in accordance with this chapter. This section applies to the:<br />
DME PSCs that develop new policies and revise existing policies.<br />
DME MACs.<br />
DMERCs that have not yet transitioned to the DME MACs.<br />
All references made to DME MACs in this section apply to DMERCs. The DME PSCs shall<br />
have on-going communication with the DME MACs as a new policy is being developed or when<br />
an existing adopted policy is being revised. CMS requires that the recommended LCDs<br />
developed by the DME PSCs be identical for each region to ensure uniformity for DMEPOS<br />
suppliers that operate nationally.<br />
The DME PSCs shall maintain an LCD record as a new policy is being developed or when an<br />
existing adopted policy is being revised. The DME PSCs shall submit the LCD record, which<br />
includes a copy of the final draft of the recommended LCD, to the DME MACs, prior to<br />
adoption of the recommended LCD. The DME MACs shall ensure that the LCD record is<br />
received prior to adoption of the recommended LCD.<br />
The LCD record shall consist of any document or material that the DME PSCs considered during<br />
the development of the new or revised LCD, including, but not limited to, the following:<br />
1. The LCD<br />
2. Any medical evidence considered on or before the date the LCD was recommended to<br />
the DME MACs for adoption, including, but not limited to, the following:<br />
Scientific articles<br />
Technology assessments<br />
Clinical guidelines
Documentation from the FDA regarding safety and efficacy of a drug or<br />
device with the exception of proprietary data and privileged information<br />
Statements from clinical experts, medical textbooks, claims data, or other<br />
indication of medical standard of practice<br />
3. Comment and Response Documents (a summary of all comments received by the<br />
DME PSCs concerning the recommended LCD). This applies only to new LCDs or revised<br />
LCDs that were sent for comment.<br />
The DME MACs shall have someone available with a clinical background to review the<br />
recommended LCD by the DME PSCs and determine if the recommended LCD shall be adopted<br />
or rejected. The DME MACs shall have on-going communication and shall coordinate with the<br />
other DME MACs to ensure that a uniform decision is made to adopt or reject a recommended<br />
LCD across all DME MAC jurisdictions. The DME MACs shall notify the DME PSCs of their<br />
decision to adopt or reject the recommended LCD. The DME MACs shall ensure that the<br />
adopted LCDs are identical among the DME MACs.<br />
If the DME MACs reject the recommended LCD by the DME PSCs, they shall explain in writing<br />
to the DME PSCs why the LCD was rejected. If the DME PSCs decide to modify the rejected<br />
LCD based on comments received from the DME MACs, the DME PSCs shall make the<br />
appropriate modifications and shall submit a final copy of the recommended LCD to the DME<br />
MACs.<br />
In addition, the DME PSCs shall publish the adopted LCD via the Medicare Coverage Database<br />
(MCD). The DME MACs shall provide an Internet link on their contractor Web site to the MCD<br />
to provide access to the adopted LCD.<br />
If an aggrieved party challenges an adopted LCD, the DME PSCs shall support the DME MACs<br />
in their efforts to defend the adopted LCD during the appeal. For example, if the DME MACs<br />
need the DME PSCs to provide oral testimony during an appeal, the DME PSCs shall provide<br />
such testimony. Questions concerning the extent of the DME PSCs’ support to the DME MACs<br />
during the appeals process shall be directed to the appropriate Primary and/or Associate GTL(s).<br />
The active LCD record shall be maintained by the DME PSCs until the LCD is retired. When an<br />
LCD is retired, the DME PSCs shall submit the retired LCD record to the DME MACs. The<br />
DME MACs shall retain the retired LCD record for 6 years and 3 months. The DME MACs shall<br />
have a mechanism for archiving retired LCDs. This mechanism shall allow the DME MACs to<br />
respond to requests and retrieve the LCD record. The DME MACs shall post on their Web site<br />
information regarding how to obtain retired LCDs. The DME MACs shall provide an Internet<br />
link on their contractor Web site to the MCD to provide access to the retired LCD. The LCD<br />
record shall be destroyed 6 years and 3 months from the date the LCD is retired. However, the<br />
DME MACs shall not destroy the retired LCD record if it relates to a current investigation or<br />
litigation/negotiation; ongoing Workers’ Compensation set aside arrangements; or documents<br />
which prompt suspicions of fraud and abuse of improper over-utilization of services. This will<br />
satisfy evidentiary needs and discovery obligations critical to the agency’s litigation interests.<br />
As referenced in Pub. 100-08, chapter 4, section 4.28, the joint operating agreement developed<br />
by the DME PSCs and the DME MACs shall be modified to address the major roles and
esponsibilities DME PSCs and DME MACs will delineate in order for the DME MACs to adopt<br />
or reject LCDs recommended by the DME PSCs.<br />
Effective March 1, 2008, DME PSCs will no longer develop, revise or recommend LCDs to the<br />
DME MACs. In accordance to this chapter, the DME MACs will have full responsibility for<br />
developing and revising LCDs, maintaining the LCD record, and responsibility for LCD<br />
challenges. CMS requires that LCDs developed and revised by the DME MACs be identical for<br />
each jurisdiction to ensure uniformity for DMEPOS suppliers that operate nationally<br />
13.3 - Individual Claim Determinations<br />
(Rev. 71, 04-09-04)<br />
Contractors may review claims on either a prepayment or postpayment basis regardless of<br />
whether a NCD, coverage provision in an interpretive manual, or LCD exists for that service.<br />
However, automated denials can be made only when clear policy or certain other conditions (see<br />
chapter 3, §3.5.1) exist. When making individual claim determinations, the contractor shall<br />
determine whether the service in question is covered based on an LCD or the clinical judgment<br />
of the medical reviewer. A service may be covered by a contractor if it meets all of the<br />
conditions listed in §3.5.1, Reasonable and Necessary Provisions in LCDs below.<br />
13.4 - When To Develop New/Revised LCDs<br />
(Rev. 71, 04-09-04)<br />
The use of a LCD helps avoid situations in which claims are paid or denied without a provider<br />
having a full understanding of the basis for payment and denial.<br />
A. Contractors Shall Develop New/Revised LCDs<br />
Contractors shall develop LCDs when they have identified a service that is never covered under<br />
certain circumstances and wish to establish automated review in the absence of an NCD or<br />
coverage provision in an interpretive manual that supports automated review.<br />
Contractors shall implement new Least Costly Alternative (LCA) determinations through an<br />
LCD. "Least Costly Alternative" is a national policy provision that shall be applied by<br />
contractors when determining payment for all durable medical equipment (DME). Contractors<br />
have the discretion to apply this principle to payment for non-DME services as well.<br />
When revising an existing policy to include an LCA determination the entire LCD should be<br />
posted, but only the new LCA determination will be subject to comment. You should highlight<br />
the new LCA determination that is subject to comment.<br />
The requirement to go through the LCD process does not apply to LCA determinations for<br />
individual claims, existing LCA determinations, or to the current moratorium on issuing LCA<br />
policy on Vitamin D analogues.<br />
B. Contractors May Develop New/Revised LCD<br />
Contractors have the option to develop LCDs when any of the following occur:
A validated widespread problem demonstrates a significant risk to the Medicare trust<br />
funds (identified or potentially high dollar and/or high volume services); See Chapter 3,§<br />
3.2A, Error Validation Review, for an explanation of the problem validation process.<br />
Multi-state contractors may develop uniform LCDs across all its jurisdictions even if data<br />
analysis indicates that the problem exists only in one state.<br />
A LCD is needed to assure beneficiary access to care.<br />
A contractor has assumed the LCD development workload of another contractor and is<br />
undertaking an initiative to create uniform LCDs across its multiple jurisdictions; or is a<br />
multi-state contractor undertaking an initiative to create uniform LCDs across its<br />
jurisdiction; or<br />
Frequent denials are issued (following routine or complex review) or frequent denials are<br />
anticipated.<br />
C. Contractors Shall Review LCD<br />
Contractors shall ensure that the LCDs appearing on the contractor’s LCD Web site and<br />
the LCDs appearing in the Medicare Coverage Database are identical. Contractors are<br />
encouraged to make use of the Medicare Coverage Database “Save as HTML” feature to<br />
assist in keeping the LCDs on their contractor Web sites current.<br />
Within 90 Days<br />
Contractors shall review and appropriately revise affected LCD within 90 days of the publication<br />
of program instruction (e.g., Program Memorandum, manual change) containing:<br />
A new or revised NCD;<br />
A new or revised coverage provision in an interpretive manual; or<br />
A change to national payment policy.<br />
Within 120 Days<br />
The Medicare Coverage Database will notify contractors of each LCD that is affected by an<br />
update to a HCPCS code or ICD-9-CM code.<br />
The database automatically incorporates code deletions into revised LCDs (and LMRPs and<br />
articles) that are placed in “to be reviewed” status. In all cases (code deletions, code insertions,<br />
and code description changes) a new version of the LCD (and LMRP and article) is<br />
automatically made to incorporate the change, and the new version is placed in the “to be<br />
reviewed” status.<br />
Contractors shall review and approve and/or appropriately revise affected LCD within 120 days<br />
of the date of this notification. Contractors shall revise the effective date, revision number, and<br />
the revision history on all revisions due to major HCPCS and ICD-9-CM changes. Contractors<br />
need not revise the effective date, revision number and revision history on revisions due to minor<br />
HCPCS changes. Contractors shall ensure that corresponding changes are made to the LCD<br />
appearing on the contractor’s LCD Web sites.
NOTE: The Medicare Coverage Database will only alert contractors to the existence of new<br />
codes if the new code falls within a code range listed in the LCD.<br />
Annually<br />
To ensure that all LCDs remain accurate and up-to-date at all times, at least annually, contractors<br />
shall review and appropriately revise LCDs based upon CMS NCD, coverage provisions in<br />
interpretive manuals, national payment policies and national coding policies. If an LCD has been<br />
rendered useless by a new/revised national policy, the LCD shall be retired. This process shall<br />
include a review of the LCDs in the Medicare Coverage Database and on the contractor’s Web<br />
site.<br />
Contractors should consider retiring LCDs that are no longer being used for prepay review, post<br />
pay review or educational purposes. For example, contractors should consider retiring LCDs for<br />
outdated technology with no claims volume.<br />
13.5 - Content of an LCD<br />
(Rev. 71, 04-09-04)<br />
Contractors shall ensure that LCDs are developed for services only within their jurisdiction.<br />
The LCD shall be clear, concise, properly formatted and not restrict or conflict with NCDs or<br />
coverage provisions in interpretive manuals. If an NCD or coverage provision in an interpretive<br />
manual states that a given item is "covered for diagnoses/conditions A, B and C," contractors<br />
should not use that as a basis to develop LCD to cover only "diagnoses/conditions A, B and C."<br />
When an NCD or coverage provision in an interpretive manual does not exclude coverage for<br />
other diagnoses/conditions, contractors shall allow for individual consideration unless the LCD<br />
supports automatic denial for some or all of those other diagnoses/conditions.<br />
13.5.1 - Reasonable and Necessary Provisions in LCDs<br />
(Rev. 71, 04-09-04)<br />
A service may be covered by a contractor if:<br />
It is reasonable and necessary under 1862(a)(1)(A) of The Act.<br />
Only reasonable and necessary provisions are considered part of the LCD.<br />
Reasonable and Necessary<br />
In order to be covered under Medicare, a service shall be reasonable and necessary. When<br />
appropriate, contractors shall describe the circumstances under which the proposed LCD for the<br />
service is considered reasonable and necessary under 1862(a)(1)(A). Contractors shall consider a<br />
service to be reasonable and necessary if the contractor determines that the service is:<br />
Safe and effective;
Not experimental or investigational (exception: routine costs of qualifying clinical trial<br />
services with dates of service on or after September 19, 2000 which meet the<br />
requirements of the Clinical Trials NCD are considered reasonable and necessary); and<br />
Appropriate, including the duration and frequency that is considered appropriate for the<br />
service, in terms of whether it is:<br />
o Furnished in accordance with accepted standards of medical practice for the diagnosis<br />
or treatment of the patient's condition or to improve the function of a malformed body<br />
member;<br />
o Furnished in a setting appropriate to the patient's medical needs and condition;<br />
o Ordered and furnished by qualified personnel;<br />
o One that meets, but does not exceed, the patient's medical need; and<br />
o At least as beneficial as an existing and available medically appropriate alternative.<br />
There are several exceptions to the requirement that a service be reasonable and necessary for<br />
diagnosis or treatment of illness or injury. The exceptions appear in the full text of<br />
§1862(a)(1)(A) and include but are not limited to:<br />
Pneumococcal, influenza and hepatitis B vaccines are covered if they are reasonable and<br />
necessary for the prevention of illness;<br />
Hospice care is covered if it is reasonable and necessary for the palliation or management<br />
of terminal illness;<br />
Screening mammography is covered if it is within frequency limits and meets quality<br />
standards;<br />
Screening pap smears and screening pelvic exam are covered if they are within frequency<br />
limits;<br />
Prostate cancer screening tests are covered if within frequency limits;<br />
Colorectal cancer screening tests are covered if within frequency limits; and<br />
One pair of conventional eyeglasses or contact lenses furnished subsequent to each<br />
cataract surgery with insertion of an interlobular lens.<br />
13.5.2 - Coding Provisions in LCDs<br />
(Rev. 71, 04-09-04)<br />
Only codes describing what is covered and what is not covered can be part of the LCD. This<br />
includes, for example, lists of HCPCs codes that spell out which services the LCD applies to,<br />
lists of ICD-9 codes for which the service is covered, lists of ICD-9 codes for which the service<br />
is not considered reasonable and necessary, etc.
13.5.3 - Use of Absolute Words in LCDs<br />
(Rev. 71, 04-09-04)<br />
Contractors should use phrases such as "rarely medically necessary" or "not usually medically<br />
necessary" in proposed LCDs to describe situations where a service is considered to be, in almost<br />
all instances, not reasonable and necessary. In order to limit unsolicited documentation, clearly<br />
state what specific clinical situation would have to exist to be considered reasonable and<br />
necessary. If a contractor chooses to apply these kinds of policy provisions (whether in NCD,<br />
national coverage provisions in interpretive manuals, or LCDs) during prepay review, they<br />
should not do so via automated review if documentation is to be submitted with the claim for<br />
manual review of such claims.<br />
When strong clinical justification exists, contractors may also develop LCDs that contain<br />
absolute words such as "is never covered" or "is only covered for". When phrases with absolute<br />
words are clearly stated in LCDs, contractors are not required to make any exceptions or give<br />
individual consideration based on evidence. Contractors should create edits/parameters that are<br />
as specific and narrow as possible to separate cases that can be automatically denied from those<br />
requiring individual review.<br />
13.5.4 - LCD Requirements That Alternative Service Be Tried First<br />
(Rev. 71, 04-09-04)<br />
Contractors should incorporate into LCDs the concept that use of an alternative item or service<br />
precedes the use of another item/service. This approach is termed a "prerequisite." Contractors<br />
shall base any requirement on evidence that a particular alternative is safe, as effective, or<br />
appropriate for a given condition without exceeding the patients' medical needs. Prerequisites<br />
shall be based on medical appropriateness, not on cost effectiveness. Non-covered items (e.g.,<br />
pillows to elevate feet) may be listed. Any prerequisite for drug therapy shall be consistent with<br />
the national coverage decision for labeled uses. Whenever national policy bases coverage on an<br />
assessment of need by the beneficiary's provider, prerequisites should not be included in LCDs.<br />
As an alternative, contractors may use phrases in proposed LCDs like "the provider should<br />
consider..."<br />
13.6 - LCD Format<br />
(Rev. 71, 04-09-04)<br />
All contractor LCDs shall be listed in the Medicare Coverage Database.<br />
All LCDs shall be posted on the contractor’s Web site in HyperText Markup Language (HTML).<br />
The Medicare Coverage Database has a feature that will allow a contractor to “save as HTML” a<br />
file of a recently entered LCD. Contractors should alter the appearance of the HTML file to<br />
meet their own Web site needs, e.g., change the background color.<br />
13.6.1 - AMA Current Procedural Terminology (CPT) Copyright Agreement<br />
(Rev. 71, 04-09-04)
Any time a CPT code is used in publications on the contractor Web site or in other electronic<br />
media such as tapes, disks or CD-ROM, contractors shall display the AMA copyright notice in<br />
the body of each LCD. Contractors shall use a point and click license on a computer screen or<br />
Web page any time CPT codes are used on the Internet.<br />
13.7 - LCD Development Process<br />
(Rev. 71, 04-09-04)<br />
When a new or revised LCD is needed, contractors do the following:<br />
Contact the CMD facilitation contractor, other contractors, the local carrier or<br />
intermediary, the DMERC (if applicable), the Medicare Coverage Database or QIOs<br />
(formerly PROs) to inquire if a policy which addresses the issue in question already<br />
exists;<br />
Adopt or adapt an existing LCD, if possible; or<br />
Develop a policy if no policy exists or an existing policy cannot be adapted to the specific<br />
situation.<br />
The process for developing the LCD includes developing a draft LCD based on review of<br />
medical literature and the contractor’s understanding of local practice.<br />
A. Multi-State Contractors<br />
A contractor with LCD jurisdiction for two or more States is strongly encouraged to develop<br />
uniform LCDs across all its jurisdictions. However, carriers shall continue to maintain and utilize<br />
<strong>CAC</strong>s in accordance with §13.8 below.<br />
13.7.1 - Evidence Supporting LCDs<br />
(Rev. 71, 04-09-04)<br />
Contractor LCDs shall be based on the strongest evidence available. The extent and quality of<br />
supporting evidence is key to defending challenges to LCDs. The initial action in gathering<br />
evidence to support LCDs shall always be a search of published scientific literature for any<br />
available evidence pertaining to the item/service in question. In order of preference, LCDs<br />
should be based on:<br />
Published authoritative evidence derived from definitive randomized clinical trials or<br />
other definitive studies, and<br />
General acceptance by the medical community (standard of practice), as supported by<br />
sound medical evidence based on:<br />
o Scientific data or research studies published in peer-reviewed medical journals;<br />
o Consensus of expert medical opinion (i.e., recognized authorities in the field); or
o Medical opinion derived from consultations with medical associations or other health<br />
care experts.<br />
Acceptance by individual health care providers, or even a limited group of health care providers,<br />
normally does not indicate general acceptance by the medical community. Testimonials<br />
indicating such limited acceptance, and limited case studies distributed by sponsors with<br />
financial interest in the outcome, are not sufficient evidence of general acceptance by the<br />
medical community. The broad range of available evidence must be considered and its quality<br />
shall be evaluated before a conclusion is reached.<br />
The LCDs, which challenge the standard of practice in a community and specify that an item is<br />
never reasonable and necessary, shall be based on sufficient evidence to convincingly refute<br />
evidence presented in support of coverage.<br />
Less stringent evidence is needed when allowing for individual consideration or when reducing<br />
to the least costly alternative.<br />
13.7.2 – LCDs That Require A Comment and Notice Period<br />
(Rev. 71, 04-09-04)<br />
Contractors shall provide for both a comment period and a notice period in the following<br />
situations:<br />
All New LCDs<br />
Revised LCDs that Restrict Existing LCDs - Examples: adding non-covered indications<br />
to an existing LCD; deleting previously covered ICD-9 codes.<br />
Revised LCDs that make a Substantive Correction - If the contractor identifies an error<br />
published in an LCD that substantively changes the reasonable and necessary intent of<br />
the LCD, then the contractor shall extend the comment and/or notice period by an<br />
additional 45 calendar days.<br />
13.7.3 - LCDs That Do Not Require a Comment and Notice Period<br />
(Rev. 71, 04-09-04)<br />
When a comment and notice period is unnecessary, contractors may immediately publish a<br />
revised LCD electronically (e.g., Medicare coverage database, contractor Web site, email). In the<br />
following situations, the comment and notice processes are unnecessary:<br />
Revised LCD that Liberalizes an Existing LCD - For example, a revised LCD expands<br />
the list of covered indications/diagnoses. The revision effective date may be retroactive.<br />
Revised LCD Being Issued for Compelling Reasons - SHALL OBTAIN RO (for PSCs,<br />
the GTL, Co-GTL, and SME) APPROVAL - For example, a highly unsafe<br />
procedure/device.
Revised LCD that Makes a Non-Substantive Correction - For example, typographical or<br />
grammatical errors that do not substantially change the LCD. The revision effective date<br />
may be retroactive.<br />
Revised LCD that makes a Clarification - For example, adding information that clarifies<br />
the LCD but does not restrict the LCD. The revision effective date may be retroactive.<br />
Revised LCD that Makes a Non-discretionary Coverage/Payment/Coding Updates -<br />
Contractors shall update LCDs to reflect changes in NCDs, coverage provisions in<br />
interpretive manuals, payment systems, HCPCS, ICD-9 or other standard coding systems<br />
within the timeframes listed in §13.4C. The revision effective date may be retroactive<br />
depending on the effective date of the NCD, etc.<br />
Revised LCD to Make Discretionary Coding Updates That Do Not Restrict -adding<br />
revisions that explain a coding issue so long as the revision does not restrict the LCD.<br />
The revision effective date may be retroactive.<br />
Revised LCD to Effectuate an Administrative Law Judge’s Decision on a BIPA 522<br />
challenge.<br />
13.7.4 - LCD Comment and Notice Process<br />
(Rev. 71, 04-09-04)<br />
When a new or revised LCD requires comment and notice (See §13.7.2) contractors shall<br />
provide a minimum comment period of 45 calendar days on the draft LCD. After the contractor<br />
considers all comments and revises the LCD as needed, the contractor shall provide a minimum<br />
notice period of 45 calendar days on the final LCD.<br />
Contractors shall solicit comments from the medical community. <strong>Carrier</strong>s solicit comments from<br />
the <strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong> (<strong>CAC</strong>.) DMERCs solicit comments through the DMERC<br />
<strong>Advisory</strong> Process (DAP.) Contractors respond to comments either individually or via a<br />
comment/response document (see §13.7.4.2). Where appropriate, the contractor shall incorporate<br />
the comments into the final LCD. Contractors notify providers of the LCD effective date. New<br />
LCDs may not be implemented retroactively.<br />
13.7.4.1 - The Comment Period<br />
(Rev. 71, 04-09-04)<br />
A. When The Comment Period Begins<br />
For LCDs that affect services submitted to carriers, the comment period begins at the time the<br />
policy is distributed to the <strong>CAC</strong> either at the regularly scheduled meeting or in writing to all<br />
members of the <strong>CAC</strong>. Contractors shall distribute these draft LCDs to the <strong>CAC</strong> members via<br />
hardcopy or via email.<br />
For LCDs that affect services submitted to intermediaries, the comment period begins when the<br />
policy is distributed to medical providers or organizations. Contractors may distribute these draft<br />
LCDs to medical providers and organizations via:
Hardcopy mailing of the entire draft LCD,<br />
Hardcopy mailing of the title and Web address of the draft LCD, or<br />
E-mail containing the title and Web address of the draft LCD.<br />
B. When The Comment Period Ends<br />
Contractors shall provide a minimum comment period of 45 calendar days. Contractors have the<br />
discretion but are not required to accept comments submitted after the end of the comment<br />
period.<br />
C. Draft LCD Distribution<br />
When a new or revised LCD requires comment and notice (See §13.7.2), all contractors shall<br />
solicit comments and recommendations on the draft LCD and get input from, at least:<br />
Groups of health professionals and provider organizations that may be affected by the<br />
LCD;<br />
Representatives of relevant specialty societies;<br />
Other intermediaries/carriers;<br />
Quality Improvement Organizations (formerly known as PROs) within the region;<br />
Other CMDs within the region;<br />
General public (see §13.7.4.4, Draft LCD Web site Requirements);<br />
The regional office, associate regional administrator, for distribution to the appropriate<br />
regional staff (e.g., coverage experts, reimbursement experts). The RO (for PSCs, the<br />
GTL, Co-GTL, and SME) staff will review the LCDs for any operational concerns; and<br />
The appropriate <strong>Advisory</strong> process:<br />
o The <strong>CAC</strong>, for carriers (See §13.8.1)<br />
o The DAP, for DMERCs (See §13.8.2)<br />
Contractors shall indicate in each distribution the date the comment period ends.<br />
D. Draft LCD Open Meetings<br />
Contractors shall provide open meetings for the purpose of discussing draft LCDs. <strong>Carrier</strong>s shall<br />
hold these open meetings prior to presenting the policy to the <strong>CAC</strong>. To accommodate those who<br />
can not be physically present at the meetings, contractors shall provide other means for<br />
attendance (e.g., telephone conference) and accept written or e-mail comments. Written and e-
mail comments shall be given full and equal consideration as if presented in the meeting.<br />
Members of the <strong>CAC</strong> may also attend these open meetings.<br />
Interested parties (generally those that would be affected by the LCD, including providers,<br />
physicians, vendors, manufacturers, beneficiaries, and caregivers) can make presentations of<br />
information related to draft policies. Contractors shall remain sensitive to organizations or<br />
groups which may have an interest in an issue (e.g., laboratories, providers who provide services<br />
in nursing facilities, home care, or hospice and the associations which represent the<br />
facilities/agencies) and invite them to participate in meetings at which a related LCD is to be<br />
specifically discussed.<br />
13.7.4.2 - Draft LCD Web site Requirements<br />
(Rev. 71, 04-09-04)<br />
Draft LCD on the Contractor Web site<br />
Contractors shall post draft LCDs on their Web sites. The Web site shall clearly indicate the start<br />
and stop date of the comment period and list an e-mail and postal address to which comments<br />
can be submitted.<br />
LCD Status Page<br />
Contractors shall post to their Web sites an LCD status page that includes the draft LCD title,<br />
date of release of draft LCD for comment, e-mail and postal address for comments to be sent,<br />
end date for comment period, current status (see the following status indicators), Date of Release<br />
for Notice, and Web site link to the active LCD (i.e., the notice period is complete and the policy<br />
is in effect.)<br />
LCD Status Indicators<br />
D = draft under development; not yet released for comments<br />
C = draft LCD released for comment<br />
E = formal comment period has ended; comments now being considered<br />
F = final new/revised LCD has been issued for notice.<br />
A= active policy; notice period complete and the policy is in effect<br />
Comment/Response Document<br />
Contractors shall post to their Web sites a summary of comments received concerning the draft<br />
LMRP/LCD with the contractor's response. This comment/response document shall be posted<br />
prior to or on the start date of the notice period. The comment/response document shall be posted<br />
(remain visible) on the Web for at least a 6 month period.<br />
The MCD allows users to attach comment/response documents to their draft document which<br />
will be visible when the LCD is reviewed.<br />
13.7.4.3 - The Notice Period<br />
(Rev. 71, 04-09-04)
When a new or revised LCD is issued following a comment period (see §13.7.2), contractors<br />
shall ensure that the effective date follows a minimum notice period of 45 calendar days.<br />
A. When The Notice Period Begins<br />
Contractors shall make final LCDs public via publication on their Web site. A summary of the<br />
LCD shall be published in a news bulletin.<br />
B. When The Notice Period Ends<br />
The notice period ends 45 calendar days after the notice period begins unless extended by the<br />
contractor. If the notice period is not extended by the contractor, the effective date of the LCD is<br />
the 46 th calendar date after the notice period began.<br />
13.7.4.4 - Final LCD Web Site Requirements<br />
(Rev. 71, 04-09-04)<br />
A. Final LCD on the Contractor Web Site<br />
Contractors shall post all final LCDs on their Web Site. Every contractor Web site shall contain<br />
all final LCDs for that contractor. The number of active LCDs in the Medicare Coverage<br />
Database should equal the number of final LCDs on the contractor Web Site.<br />
Contractors who are an intermediary and a carrier within the same corporation shall have<br />
separate Web pages for their LCDs. Contractors shall notify all providers of the contractor LCD<br />
Web address. If a contractor becomes aware of a provider without web access, the contractor<br />
shall advise providers that they may request hard copy LCDs.<br />
B. Final LCD in the Medicare Coverage Database (MCD)<br />
The public can access the MCD at www.cms.hhs.gov/mcd.<br />
Contractors shall update the MCD when they issue a new or revised LCD or retire an existing<br />
LCD.<br />
Contractors shall develop a mechanism for ensuring the accuracy of the information entered into<br />
the MCD. This mechanism shall include, at a minimum, a process by which data that is entered<br />
into the database is reviewed and verified for accuracy within four days of appearing to the<br />
public on the Web.<br />
13.8 - The LCD <strong>Advisory</strong> Process<br />
(Rev. 71, 04-09-04)<br />
13.8.1 - The <strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong><br />
(Rev. 99, Issued: 01-21-05, Effective: 03-24-04, Implementation: 02-22-05)<br />
<strong>Carrier</strong>s shall establish one <strong>CAC</strong> per State. Where there is more than one carrier in a State, the<br />
carriers shall jointly establish a <strong>CAC</strong>. If there is one carrier for many States, each State shall<br />
have a full committee and the opportunity to discuss draft LCDs and issues presented in their
State. <strong>Carrier</strong>s maintain a current directory of <strong>CAC</strong> members which is available to CO, RO (for<br />
PSCs, the GTL, Co-GTL, and SME) staff, and the provider community on request. <strong>Carrier</strong>s that<br />
develop identical policies for their entire jurisdiction may establish a single <strong>CAC</strong> if they are<br />
granted a waiver from the CO (for PSCs, the GTL, Co-GTL, and SME). In order to obtain a<br />
waiver from the CO (for PSCs, the GTL, Co-GTL, and SME), contractors shall obtain agreement<br />
from <strong>CAC</strong> members within the jurisdiction.<br />
13.8.1.1 - Purpose of the <strong>CAC</strong><br />
(Rev. 71, 04-09-04)<br />
The purpose of the <strong>CAC</strong> is to provide:<br />
A formal mechanism for physicians in the State to be informed of and participate in the<br />
development of an LCD in an advisory capacity;<br />
A mechanism to discuss and improve administrative policies that are within carrier<br />
discretion; and<br />
A forum for information exchange between carriers and physicians.<br />
<strong>Carrier</strong>s shall clearly communicate to <strong>CAC</strong> members that the focus of the <strong>CAC</strong> is LCDs and<br />
administrative policies and not issues and policies related to private insurance business. The<br />
<strong>CAC</strong> is not a forum for peer review, discussion of individual cases or individual providers.<br />
While the <strong>CAC</strong> shall review all draft LCDs, the final implementation decision about LCDs rests<br />
with the CMD.<br />
The CMD jointly develops the agenda with the co-chair representing the <strong>CAC</strong> to include<br />
concerns about LCDs and local administrative issues.<br />
13.8.1.2 - Membership on the <strong>CAC</strong><br />
(Rev. 71, 04-09-04)<br />
The <strong>CAC</strong> is to be composed of physicians, a beneficiary representative, and representatives of<br />
other medical organizations. Each is individually described in Exhibit 3.<br />
13.8.1.3 - Role of <strong>CAC</strong> Members<br />
(Rev. 71, 04-09-04)<br />
<strong>CAC</strong> members serve to improve the relations and communication between Medicare and the<br />
physician community. Specifically, they:<br />
Disseminate proposed LCDs to colleagues in their respective State and specialty societies<br />
to solicit comments;<br />
Disseminate information about the Medicare program obtained at <strong>CAC</strong> meetings to their<br />
respective State and specialty societies; and<br />
Discuss inconsistent or conflicting MR policies.
13.8.1.4 - <strong>CAC</strong> Structure and Process<br />
(Rev. 71, 04-09-04)<br />
A. Number of Representatives<br />
Each specialty shall have only one member and a designated alternate with approval of<br />
committee co-chairs. Additional members may attend when policies that require their expertise<br />
are under discussion. <strong>Carrier</strong>s maintain a current local directory of <strong>CAC</strong> members that is<br />
available to CO, RO (for PSCs, the GTL, Co-GTL, and SME), or the provider community on<br />
request.<br />
B. Tenure<br />
<strong>Carrier</strong>s have discretion to establish the duration of membership on the committee. The term<br />
should balance the duration of time needed to learn about the process to enhance the level of<br />
participation and functioning with the desire to allow a variety of physicians to participate.<br />
Consider a 2-3 year term.<br />
C. Co-Chairs<br />
The <strong>CAC</strong> shall be co-chaired by the contractor medical director and one physician selected by<br />
the committee. The co-chairs:<br />
Run the meetings and determine the agendas;<br />
Provide the full agenda and background material to each committee member at least 14<br />
days in advance; and<br />
Encourage committee members to discuss the material and disseminate it to interested<br />
colleagues within their specialty and to clinic or hospital colleagues for whom the item<br />
may be pertinent. The members may bring comments back to the meeting or request that<br />
their colleagues send written comments to the CMD separately.<br />
Attendance at the meeting is at the discretion of the committee members. If the item is of<br />
importance to their specialty, encourage members to attend or send an alternate. This is the<br />
primary forum for discussion of proposed LCDs developed by the CMD. The 45-calendar-day<br />
comment process required for all LCDs starts when the proposed LCD is distributed to the<br />
committee members. (See PIM Chapter 13 §13.7.4.1).<br />
Co-chairs present all proposed LCDs to the <strong>CAC</strong> for discussion. If the need arises to develop and<br />
implement LCDs before the next scheduled meeting, they solicit comments from committee<br />
members by mail or e-mail.<br />
D. Staff Participation<br />
The Director of Medicare Operations shall assure that appropriate contractor staff attend to<br />
address administrative issues on the agenda. Other staff may also be required to attend include:<br />
Professional relations representative;
MR manager and<br />
MFIS/PSC Network.<br />
E. Location<br />
<strong>Carrier</strong>s work with the State medical society and committee members to select a meeting<br />
location that will optimize participation of physician committee members.<br />
F. Frequency of Meetings<br />
Hold a minimum of 3 meetings a year, with no more than 4 months between meetings. In the<br />
circumstance where a contractor is switching from 4 <strong>CAC</strong> meetings per year to 3 meetings, it is<br />
acceptable to have more than 4 months between the meetings. However, the contractor shall<br />
notify the RO (for PSCs, the GTL, Co-GTL, and SME) that this one time occurrence is taking<br />
place.<br />
G. Data<br />
Each meeting should include a discussion and presentation of comparative utilization data that<br />
has undergone preliminary analysis by the carrier and relates to discussion of proposed LCD.<br />
<strong>Carrier</strong>s solicit input from <strong>CAC</strong> members to help explain or interpret the data and give advice on<br />
how overutilization should be addressed. The use of data to illustrate the extent of problem<br />
billing (e.g., average number of services per 100 patients) might help justify the need for a<br />
particular policy. The comparative data should be presented using graphs, charts, and other<br />
visual methods of presenting data. <strong>Carrier</strong>s may present egregious individual provider's data as<br />
long as the provider's identification is not disclosed or cannot be deduced.<br />
H. Payment for Participation<br />
Participation in the <strong>CAC</strong> is considered a service to physician colleagues. <strong>Carrier</strong>s do not provide<br />
an honorarium or other forms of compensation to members. Expenses are the responsibility of<br />
the individuals or the associations they represent.<br />
I. Recordkeeping<br />
<strong>Carrier</strong>s keep minutes of the meeting and distribute them to members. <strong>Carrier</strong>s submit the<br />
following items from <strong>CAC</strong> meetings to the RO MR staff (for PSCs, the GTL, Co-GTL, and<br />
SME) within 10 days following the meetings:<br />
A copy of the meeting agenda (include the date of the meeting);<br />
A prompt copy of meeting minutes (not approved);<br />
A copy of the approved minutes from the prior meeting, including a summary of this<br />
discussion and the number of attendees, broken down into committee members, alternates<br />
or observers and RO staff (for PSCs, the GTL, Co-GTL, and SME); and<br />
Tentative date of the next meeting.
Contractors should (but are not required to) prepare a version of the <strong>CAC</strong> minutes to be placed<br />
on their Web site. This version could differ from a more detailed internal version. Contractors<br />
shall assure that the Web site version of the minutes does not include any information that would<br />
be protected by FOIA's exemption (b)(6) -- information that would be an invasion of personal<br />
privacy (such as a <strong>CAC</strong> member's home phone number) or any other kind of sensitive<br />
information. When contractors receive a request for a hard copy of <strong>CAC</strong> minutes, the request<br />
should go to the contractor's FOIA coordinator for processing through the freedom of<br />
information request process.<br />
J. Communicating With CO on National Issues<br />
While the CMD should encourage <strong>CAC</strong> members to work through their respective organizations<br />
and Practicing Physicians <strong>Advisory</strong> Council (PPAC) to effect national policy, the <strong>CAC</strong> is not<br />
precluded from commenting on these issues. When appropriate, the CMD may choose to forward<br />
a formal letter to CMS CO from the <strong>CAC</strong>. Send these letters through the RO, where they will be<br />
answered or forwarded to the appropriate component in CO for response.<br />
K. Support for Beneficiary Member<br />
Provide individual support to the beneficiary representative in understanding the <strong>CAC</strong> role and<br />
process. This includes assisting the beneficiary representative in understanding the LCDs so they<br />
are better able to determine the effect of the policy on the beneficiary community. <strong>Carrier</strong>s are<br />
encouraged to find ways to involve the beneficiary community in efforts to stem abuse through<br />
LCD development.<br />
13.8.2 - Durable Medical Equipment Regional <strong>Carrier</strong> (DMERC) <strong>Advisory</strong><br />
Process (DAP)<br />
(Rev. 71, 04-09-04)<br />
The DMERC shall establish a forum of DME advisory workgroups in each region to discuss<br />
DME issues and concerns with physicians, clinicians, beneficiaries, suppliers, and<br />
manufacturers. Options for this forum should include ad hoc workgroups that are time-limited<br />
and/or topic specific. <strong>Advisory</strong> participants do not advise the Federal Government. Therefore,<br />
the rules governing open meetings of Federal Government committees do not apply to the DAP<br />
process. Encourage individuals who are concerned with the issues or processes pertaining to<br />
DME to attend.<br />
The purpose of the DAP is to provide:<br />
A formal mechanism to obtain input regarding Regional LCDs (RLCDs) development<br />
and revision;<br />
A mechanism to discuss and improve administrative policies that are within the<br />
DMERCs' discretion; and<br />
A forum for information exchange between the DMERCs, physicians, clinicians,<br />
beneficiaries, suppliers, and manufacturers.
13.9 - Provider Education Regarding LCDs<br />
(Rev. 174, Issued: 11-17-06, Effective: 10-01-06, Implementation: 10-06-06)<br />
Contractors shall educate the provider community on new or significantly revised LCDs (e.g.,<br />
training sessions, speaking at society meetings or writing articles in the society's newsletter).<br />
This function shall be charged to provider outreach and education (POE). Inquiries of a clinical<br />
nature, such as the rationale behind coverage of certain items or services, shall be handled within<br />
medical review (MR), the department responsible for the development of the LCD.<br />
<strong>Carrier</strong>s are required to publish DMERC summary policies, and other pertinent information<br />
supplied by DMERCs, as requested, as part of regular bulletin distributions.<br />
13.10 - Application of LCD<br />
(Rev. 71, 04-09-04)<br />
Contractors should apply LCDs to claims on either a prepayment or postpayment basis. If a<br />
contractor decides to enforce an LCD on a prepayment basis, the contractor shall design an MR<br />
edit. (See PIM Chapter 3, §3.5) Contractors have flexibility to add, alter, or eliminate MR edits<br />
at any time. Contractors should not apply a LCD retroactively to claims processed prior to the<br />
effective date of the policy.<br />
13.11 - LCD Reconsideration Process<br />
(Rev. 71, 04-09-04)<br />
Contractors who have the task of developing LCDs shall have an LCD Reconsideration Process<br />
in accordance with the following instructions.<br />
A. Purpose<br />
The LCD Reconsideration Process is a mechanism by which interested parties can request a<br />
revision to an LCD.<br />
B. Scope<br />
The LCD Reconsideration Process is available only for final LCDs. The whole LCD or any<br />
provision of the LCD may be reconsidered.<br />
C. General<br />
Contractors shall respond timely to requests for LCD reconsideration. In addition, contractors<br />
have the discretion to revise or retire their LCDs at any time on their own initiatives.<br />
D. Web site Requirements for the LCD Reconsideration Process<br />
Contractors shall add to their current Web sites information on the LCD Reconsideration<br />
Process. This information should be on the home page or linked to another location. It shall be<br />
labeled "LCD Reconsideration Process" and shall include:<br />
A description of the LCD Reconsideration Process; and
Instructions for submitting LCD reconsideration requests, including postal, e-mail, and<br />
fax addresses where requests may be submitted.<br />
E. Valid LCD Reconsideration Request Requirements<br />
1. Contractors:<br />
SHALL consider all LCD reconsideration requests from:<br />
Beneficiaries residing or receiving care in a contractor's jurisdiction; and<br />
Providers doing business in a contractor's jurisdiction.<br />
Any interested party doing business in a contractor's jurisdiction.<br />
2. Contractors should only accept reconsideration requests for LCDs published in final form.<br />
Requests shall not be accepted for other documents including:<br />
National Coverage Decisions (NCD);<br />
Coverage provisions in interpretive manuals;<br />
Draft LCDs;<br />
Template LCDs, unless or until they are adopted by the contractor;<br />
Retired LCDs;<br />
Individual claim determinations;<br />
Bulletins, articles, training materials; and<br />
Any instance in which no LCD exists, i.e., requests for development of an LCD.<br />
If modification of the LCD would conflict with an NCD, the request would not be valid. The<br />
contractor should refer the requestor to the NCD reconsideration process. Requestors can be<br />
referred to www.cms.hhs.gov/coverage/8a1.asp or www.access.gpo.gov/nara/index.html.<br />
3. Requests shall be submitted in writing, and shall identify the language that the requestor<br />
wants added to or deleted from an LCD. Requests shall include a justification supported by<br />
new evidence, which may materially affect the LCD's content or basis. Copies of published<br />
evidence shall be included.<br />
The level of evidence required for LCD reconsideration is the same as that required for<br />
new/revised LCD development. (PIM Chapter 13, Section 13.7.1)<br />
4. Any request for LCD reconsideration that, in the judgment of the contractor, does not meet<br />
these criteria is invalid.<br />
5. Contractors have the discretion to consolidate valid requests if similar requests are received.<br />
F. Process<br />
1. The requestor should submit a valid LCD reconsideration request to the appropriate<br />
contractor, following instructions on the contractor's Web site.
2. Within 30 days of the day the request is received, the contractor shall determine whether the<br />
request is valid or invalid. If the request is invalid, the contractor shall respond, in writing, to<br />
the requestor explaining why the request was invalid. If the request is valid, the contractor<br />
should follow the requirements below.<br />
3. Within 90 days of the day the request was received, the contractor shall make a final LCD<br />
reconsideration decision on the valid request and notify the requestor of the decision with its<br />
rationale. Decision options include retiring the policy, no revision, revision to a more<br />
restrictive policy, or revision to a less restrictive policy.<br />
4. If the decision is either to retire the LCD or to make no revision to the LCD, then within 90<br />
days of the day the request was received, the contractor shall inform the requestor of that<br />
decision with its rationale.<br />
5. If the decision is to revise the LCD, follow the normal process for LCD development.<br />
6. Contractors shall keep an internal list of the LCD Reconsideration Requests received and the<br />
relevant dates, subject, and disposition of each one.<br />
13.12 - Retired LCDs and The LCD Record<br />
(Rev. 186, Issued: 01-26-07, Effective: DMERCs 09-11-06/DME MACs Upon Release of<br />
Contract Modification, Implementation: 02-26-07)<br />
Contractors shall list the retired date on all retired LCDs. The active LCD record shall be<br />
maintained by contractors until the LCD is retired. Contractors shall retain the retired LCD<br />
record for 6 years and 3 months. Contractors shall have a mechanism for archiving retired LCDs.<br />
This mechanism shall also allow the contractor to respond to requests and retrieve the LCD<br />
record. Contractors shall post on their Web site information regarding how to obtain retired<br />
LCD. The LCD record shall be destroyed 6 years and 3 months from the date the LCD is retired.<br />
However, contractors shall not destroy the LCD record if it relates to a current investigation or<br />
litigation/negotiation; ongoing Workers’ Compensation set aside arrangements; or documents<br />
which prompt suspicions of fraud and abuse of improper over-utilization of services. This will<br />
satisfy evidentiary needs and discovery obligations critical to the agency’s litigation interests.<br />
13.13 – Challenge of an LCD<br />
(Rev.)<br />
In addition to creating the term “Local Coverage Determination” (LCD), BIPA 522 creates an<br />
appeals process for an “aggrieved party” to challenge LCDs/LCD provisions that are in effect at<br />
the time of the challenge. “Aggrieved party” is defined as a Medicare beneficiary, or the estate<br />
of a Medicare beneficiary, who is entitled to benefits under Part A, enrolled under Part B, or both<br />
(including an individual enrolled in fee-for-service Medicare, in a Medicare+Choice plan<br />
(MAC), or in another Medicare managed care plan), and is in need of coverage for a service that<br />
would be denied by an LCD, as documented by the beneficiary’s treating physician, regardless of<br />
whether the service has been received.
The term LCD refers to both 1.) A reasonable and necessary provision of an LMRP and 2.) A<br />
separate, stand alone LCD that contains only reasonable and necessary language.<br />
If appropriate, CMS may choose to participate as a party in the process. (See §426.415 of the<br />
regulation).<br />
13.13.1 - The Challenge<br />
(Rev. 71, 04-09-04)<br />
An aggrieved party who chooses to file an LCD challenge before receiving the service shall file a<br />
complaint within 6 months of the issuance of a written statement from his or her treating<br />
practitioner. An aggrieved party who chooses to file an LCD challenge after receiving the service<br />
shall file the complaint within 120 days of the initial denial notice.<br />
The aggrieved party bears the burden of proof and burden of persuasion (which will be judged by<br />
a preponderance of the evidence) in an LCD challenge. In other words, the aggrieved party shall<br />
come forward with evidence to support his/her claim and prove that it is more likely than not that<br />
the provision(s) in question should be found invalid. (See section 426.30 of the regulation).<br />
Upon acceptance of a complaint from an aggrieved party, the Administrative Law Judge (ALJ)<br />
will forward a copy of the complaint to the contractor. The contractor will then be required to<br />
send a copy of the LCD record to the ALJ and all other parties involved in the LCD review (i.e.,<br />
the aggrieved party/parties) within 30 days (subject to extension for good cause shown).<br />
Addresses of these parties will be provided in the letter from the ALJ. The contractor shall also<br />
send a copy of the LCD record and a copy of all materials sent by the ALJ to CMS at 7500<br />
Security Blvd, Baltimore, MD 21230, Mail Stop C3-02-16, Attn: LCD Challenge Staff.<br />
Within 10 days of receiving a valid challenge from the ALJ, the contractor shall initiate a<br />
reconsideration of the challenged policy. In instances where the contractor feels the policy is<br />
reasonable despite the new evidence presented, the contractor shall simply continue with the<br />
review process in order to defend the policy. In cases where the contractor feels that the policy<br />
is unreasonable in light of the new evidence, the contractor shall revise the policy through the<br />
reconsideration process and notify the ALJ within 48 hours of issuing a revised policy. The<br />
contractor shall then forward a copy of the revised LCD to the ALJ. If the provision in question<br />
is not entirely removed, the review will continue on the revised LCD. (See §426.420 of the<br />
regulation.)<br />
13.13.2 - The LCD Record<br />
(Rev. 71, 04-09-04)<br />
The contractor shall, by June 2004, maintain an LCD record for each active LCD (both stand<br />
alone LCDs and LCDs within LMRPs). In order to fulfill this requirement, contractors shall<br />
develop and maintain an LCD record when any new LCD is developed. Additionally, the<br />
contractor will have 30 days to provide an LCD record to the ALJ when an LCD is challenged.<br />
Finally, contractors shall develop and maintain an LCD record for all other LCDs by June 1,<br />
2004.
The LCD record sent to the aggrieved party consists of any document or material that the<br />
contractor considered during the development of the LCD, including, but not limited to, the<br />
following:<br />
(1) The LCD.<br />
(2) Any medical evidence considered on or before the date the LCD was issued,<br />
including, but not limited to, the following:<br />
(i) Scientific articles.<br />
(ii) Technology assessments.<br />
(iii) Clinical guidelines.<br />
(iv) Documentation from the FDA regarding safety and efficacy of a drug or device with<br />
the exception of proprietary data and privileged information.<br />
(v) Statements from clinical experts, medical textbooks, claims data, or other indication<br />
of medical standard of practice.<br />
(3) Comment and Response Document (a summary of comments received by the<br />
contractor concerning the draft LCD).<br />
(4) An index of documents considered that are excluded from the record provided to the<br />
aggrieved part but provided to the ALJ because of their proprietary nature. (See<br />
§426.418 of the final regulation)<br />
The LCD record furnished to the aggrieved party does not include the following:<br />
(1) Proprietary data or privileged information.<br />
(2) Any new evidence.<br />
The LCD record furnished to the ALJ will include the following<br />
(1) All documents furnished to the aggrieved party.<br />
(2) Privileged information and proprietary data considered that shall be filed with the<br />
ALJ under seal. This information shall be clearly marked as “proprietary” so the ALJ<br />
will know to keep it confidential. (See §426.419 of the final regulation).<br />
Within 30 days of receiving the record, the aggrieved party shall file a statement explaining why<br />
the contractor’s LCD record is not complete, or not adequate to support the validity of the LCD.<br />
Upon the receipt of the aggrieved party’s statement, the contractor will have 30 days to submit a<br />
written response to the ALJ in order to defend the LCD. Generally, the response should explain<br />
why the aggrieved party’s statement is incorrect. These statements will become part of the<br />
record.
If the ALJ finds the record complete and adequate to support the validity of the LCD, the review<br />
process ends.<br />
If the ALJ determines that the LCD record is not complete and adequate to support the validity<br />
of the LCD, the ALJ will permit discovery and the taking of evidence (see §§426.432 and<br />
426.440 of the regulation) and evaluate the LCD (see §426.431 of the regulation) This process<br />
shall apply when an LCD record has been supplemented.<br />
Upon agreement of the parties, any conferences, arguments or hearings may be held in person,<br />
via telephone, or via any other means (See §426.405 of the regulation.)<br />
13.13.3 - Ex Parte Contacts<br />
(Rev. 71, 04-09-04)<br />
No party or person (except employees of the ALJ's office) will communicate in any way with the<br />
ALJ on any substantive matter at issue in a case, unless all parties are given notice and an<br />
opportunity to participate. This provision does not prohibit a person or party from inquiring<br />
about the status of a case or asking routine questions concerning administrative functions or<br />
procedures. (See Section §426.406 of the regulation)<br />
13.13.4 - Discovery<br />
(Rev. 71, 04-09-04)<br />
If the ALJ orders discovery, then he or she will establish a reasonable timeframe for completion<br />
of discovery. If the Contractor (or any party) feels that the discovery sought is irrelevant or<br />
unduly repetitive, unduly costly or burdensome, or will unduly delay the proceeding, he or she<br />
should file a motion for a protective order before the date of production of the discovery.<br />
A party may obtain discovery via a request for the production of documents and/or via the<br />
submission of 10 written interrogatory questions relating to a specific LCD. The term<br />
"documents" includes relevant information, reports, answers, records, accounts, papers, and other<br />
data and documentary evidence. Nothing in the discovery section of the Regulation will be<br />
interpreted to require the creation of a document. Requests for admissions, depositions, or any<br />
other forms of discovery will not be used in the 522 appeals process. The ALJ will notify all<br />
parties in writing when the discovery period will be closed. (See § 426.432 of the regulation)<br />
13.13.5 - Subpoenas<br />
(Rev. 71, 04-09-04)<br />
A subpoena requires the attendance of an individual at a hearing and may also require a party to<br />
produce evidence at or before the hearing. A party seeking a subpoena shall file a written motion<br />
with the ALJ not less than 30 days before the date fixed for the hearing. The motion shall<br />
designate the witnesses, specify any evidence to be produced, describe the address and location<br />
with sufficient particularity to permit the witnesses to be found, and state the pertinent facts that<br />
the party expects to establish by the witnesses or documents and whether the facts could be<br />
established by other evidence without the use of a subpoena. (See § 426.435 of the regulation)
Within 15 days after the written motion requesting issuance of a subpoena is served on all<br />
parties, any party may file an opposition to the motion or other response.<br />
If the ALJ grants a motion requesting issuance of a subpoena, the subpoena shall do the<br />
following:<br />
(1) Be issued in the name of the ALJ.<br />
(2) Include the docket number and title of the LCD under review.<br />
(3) Provide notice that the subpoena is issued according to sections 1872 and 205(d) and<br />
(e) of the Act.<br />
(4) Specify the time and place at which the witness is to appear and any evidence the<br />
witness is to produce.<br />
The party seeking the subpoena will serve it by personal delivery to the individual named, or by<br />
certified mail return receipt requested, addressed to the individual at his or her last dwelling<br />
place or principal place of business. The individual to whom the subpoena is directed may file<br />
motion to quash the subpoena with the ALJ within 10 days after service.<br />
The exclusive remedy for or refusal to obey a subpoena duly served upon any person is specified<br />
in section 205(e) of the Act (42 U.S.C. 405(e)). That section provides the appropriate district<br />
court of the United States, upon application of the Commissioner of the Social Security<br />
Administration/Secretary of the Department of Health and Human services, can issue an order<br />
and charge a person who doesn’t comply with that order with contempt of court.<br />
13.13.6 - Evidence<br />
(Rev. 71, 04-09-04)<br />
The ALJ is not bound by the Federal Rules of Evidence. However, the ALJ may apply the<br />
Federal Rules of Evidence when appropriate, for example, to exclude unreliable evidence. The<br />
ALJ shall exclude evidence that he/she determines is clearly irrelevant, immaterial, or unduly<br />
repetitive. The ALJ may accept privileged information or proprietary data, but shall maintain it<br />
under seal.<br />
The ALJ may permit the parties to introduce the testimony of expert witnesses on scientific and<br />
clinical issues, rebuttal witnesses, and other relevant evidence. The ALJ may require that the<br />
testimony of expert witnesses be submitted in the form of a written report, accompanied by the<br />
curriculum vitae of the expert preparing the report. Experts submitting reports shall be available<br />
for cross-examination at an evidentiary hearing upon request of the ALJ or a party to the<br />
proceeding, or the reports will be excluded from the record. Unless otherwise ordered by the<br />
ALJ for good cause shown, all documents and other evidence offered or taken for the record will<br />
be open to examination by all parties. (See Section 426.440).<br />
13.13.7 - Dismissals for Cause<br />
(Rev. 71, 04-09-04)
The ALJ may, at the request of any party, or on his or her own motion, dismiss a complaint if the<br />
aggrieved party fails to attend or participate in a prehearing conference or hearing without good<br />
cause shown or comply with a lawful order of the ALJ without good cause shown.<br />
The ALJ shall dismiss any complaint concerning LCD provision(s) if the following conditions<br />
exist:<br />
(1) The ALJ does not have the authority to rule on that provision<br />
(2) The complaint is not timely.<br />
(3) The complaint is not filed by an aggrieved party.<br />
(4) The complaint is filed by an individual who fails to provide an adequate statement of<br />
need for the service from the treating practitioner.<br />
(5) The complaint challenges a provision or provisions of an NCD<br />
(6) The contractor notifies the ALJ that the LCD provision(s) is (are) no longer in effect.<br />
(7) The aggrieved party withdraws the complaint<br />
13.13.8 - New Evidence<br />
(Rev. 71, 04-09-04)<br />
An aggrieved party may submit new evidence pertaining to the LCD provision(s) in question.<br />
New evidence is defined as clinical or scientific evidence that was not considered by the<br />
contractor before the LCD was issued. The ALJ will review the new evidence and decide<br />
whether this evidence has the potential to significantly affect the evaluation of the LCD<br />
provision(s) in question under the reasonableness standard provided for in BIPA 522. (See<br />
§426.340 of the regulation.)<br />
The reasonableness standard is defined in the regulation as the standard that an ALJ or the Board<br />
shall apply when conducting an LCD review. In determining whether LCDs are valid, the<br />
adjudicator shall uphold a challenged policy (or a provision or provisions of a challenged policy)<br />
if the findings of fact, interpretations of law, and applications of fact to law by the contractor or<br />
CMS are reasonable based on the LCD or NCD record and the relevant record developed before<br />
the ALJ/Board.<br />
If the ALJ determines that the new evidence does not have the potential to significantly affect the<br />
ALJ’s evaluation of the LCD provision(s), this evidence will be included in the record of the<br />
hearing to prevent it from being resubmitted as new evidence at a later date, and the review will<br />
continue.<br />
If the ALJ determines that the new evidence has the potential to significantly affect the ALJ’s<br />
evaluation of the LCD provision(s), then the ALJ will suspend the proceedings and send the new<br />
evidence to the contractor for review. The contractor will have 10 days, generally, to review the<br />
new evidence and decide whether the contractor will initiate a reconsideration.
If the contractor informs the ALJ that a reconsideration will be initiated, then the ALJ will set a<br />
reasonable timeframe, generally, but not more than, 90 days, by which the contractor will<br />
complete the reconsideration as described in Section (13.11) of this chapter.<br />
The ALJ will lift the stay in proceedings and continue the review on the challenged provision(s)<br />
of the original LCD, including the new evidence in the record of the hearing, if the contractor:<br />
(1) Informs the ALJ that a reconsideration will not be initiated; or<br />
(2) The 90-day reconsideration timeframe is not met.<br />
(a) If an LCD is reconsidered and revised within the 90-day timeframe allotted by the<br />
The ALJ/Board, then the revised LCD and any supplement to the LCD record will be forwarded<br />
to the ALJ and all parties and the review will proceed on the LCD.<br />
The contractor should review any new evidence that is submitted, regardless of whether the ALJ<br />
has stayed the proceedings, including but not limited to—<br />
(1) New evidence submitted with the initial complaint;<br />
(2) New evidence submitted with an amended complaint;<br />
(3) New evidence produced during discovery; and<br />
(4) New evidence produced when the ALJ consults with scientific and clinical experts.<br />
(5) New evidence presented during any hearing.<br />
The contractor should submit a statement regarding whether the new evidence is significant<br />
within such deadline as the ALJ may set. (See §426.417 of the regulation.)<br />
13.13.9 - Contractor Options<br />
(Rev. 71, 04-09-04)<br />
A. Retiring the LCD<br />
A contractor has the discretion to retire an LCD under review any time before the date the ALJ<br />
issues a decision regarding that LCD. Retiring an LCD under review has the same effect as a<br />
decision under §426.460(b) of the final regulation, which is described below.<br />
B. Revising the LCD<br />
A contractor has the discretion to revise an LCD under review to remove or amend the LCD<br />
provision listed in the complaint at any time before the date the ALJ issues a decision regarding<br />
that LCD through the reconsideration process. Revising an LCD under review to remove the<br />
LCD provision in question has the same effect as a decision under §426.460(b) of the final<br />
regulation, which is described below.<br />
A contractor shall notify the ALJ within 48 hours of:<br />
(1) Retiring an LCD that is under review, or<br />
(2) Issuing a revised version of the LCD that is under review.
If the contractor issues a revised LCD, they shall forward a copy of the revised LCD to the ALJ.<br />
If the provision in question is not entirely removed, the review will continue on the revised LCD.<br />
(See §426.420 of the regulation.)<br />
13.13.10 - The ALJ Decision<br />
(Rev. 71, 04-09-04)<br />
Within 90 days from closing the review record to the taking of evidence, the ALJ is required<br />
either to issue a decision, including a description of appeal rights, or to provide notice that the<br />
decision is pending, and an approximate date a decision will be issued. (See § 426.447 of the<br />
regulation).<br />
After the ALJ has made a decision regarding an LCD complaint, the ALJ will send a<br />
written notice of the decision to each party.<br />
If the ALJ finds that the provision or provisions of the LCD named in the complaint is (are) valid<br />
under the reasonableness standard, the aggrieved party or parties may appeal that (those) part(s)<br />
of the ALJ decision to the Board. (See §426.465 of the final regulation.)<br />
ALJ decisions may be written narrowly to hold specific provision(s) invalid as applied to specific<br />
clinical indications and for similar conditions.<br />
13.13.11 - Effectuating the Decision<br />
(Rev. 71, 04-09-04)<br />
If the ALJ finds that the provision or provisions of the LCD named in the complaint is (are)<br />
invalid under the reasonableness standard, and no appeal is filed by the contractor, the contractor<br />
will provide the following according to §426.460(b) of the final regulation:<br />
(1) Individual claims: If the contractor does not appeal the ALJ decision and if an<br />
aggrieved party’s claim/appeal(s) had previously been denied, the contractor shall reopen the<br />
aggrieved party’s claim and adjudicate the claim without using the provision(s) of the LCD that<br />
the ALJ found invalid. If a revised LCD is issued, the contractor will use the revised LCD in<br />
reviewing claim/appeal submissions or request for services delivered or services performed on or<br />
after the effective date of the revised LCD. If an aggrieved party has not yet submitted a claim,<br />
the contractor will adjudicate the claim without using the provision(s) of the LCD that the ALJ<br />
found invalid. In either case, the claim will be adjudicated without using the LCD provision(s)<br />
found invalid.<br />
(2) Coverage determination relief. If the contractor does not appeal the ALJ decision,<br />
the contractor will implement the ALJ decision within 30 days by doing one of the following:<br />
(i) Revise the LCD to remove the provision(s) of the LCD that the ALJ decision stated<br />
was/were not valid under the reasonableness standard. The revised LCD is effective for dates of<br />
service on or after the 30 th day following the ALJ’s decision.<br />
(ii) Retire the LCD in its entirety and not use the LCD in adjudicating claims with dates<br />
of service on or after the 30 th day following the ALJ decision. (See §426.460 of the final<br />
regulation.)
13.13.12 - Appeals<br />
(Rev. 71, 04-09-04)<br />
A contractor has the discretion to appeal any part of an ALJ’s decision that states that a provision<br />
(or provisions) of an LCD is (are) unreasonable to the Departmental Appeals Board (the Board).<br />
The appeal shall be received by the Board within 30 days of the date the ALJ’s decision was<br />
issued, or it shall include a rationale stating why the late appeal should be accepted by the Board.<br />
An appeal to the Board stays implementation of the Contractor’s decision until the Board issues<br />
a final decision.<br />
To file an appeal described in paragraph (a) of this section, a contractor shall send the following<br />
to the Board:<br />
(i) The full names and addresses of the parties, including the name of the LCD.<br />
(ii) The date of issuance of the ALJ’s decision.<br />
(iii) The docket number that appears on the ALJ’s decision.<br />
(iv) A statement identifying the part(s) of the ALJ’s decision that are being appealed.<br />
(See §426.465 of the regulation.)<br />
13.13.13 - Board Review of an ALJ Decision<br />
(Rev. 71, 04-09-04)<br />
If the Board determines that an appeal is acceptable, the Board will do the following:<br />
Permit the party that did not file the appeal an opportunity to respond to the appeal.<br />
Hold an oral argument (which may be held by telephone) if the Board determines<br />
that oral argument would be helpful to the Board’s review of the ALJ decision.<br />
Review the LCD review record and the parties’ arguments.<br />
Issue a written decision either upholding, modifying, or reversing the ALJ decision,<br />
or remanding the case to the ALJ for further proceedings.<br />
Dismiss an appeal by an aggrieved party of an ALJ decision finding that an LCD was<br />
valid if the contractor notifies the Board that it has retired the LCD or revised the<br />
LCD to remove the LCD provision in question. (See §426.476 of the final<br />
regulation.)<br />
A contractor has the discretion to retire or revise an LCD during the Board’s review of an ALJ’s<br />
decision. If an LCD is retired or revised to remove completely the challenged provision(s), the<br />
aggrieved party is entitled to individual claim relief provided under §426.488(b) of the<br />
regulation. (See §426.478 of the regulation.)<br />
A party (contractor or aggrieved party) who filed an appeal of an ALJ’s decision may withdraw<br />
the appeal before the Board issues a decision by sending the Board and any other party written<br />
notice announcing the intent to withdraw the appeal. (See §426.480 of the regulation).
The Board shall issue a written decision to all parties to the review of the ALJ decision. The<br />
decision shall include the following:<br />
The Board’s Findings (i.e., A statement upholding the part(s) of the ALJ decision<br />
named in the appeal, a statement reversing the part(s) of the ALJ decision named in<br />
the appeal, a statement modifying the part(s) of the ALJ decision named in the appeal,<br />
or a statement dismissing the appeal of an ALJ decision and a rationale for the<br />
dismissal);<br />
The date of issuance;<br />
The docket number of the review of the ALJ decision;<br />
A summary of the ALJ's decision; and<br />
A rationale for the basis of the Board’s decision.<br />
The Board may not do the following:<br />
Order CMS or its contractors to add any language to a provision or provisions<br />
of an LCD;<br />
Order CMS or its contractors to pay a specific claim;<br />
Order CMS or its contractors to pay a specific claim;<br />
Set a time limit to establish a new or revised LCD;<br />
Review or evaluate an LCD other than the LCD named in the ALJ’s decision;<br />
Include a requirement for CMS or its contractors that specifies payment,<br />
coding, or system changes for an LCD or deadlines for implementing these<br />
changes; or<br />
Order CMS or its contractors to implement an LCD in a particular manner.<br />
13.13.14 - Effect of a Board Decision<br />
(Rev. 71, 04-09-04)<br />
If the Board’s decision upholds the ALJ decision that an LCD is valid under the reasonableness<br />
standard or reverses an ALJ decision that than LCD is invalid, the contractor or CMS is not<br />
required to take any action.<br />
If the Board’s decision upholds an ALJ determination that the LCD is invalid, then the contractor<br />
will provide individual claim relief and coverage determination relief as described above and at<br />
§426.460(b) of the regulation.<br />
If the Board reverses an ALJ’s decision dismissing a complaint, the Board remands to the ALJ<br />
and the LCD review continues. (See §426.488 of the regulation.)<br />
If the Board remands a case to the ALJ, the Board will notify each aggrieved party at his or her<br />
last known address, the contractor and CMS of the Board’s remand decision and explain why the<br />
case is being remanded and the specific actions ordered by the Board. (See §426.489 of the<br />
regulation.)
A decision by the Board (other than a remand) constitutes a final agency action and is subject to<br />
judicial review. Neither the contractor nor CMS may appeal a Board decision. (See §426.490 of<br />
the regulation.)<br />
13.13.15 - Future New or Revised LCDs<br />
(Rev. 71, 04-09-04)<br />
The contractor shall not reinstate an LCD provision(s) found to be unreasonable unless the<br />
contractor has a different basis (such as additional evidence) than what the ALJ evaluated. (See<br />
§426.463 of the regulation)<br />
If Contractors incorrectly receive a “Challenge” they shall forward the challenge to the<br />
appropriate office designated at http://www.medicare.gov/coverage/static/appeals.asp, notify the<br />
aggrieved party that the complaint has been forwarded, and initiate a reconsideration of the<br />
policy.<br />
13.14 - Evaluation of Local Coverage Determination (LCD) Topics for<br />
National Coverage Determination (NCD) Consideration<br />
(Rev. 147, Issued: 05-19-06, Effective: 06-19-06, Implementation: 06-19-06)<br />
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), section<br />
731, requires the Centers for Medicare & Medicaid Services (CMS) to develop a plan to evaluate<br />
new LCDs to decide which local decisions should be adopted nationally. CMS currently has<br />
policies in place that address the MMA requirements to promote greater consistency among<br />
LCDs, require Medicare contractors within an area to consult on new local coverage policies,<br />
and to disseminate information on LCDs among Medicare contractors. These existing policies<br />
(see section 7 of this chapter) require Medicare contractors to:<br />
Consult with other contractors prior to developing a new policy;<br />
Adopt/ adapt an existing LCD, if possible; and<br />
Disseminate draft/final LCDs in the national CMS Medicare Coverage Database<br />
(www.cms.hhs.gov/mcd).<br />
Pursuant to section 731 of the MMA, CMS developed a process where “new” LCDs developed<br />
after [insert implementation date] may be evaluated to determine whether they should be adopted<br />
nationally. “New” LCDs, for purposes of this process, are initial evaluations of technologies and<br />
services and do not include existing LCDs developed prior to June 19, 2006, LCD<br />
reconsiderations based on new information, or reevaluation of previously available information.<br />
The term “Contractor,” for purposes of this process, includes but is not limited to fiscal<br />
intermediaries, durable medical equipment regional contractors, durable medical equipment<br />
program safeguard contractors, carriers, regional home health intermediaries and Medicare<br />
administrative contractors.<br />
This process is distinct from, and should not be confused with, the current national coverage<br />
determination (NCD) request process described in the September 26, 2003, “Federal Register”<br />
(FR) Notice (68 FR 55634), “Revised Process for Making Medicare National Coverage<br />
Determinations,” and/or any current or future guidance documents that provide NCD guidelines.<br />
The NCD process outlined in the FR notice allows any interested party to request an NCD under
specific sections of the Social Security Act and the Benefits Improvement and Protection Act of<br />
2000.<br />
Under this process, a 731 <strong>Advisory</strong> Group has been established to review LCD topic submissions<br />
and determine which LCD topics to forward to the CMS Coverage and Analysis Group (CAG).<br />
The 731 <strong>Advisory</strong> Group will establish standard operating procedures for the contractors to<br />
follow regarding how to refer an LCD topic within the following framework:<br />
1. When a Medicare contractor begins developing a new LCD and believes the topic may be<br />
more appropriate to review as an NCD, the contractor medical director (CMD) should use the<br />
LCD evaluation criteria below to make a determination as to whether the topic is appropriate to<br />
submit to the 731 <strong>Advisory</strong> Group for NCD consideration. This evaluation will ideally be<br />
initiated early in the LCD development process before the contactor invests time into developing<br />
the policy. In addition to the CMD developing the policy, any other Medicare CMD or CMD<br />
Workgroup may utilize this process for any new LCD.<br />
2. If a Medicare contractor, after reviewing the LCD evaluation criteria, determines that an<br />
LCD topic is appropriate for NCD consideration, the contractor shall submit the LCD topic, a<br />
formal evaluation (using the format provided by the 731 <strong>Advisory</strong> Group), and appropriate<br />
supporting documentation, (as determined by the 731 <strong>Advisory</strong> Group), to the 731 <strong>Advisory</strong><br />
Group.<br />
3. The 731 <strong>Advisory</strong> Group will review the LCD topic, evaluation, and supporting<br />
documentation to determine whether to refer the LCD topic to CAG for NCD consideration. The<br />
731 <strong>Advisory</strong> Group will notify the requesting contractor of its decision. If the 731 <strong>Advisory</strong><br />
Group determines that the LCD topic is appropriate for NCD consideration, it will refer the LCD<br />
topic to CAG.<br />
4. The CAG will review each coverage topic referral and provide feedback to the 731<br />
<strong>Advisory</strong> Group within 30 working days from the date that a request is deemed complete by<br />
CAG. (CAG will alert the 731 <strong>Advisory</strong> Group within 10 working days if it determines that the<br />
referral is incomplete, along with what is required for a complete referral). Final CAG feedback<br />
shall include both the decision to accept (or reject) the LCD topic for a formal NCD review, and<br />
the rationale for that decision.<br />
5. If CAG accepts an LCD topic for NCD reconsideration, the ensuing process, time lines,<br />
etc., will follow those outlined in the September 26, 2003, FR notice for internally generated<br />
NCD requests and relevant coverage guidance documents. This process includes posting the<br />
proposed NCD topics on the CMS Web site.<br />
6. The LCD topics submitted through this process will be tracked through a free-standing<br />
database by the 731 <strong>Advisory</strong> Group. The database will include, at a minimum, the following<br />
information: the date the topic is submitted to the 731 <strong>Advisory</strong> Group; the date the topic is<br />
accepted by the 731 <strong>Advisory</strong> Group as complete; the date of the 731 <strong>Advisory</strong> Group decision;<br />
the date the topic is referred to CAG; the date the referral is accepted by CAG as complete; and<br />
the date the CAG decision is provided to the 731 <strong>Advisory</strong> Group.<br />
7. The CMS Program Integrity Group, in collaboration with CAG, CMDs, and Medicare<br />
contractors, will be responsible for assessing the new process and its impact on the volume of
additional NCDs it might generate, as well as the characteristics of LCD topics forwarded for<br />
NCD consideration.<br />
8. Contractors have the discretion to continue development of the LCD throughout this<br />
process, regardless of the decisions made by the 731 <strong>Advisory</strong> Group and CAG.<br />
LCD Topic Evaluation Criteria for NCD Consideration<br />
When assessing whether an LCD topic should be referred to the 731 <strong>Advisory</strong> Group for NCD<br />
consideration, contractors should consider the following criteria:<br />
Net impact on clinical health outcomes;<br />
Current and projected local utilization patterns outside of perceived reasonable and<br />
necessary boundaries;<br />
Current and projected national utilization patterns outside of perceived reasonable and<br />
necessary boundaries;<br />
Unit cost;<br />
Collateral costs;<br />
Associated quality and access to care issues including capacity of health system to use<br />
technology safely; and<br />
Medicare payment error rate impact.
Transmittals Issued for this Chapter<br />
Rev # Issue Date Subject Impl Date CR#<br />
R253PI 04/25/2008 Local Coverage Determinations (LCDs)<br />
Responsibility Transition From Durable Medical<br />
Equipment (DME) Program Safeguard Contractor<br />
(PSC) to DME Medicare Administrative<br />
Contractors (MAC)<br />
R186PI 01/26/2007 Durable Medical Equipment Medicare<br />
Administrative Contractors (DME MACs)<br />
Adoption or Rejection of Local Coverage<br />
Determinations (LCDs) Recommended by<br />
Durable Medical Equipment Program Safeguard<br />
Contractors (DME PSCs)<br />
R174PI 11/17/2006 Transition of Medical Review Educational<br />
Activities<br />
R170PI 11/03/2006 Transition of Medical Review Educational<br />
Activities – Replaced by Transmittal 174<br />
R165PI 10/06/2006 Durable Medical Equipment Medicare<br />
Administrative Contractors (DME MACs)<br />
Adoption or Rejection of Local Coverage<br />
Determinations (LCDs) Recommended by<br />
Durable Medical Equipment Program Safeguard<br />
Contractors (DME PSCs)<br />
R163PI 09/29/2006 Transition of Medical Review Educational<br />
Activities – Replaced by Transmittal 170<br />
05/27/2008 5953<br />
02/26/2007 5410<br />
10/06/2006 5275<br />
10/06/2006 5275<br />
10/26/2006 5301<br />
10/06/2006 5275<br />
R147PI 05/19/2006 Evaluation of LCD Topics for NCD Consideration 06/19/2006 4233<br />
R099PI 01/21/2005 Waivers Approved by the Regional Office (RO)<br />
by Replacing Regional Office with Central office<br />
(CO)<br />
R071PI 04/09/2004 Rewrite of Program Integrity Manual (except<br />
Chapter 10) to Apply to PSCs<br />
02/22/2005 3646<br />
05/10/2004 3030<br />
R063PI 01/23/2004 Conversion from LMRP to LCD 02/23/2004 3010<br />
R044PI 07/25/2003 Replacing Contractor MR Web Sites with<br />
Medicare Coverage Database<br />
10/01/2003 2592<br />
R038PI 02/03/2003 Articles is deleted 02/14/2003 2120<br />
R034PI 11/22/2002 LMRP Reconsideration N/A 2435<br />
R028PIM 07/10/2002 LMRP Reconsideration 10/01/2002 2196<br />
R027PIM 07/02/2002 Contractor Review of LMRPs 10/01/2002 2141<br />
R024PIM 04/05/2002 Moves the LMRP and related sections from Chap<br />
1 and to Chap 13<br />
10/01/2002 2061
(Rev.106, Issued: 03-04-05, Effective: 02-01-05, Implementation: 04-04-05)<br />
3.1 - Physicians<br />
(Rev. 220, Issued: 08-24-07, Effective: 09-03-07, Implementation: 09-03-07)<br />
Medicare defines physicians as:<br />
• Doctors of medicine;<br />
• Doctors of osteopathy;<br />
• Doctors of dental surgery or dental medicine;<br />
• Chiropractors;<br />
• Doctors of podiatry or surgical chiropody; and<br />
• Doctors of optometry.<br />
Do not include other practitioners on this committee.<br />
<strong>Carrier</strong>s select committee representatives from names recommended by State medical societies<br />
and specialty societies. If the CMD is concerned because of identified utilization/MR problems<br />
with an individual who has been recommended as a committee representative, the CMD should<br />
discuss the recommendation with the nominating body. They must maintain confidentiality of<br />
the specifics of the situation in any discussion.<br />
If there is no organized specialty society for a particular specialty, the CMD should work with<br />
the State medical society to determine how the specialty is to be represented. Encourage each<br />
State medical society and specialty society to nominate representatives to the <strong>CAC</strong>.<br />
If there are multiple specialty societies representing a specialty, select only one representative.<br />
Encourage specialty societies to work together to determine how a representative is selected and<br />
how that representative communicates with each society.<br />
The CMDs who become committee members or are appointed or elected as officers in any state<br />
or national medical society or other professional organization must provide written notice of<br />
membership, election, or appointment to CO and RO, as well as to the <strong>CAC</strong> within 3 months of<br />
the membership, election, or appointment effective date. This notice can be provided as part of<br />
the <strong>CAC</strong> minutes if the CMD chooses to give <strong>CAC</strong> notice via the <strong>CAC</strong> meeting forum, provided<br />
that the <strong>CAC</strong> meeting is held within the 3-month notice period.<br />
Attempt to include, as members of your <strong>CAC</strong>, physician representatives from each of the<br />
following groups:<br />
• State medical and osteopathic societies (president or designee);
• National Medical Association (representative of either the local or State chapter<br />
or its equivalent, if one exists); and<br />
• Medicare Medicare Advantage organizations. In order to enhance the consistency<br />
of decision making between Medicare Medicare Advantage plans and traditional fee-forservice,<br />
Medicare Medicare Advantage organizations shall also have representation on<br />
the <strong>CAC</strong>. The number of Medicare Advantage representatives on the <strong>CAC</strong> should be<br />
based on the Medicare penetration (enrollment) rates for that State; one representative for<br />
those States with penetration rates of less than 5 percent and two representatives for those<br />
States with penetration rates of 5 percent or higher. The State HMO association should<br />
periodically submit nominees for membership on the <strong>CAC</strong>.<br />
• Physician representatives for each of the following: 1) Chiropractic; 2)<br />
Maxillofacial/Oral surgery; 3) Optometry; and 4) Podiatry.<br />
Include one physician representative of each of the following clinical specialties and subspecialties:<br />
• Allergy;<br />
• Anesthesia;<br />
• Cardiology;<br />
• Cardiovascular/Thoracic Surgery;<br />
• Dermatology;<br />
• Emergency Medicine;<br />
• Family Practice;<br />
• Gastroenterology;<br />
• Gerontology<br />
• General Surgery;<br />
• <strong>Hematology</strong>;<br />
• Internal Medicine;<br />
• Infectious Disease;<br />
• Interventional Pain Management;<br />
• Medical <strong>Oncology</strong>;<br />
• Nephrology;<br />
• Neurology;<br />
• Neurosurgery;<br />
• Nuclear Medicine;<br />
• Obstetrics/Gynecology;<br />
• Ophthalmology;<br />
• Orthopedic Surgery;<br />
• Otolaryngology;
• Pathology;<br />
• Pediatrics;<br />
• Peripheral Vascular Surgery;<br />
• Physical Medicine and Rehabilitation;<br />
• Plastic and Reconstructive Surgery;<br />
• Psychiatry;<br />
• Pulmonary Medicine;<br />
• Radiation <strong>Oncology</strong>;<br />
• Radiology;<br />
• Rheumatology; and<br />
• Urology<br />
The CMD must work with the societies to ensure that committee members are representative of<br />
the entire service area and represent a variety of practice settings.<br />
3.2 - Clinical Laboratory Representative - (Rev. 3, 11-22-00)<br />
In addition to the representatives for physician clinical specialties, include an individual to<br />
represent clinical laboratories. This individual may also be a physician. Consider<br />
recommendations from national and local organizations that represent independent clinical<br />
laboratories in making this selection.<br />
3.3 - Beneficiaries - (Rev. 3, 11-22-00)<br />
Include two representatives of the beneficiary community:<br />
One based on recommendations made by an association(s) representing issues of the<br />
elderly (e.g., coalitions for the elderly, senior citizen centers), and<br />
One based on recommendations made by an association(s) representing the disabled.<br />
One role of the beneficiary representatives is to communicate with other beneficiary groups that<br />
have an interest in LMRP.<br />
3.4 - Other Organizations - (Rev. 3, 11-22-00)<br />
<strong>Carrier</strong>s invite the following to be members:<br />
A representative from the State Hospital Association;<br />
QIO medical director;<br />
Intermediary medical director;<br />
Medicaid medical director (or designee); and
LCD Information<br />
LCD Database ID Number<br />
LCD Title<br />
Contractor’s Determination Number<br />
AMA CPT/ADA CDT Copyright Statement<br />
CPT codes, descriptions and other data only are copyright 2007 American Medical<br />
Association (or such other date of publication of CPT). All Rights Reserved. Applicable<br />
FARS/DFARS Clauses Apply. Current Dental Terminology, (CDT) (including procedure<br />
codes, nomenclature, descriptors and other data contained therein) is copyright by the<br />
American Dental Association. © 2002, 2004 American Dental Association. All rights<br />
reserved. Applicable FARS/DFARS apply.<br />
CMS National Coverage Policy<br />
Title XVIII of the Social Security Act, Section 1862(a)(7). This section excludes routine<br />
physical examinations.<br />
Title XVIII of the Social Security Act, Section 1862(a)(1)(A) states that no Medicare<br />
payment shall be made for items or services which are not reasonable and necessary for<br />
the diagnosis or treatment of illness or injury.<br />
Title XVIII of the Social Security Act, Section 1833(e) states that no payment shall be<br />
made to any provider for any claim that lacks the necessary information to process the<br />
claim.<br />
Primary Geographic Jurisdiction<br />
Oversight Region
Original Determination Effective Date<br />
Original Determination Ending Date<br />
Revision Effective Date<br />
Revision Ending Date<br />
Indications and Limitations of Coverage and/or<br />
Medical Necessity<br />
Compliance with the provisions in this policy may be monitored and addressed through<br />
post payment data analysis and subsequent medical review audits.<br />
Coverage Topic<br />
Category Undefined<br />
Go to Top<br />
Coding Information<br />
CPT/HCPCS Codes<br />
Diagnoses that Support Medical Necessity
ICD-9 Codes that DO NOT Support Medical Necessity<br />
Codes not included in the listing above<br />
ICD-9 Codes that DO NOT Support Medical Necessity<br />
Asterisk Expanation<br />
N/A<br />
Diagnoses that DO NOT Support Medical Necessity<br />
Conditions that are not listed in the "ICD-9-CM Codes that Support Medical Necessity"<br />
section of this policy.<br />
Go to Top<br />
General Information<br />
Documentation Requirements<br />
Documentation supporting the service reported, must be maintained in the patient's<br />
medical record.<br />
The patient's medical record should be legible, support the medical necessity for this<br />
service and be available to the carrier upon request.<br />
Utilization Guidelines<br />
In accordance with CMS Ruling 95-1 (V), utilization of these services should be<br />
consistent with locally acceptable standards of practice.
Sources of Information and Basis for Decision<br />
<strong>Advisory</strong> <strong>Committee</strong> Meeting Notes<br />
This policy does not reflect the sole opinion of the contractor or Contractor Medical<br />
Director. Although the final decision rests with the contractor, this policy was developed<br />
in cooperation with advisory groups that include representatives from various specialties.<br />
<strong>CAC</strong> presentation:<br />
Start Date of Comment Period<br />
End Date of Comment Period:<br />
Start Date of Notice Period<br />
Go to Top<br />
Revision History<br />
Revision History Number<br />
Revision History Explanation
February 9, <strong>2009</strong><br />
Barry M. Straube, MD<br />
Director and Chief Clinical Officer<br />
Office of Clinical Standards and Quality<br />
Centers for Medicare & Medicaid Services<br />
Mail Stop S3-02-01<br />
7500 Security Boulevard<br />
Baltimore, MD 21244<br />
Dear Dr. Straube:<br />
We are writing on behalf of the American Society of Clinical <strong>Oncology</strong><br />
(ASCO) to request that the Centers for Medicare & Medicaid Services advise<br />
National Government Services (NGS), an A/B Medicare Administrative<br />
Contractor, that its recently announced policy disfavoring coverage of<br />
intravenous antiemetics is inconsistent with national Medicare policy and<br />
must be rescinded. ASCO is the national organization representing physicians<br />
<br />
the interests of our patients as well as contrary to national Medicare policy.<br />
On January 13, <strong>2009</strong>, NGS posted the following announcement on its web site<br />
(emphasis added):<br />
Use of Injectable Medications When an Oral Equivalent is<br />
Available<br />
National Government Services would like to remind providers that the<br />
use of injectable medications when an oral form of the same<br />
medication is available must meet medical necessity requirements for<br />
use of the drug, and for the route of administration. Documentation<br />
should indicate that the patient was unable to tolerate the oral<br />
preparation prior to initiation of the intravenous form of the<br />
medication.<br />
An example is a failed course of the oral anti-emetic before starting an<br />
intravenous form of the same anti-emetic.<br />
Instruction regarding this topic is from the Centers for Medicare &<br />
Medicaid Services (CMS) and is national not a local determination.<br />
Please refer to the following references used for this article:
The Medicare Benefit Policy Manual, CMS Publication 100-2, Chapter 15, Section 50.2<br />
& 50.5.4<br />
National Government Services Local Coverage Determination Supplemental Instruction<br />
Article for Drugs and Biologicals, Coverage of, for Label and Off-Label Uses -<br />
Supplemental Instructions Article (A44930)<br />
As noted in the announcement, NGS takes the position that this policy under which intravenous<br />
antiemetics will ordinarily not be covered by Medicare is mandated by provisions of the<br />
Medicare Benefit Policy Manual that were issued years ago. No other Medicare contractor takes<br />
this position.<br />
NGS cites section 50.5.4 of the Manual, but this section does not support its position. This<br />
<br />
intravenous antiemetics. It provides that, notwi <br />
Medicare will cover supplemental intravenous antiemetics if the oral antiemetics were<br />
ineffective.<br />
Section 50.2.A, K of the Manual, also cited by NGS, provides that the route of administration<br />
must be medic<br />
oral and injectable forms, the injectable form of the drug must be reasonable and necessary as<br />
intended to deny<br />
coverage to injectable drugs whenever an oral version exists. Instead, we believe that his<br />
language is intended to reflect the policy stated in section 50.4.3:<br />
Medication given by injection (parenterally) is not covered if standard medical<br />
practice indicates that the administration of the medication by mouth (orally) is<br />
effective and is an accepted or preferred method of administration. For example,<br />
the accepted standard of medical practice for the treatment of certain diseases is to<br />
initiate therapy with parenteral penicillin and to complete therapy with oral<br />
penicillin. <strong>Carrier</strong>s exclude the entire charge for penicillin injections given after<br />
the initiation of therapy if oral penicillin is indicated unless there are special<br />
medical circumstances that justify additional injections.<br />
In other words, intravenous antiemetics are to be denied coverage in favor of oral antiemetics<br />
only if use of oral antiemetics rather than intravenous antiemetics is the established medical<br />
practice in the circumstance at issue.<br />
In the case of antiemetics administered in conjunction with anticancer chemotherapy, the<br />
standard practice is to use intravenous antiemetics, although oral antiemetics may sometimes be<br />
icy, under which Medicare coverage of<br />
intravenous antiemetics will usually be denied, is not consistent with national Medicare policy.<br />
<br />
Most physicians do not dispense oral drugs, which means that cancer patients must obtain their<br />
2
oral antiemetics from a pharmacy and bring them to the oncologist on the days of chemotherapy.<br />
In the case of oral antiemetics covered by Part B, however, the Medicare Claims Processing<br />
Manual (Ch. 17, § 80.2) provides:<br />
The oral anti-emetic drug(s) should be prescribed only on a per chemotherapy<br />
treatment basis. For example, only enough of the oral anti-emetic(s) for one 24- or<br />
48-hour dosage regimen (depending upon the drug) should be prescribed/supplied<br />
for each incidence of chemotherapy treatment.<br />
This Manual provision precludes physicians from writing a prescription for antiemetics for the<br />
entire course of chemotherapy, thus requiring only a single trip to the pharmacy. Instead, cancer<br />
patients, who are often seriously ill, could be required to fill prescriptions for antiemetics prior to<br />
every chemotherapy encounter. This is a burden that should not be imposed on these patients.<br />
In the case of oral antiemetics that do not meet the conditions for Part B coverage, patients will<br />
be subject to the prior authorization and quantity limits that the Medicare Part D plans may<br />
impose. Again, these requirements could be highly disruptive to the care of cancer patients.<br />
ASCO sees no basis for the new NGS policy, which purports to be simply an implementation of<br />
longstanding Manual provisions even though no other contractor has interpreted the Manual in<br />
this manner. ASCO respectfully requests that CMS direct NGS to rescind its recent policy<br />
announcement and to cover medically necessary intravenous antiemetics without requiring a<br />
showing that the patient has failed on oral antiemetics.<br />
We are available for a meeting or conference call to discuss this issue should you feel it<br />
necessary. Please let us know if you need any further information. Thank you for your<br />
consideration of this request.<br />
Sincerely,<br />
Joseph S. Bailes, MD W. Charles Penley, MD<br />
Chair, Government Relations Council Chair, Clinical Practice <strong>Committee</strong><br />
3
Hepatitis B Testing<br />
The routine screening of all patients for Hepatitis B Virus (HBV) is not considered reasonable and<br />
necessary and is non-covered. The use of hepatitis B testing to follow a confirmed disease, such as<br />
cancer, however, is NOT considered routine screening. The National Coverage Decision for the<br />
Hepatitis Panel/Acute Hepatitis Panel (CMS Publication 100-03, Medicare National Coverage<br />
Determinations Manual, Chapter 1, Section 190.33) addresses national coverage for Acute Hepatic<br />
Panel, CPT 80074. The URL to the NCD is:<br />
http://www.cms.hhs.gov/manuals/downloads/ncd103c1_Part3.pdf<br />
The covered indications per the Medicare National Coverage Determination are:<br />
• To detect viral hepatitis infection when there are abnormal liver function test results, with or<br />
without signs or symptoms of hepatitis.<br />
• Prior to and subsequent to liver transplantation.<br />
The acute hepatic panel (CPT code 80074) – includes the following tests:<br />
• Hepatitis A antibody (HAAb), IgM antibody (CPT code 86709);<br />
• HEPATITIS B core antibody (HBcAb), IgM antibody (CPT code 86705);<br />
• HEPATITIS B surface antigen (HBsAg (CPT code 87340); and<br />
• Hepatitis C antibody (CPT code 86803)<br />
The NCD limitations are:<br />
• After a hepatitis diagnosis has been established, only individual tests, rather than the entire<br />
panel, are needed. This is because this panel of tests is used for differential diagnosis in a<br />
patient with symptoms of liver disease or injury. When the time of exposure or the stage of the<br />
disease is not known, a patient with continued symptoms of liver disease, despite a completely<br />
negative hepatitis panel, may need a repeat panel approximately 2 weeks to 2 months later to<br />
exclude the possibility of hepatitis. Once a diagnosis is established, however, specific tests can<br />
and should be used to monitor the course of the disease.<br />
Since a Medicare NCD exists that outlines the national coverage for Acute Hepatic Panels, most of the<br />
local coverage determinations (LCDs) actually address coverage for the individual components of the<br />
panel. It seems that most carriers agree on the following:<br />
• The use of hepatitis B testing to follow a confirmed disease is not considered routine screening;<br />
• Hepatitis B core antibody testing (CPT codes 86704 - 86705) - should NOT be utilized in the<br />
presence of a recently positive HEPATITIS B surface antigen test;<br />
• There is no need to repeat a test unless there is clinical evidence of reactivation of HEPATITIS<br />
B.<br />
• Tests for screening purposes that are performed in the absence of signs, symptoms, complaints,<br />
or personal history of disease or injury are not covered.<br />
• Tests that are not reasonable and necessary for the diagnosis or treatment of an illness or injury<br />
are not covered.<br />
• If a policy identifies a frequency expectation, a claim for a test that exceeds that expectation<br />
may be denied as not reasonable and necessary, unless it is submitted with documentation<br />
justifying increased frequency.<br />
Even though the national and local coverage policies may or may not specify Hepatitis B testing<br />
specific to chemotherapy or immunosuppressive therapy outright, if the patient has a confirmed<br />
disease, and assuming that there is medical necessity, Medicare will provide coverage for the Hepatitis<br />
B testing.
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CMS Home > Medicare > Medicare Coverage - General Information > Medicare Coverage Database<br />
> Indexes Home > Medicare Evidence Development & Coverage <strong>Advisory</strong> <strong>Committee</strong> (Med<strong>CAC</strong>)<br />
Meetings > View Med<strong>CAC</strong><br />
Med<strong>CAC</strong> Meetings<br />
5/6/<strong>2009</strong> - Screening Genetic Tests<br />
Issue<br />
On May 6, <strong>2009</strong>, CMS will convene a public meeting of the Medicare<br />
Evidence Development and Coverage <strong>Advisory</strong> <strong>Committee</strong> (MED<strong>CAC</strong>)<br />
entitled "Screening Genetic Tests".<br />
The Secretary's <strong>Advisory</strong> <strong>Committee</strong> on Genetics, Health and Society<br />
(SACGHS) defines genetic testing as "…any test performed using<br />
molecular biology methods to test DNA or RNA, including germline,<br />
heritable, and acquired somatic variations." Genetic screening test(s) are<br />
used for individuals who do not exhibit signs or symptoms of a disorder<br />
to detect possible diseases and for clinical uses. Currently, these tests<br />
are sweeping into the market despite the less than robust evidence to<br />
support these uses.<br />
This meeting will focus on the desirable characteristics of evidence that<br />
are needed to evaluate screening genetic test(s) for Medicare coverage.<br />
As such CMS wants to determine whether genetic testing as a laboratory<br />
screening service improves health outcomes for the Medicare population.<br />
Specifically, does the screening genetic testing change the natural<br />
history and/or reduce the complications of the disease and alter<br />
morbidity/mortality. CMS also asks the committee to identify current<br />
data deficiencies that warrant further research.<br />
Actions Taken<br />
February 25,<br />
<strong>2009</strong><br />
Announced meeting.<br />
March 17, <strong>2009</strong> Posted Federal Register notice.<br />
March 20, <strong>2009</strong> Posted questions for meeting.<br />
April 30, <strong>2009</strong> Posted roster, agenda and speaker list for meeting.<br />
May 11, <strong>2009</strong> Posted scoresheet from meeting.<br />
Federal Register Notice<br />
Agenda<br />
Search now Search<br />
Agenda<br />
Medicare Evidence Development & Coverage <strong>Advisory</strong> <strong>Committee</strong><br />
May 6, <strong>2009</strong><br />
7:30 AM – 4:30 PM<br />
CMS Auditorium<br />
1 of 7 5/20/<strong>2009</strong> 12:25 PM
Centers for Medicare & Medicaid Services http://www.cms.hhs.gov/mcd/viewmcac.asp?from2=viewmcac.asp&wher...<br />
Saty Satya-Murti, Acting Chair<br />
Marcel Salive, MD, Coverage and Analysis Group<br />
Maria Ellis, Executive Secretary<br />
7:30 – 8:00 AM Registration<br />
8:00 – 8:20 AM Opening Remarks—Maria Ellis/ Marcel Salive,<br />
MD/Saty Satya-Murti, MD<br />
8:20 - 8:40 AM CMS Presentation & Voting Questions – Sandra<br />
Jones, RN/Jeffrey Roche, MD, MPH<br />
8:40 – 9:00 AM William G. Feero, MD, PhD, Chief, Genomic<br />
Healthcare Branch, National Human Genome<br />
Research Institute, National Institutes of Health<br />
9:00 – 9:20 AM Steven Teutsch, MD, MPH, Chief Science Officer,<br />
LA County Public Health Department<br />
9:20 – 10:05<br />
AM<br />
10:05- 10:20AM BREAK<br />
10:20 – 10:45<br />
AM<br />
10:45 – 11:30<br />
AM<br />
Scheduled Public Comments<br />
(Refer to Speaker List)<br />
Open Public Comments<br />
Public Attendees who wish to address the panel will<br />
be given that opportunity<br />
Questions to Presenters<br />
Public attendees, who have contacted the executive secretary prior to<br />
the meeting, will address the panel and present information relevant<br />
to the agenda. Speakers are asked to state whether or not they have<br />
any financial involvement with manufacturers of any products being<br />
discussed or with their competitors and who funded their travel to this<br />
meeting.<br />
11:30 – 12:30<br />
PM<br />
LUNCH (on your own)<br />
12:30 – 1:30 PM Initial Open Panel Discussion: Dr. Satya-Murti<br />
1:30 – 2:30 PM Formal Remarks and Voting Questions<br />
The Chairperson will ask each panel member to<br />
state his or her position on the voting questions<br />
2:30 – 3:30 PM Final Open Panel Discussion: Dr. Satya-Murti<br />
3:30 – 4:30 PM Closing Remarks/Adjournment: Dr. Salive & Dr.<br />
Satya-Murti<br />
4:30 PM ADJOURN<br />
Panel Voting Questions<br />
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Issue:<br />
CMS wishes to obtain the MED<strong>CAC</strong>’s recommendation regarding the<br />
desirable characteristics of evidence that could be used by the Medicare<br />
program to determine whether the screening use of genetic testing<br />
improves health outcomes or leads to early detection of clinically<br />
inapparent disease. The Secretary’s <strong>Advisory</strong> <strong>Committee</strong> on Genetics,<br />
Health and Society (SACGHS) has defined genetic testing as “…any test<br />
performed using molecular biology methods to test DNA or RNA,<br />
including germline, heritable, and acquired somatic variations.”<br />
Pursuant to Title XVIII of the Social Security Act (the Act), §1862(a)<br />
(1)(A), Congress gave the Secretary of Health and Human Services the<br />
authority to consider Medicare coverage of diagnostic tests. Diagnostic<br />
tests are used by the treating physician to diagnose or treat a condition<br />
or disease when the beneficiary has signs or symptoms of a disorder. In<br />
contrast to diagnostic tests, screening tests are administered to<br />
asymptomatic individuals for the prevention or early detection of illness<br />
or disability. During the last 25 years, Congress has added some<br />
screening services that are now covered by Medicare; and these<br />
screening services include: mammography, glaucoma, pelvic exam and<br />
pap test, diabetes, lipids, colorectal cancer and prostate cancer.<br />
Recently, the Medicare Improvements for Patients and Providers Act of<br />
2008 (MIPPA) (Pub. L. 110-275) was approved by Congress. Effective<br />
January 1, <strong>2009</strong>, MIPPA, section 101(a), provides for Medicare Part B<br />
coverage for additional preventive services, that are not already<br />
described in Title XVIII of the Act, when the Secretary determines<br />
through the national coverage determination (NCD) process (as<br />
described in section 1869(f)(1)(B) of the Act) that a new service meets<br />
the following statutory requirements for coverage.<br />
(1) The service is reasonable and necessary for the prevention or<br />
early detection of an illness or disability;<br />
(2) The United States Preventive Services Task Force (USPSTF)<br />
provides a grade A or B recommendation for the service. (The<br />
USPSTF recommendations are located at: http://www.ahrq.gov/clinic<br />
/uspstfix.htm); and<br />
(3) The service is appropriate for beneficiaries entitled to benefits<br />
under Part A or enrolled under Part B.<br />
Currently, Medicare does not have a national coverage decision for<br />
screening genetic tests. Since screening is conducted on asymptomatic<br />
individuals, the analytic framework for screening tests involves<br />
consideration of several different factors compared to diagnostic tests<br />
and therapeutic interventions. One framework for evaluating screening<br />
tests was outlined by Cochrane and Holland (1971) as follows: “The<br />
value of a screening test may be assessed according to the following<br />
criteria:<br />
i. Simplicity. In many screening programmes more than one test is<br />
used to detect one disease, and in a multiphasic programme the<br />
individual will be subjected to a number of tests within a short space<br />
of time. It is therefore essential that the tests used should be easy to<br />
administer and should be capable of use by para-medical and other<br />
personnel.<br />
ii. Acceptability. As screening is in most instances voluntary and a<br />
high rate of co-operation is necessary in an efficient screening<br />
programme, it is important that tests should be acceptable to the<br />
subjects.<br />
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iii. Accuracy. The test should give a true measurement of the<br />
attribute under investigation.<br />
iv. Cost. The expense of screening should be considered in relation to<br />
the benefits resulting from the early detection of disease, i.e., the<br />
severity of the disease, the advantages of treatment at an early<br />
stage and the probability of cure.<br />
v. Precision (sometimes called repeatability). The test should give<br />
consistent results in repeated trials.<br />
vi. Sensitivity. This may be defined as the ability of the test to give a<br />
positive finding when the individual screened has the disease or<br />
abnormality under investigation.<br />
vii. Specificity. This may be defined as the ability of the test to give a<br />
negative finding when the individual screened does not have the<br />
disease or abnormality under investigation.”<br />
An example of a genetic test suggested for screening use is detection of<br />
the homozygous presence of e4 allele of the APOE gene (also expressed<br />
as APOE e4/e4). This genetic characteristic has been shown in published<br />
studies to be associated with an elevated risk of developing Alzheimer<br />
disease (Odds Ratio 2.1 (95% CI, 5.1-11.9)b). A further discussion of<br />
considerations for using this genetic test in a specific clinical scenario is<br />
provided in the series of recent articles.<br />
Reference: Attia J, Ioannidis JPA, Thakkinstian A, McEvoy M, Scott RJ,<br />
Minelli C, et al. How to use an article about genetic association:<br />
A: background concepts. JAMA <strong>2009</strong> Jan 7; 301(1): 74-81;<br />
B: Are the results of the study valid? JAMA <strong>2009</strong> Jan 14; 301(2): 191-7;<br />
C: What are the results and will they help me in caring for my patients?<br />
JAMA Jan 21; 301(3): 304-8.<br />
Questions:<br />
The following questions should be addressed in the context of screening<br />
genetic tests for the early detection of disease:<br />
Q1. Are there differences in the desirable characteristics of evidence<br />
about screening genetic tests versus those of screening tests in<br />
general?<br />
Discussion<br />
Q2. What are the desirable characteristics of evidence for<br />
determining the analytical validity of screening genetic tests?<br />
Discussion<br />
Q3A. Beyond aspects of analytical validity, are there meaningful<br />
differences in the desirable and/or necessary characteristics of<br />
evidence about the effect of genetic testing on outcomes? If yes,<br />
please consider question 3 separately for each paradigm.<br />
Early detection of disease in an asymptomatic person<br />
Early treatment of disease (before signs or symptoms are<br />
apparent)<br />
Q3B. What comparative data are needed on alternative strategies for<br />
screening?<br />
Q4. For each type of outcome below, how confident are you that<br />
methodologically rigorous evidence on the outcome is sufficient to<br />
infer whether or not screening genetic testing is effective for the<br />
prevention or early detection of illness or disability?<br />
4 of 7 5/20/<strong>2009</strong> 12:25 PM
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For each lettered outcome type, assign a number from 1 to 5 to<br />
indicate your vote. A lower number indicates lower confidence; a<br />
higher number indicates higher confidence.<br />
a) Additional (confirmatory) diagnostic procedure<br />
b) Survival<br />
c) Other patient-focused healthcare outcomes e.g., functional<br />
status, incidence of adverse events<br />
Q5. What are the desirable measures of the cost-effectiveness of<br />
screening genetic tests for the prevention or early detection of illness<br />
or disability?<br />
Consider ranking (1=lowest thru 3=highest) the below (a-c) options<br />
and/or identify other measures that would be appropriate.<br />
a) Quality-adjusted life years (QALYs) gained due to screening?<br />
b) Decreases in incidence of illness or disability, or net gains in<br />
other patient-focused healthcare outcomes?<br />
c) Net changes in lifetime costs of illness or disability?<br />
For discussion.<br />
Q6. What are the desirable methodological characteristics of studies<br />
of cost-effectiveness for screening genetic tests for the prevention or<br />
early detection of illness of disability?<br />
For discussion.<br />
Q7. Are there ethical issues particular to screening genetic testing<br />
that may alter the methodologic rigor of studies of genetic testing?<br />
Please discuss the existence, relevance, and impact of such issues.<br />
Q8. Does the age of the Medicare beneficiary population present<br />
particular challenges that may compromise the generation and/or<br />
interpretation of evidence regarding genetic testing?<br />
Please discuss the existence, relevance, and impact of such<br />
challenges.<br />
Download scoresheet [PDF, 25KB]<br />
Roster<br />
Saty Satya-Murti, MD, FANN<br />
Acting Chair<br />
Health Policy Consultant<br />
May 6, <strong>2009</strong><br />
MED<strong>CAC</strong> Roster<br />
John Spertus, MD, MPH, FACC<br />
Director<br />
Cardiovascular Education and<br />
Outcomes<br />
Research<br />
Mid America Heart Institute<br />
University of Missouri<br />
5 of 7 5/20/<strong>2009</strong> 12:25 PM
Centers for Medicare & Medicaid Services http://www.cms.hhs.gov/mcd/viewmcac.asp?from2=viewmcac.asp&wher...<br />
Marion Danis, MD<br />
Chief<br />
Bioethics Consultation Service<br />
NIH Clinical Center<br />
Nancy Davenport-Ennis, BA<br />
CEO<br />
Patient Advocate Foundation<br />
Mark D. Grant, MD, MPH<br />
Associate Director<br />
Technology Evaluation Center<br />
BlueCross BlueShield Association<br />
Daniel F. Hayes, MD<br />
Clinical Director<br />
Breast <strong>Oncology</strong> Program<br />
Stuart B. Padnos<br />
Professor in Breast Cancer<br />
Research<br />
University of Michigan<br />
Comprehensive Cancer Center<br />
I. Craig Henderson, MD<br />
Adjunct Professor of Medicine<br />
University of California, San<br />
Francisco<br />
James E. Puklin, MD<br />
Professor of Ophthalmology<br />
Department of Ophthalmolgy<br />
Kresge Eye Institute<br />
Wayne State University School<br />
of Medicine<br />
Randal Richner, BSN, MPH<br />
President and Founder<br />
Neocure Group, LLC<br />
Maren T. Scheuner, MD, MPH<br />
RAND Corporation<br />
Teresa M. Schroeder, BS, MBA<br />
Director<br />
Clinical Affairs<br />
Musculoskeletal Clinical<br />
Steven Teutsch, MD, MPH<br />
Chief Science Officer<br />
LA County Public Health<br />
Department<br />
Jonathan P. Weiner, PhD<br />
Professor<br />
Health Policy & Management<br />
Johns Hopkins University<br />
Bloomberg School of Public<br />
Health<br />
Industry Representative<br />
Eleanor M. Perfetto, PhD, MS<br />
Senior Director<br />
Evidence Based Strategies<br />
Pfizer, Inc.<br />
Guest Panelist<br />
Steve Gutman, MD<br />
Professor of Pathology<br />
University of Central Florida<br />
Neil Holtzman, MD<br />
Professor<br />
Johns Hopkins Bloomberg School<br />
of Public Health<br />
Elizabeth Mansfield, PhD<br />
Senior Genomics Advisor<br />
OSMP, Office of the Chief<br />
Scientist<br />
Food and Drug Administration<br />
Guest Speakers<br />
W. Gregory Feero, MD, PhD<br />
Chief<br />
Genomic Healthcare Branch<br />
National Human Genome<br />
Research<br />
National Institute of Health<br />
CMS Liaison<br />
Marcel Salive, MD<br />
Director<br />
Division of Medical & Surgical<br />
Services<br />
Coverage and Analysis Group<br />
Executive Secretary<br />
Maria A. Ellis<br />
6 of 7 5/20/<strong>2009</strong> 12:25 PM
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Regulatory<br />
Advisers, LLC<br />
Speaker List<br />
Medicare Evidence Development & Coverage <strong>Advisory</strong> <strong>Committee</strong><br />
May 6, <strong>2009</strong><br />
SPEAKER LIST<br />
* 7 MINUTES PER SPEAKER*<br />
Jan A. Nowak, MD, PhD, FCAP, Medical Director, Molecular<br />
Diagnostics Laboratory, Evanston Hospital<br />
Richard Wenstrup, MD, Chief Medical Officer, Myriad Genetic<br />
Laboratories, Inc.<br />
Bruce Quinn, MD, MBA, Senior Health Policy Specialist, Foley<br />
Hoag, LLP<br />
Charis Eng, MD, PhD, FACP, Chairman and Director,<br />
Cleveland Clinic Genomic Medicine Institute<br />
Diane J. Allingham-Hawkins, PhD, FCCMG, FACMG, Director,<br />
Genetics Test Evaluation Program, Hayes, Inc.<br />
Roger D. Klein, MD, JD, Medical Director, Molecular <strong>Oncology</strong>,<br />
Blood Center of Wisconsin<br />
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Memo<br />
February 25, <strong>2009</strong><br />
Medicare Holds <strong>Advisory</strong> Panel on Evidence Standards<br />
for Genomic Diagnostic Tests<br />
On August 4, 2008, Medicare opened a National Coverage Decision to consider whether to<br />
cover, or non-cover, warfarin pharmacogenetic testing. 1 In December, CMS announced a<br />
February 25 public advisory panel meeting (“Med<strong>CAC</strong>”) to advise CMS on the appropriate<br />
evidentiary standards for coverage of genetic/genomic tests in general. 2 Although this<br />
Med<strong>CAC</strong> panel is not specific focused on issues stemming from warfarin pharmacogenetics,<br />
the date of the in-process warfarin NCD was shifted to 5/4/<strong>2009</strong> to allow additional evidence<br />
review in light of the Med<strong>CAC</strong> findings.<br />
In a morning session, an AHRQ-commissioned technology assessment of three groups of<br />
genetic tests was presented. 3 The tests reviewed were the P450/VKOR genes associated<br />
with warfarin response; the ApoE variants associated with statin response; and the MTHFR<br />
gene for methotrexate metabolism. In general, the AHRQ report emphasized the volume of<br />
the foundational clinical literature (association of genes with an index such as drug level) but<br />
the lack of studies showing changes in clinical outcome based on management using the<br />
tests.<br />
1 https://www.cms.hhs.gov/mcd/viewtrackingsheet.asp?from2=viewtrackingsheet.asp&id=224& The CMS<br />
preface to this coverage decision noted that warfarin had many risks, and was subject to many factors which<br />
affect dosing. CMS remarked that the FDA label was updated in 2006 reflecting “small clinical trials” which<br />
“associate” genetic factors with dose and that the label “neither requires nor explicitly recommends”<br />
pharmacogenomic testing. Therefore, CMS stated that “Clearly, an individual patient's initial response to<br />
warfarin therapy may be influenced by a multitude of factors well beyond genetic variation. We are concerned<br />
by the paucity of evidence available to determine what effect on overall health outcomes, if any, can be<br />
confidently attributed to treatment strategies that include pharmacogenomic testing in the determination of<br />
dosing.”<br />
2 http://www.cms.hhs.gov/mcd/viewmcac.asp?where=index&mid=47<br />
3 http://www.cms.hhs.gov/determinationprocess/downloads/id61TA.pdf Reviews of Selected<br />
Pharmacogenetic Tests for Non-Cancer and Cancer Conditions. AHRQ / Tufts. G Raman et al., 193 pp.
The CDC presented recent work from its EGAPP program (Evaluation of Genomic<br />
Applications in Practice and Prevention). 4 In addition to several publications describing the<br />
EGAPP approach, this group has very recently published several individual reports which<br />
reviewed gene panel tests for breast cancer, pharmacogenetic testing for anti-depressant<br />
dosing, irinotecan dosing, and management of patients with colon cancer by Lynch syndrome<br />
testing. Across this group of reports, the only clearly favorable finding was related to 1 of 3<br />
tests examined in breast cancer; none of the other genetic tests were reviewed favorably.<br />
Six speakers made brief, 5-minute presentations. These highlighted perspectives of Medicare<br />
contractors, the College of American Pathologists, the Center for Medical Technology<br />
Policy, the American Clinical Laboratory Association, Medco Health Solutions, and the<br />
Blood Center of Wisconsin.<br />
The 13-member Med<strong>CAC</strong> panel and two guest panelists then discussed the morning’s<br />
presentations and the question set provided by CMS to structure their afternoon discussion.<br />
CMS requested feedback from the panel as to whether: 5<br />
1. Do evidence characteristics for diagnostic genetic tests differ relative to<br />
diagnostic testing in general?<br />
2. What are the desirable characteristics of evidence for analytic validity of<br />
genetic diagnostic tests? [Analytical validity refers to the direct output of the<br />
test data, such as sensitivity and accuracy.]<br />
3. Are there differences in the evaluation of tests for:<br />
a) Diagnostic assessment (what disease does the patient have?)<br />
b) Prognostic assessment (what is the course of disease, such as mild or<br />
severe?)<br />
c) Pharmacogenetic assessment (what is the patient’s optimal drug or<br />
dose?)<br />
4. How confident are you that rigorous data on each of the following features<br />
is, in itself, enough to infer improved health outcomes?<br />
a) Changes in physician-directed patient management<br />
b) Indirect outcomes, such as changes in hemoglobin<br />
c) Direct patient-centered outcomes, such as mortality or adverse<br />
events?<br />
5. Do ethical issues, particular to genetic testing, alter the methodology of<br />
clinical validity studies?<br />
6. Does the age of the Medicare population present particular challenges to<br />
evidence interpretation?<br />
4 http://www.cdc.gov/Genomics/gTesting.htm<br />
5 As shown here, the questions were paraphrased for brevity and clarity.<br />
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During the extended discussion, CMS expressed its appreciation of the panel’s input as to<br />
how these coverage questions should be approached. Discussion reiterated the morning’s<br />
presentations which found a consistent lack of real-world clinical utility data for that there<br />
are direct, demonstrated health improvements before and after tests are put in use. The<br />
issues for CMS coverage decisions have parallels with FDA decision making, such as when a<br />
drug and its clinical setting merit accelerated approval or fast track status and when so, what<br />
are the applicable data minimums. The panel felt that CMS should aim to hold for high data<br />
standards, against which, there are clinical settings that are so compelling that the value of<br />
the test is self-evident. In particular, the FDA advisory committee in December on K-RAS 6<br />
was cited numerous times by both speakers and panelists as an example of data which was,<br />
on its face, self-evident in clinical impact and value without a prospective randomized trial.<br />
6 http://www.fda.gov/ohrms/dockets/AC/08/agenda/2008-4409a1-final-agenda.pdf<br />
B3601840.3 -3-
SUMMARY OF Med<strong>CAC</strong> DISCUSSION<br />
Note: Comments are presented as summaries of available notes and do not reflect exact<br />
quotations of the speakers.<br />
Dr. Phurrough: Diagnostic versus Screening Tests<br />
Introducing the workshop, Dr. Steve Phurrough, head of the Coverage & Analysis Group,<br />
noted that CMS distinguishes sharply between “diagnostic” and “screening” tests.<br />
Diagnostic tests are designed to elucidate what is going on in patients who currently have<br />
signs and symptoms of disease. Screening tests are used in patients regardless of symptoms<br />
or the lack of symptoms. CMS will consider evidence standards for screening tests in a<br />
separate Med<strong>CAC</strong> on May 6. 7<br />
Agenda and Questions for the Panel<br />
The day’s question set was read and briefly discussed.<br />
Q1. Are the desirable characteristics of evidence for diagnostic genetic testing different from<br />
the desirable characteristics of diagnostic testing in general?<br />
Q2. What are the desirable characteristics of evidence for determining the analytical validity<br />
of genetic diagnostic tests?<br />
Q3. Beyond aspects of analytical validity considered above, are there meaningful differences<br />
in the desirable and/or necessary characteristics of evidence about the effect of genetic<br />
testing on outcomes for the three testing paradigms below? If yes, please consider question 4<br />
separately for each paradigm. If not, please consider question 4 to apply equally to all three.<br />
o Diagnostic assessment<br />
o Prognostic assessment<br />
o Pharmacogenomic assessment<br />
Q4. For each type of outcome below, how confident are you that methodologically rigorous<br />
evidence on the outcome is sufficient to infer whether or not diagnostic genetic testing<br />
improves patient centered health outcomes?<br />
Changes in physician-directed patient management<br />
Indirect or intermediate healthcare outcomes e.g., changes in laboratory test<br />
results such as hemoglobin or time to achieve a target value<br />
Direct patient-centered healthcare outcome e.g., mortality, functional status,<br />
adverse events<br />
Q5. Are there ethical issues particular to genetic testing that may alter the methodologic rigor<br />
of studies of genetic testing?<br />
7 http://www.cms.hhs.gov/mcd/viewmcac.asp?where=index&mid=48<br />
B3601840.3 -4-
.<br />
Q6. Does the age of the Medicare beneficiary population present particular challenges that<br />
may compromise the generation and/or interpretation of evidence regarding genetic testing?<br />
Dr. Jeffrey Roche: Overview of Agenda and Interests of CMS<br />
Genetic tests provide information to help make decisions about many aspects of patient care.<br />
They may characterize an illness; identify the extent, burden, or course of illness, or assess<br />
the best therapy for the patient. There is no question that molecular tests are now in<br />
widespread use, particularly in infectious disease. Many hospitals, for example, do some<br />
form of molecular testing. Many groups are looking at specific genes, such as VKOR or<br />
UGT1A1. Genomic tests can predict risk of death among breast cancer patients. But<br />
questions remain, as highlighted in a set of articles in JAMA, January <strong>2009</strong>, by Attia and<br />
colleagues. 8 We still need to ask, what are the results? How large and precise are the<br />
associations? Are the results of a study valid?<br />
Several recent papers on specific genetic tests by the EGAPP group were highlighted. 9 For<br />
example, for breast cancer genomic tests, the panel found that all needed further study.<br />
EGAPP hopes to provide a framework for general approach which can lead to consistency of<br />
study designs which minimize bias and focus on patient outcomes. See:<br />
http://www.cdc.gov/Genomics/gTesting.htm<br />
AHRQ/Tufts: Technology Assessment<br />
The keystone TA was presented by Dr. Thomas Trikalinos of the Tufts Evidence Based<br />
Practice Center. Dr. Trikalinos highlighted results reported in the recent 193-page<br />
monograph, Raman et al., Reviews of Selected Pharmacogenetic Tests for Non-Cancer and<br />
Cancer Conditions, which CMS commissioned for this meeting. The report was prepared by<br />
Tufts under the auspices of the AHRQ technology assessment program and has a cover date<br />
of 11/12/2008. 10<br />
By way of background, Tufts has undertaken previous horizon scans or test inventories for<br />
CMS. An initial 2006 assessment identified 62 tests for patients with cancers; a 2007<br />
assessment identified 91 non-cancer tests likely to be used in the Medicare population. For<br />
the current TA, Tufts selected four tests with a high likelihood of utilization in the Medicare<br />
beneficiary population which could stand as representative frameworks for the general<br />
8<br />
Attia et al., (<strong>2009</strong>) How to Use an Article about Genetic Association; in three parts. JAMA, January 7, 14, 21,<br />
<strong>2009</strong>.<br />
9 See Appendix D.<br />
10 http://www.cms.hhs.gov/determinationprocess/downloads/id61TA.pdf Contact information:<br />
ttrikalinos@tuftsmedicalcenter.org Summary in Appendix C.<br />
B3601840.3 -5-
evaluation of genetic tests. The tests selective are examples or case studies to be used to<br />
stimulate discussion. The review excluded candidates who were currently under separate<br />
review by AHRQ (such as her2/neu) and tests that had too many publications for review in<br />
the time available. Tests did not have to be in routine clinical practice. The four tests were:<br />
CYP2C9 and VKORC1 variants relevant to warfarin therapy, ApoE variants in relation to<br />
statin therapy, and MTHFR pharmacogenetics relevant to the folate pathway and<br />
methotrexate dosing in cancer patients. The literature review ran up to September 2007.<br />
The study used a template methodology to assess:<br />
• Associations between gene variants and clinical or biochemical outcomes<br />
• Factors that modify the strength of the associations<br />
• Does the testing affect treatment decisions?<br />
• What are benefits and harms of testing?<br />
For example, the template would ask, AMONG patients taking [WARFARIN] are there any<br />
GENETIC ASSOCIATIONS with [VKORC1] and [ADVERSE OUTCOMES] such as<br />
[STROKE] ?<br />
The report also characterized the availability of data in the hierarchy initially proposed by<br />
Fryback and Thornbury in 1991: 11<br />
• Is the technology technically feasible?<br />
• What is the test accuracy?<br />
• What is the diagnostic impact? (e.g. end of a series of tests)<br />
• What is the therapeutic impact? (e.g. choice of a drug)<br />
• What are the clinical outcomes, based on the test?<br />
• What is the societal impact? (e.g. cost effective or cost-ineffective?)<br />
Dr. Trikalinos also discussed the ACCE evaluation matrix developed earlier by the CDC: 12<br />
Panelists noted that the ACCE matrix is somewhat more specific for laboratory diagnostic<br />
tests, including specific features such as assay analytic sensitivity. A graphic presentation of<br />
the framework is shown below.<br />
11 Journal: Medical Decision Making (1991) 11:88-94<br />
12 http://www.cdc.gov/Genomics/gtesting/ACCE.htm ; see also reports at<br />
http://www.cdc.gov/Genomics/gtesting/ACCE/fbr.htm<br />
B3601840.3 -6-
ACCE evaluation framework.<br />
Warfarin genetics. Common variants of the genes CYP2C9 and VKORC1 confer excess<br />
sensitivity to warfarin; a rare mutation of the VKOR gene confers resistance. Doses for<br />
optimized patients may range by a factor of 10, although factors other than these two genes<br />
contribute to that variability. It has been shown that genetics are strongly associated with<br />
the average maintenance dose of warfarin. Associations with major bleeding events (excess<br />
dose adverse effect) or thromboembolism (reduced dose adverse effect) were stated to be<br />
unclear. No study, in the literature period, directly assessed the effect on patient outcomes<br />
after genetic testing was used. There were an abundance of associations, however, with<br />
“surrogates” of clinical outcome, the most common metric being mean dose or sometimes a<br />
metric based on INR (INR 4, etc.) The mean oral dose was generally reduced by<br />
1 to 1.5 mg per day for carriers of variant alleles; the first study in the field dates to 1995.<br />
Several small studies attempting to look at clinical outcomes found no major adverse events<br />
in either arm; otherwise, results were in the expected direction. With the high-sensitivity<br />
genes, patients were about 2X more likely to have a bleeding event. Studies varied in the<br />
total number of alleles assessed.<br />
ApoE and Statins; MTHFR and Methotrexate. These studies were summarized more<br />
briefly. 5 studies look at ApoE with regard to adverse events such as cerebrovascular<br />
disease and stroke and 30 studies looked at ApoE with regard to change in lipids on statins.<br />
11 studies looked at response to chemotherapy relative to MTHFR genetics. Dr. Trikalinos<br />
noted the data was like “pieces of a puzzle” but the value of the test is to affect patient<br />
outcomes and this data was generally lacking. In the Fryback & Thornbury hierarchy, the<br />
higher levels generally were represented by no research studies.<br />
It was noted that the trials require optimal methodology in both study arms, for example, if<br />
standard of care is measuring INR twice or three times a week, all the control patients would<br />
have that, but patients in the general public outside a trial might not.<br />
B3601840.3 -7-
Panel discussion. It was noted that additional studies postdated the literature search interval<br />
of September 2007, now almost 18 months ago. It was noted that the project also excluded<br />
genes with “too much literature” to review expediently. Tufts noted that CMS and AHRQ<br />
vetted the topics chosen, however. Dr. Phurrough noted that the genes studied were<br />
examplars. Some cancer genes, such as P53 in head and neck and GI cancers, were<br />
excluded. Her2/neu was excluded.<br />
Tufts noted that there may be times when you do not need an RCT; when a clinical<br />
conclusion could be self-evident. Decision analysis of available data could be useful.<br />
Whether there must be a new RCT (where only half the patients have test results available,<br />
the rest have non-genetic management) is a case by case call. There was criticism of odds<br />
ratio as a single number that loses aspects of sensitivity, specificity (S&S), positive<br />
predictive value, etc. Tufts noted that it is hard to crosswalk between S&S and clinical<br />
validity, but you could construct S&S for a binary clinical data point, like the risk of stroke at<br />
2 years. Key questions quickly point to gaps in the evidence, for example, in a cohort of<br />
patients with genetics that point to a low warfarin dose, how many will prove clinically to<br />
need a high dose? We don’t know.<br />
There was a further discussion of when and how you know when data from one good,<br />
retrospective trial was sufficient to make a conclusion that a test was useful. For example,<br />
the K-RAS gene test and certain colon cancer drugs has been much discussed in the last<br />
several months. 13 Tufts noted that retrospective studies were less dangerous if it was clear<br />
the study populations (e.g. with and without the gene) were not biased. There was a<br />
discussion that in this case, the effect seemed large; if you had a certain K-RAS variant, the<br />
drug never worked. With many other genes, the effects are small, like an odds ratio of 1.2.<br />
Dr. Phurrough asked, if you have one study, that keeping INR within a certain range was<br />
healthier, and over here, another study, that with genetic results, doctors can keep more<br />
patients within than INR range, then can you leap between the two and infer that genetic<br />
results will be associated with healthier patients?<br />
CDC: THE EGAPP PROGRAM<br />
Presentation by Dr. Ralph Coates, Associate Director, CDC. 14<br />
EGAPP offers a unique method to assess the evidence for determining requirements for<br />
specific genomic tests. The results are specific publications which summarize the evidence<br />
for the test in a standard way; they are in essence technology assessments. EGAPP uses:<br />
• EGAPP uses standard EBM guidelines<br />
13 E.g. see http://www.medpagetoday.com/MeetingCoverage/ASCOGI/12446<br />
14 rcoates@cdc.gov<br />
B3601840.3 -8-
• Published and transparent methods<br />
• Systematic evidence reviews<br />
• Attempt to find gray literature<br />
• Technical experts and stakeholders as consultants not decision makers<br />
• Peer review of reviews<br />
• Final evaluation and recommendations from independent panel, primarily from<br />
academics, minimizing conflicts of interest<br />
The general methodology was published in the January <strong>2009</strong> issue of Genetics in Medicine<br />
(11:3-14, Teutsch et al.) 15 Now specific publications are following as well. The<br />
methodology requires careful definition of the disorder in question, the test in question, and<br />
the setting (e.g. academic or community). There is an assessment of the analytical and<br />
clinical validity, the clinical utility, and the overall net benefits and harms that could result<br />
from test usage.<br />
For example, for use of P450 genotype and antidepressant dosing, EGAPP found that<br />
sensitivity and specificity were high (if you have gene X1 you really have gene X1), but that<br />
clinical validity studies were mixed and there were no studies of clinical utility.<br />
Other tests already published by the EGAPP group include reviews on breast cancer gene<br />
panels, UGT1A1 testing for irinotecan toxicity, and testing for Lynch syndrome (familial<br />
colon cancer; carriers may get interventions like more frequent screening.) Rigorous<br />
questions quickly exceed available evidence: for example, is UGT1A1 testing utilized in the<br />
clinic to avoid drug use or to reduce dose? If you reduce dose, do you change 10-year cancer<br />
mortality due to higher recurrences? We don’t know.<br />
There was a discussion that competing diagnostic products for the same gene may make the<br />
literature very confusing (e.g. one test looks at 3 alleles, another at 10 alleles, and systematic<br />
reviews over time will either get very granular or blur the difference.) There was a remark,<br />
if trials are by the test manufacturer, are they free of bias? There was a discussion of whether<br />
inconsistent data should lead to “no recommendation” or a recommendation against use.<br />
There was a discussion that odds ratios and most other data do not address the incremental<br />
value of a new test very well, which is a difficult but important problem.<br />
BRIEF PUBLIC PRESENTATIONS<br />
Mitchell Burken, MD, a Medicare contractor medical director, gave a presentation cowritten<br />
by Dr. Elaine Jeter, also a contractor medical director. The presentation urged the<br />
panel to give medical directors detailed guidance on the principles of evidence construction<br />
and guidance as to the type and quality of data which are needed to meet Medicare’s<br />
coverage criteria. Better guidelines for general evaluation of tests will lead to a more<br />
15 See Appendix D.<br />
B3601840.3 -9-
ational and fair coverage processs. For example, doubts exist about when retrospective<br />
trials are adequate. Dr. Burken referred to the transcript and opinions of the December<br />
2008 FDA ODAC advisory meeting on K-RAS tumor genomics. 16<br />
Mary Fowkes, MD, for the College of American Pathologists, discussed the importance of<br />
the clinical pathologist in performing genetic testing of high quality, interpreting results, and<br />
helping guide choice of tests. The clinical pathologist has the domain expertise and content<br />
knowledge and must be a key player to ensure quality use of genetic tests. In some cases,<br />
the level of evidence may not be as high, for example, in association studies for<br />
chemotherapy of oligodendrogliomas, where the patients are fairly rare and large outcome<br />
studies will be far in the future or never.<br />
Russell Teagarden, Vice President, Medco Health Solutions, described Medco’s programs<br />
in clinical genetics and the high importance of administrative claims analysis to study<br />
outcomes data. He also described intervention programs, where a warfarin new prescription<br />
could stimulate immediate outreach to the patient and physician that pharmacogenetic testing<br />
can be provided. He noted that claims data has found important clinical outcomes, like poor<br />
results for clopidogrel in patients taking concurrent proton pump inhibitors. He advocated<br />
use of warfarin genetic testing in the clinic, because after years of problems with warfarin<br />
adverse events, there is not much improvement with existing tools, and a new, relatively<br />
inexpensive tool could have substantial benefits.<br />
Bruce Quinn MD, Foley Hoag LLP, discussed the perspective of a former CMS local<br />
medical director. Medicare’s published guidance to carriers is telegraphic (services should<br />
be “reasonable and necessary,” “appropriate in duration”, “meet the patients need”, etc.)<br />
<strong>Carrier</strong>s have very few policies on clinical genetics at this point, primarily a local policy for<br />
BRCA testing relevant to Myriad Genetics, a Utah company. Quinn advocated a<br />
framework-based approach where the company and insurer agree on a “value proposition”<br />
that justifies test coverage, and then explicitly discuss whether the data supports that<br />
proposition, in much the way the FDA closely examines data to support the exact wording of<br />
a label. 17<br />
Penny Mohr, Center for Medical Technology Policy (www. Cmtpnet.org) described the<br />
center’s efforts to provide systematic, highly vetted guidance to industry and insurers as to<br />
the appropriate studies and standards for evidence-based acceptance of novel molecular<br />
diagnostics. The Center will soon publish guidance for breast cancer gene panel tests, for<br />
example. Further examples will be forthcoming. As Janet Woodcock of the FDA has noted,<br />
not every conclusion requires a new prospective RCT. There needs to be robust evidence<br />
that health outcomes are improved, but the situation helps determine what evidence is<br />
needed.<br />
16 www.fda.gov/ohrms/dockets/AC/08/agenda/2008-4409a1-final-agenda.pdf<br />
17 Presentation available; bquinn@foleyhoag.com<br />
B3601840.3 -10-
David Mongillo, Vice President, Policy and Medical Affairs, American Clinical<br />
Laboratory Association, described genetic testing as a vital clinical tool. There are often<br />
impediments to optimal data. For example, recurrence studies (if prospective) would take a<br />
very long time. Some rare diseases have limited study participants. We need to avoid delays<br />
in diagnostic information that can directly help patients. He urged CMS not to attempt a<br />
single NCD for all genetic testing. There must be a notion of balance.<br />
Roger Klein, MD JD, Blood Center of Wisconsin. Molecular labs face historical<br />
challenges; often limited in size and scope and limited budgets. Novel information now, like<br />
genome wide association studies, present new challenges. Recognizing that both the<br />
outgoing and new administration will have a prominent role for personalized medicine, the<br />
evidence standards set by CMS will play a major role. Molecular diagnostics tend to excel<br />
analytically. But clear demonstrations of clinical utility may be missing even when there is<br />
widespread belief in the medical value. A lot of change is going on, such as when K-RAS<br />
variants change the pathological evaluation of tumors. Although surrogate markers can be<br />
misleading, direct outcomes data is often not available, so that clinical judgment and expert<br />
opinion remain necessary. There are some ethical issues, such as the impact of a carrier<br />
gene on family members. The Association of Molecular Pathologists looks forward to<br />
collaborating on these issues with CMS.<br />
Discussion of morning presentations.<br />
Are there different classes of SSRI’s that affect the utility of P450 genetics? There may be,<br />
but data is not strong.<br />
Dr. Gutman, previous head of the Office of In Vitro Devices (OIVD) of the FDA,<br />
commented that EGAPP is a “Cadillac” or a gold standard, but takes a lot of time to do, and<br />
sometimes other approaches are clinically important.<br />
Dr. Folkes made a comment that standards change, for example, a group now recommends<br />
the Nottingham grading system for breast cancer, which was not widely used here in the<br />
1990s when the NSABP 18 studies that underly the Oncotype DX test were designed. She<br />
added that understanding the incremental value of a test can be challenging. Dr. McNeill<br />
noted that yes, standards were always changing, and we use the data we have, not the data we<br />
may have 10 years in the future. Dr. Paul Radensky noted that there have been a number of<br />
futher Oncotype DX studies, including data on chemotherapy benefit and the ongoing<br />
TailorRx study. TailorRx accepts the Oncotype DX test as a driver of clinical decision<br />
making and is using mid-range patients as clinically defining a clinically valid benchmark<br />
group (having a modest but not minimal risk of recurrence) in which to study the value of<br />
adjuvant chemotherapy.<br />
18 www.nsabp.pitt.edu/<br />
B3601840.3 -11-
The panel addressed a number of additional questions to Dr. Coates regarding EGAPP. For<br />
example, when would a recommendation be a strong negative – this would be when the<br />
balance of risk and benefit of the test was skewed to frank harm when the test is used.<br />
There was a question as to whether “lab developed tests” had enough data on the<br />
performance of the assay. It’s important to know, too, what percent of assays provide no<br />
information (for technical reasons). The credentialing (e.g. CLIA) process is a “black box”<br />
to many panelists.<br />
There was a discussion of whether doctors are able to use test results appropriately. Dr.<br />
Jacques noted that CMS regulations require that a payable test is used by the physician in<br />
patient management; there “has” to be an expectation of clinical utility.<br />
There was a discussion of how you translate problems in EBM to clinical coverage. For<br />
example, there have been analyses that “first publications” are often stronger in results than<br />
later publications; later on the populations and tests don’t perform as well. 19 So if that is the<br />
case, can you give coverage decisions based on one publication? Dr. Quinn commented that<br />
is a known concern, and a cause for conservatism, but you still have to go case by case.<br />
A panelist raised concerns that with “lab developed tests” there is less review of data, less<br />
data in the public domain, there is more if the test has to go through a PMA at the FDA.<br />
There was a discussion that coverage with evidence development was good, because<br />
individual hospital labs don’t have the framework and funding to create and analyze<br />
interstate registries, but Medicare could do this; and there is limited NIH funding for applied<br />
clinical work equivalent to registry or outcomes data. There was a discussion that a few<br />
high profile tests like BRCA get a lot of attention, but there are so many other, relatively less<br />
funded or less studied tests. There was a discussion that we need support to study tumors<br />
like oligodendrogliomas, and that conventional grading is imprecise. Consider the clinical<br />
context; can a burr-hole brain biopsy plus molecular diagnostics replace a large, costly<br />
craniotomy with very high morbidity and risk? That is important to consider.<br />
Dr. Teagarden of Medco discussed their program to facilitate uptake of warfarin genetics<br />
when a warfarin Rx scrip hits the system. The participation is quite high. The population<br />
should be pretty unbiased, it is a general insurer population. Six million people are in this<br />
Medco program already.<br />
There was a discussion of the need for broad biorepositories; if we are going to doing<br />
retrospective studies for this data, then we need the biosamples.<br />
AFTERNOON DISCUSSION<br />
The afternoon discussion addressed the key question areas highlighted by CMS.<br />
19 Publications of John P.A. Ionnadisis; one open source publication being: “Why most published research<br />
findings are false”, PLoS 2005 2:e124, at http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1182327<br />
B3601840.3 -12-
Q1. Are the desirable characteristics of evidence for diagnostic genetic<br />
testing different from the desirable characteristics of diagnostic testing<br />
in general?<br />
Q2. What are the desirable characteristics of evidence for determining<br />
the analytical validity of genetic diagnostic tests?<br />
In the Fryback and Thornbury hierarchy, all six levels of evidence should be “filled in”, from<br />
analytical accuracy to societal impact (such as pharmacoeconomics). The day’s subject<br />
matter was defined as both genetic (germline) testing and disease-specific molecular tests<br />
such as tumor gene expressions panels. In general, the panel did not feel that molecular<br />
(genetic) testing raised different issues than other diagnostic tests, however, there are a few<br />
additional considerations regarding germline testing. These include the impact of carrier<br />
status on family members. There was also a discussion that among germline tumors, there<br />
were differences between high-penetrance Mendelian genes (such as Huntington’s disease)<br />
and risk factor genes, such as found in warfarin pharmacogenetics.<br />
Dr. Phurrough initiated a discussion as to when the ACCE criteria have advantages over<br />
Fryback & Thornbury. The ACCE “wheel” (shown above) has some advantages in that in<br />
encompasses the stages listed by Fryback while also including specific lab test specific<br />
questions such as analyte quality analysis, and effects (if any) on patients and families.<br />
These are enumerated in a more specific way in the ACCE framework, which includes a<br />
dossier of 44 questions to be addressed. On the other hand, for newer tests there would be<br />
little published data on some of those enumerated questions. The ACCE framework walks a<br />
reviewer through a broad landscape of issues and questions. Some panelists viewed the two<br />
frameworks as “essentially the same” but driven to a much more granular level in the ACCE<br />
paradigm. 20 There was a brief discussion of whether Medicare should look specifically at<br />
cost-effectiveness data. Dr. Phurrough noted the panel should take a free hand in making its<br />
recommendations, and then, CAG would filter all such recommendations through appropriate<br />
Medicare laws and regulations.<br />
Dr Gutman noted that even the ACCE criteria missed some issues you would think of in the<br />
FDA setting and which are probably just as relevant in a payor setting. For Dr. Gutman,<br />
20 Quinn notes for this meeting summary, there are cases where the clinical context “skips” some of the steps in<br />
the Fryback or ACCE frameworks. For example, high-penetrance genes have extremely good analytical<br />
validity, as noted by Dr Klein, that the issue skips forward to clinical validity or clinical outcome. While data<br />
on clinical validity usually precede outcome data, this is not always the case. For example, if you carry a<br />
cerebral amyloidosis gene, the main clinical parameter is “stroke” which is directly a health outcome, and there<br />
is no intermediate parameter for “validity” such as correlation to a serum drug level. You can also have clinical<br />
outcome data (e.g. you will get Huntington’s disease) with limited clinical utility (what is done different.)<br />
There are settings where true positive, false positive have no meaning, e.g. if a test shows a man has 20% risk of<br />
prostate cancer recurrence, whether than man recurs or not, the test is not a “false negative” etc.<br />
B3601840.3 -13-
• “Accuracy” or “trueness”, 21 including whether the test is traceable to an explicit<br />
laboratory standard. In some cases, absolute traceability is difficult and you “make<br />
do.”<br />
• Robustness and precision of the test. Also, consideration of stresses to the test,<br />
including performance at multiple locations or with samples stored at different times<br />
and temperatures. 22<br />
• Specificity of the test – and expect it to deteriorate with broader clinical use. E.g.<br />
what drugs interfere with the accuracy of the test and alter false positives, false<br />
negatives.<br />
• Definition of the level of quantitation or level of measurement (e.g. 100 cells, 0.1 mg,<br />
etc)<br />
There was a discussion of whether clinical analytic accuracy could be assumed, “can we be<br />
comfortable with labs in general” on this issue, and a discussion of CLIA versus FDA<br />
requirements. Panelists were aware of the difference but thought CLIA relatively a “black<br />
box” for those in the evidence based medicine (literature evaluation) field. Dr. Neil<br />
Holtzman (Johns Hopkins, emeritus) favored FDA review. Dr. Steve Gutman emphasized<br />
that the analytical standards under FDA and CLIA review are similar. But he emphasized<br />
that FDA provides a “soup to nuts” review of data and claims, not under “cover of night,” an<br />
apparent reference to CLIA examinations of the lab. He described CLIA review as covering<br />
the lab safety manual, documentation of education, review of the menu of tests, specimen<br />
requirements, temperature charts, analytical performance – all similar, regarding test<br />
performance per se, to FDA.<br />
There was a comment that EGAPP has put in years on setting up frameworks and standards,<br />
and it is unlikely the panel would improve on them, and should endorse them.<br />
There was a comment, a well designed study should consider Hardy Weinberg equilibrium.<br />
And the studies in the JAMA series on genetic tests in January <strong>2009</strong> should be considered.<br />
Q3. Beyond aspects of analytical validity considered above, are<br />
there meaningful differences in the desirable and/or necessary<br />
characteristics of evidence about the effect of genetic testing on<br />
outcomes for the three testing paradigms below? If yes, please<br />
21 Trueness was presented as a term of art in laboratory testing with regard to accuracy and clinical lab<br />
standards. Eg: “Trueness verification and traceability assessment of results from commercial systems for<br />
measurement of six enzyme activities in serum: an international study in the EC4 framework of the Calibration<br />
2000 project.” Jansen R et al. Clin Chim Acta. 2006 368:160-7<br />
22 Reference made to work of Dr Carolyn Compton at the NCI; Director, Office of Biorepositories and<br />
Biospecimen Research, http://biospecimens.cancer.gov/default.asp .<br />
B3601840.3 -14-
consider question 4 separately for each paradigm. If not, please<br />
consider question 4 to apply equally to all three.<br />
o Diagnostic assessment<br />
o Prognostic assessment<br />
o Pharmacogenomic assessment 23<br />
There was criticism that the data cannot be excessively abstracted and simplified. As in the<br />
morning, there were discussions that breaking down data to just odds ratios misses too much.<br />
There are questions in how to pick optimal cutoffs, that sensitivity and specificity are<br />
presented as point estimates but actually there is an underlying Receiver Operating Curve<br />
(ROC). Also, “classification metrics” are important to review (such as classification for true<br />
positive, false positive; or classification in four groups of low to high risk, etc).<br />
Dr. Burken discussed the terms of art prognostic versus prediction, which were unfamiliar to<br />
some panelists.<br />
• Prognosis = disease or course of disease (you have Huntington’s; you have high risk<br />
breast cancer);<br />
• Prediction = response to a drug or choice and dose of a drug.<br />
There was also a discussion that it is very difficult to quantify the “incremental value” of a<br />
test. For example, do you classify 10 extra patients in each 100 more accurately than the<br />
next available test? And if so, what is the net benefit (or balance of benefit and harm?) Are<br />
the clinical consequences of the added accuracy useful? You can’t weigh those factors<br />
based on a summary statistic like an odds ratio.<br />
Dr Phurrough noted that for some areas or tests, Medicare has no proscribed standards, so<br />
creating standards in this panel may seem like a “higher standard” but don’t worry about that.<br />
The lack of standards is not a standard to weigh against.<br />
The discussion returned to the topic of one study versus several studies; and whether there<br />
should be different standards for common versus rare diseases (yes, a higher standard for<br />
common diseases.) But all decisions have some level of uncertainty. CMS should closely<br />
consider incremental value, particularly for prognostic tests, and classification metrics.<br />
There was a discussion of whether “case control” studies were an appropriate standard for<br />
pharmacogenetic studies. “When you link a drug to a diagnostic test, you immediately raise<br />
the stakes because the drug becomes a slave to the test, and should you choose the wrong<br />
one, you’ve immediately worsened patient care – you’ve complicated and telescoped the<br />
23 CMS provided examples in its agenda guidance. A diagnostic test = Huntington’s disease gene. A<br />
prognostic test = recurrence of breast cancer via a gene panel of tumor expression. A pharmacogenetic test =<br />
K-RAS for colon cancer.<br />
B3601840.3 -15-
design and application of the diagnostic test.” Also, the big debate here is whether you can<br />
study only biomarker-selected patients. Then you know nothing about the results in negative<br />
patients. In summary you have to “climb up the evidence hierarchy” in pharmacogenetics<br />
because of the direct link to therapy.<br />
B3601840.3 -16-
Q4. For each type of outcome below, how confident are you that<br />
methodologically rigorous evidence on the outcome is sufficient to infer<br />
whether or not diagnostic genetic testing improves patient centered health<br />
outcomes?<br />
(a) Changes in physician-directed patient management<br />
(b) Indirect or intermediate healthcare outcomes e.g.,<br />
changes in laboratory test results such as hemoglobin or<br />
time to achieve a target value<br />
(c) Direct patient-centered healthcare outcome e.g.,<br />
mortality, functional status, adverse events<br />
Dr. Phurrough emphasized the format here is a little tricky. Read the questions as such:<br />
• IF you had SOLID data for each of the three bullet points, WOULD that let you<br />
assume the clinical utility of the test (e.g. a coverage decision)? And if so, for each<br />
bullet point, does you answer vary by the application of the test (e.g. diagnostic<br />
versus prognostic versus pharmacogenetic.)<br />
There was a comment that “we mismanage a lot of things” and it’s hard to assess what will<br />
happen once a test is introduced into general practice.<br />
Although we lay out four levels of evidence – analytical accuracy, clinical validity, clinical<br />
outcomes, clinical utility – the whole picture of the evidence is variable and what decision<br />
makers have to work with is evidence that is accurate or on point in varying degrees. How<br />
you piece it all together is the crux of decision making. Sometimes it’s easier – e.g. K-RAS<br />
seems to be convincing to most people – but other times it’s very difficult, especially when<br />
questions like differential utility (of the new test) are put on the table. And there can be a<br />
few paradoxes; can you improvement “QALYs” on average but at the expense of absolute<br />
life expectancy (e.g. 3 high quality QALY versus 4 lower quality years). Then there are the<br />
harms like those of unnecessary chemotherapy.<br />
Dr. Gutman noted that on the three bullet points for this question, A is very poor (a 1) and C<br />
is great (a 5) but usually the decision hinges on “B” and that can be anywhere from “-1” to<br />
“+6”. You have to look at the “power of the evidence” without necessarily going all the<br />
way to a randomized prospective clinical trial.<br />
There were comments that the three rows and three columns of the model in question can<br />
overlap. Precision by itself is not of stand-alone value; you can have excess precision like<br />
measuring O2 saturation to a tenth of a percent.<br />
There was a discussion of the differences in quality of management between academic<br />
centers at peripheral care centers. In the example of warfarin outcomes, the setting for a<br />
B3601840.3 -17-
trial would really be complex, frail elderly patients, unpredictable nutrition status, elevated<br />
risk of falls, it’s not just a function of the genetics. Dr. McNeill asked if, in fact, it is just not<br />
possible to effectively answer these questions in the abstract. For example, a surrogate<br />
marker might be useful, but it must be a well-validated, convincing surrogate.<br />
When we refer to “changes in practices” (in the current question) is it possible changes in<br />
practices, or actual changes in real practice in real clinics?<br />
There was a concensus that clinical outcomes data were always better than “change in<br />
management” data, but that it’s hard to answer for specific cases in the abstract. Everyone<br />
should rate management changes lower than surrogate outcomes lower than clinical<br />
outcomes.<br />
On a scale from 1 to 5, change-in-management metrics were often rated a “1” with a few 2’s<br />
and a 4; average 2.1. There are exceptions – for example, ending a diagnostic dilemma is of<br />
value in itself, but that implies no more procedures, which is a clinical outcome for the<br />
patient.<br />
Intermediate metrics (like, change in mean warfarin dose) averaged a 3.3 rating, and direct<br />
events (like mortality) rated 4.8.<br />
Q5. Are there ethical issues particular to genetic testing that may alter the<br />
methodologic rigor of studies of genetic testing?<br />
Q6. Does the age of the Medicare beneficiary population present particular<br />
challenges that may compromise the generation and/or interpretation of<br />
evidence regarding genetic testing?<br />
The public is more and more interesting in high quality data (comparative effectiveness) but<br />
also data privacy, and both came out in the January <strong>2009</strong> economic stimulus bill.<br />
Ethics is about human subjects protection but there is also value of scientific data to society.<br />
With genetic tests, we may have to have extra rigors of controls and protections, but we need<br />
to deal with that, not do lesser or fewer studies. There was a comment that genetic data<br />
should be as well protected anyway as other clinical data, once health data is “protected” it is<br />
secure and protected, and one level of safety should be for all types of data.<br />
There was a comment that a panelist who knew of people who had their BRCA test done in<br />
Europe to avoid records in the US which could have adverse effects on insurance. There<br />
was a comment that some genetics tests raise large issues (BRCA) others few ethical issues<br />
(warfarin.)<br />
We want to ensure that just because of extra issues with ethics or privacy of data, we don’t<br />
end up with trials that aren’t “done right.” We want to send a signal that there shouldn’t be<br />
an excuse for not producing evidence we need. Don’t say “hey, my evidence isn’t good, but<br />
the ethical issues were tough, so give me a break.”<br />
B3601840.3 -18-
There was the discussion of increasing effort to have many archived and consented<br />
biorepositories to deal with these issues. One of the panelists noted he is the chairman of the<br />
IRB at a major university.<br />
Regarding the age of the Medicare beneficiary, there was a consensus that many genetic<br />
disorders are less likely to appear or be tested or be relevant in this population. There was a<br />
discussion that “biological age” may be very different for two, for example, eight year olds.<br />
Dr. Phurrough mentioned, is there any concern there is something biologically different<br />
about aged DNA per se? Dr. Holtzman noted that most disorders, even Alzheimer’s, when<br />
there are highly penetrant genes they tend to coincide with early or midlife disease<br />
expression anyway. Then again, there can be new surprises, such as an association between<br />
a Fragile X carrier state and tremor in the elderly.<br />
However, pharmacogenetic testing and prognostic testing e.g. for prostate cancer, is just as<br />
important in the older population. There could be an argument that testing like CYP2C9<br />
testing could actually be more contributory to improved outcomes in older people, although<br />
it’s only an intuition at this point. Maybe it’s more important, or maybe it’s overridden by<br />
increasing variance with age in hepatic and renal function. It’s hard to know.<br />
The panel wrapped up. There was a comment that after seven years as the head of the CMS<br />
coverage and analysis group, Dr. Phurrough would transition to a position at the AHRQ in<br />
March.<br />
Voting data is summarized as:<br />
http://www.cms.hhs.gov/faca/downloads/id47a.pdf<br />
B3601840.3 -19-
APPENDIX A<br />
Tracking Sheet for Warfarin Genetics Coverage Review at CMS<br />
B3601840.3 -20-
http://www.cms.hhs.gov/mcd/viewtrackingsheet.asp?id=224<br />
NCA Tracking Sheet for Pharmacogenomic Testing for Warfarin Response (CAG-00400N)<br />
Issue<br />
Pharmacogenomics is the study of how an individual's genetic makeup, or genotype, affects<br />
the body's response to drugs. It is an examination of the inherited components and variations<br />
in genes that dictate drug or medication response. Pharmacogenomics explores the ways<br />
these variations can be used to try to predict whether a patient will have a good response to a<br />
drug, a bad response to a drug, or no response at all.<br />
There has been considerable public interest in the use of pharmacogenomic testing to predict<br />
the patient's response to warfarin, an orally administered anticoagulant drug that is marketed<br />
most commonly as Coumadin. Anticoagulant drugs are sometimes referred to as "blood<br />
thinners" by the lay public. Warfarin affects the vitamin K-dependent clotting factors II, VII,<br />
IX and X. The anticoagulant effect of warfarin is assessed with the prothrombin time (PT)<br />
and the International Normalized Ratio (INR). In this method, the ratio of the patient's PT to<br />
the mean PT for a group of normal individuals is calculated.<br />
The most common and generally agreed upon indications for warfarin therapy are in patients<br />
with mechanical heart valves and, to a lesser extent, those patients with atrial fibrillation who<br />
are post-cerebrovascular accident or transient ischemic attack. Other indications include<br />
atrial fibrillation with thromboembolic risk factors including age over 65 years, diabetes,<br />
hypertension, as well as congestive heart failure.<br />
The duration of anticoagulation therapy varies with the underlying indication and with the<br />
patient's response to therapy. Some conditions require anticoagulation for only a period of a<br />
few months, while other conditions require long-term and possibly life-long anticoagulation.<br />
Since October 4, 2006, the FDA approved labeling for Coumadin® has included the<br />
following boxed warning.<br />
WARNING: BLEEDING RISK<br />
Warfarin sodium can cause major or fatal bleeding. Bleeding is more likely to occur<br />
during the starting period and with a higher dose (resulting in a higher INR). Risk<br />
factors for bleeding include high intensity of anticoagulation (INR >4.0), age >65,<br />
highly variable INRs, history of gastrointestinal bleeding, hypertension,<br />
cerebrovascular disease, serious heart disease, anemia, malignancy, trauma, renal<br />
insufficiency, concomitant drugs (see PRECAUTIONS) and long duration of<br />
warfarin therapy. Regular monitoring of INR should be performed on all treated<br />
patients. Those at high risk of bleeding may benefit from more frequent INR<br />
monitoring, careful dose adjustment to desired INR, and a shorter duration of therapy.<br />
Patients should be instructed about prevention measures to minimize risk of bleeding<br />
and to report immediately to physicians signs and symptoms of bleeding (see<br />
PRECAUTIONS: Information for Patients).<br />
B3601840.3 -21-
The FDA approved label notes many factors that can influence the anticoagulant effect of<br />
warfarin, including dietary intake of green leafy vegetables and cranberry juice, alcohol<br />
consumption, age, Asian ethnicity and liver function. Many other drugs affect warfarin<br />
metabolism. A very small sample includes analgesics, antibiotics, anticonvulsants,<br />
antineoplastics, beta adrenergic blockers, antifungals, hormone preparations and vitamins.<br />
The current label lists approximately 130 specific drugs reported to interact with coumadin.<br />
Warfarin is eliminated by metabolic conversion to inactive metabolites by cytochrome P450<br />
enzymes in the liver. It is claimed that genetic variability in the CYP2C9 and/or VKORC1<br />
genes, in combination with many other factors, may partially predict a patient's response to<br />
warfarin.<br />
The label also notes several small clinical trials that associate genomic factors with warfarin<br />
dose. The trial investigators suggest that pharmacogenomic testing may contribute to the<br />
identification of patients who may be more likely to over- or under-respond to warfarin. The<br />
dosing information in the label does not require or explicitly recommend pharmacogenomic<br />
testing prior to the initiation of warfarin therapy.<br />
Clearly, an individual patient's initial response to warfarin therapy may be influenced by a<br />
multitude of factors well beyond genetic variation. We are concerned by the paucity of<br />
evidence available to determine what effect on overall health outcomes, if any, can be<br />
confidently attributed to treatment strategies that include pharmacogenomic testing in the<br />
determination of dosing.<br />
CMS is internally opening this National Coverage Analysis (NCA) to complete a thorough<br />
review of the evidence to determine if the use of pharmacogenomic testing for warfarin is<br />
reasonable and necessary under the Medicare program.<br />
Benefit Category<br />
Diagnostic Tests (other)<br />
Requestor Name(s)<br />
Internally Generated<br />
Formal Request Accepted and Review Initiated<br />
8/4/2008<br />
Expected NCA Completion Date<br />
8/3/<strong>2009</strong><br />
Proposed Decision Memo Due Date<br />
5/4/<strong>2009</strong><br />
Lead Analyst(s)<br />
Maria Ciccanti<br />
maria.ciccanti@cms.hhs.gov<br />
B3601840.3 -22-
1-410-786-3107<br />
Kimberly Long<br />
Kimberly.long@cms.hhs.gov<br />
1-410-786-5702<br />
Lead Medical Officer(s)<br />
Jeffrey Roche, MD<br />
B3601840.3 -23-
APPENDIX B<br />
Website for Med<strong>CAC</strong> Meeting<br />
B3601840.3 -24-
http://www.cms.hhs.gov/mcd/viewmcac.asp?id=224<br />
Med<strong>CAC</strong> Meetings for Pharmacogenomic Testing for Warfarin Response (CAG-00400N)<br />
2/25/<strong>2009</strong> - Genetic (Genomic) Testing<br />
Issue<br />
Genetic tests have been developed for a growing number of diseases. Many tests are<br />
currently marketed for clinical uses, but the evidence base used to support these uses is not<br />
yet well developed.<br />
CMS wishes to obtain the MED<strong>CAC</strong>’s recommendation regarding the desirable<br />
characteristics of evidence that could be used by the Medicare program to determine<br />
whether genetic testing as a laboratory diagnostic service improves health outcomes. The<br />
Secretary’s <strong>Advisory</strong> <strong>Committee</strong> on Genetics, Health and Society (SACGHS) has defined<br />
genetic testing as “…any test performed using molecular biology methods to test DNA or<br />
RNA, including germline, heritable, and acquired somatic variations.”<br />
Actions Taken<br />
December 11, 2008 Announced meeting<br />
December 22, 2008 Posted Federal Register Notice.<br />
January 30, <strong>2009</strong> Posted questions and question background.<br />
February 23, <strong>2009</strong> Posted agenda and roster.<br />
Federal Register Notice<br />
Agenda<br />
Agenda<br />
Medicare Evidence Development & Coverage <strong>Advisory</strong> <strong>Committee</strong><br />
February 25, <strong>2009</strong><br />
7:30 AM – 4:30 PM<br />
CMS Auditorium<br />
Barbara McNeil, MD PhD, Chair<br />
Steve Pearson, MD, MSC, Vice-Chair<br />
Steve E. Phurrough, MD, MPA, Coverage and Analysis Group<br />
Maria Ellis, Executive Secretary<br />
7:30 – 8:00 AM Registration<br />
8:00 – 8:20 AM Opening Remarks—M. Ellis/ S. Phurrough, MD, MPA/<br />
Barbara McNeil, MD, PhD<br />
8:20 - 8:35 AM CMS Presentation & Voting Questions – Maria Ciccanti/Jeffrey<br />
Roche, MD, MPH<br />
8:35 – 9:20 AM TA Presentation: Thomas A. Trikalinos, MD, PhD, Assistant Director,<br />
Tufts-New England Medical Center, EPC, Assistant Professor of Medicine, Tufts<br />
B3601840.3 -25-
University<br />
9:20 – 10:00 AM Ralph J. Coates, PhD, Associate Director for Science, Office of Public<br />
Health Genomics, NCCDPHP, Centers for Disease Control and Prevention<br />
10:00 – 10:15 AM BREAK<br />
10:15 – 11:00 AM Scheduled Public Comments<br />
(Refer to Speaker List)<br />
Public attendees, who have contacted the executive secretary prior to the meeting, will<br />
address the panel and present information relevant to the agenda. Speakers are asked to state<br />
whether or not they have any financial involvement with manufacturers of any products<br />
being discussed or with their competitors and who funded their travel to this meeting.<br />
11:00 – 11:30 AM Open Public Comments<br />
Public Attendees who wish to address the panel will be given that opportunity<br />
11:35 – 12:35 PM LUNCH (on your own)<br />
12:35 – 1:35 PM Questions to Presenters<br />
1:35 – 2:45 PM Initial Open Panel Discussion: Dr. McNeil<br />
2:45 – 3:30 PM Formal Remarks and Voting Questions<br />
The Chairperson will ask each panel member to state his or her position on the voting<br />
questions<br />
3:30 – 4:25 PM Final Open Panel Discussion: Dr. McNeil<br />
4:25 – 4:30 PM Closing Remarks/Adjournment: Dr. Phurrough & Dr. McNeil<br />
4:30 PM ADJOURN<br />
Panel Voting Questions<br />
Questions for MED<strong>CAC</strong>: Desirable Characteristics of Evidence<br />
For Diagnostic Genetic (including Genomic) Tests<br />
CMS wishes to obtain the MED<strong>CAC</strong>’s recommendation regarding the desirable<br />
characteristics of evidence that could be used by the Medicare program to determine whether<br />
genetic (including genomic) testing as a laboratory diagnostic service improves health<br />
outcomes in Medicare beneficiaries. SACGHS has defined genetic testing as “…any test<br />
performed using molecular biology methods to test DNA or RNA, including germline,<br />
heritable, and acquired somatic variations.”<br />
Medicare may cover a diagnostic test that is used by the beneficiary’s treating physician to<br />
guide the physician’s diagnosis and treatment of the beneficiary’s personal condition. This<br />
contrasts with a screening test used to identify an occult condition or state in an<br />
asymptomatic person. The questions below should be addressed in the former context, i.e.<br />
diagnostic testing.<br />
Q1. Are the desirable characteristics of evidence for diagnostic genetic testing<br />
different from the desirable characteristics of diagnostic testing in general?<br />
Discussion<br />
Q2. What are the desirable characteristics of evidence for determining the analytical<br />
B3601840.3 -26-
validity of genetic diagnostic tests?<br />
Discussion<br />
Q3. Beyond aspects of analytical validity considered above, are there meaningful<br />
differences in the desirable and/or necessary characteristics of evidence about the<br />
effect of genetic testing on outcomes for the three testing paradigms below? If yes,<br />
please consider question 4 separately for each paradigm. If not, please consider<br />
question 4 to apply equally to all three.<br />
o Diagnostic assessment<br />
o Prognostic assessment<br />
o Pharmacogenomic assessment<br />
Q4. For each type of outcome below, how confident are you that methodologically<br />
rigorous evidence on the outcome is sufficient to infer whether or not diagnostic<br />
genetic testing improves patient centered health outcomes?<br />
For each lettered outcome type, assign a number from 1 to 5 to indicate your vote. A<br />
lower number indicates lower confidence; a higher number indicates higher<br />
confidence.<br />
d. Changes in physician-directed patient management<br />
e. Indirect or intermediate healthcare outcomes e.g., changes in laboratory test<br />
results such as hemoglobin or time to achieve a target value<br />
f. Direct patient-centered healthcare outcome e.g., mortality, functional status,<br />
adverse events<br />
Q5. Are there ethical issues particular to genetic testing that may alter the<br />
methodologic rigor of studies of genetic testing?<br />
Please discuss the existence, relevance, and impact of such issues.<br />
Q6. Does the age of the Medicare beneficiary population present particular challenges<br />
that may compromise the generation and/or interpretation of evidence regarding<br />
genetic testing?<br />
Please discuss the existence, relevance, and impact of such issues.<br />
Medicare Evidence Development and Coverage <strong>Advisory</strong> <strong>Committee</strong><br />
Meeting of February 25, <strong>2009</strong>: Diagnostic Uses of Genetic Testing<br />
CMS seeks advice from the Medicare Evidence Development and Coverage <strong>Advisory</strong><br />
<strong>Committee</strong> (MED<strong>CAC</strong>) about the basis of evidence for coverage of genetic testing. Each of<br />
these two MED<strong>CAC</strong> sessions will focus on a separate use of genetic testing:<br />
B3601840.3 -27-
1. The first, in February <strong>2009</strong>, seeks guidance on the types of evidence on which to base<br />
coverage decisions relating to diagnostic uses of genetic testing (see examples below)<br />
as it may apply to improving health outcomes in the Medicare beneficiary population.<br />
2. The second, tentatively scheduled for May <strong>2009</strong>, will focus on screening uses of<br />
genetic testing and its potential application to Medicare beneficiaries. Further<br />
clarification of specific issues which CMS asks this MED<strong>CAC</strong> session to consider<br />
will be available later.<br />
CMS considers that a laboratory test is performed for screening if used to detect the presence<br />
or the risk of a latent or inapparent disease on a test sample from an individual who does not<br />
demonstrate signs or symptoms of the disease. Screening uses of laboratory tests (including<br />
genetic tests) are not generally benefits under the Medicare program and thus are ineligible<br />
for Medicare coverage unless Congress has specifically directed otherwise..<br />
In Question 3 proposed for MED<strong>CAC</strong> consideration, the <strong>Committee</strong> may wish to consider<br />
several uses of genetic testing together or separately:<br />
• Diagnostic assessment: for example, testing for the variant of the gene HD associated<br />
with Huntington’s disease;<br />
• Prognostic assessment: for example, assessment of gene expression in tumor tissue to<br />
evaluate likelihood of distant recurrence in patients with early-stage breast cancer;<br />
and<br />
• Pharmacogenomic assessment: for example, testing for variants in the K-ras gene<br />
which indicated absent response to certain chemotherapy for colorectal cancer (e.g.,<br />
cetuximab).<br />
A table briefly summarizing recent articles on each genetic test cited above is included<br />
below.<br />
Use of Genetic Test and Example: Summary:<br />
Diagnostic: Huntington’s disease Walker 2007 1 describes the genetic defect in the HD<br />
gene and its use in diagnosis.<br />
Prognostic: Risk of distant recurrence in breast cancer based on tumor gene expression<br />
profile EGAPP <strong>2009</strong> 2 found evidence to support the association<br />
between the ‘recurrence score’ based on a 21-gene expression profile, and rates of distant<br />
metastases at 10 years among women with Stage I or II node-negative estrogen-receptor<br />
positive breast cancer treated with tamoxifen.<br />
Pharmacogenomic: Colorectal cancer A preliminary clinical opinion of the American<br />
Society of Clinical Oncologists 3 reviews the evidence that colorectal cancer patients with<br />
mutated K-ras have little or no chemotherapeutic response to certain EGFR receptor<br />
antagonist agents such as cetuximab or panitumumab.<br />
References:<br />
B3601840.3 -28-
1. Walker FO. “Huntington’s Disease”. Lancet 2007; 369: 218–28.<br />
2. EGAPP Working Group. “Recommendations from the EGAPP Working Group: can<br />
tumor gene expression profiling improve outcomes in patients with breast cancer?”<br />
Genet Med <strong>2009</strong> January; 11(1): 66-73.<br />
. Allegra CJ, Jessup JM, Somerfield MR, et al. “American Society of Clinical<br />
<strong>Oncology</strong> Provisional Clinical Opinion: Testing for KRAS Gene Mutations in Patients with<br />
Metastatic Colorectal Carcinoma to Predict Response to Anti–Epidermal Growth Factor<br />
Receptor Monoclonal Antibody Therapy”. American Society of Clinical <strong>Oncology</strong>,<br />
Alexandria, VA, 2008. Downloaded on 1/21/<strong>2009</strong> from www.asco.org.<br />
Roster<br />
February 25, <strong>2009</strong><br />
MED<strong>CAC</strong> Roster<br />
Barbara McNeil, MD, PhD - Chair<br />
Professor<br />
Department of Health Care Policy<br />
Harvard Medical School Maren T. Scheuner, MD, MPH<br />
RAND Corporation<br />
Steven Pearson, MD, MSC - Vice Chair<br />
President<br />
Institute for Clinical and Economic Review<br />
Massachusetts General Hospital and<br />
Harvard Medical School Teresa M. Schroeder, BS, MBA<br />
Director<br />
Clinical Affairs<br />
Musculoskeletal Clinical Regulatory<br />
Advisers, LLC<br />
Mina Chung, MD<br />
Assoicate Professor<br />
Department of Cardiovascular Medicine<br />
The Cleveland Clinic Foundation Deborah Shatin, PhD<br />
Principal<br />
Shatin Associates, LLC<br />
Marion Danis, MD<br />
Chief<br />
Bioethics Consultation Service<br />
NIH Clinical Center Consumer Representative<br />
Linda A. Bergthold, PhD<br />
Santa Cruz, CA 95065<br />
Catherine Eng, MD, FACP<br />
Medical Director<br />
On Lok Lifeways Industry Representative<br />
Eleanor M. Perfetto, PhD, MS<br />
Senior Director<br />
Evidence Based Strategies<br />
B3601840.3 -29-
Pfizer, Inc.<br />
Mark D. Grant, MD, MPH<br />
Associate Director<br />
Technology Evaluation Center<br />
BlueCross BlueShield Association Guest Speakers<br />
Ralph Coates, PhD<br />
Associate Director for Science<br />
Office of Public Health Genomics<br />
Centers for Disease Control and Prevention<br />
Clifford Goodman, PhD<br />
Senior Vice President<br />
The Lewin Group Guest Panelists<br />
Steve Gutman, MD<br />
Professor of Pathology<br />
University of Central Florida<br />
James E. Puklin, MD<br />
Professor of Ophthalmology<br />
Department of Ophthalmolgy<br />
Kresge Eye Institute<br />
Wayne State University School of Medicine Neil Holtzman, MD<br />
Professor<br />
Johns Hopkins Bloomberg School of<br />
Public Health<br />
Associated NCA<br />
Pharmacogenomic Testing for Warfarin Response (CAG-00400N)<br />
B3601840.3 -30-
APPENDIX C<br />
AHRQ / TUFTS EVIDENCE ASSESSMENT<br />
B3601840.3 -31-
Reviews of Selected Pharmacogenetic Tests for Non-Cancer and Cancer Conditions<br />
AHRQ & Tufts Evidence-Based Practice Center (EPC)<br />
G. Raman et al.<br />
Cover date: 11/12/2008<br />
http://www.cms.hhs.gov/determinationprocess/downloads/id61TA.pdf<br />
Double Click Box Below to Open PPT presentation :<br />
B3601840.3 -32-<br />
H:\My Documents\<br />
@CMS\Trikalinos_MED<br />
Abstract<br />
Objective:<br />
We assessed four pharmacogenetic tests: 1) cytochrome P450, subfamily IIC, polypeptide 9<br />
(CYP2C9), 2) vitamin K epoxide reductase subunit protein 1 (VKORC1), 3) apolipoprotein<br />
E (Apo E), and 4) methylenetetrahydrofolate reductase (MTHFR) for their associations with<br />
patient’s response to therapy with warfarin (CYP2C9 and VKORC1), statins (Apo E), or<br />
antifolate chemotherapy (MTHFR).<br />
Data Sources:<br />
Published studies were identified through an electronic search up to October 2007, and<br />
relevant bibliographies were reviewed. Focused searches for specific topics were conducted<br />
through April 2008 to identify published randomized controlled trials, systematic reviews,<br />
and ongoing clinical trials. Methods: We included studies of any design that evaluated adults<br />
and abstracted data on all relevant clinical and laboratory outcomes. When sufficient data<br />
were available from studies making the same comparisons, the data were summarized in a<br />
meta-analysis. Additional subgroup, sensitivity, and meta-regression analyses were<br />
conducted as appropriate.<br />
Results:<br />
The 99 included articles reported 103 studies: 29 tested the association of CYP2C9 and the<br />
response to warfarin; 19 tested the association of VKORC1 and the response to warfarin; 44<br />
tested the association of Apo E and the response to statins; and 11 tested the association of<br />
MTHFR with the response to antifolate chemotherapy.<br />
CYP2C9 and VKORC1 gene polymorphisms and response to warfarin therapy<br />
Of the 29 studies of CYP2C9 gene polymorphisms, 26 evaluated their association with<br />
responses to maintenance does of warfarin. The remaining three studies were randomized<br />
controlled trials that evaluated response to therapy based on dosage-based algorithms among<br />
patients with pharmacogenetic test results. <strong>Carrier</strong>s of the CYP2C9 gene variant alleles *2 or<br />
*3 had lower mean maintenance warfarin dose requirements than did non-carriers. Few
studies investigated the relationship between genetic variations in CYP2C9 or VKORC1 and<br />
warfarin dose requirements in the induction phase. CYP2C9 variants were associated with an<br />
increased rate of bleeding complications during the induction phase of warfarin therapy, but<br />
the studies did not report whether affected patients had normal or supratherapeutic INR<br />
ranges. As with the CYP2C9 variants, carriers of the three common VKORC1 variants<br />
(alleles T, G, and C) required lower mean maintenance doses of warfarin than did noncarriers.<br />
Studies of CYP2C9 and VKORC1 had significant between-study heterogeneity. Few<br />
studies evaluated the relationship between pharmacogenetic test results and patient- and<br />
disease-related factors or response to therapy. No study addressed how therapeutic choices<br />
affected the benefits, harms, or adverse effects of patients from subsequent therapeutic<br />
management after pharmacogenetic testing for CYP2C9 and VKORC1.<br />
Apo E genotype and statin treatment<br />
In studies of the Apo E genotype (e2 carriers, e3 homozygotes, and e4 carriers) and statin<br />
treatment, the pooled reduction in total and LDL cholesterol from baseline values was lower<br />
for all three genotypes but did not differ significantly among them. These studies also had<br />
significant between-study heterogeneity. Although few studies included certain subgroups,<br />
factors that may affect the associations between all three Apo E genotypes and response to<br />
statin therapy were ethnicity, sex, familial hyperlipidemia, the type of statin used, and<br />
possibly the presence of diabetes. No studies addressed the effects of therapeutic choice:<br />
there were no data on the benefits, harms, or adverse effects on patients from subsequent<br />
therapeutic management after pharmacogenetic testing for the three Apo E genotypes.<br />
MTHFR gene polymorphisms and response to chemotherapy<br />
Limited data preclude making meaningful inferences about the relationship between common<br />
variants in MTHFR and chemotherapy of the folate metabolic pathway. Conclusions: Certain<br />
CYP2C9 and VKORC1 variants are associated with lower warfarin maintenance doses, and<br />
CYP2C9 variants are associated with increased bleeding rates among patients who use<br />
warfarin. Total and LDL cholesterol levels among patients on statin therapy were lower than<br />
baseline values among patients with the three ApoE genotypes. Response to chemotherapy<br />
based on the folate metabolic pathway in solid organ cancers was not associated with genetic<br />
variations in MTHFR. Overall, studies evaluating associations between the pharmacogenetic<br />
test results and the patient’s response to therapy for non-cancer and cancer conditions<br />
showed considerable variation in study designs, study populations, medication dosages, and<br />
the type of medications. This variation warrants caution when interpreting our results. Data<br />
on the relationships among pharmacogenetic test results and patient- and disease-related<br />
factors and on the patient’s response to therapy are limited. We found no data on the benefits,<br />
harms, or adverse effects from subsequent therapeutic management after pharmacogenetic<br />
testing. Detailed patient-level analyses are needed to adjust estimates for the effects of<br />
modifiers, such as age or tumor stage.<br />
B3601840.3 -33-
APPENDIX D<br />
CDC / EGAPP PRESENTATION<br />
B3601840.3 -34-
Attached as 21-page embedded document by double-clicking this symbol:<br />
C:\Users\bquinn\<br />
Desktop\@@Current\<br />
Selected EGAPP Publications:<br />
Genet Med. <strong>2009</strong> Jan;11(1):3-14: The Evaluation of Genomic Applications in Practice and<br />
Prevention (EGAPP) Initiative: methods of the EGAPP Working Group. Teutsch SM et al.<br />
Genet Med. 2007 Dec;9(12):819-25: Recommendations from the EGAPP Working Group:<br />
testing for cytochrome P450 polymorphisms in adults with nonpsychotic depression treated<br />
with selective serotonin reuptake inhibitors. EGAPP Working Group.<br />
Genet Med. <strong>2009</strong> Jan;11(1):15-20: Recommendations from the EGAPP Working Group: can<br />
UGT1A1 genotyping reduce morbidity and mortality in patients with metastatic colorectal<br />
cancer treated with irinotecan? EGAPP Working Group.<br />
Genet Med. <strong>2009</strong> Jan;11(1):42-65: EGAPP supplementary evidence review: DNA testing<br />
strategies aimed at reducing morbidity and mortality from Lynch syndrome. Palomaki GE et<br />
al.<br />
B3601840.3 -35-
Genet Med. <strong>2009</strong> Jan;11(1):35-41: Recommendations from the EGAPP Working Group:<br />
genetic testing strategies in newly diagnosed individuals with colorectal cancer aimed at<br />
reducing morbidity and mortality from Lynch syndrome in relatives. EGAPP Working<br />
Group.<br />
Genet Med. <strong>2009</strong> Jan;11(1):66-73: Recommendations from the EGAPP Working Group: can<br />
tumor gene expression profiling improve outcomes in patients with breast cancer? EGAPP<br />
Working Group.<br />
[Enclosures]<br />
B3601840.3 -36-
CMS Gets Advice On Genetic Screening, Medicare Coverage Distant<br />
Medicare coverage of genetic tests as a screening tool is a distant possibility, but feedback CMS<br />
received from geneticists, physicians, payers and health consultants at a recent coverage advisory<br />
meeting provides useful information that the industry could use to further develop the tests, an<br />
agency official tells Inside CMS.<br />
The Medicare Evidence Development and Coverage Analysis (MED<strong>CAC</strong>) panel didn’t reach a<br />
definite conclusion about covering genetic tests, but the group agreed, as did those commenting<br />
at the meeting, that a solid family history should be a priority over genetic tests and a key first<br />
step to determine the appropriateness of a gene test.<br />
CMS received the authority from Congress to cover under Medicare Part B additional preventive<br />
services using a national coverage determination (MIPPA sec. 101[a]), which brought about the<br />
agency’s consideration of covering genetic screening tests. While it’s a possibility, Marcel<br />
Salive, director of the division of medical and surgical services in CMS’ Coverage and Analysis<br />
Group, said the agency is likely to wait until genetic tests are further developed before Medicare<br />
offers coverage.<br />
“There are not a lot of these tests yet available or well studied, but we do think they are evolving<br />
fairly quickly so we want to just get out ahead of the curve,” Salive told Inside CMS after the<br />
May 6 MED<strong>CAC</strong> meeting. “It depends on how things evolve really when we would need to have<br />
to make those decisions.”<br />
Genetic screening is farther down the line for Medicare coverage than other screening services<br />
that could be covered under the MIPPA prevention authority, Salive said after the MED<strong>CAC</strong><br />
meeting during which experts debated the topic, but “getting the advice was helpful.”<br />
“Mainly, we also want to communicate ... it out to people developing these tests if there’s any<br />
kind of message that they need to hear” so they can develop and run trials on genetic tests that<br />
CMS would be more likely to deem acceptable for coverage, Salive said.<br />
Diane Allingham-Hawkins, director of the genetics test evaluation program at Hayes, Inc., who<br />
commented at the meeting, said CMS plays “a critical role in determining coverage policy,” even<br />
if it’s not for the Medicare population but to influence private coverage decisions as well. The<br />
CMS discussion could also drive what is needed to make genetic testing a more common<br />
screening or diagnostic tool, Allingham-Hawkins told Inside CMS.<br />
As for using genetic testing as a screening tool within the Medicare population, Allingham-<br />
Hawkins said it depends. There are some genetics tests, such as that to determine the inherited<br />
gene for colon cancer, that would benefit Medicare enrollees, whereas others, like the less<br />
accurate single nucleotide polymorphism (SNP) test for heart disease, that don’t have as much<br />
evidence yet to prove effective in the 65 and older population.<br />
Experts said it’s important that as CMS considers Medicare coverage there be a clear distinction<br />
between validated Mendelian gene tests, which represent clearly known inherited genes that
indicate a disease, and single nucleotide polymorphisms (SNPs) that are gene tests of a small<br />
portion of DNA that can result in false positives for a disease much more often. Charis Eng,<br />
chair and director of the Cleveland Clinic Genomic Medicine Institute, who commented at the<br />
MED<strong>CAC</strong> meeting, said SNP-based associations “should never be used in the Medicare<br />
population, but validated [Mendelian] gene testing should.”<br />
MED<strong>CAC</strong> panel members focused largely on genetic screening for breast cancer (BRCA1),<br />
ovarian cancer (BRCA2) and familial colon cancer (Lynch syndrome). When it came to ethics of<br />
the tests, a common concern surfaced throughout the conversation: the family impact.<br />
Nancy Davenport-Ennis, CEO of the Patient Advocate Foundation, said a positive genetic<br />
screening should correlate with the development of the disease. This is especially necessary<br />
when it’s used as an early detection screening method on asymptomatic patients because<br />
presence of genes indicating potential to develop a disease doesn’t always mean the genes will<br />
become active, Davenport-Ennis said.<br />
Genetic tests for screening also pose issues “down stream” for a patient’s family members that<br />
currently utilized screening tests do not, said Mark Grant, panel member and Blue Cross Blue<br />
Shield Association associate director of the Technology Evaluation Center.<br />
Similarly, Jonathan Weiner, health policy and management professor at Johns Hopkins<br />
University, said economists and secondary payers need to be considered in the mix before<br />
Medicare begins paying for the new type of screening tests. There could be costs down the line<br />
that Medicare wouldn’t cover or, the concern for private payers is that results of a Medicare<br />
patient’s genetic screening could raise concerns for that individual’s non-Medicare eligible<br />
family members, Weiner said.<br />
Also on the ethical issues raised by genetic screening, MED<strong>CAC</strong> members agreed false positives<br />
would have to be nearly eliminated before there is widespread coverage of the tests, not only<br />
because of the ramifications for the Medicare patient but also because of the trickledown effect<br />
on families. Davenport-Ennis said that from a societal perspective, Medicare should consider<br />
before covering genetic screening whether the tests accelerate the time to diagnosis and lead to<br />
the correct therapy.<br />
The MED<strong>CAC</strong> panel’s discussion also included the clinical application of genetic screening, and<br />
the group tried to rein in the conversation to specifically address its use as a screening<br />
mechanism within the Medicare population. Beyond that, the commission was also tasked with<br />
determining whether it’s a preventive tool, which CMS would need to prove in order to justify<br />
under the authority the agency was granted in MIPPA. A definitive answer wasn’t reached on<br />
those issues, as some members wrestled with the lack of a clear definition for “screening” and<br />
limited data proving the benefit of certain genetics testing in individuals 65 and up.<br />
Bruce Quinn, a health consultant for Foley Hoag and former CMS carrier medical director, said<br />
the question about defining screening left unanswered questions and led some MED<strong>CAC</strong><br />
members to believe genetics testing needs to undergo large randomized controlled trials before<br />
being used on a larger scale.
A traditional screening test would be a mammogram, which women at a certain age begin<br />
receiving annually or once every five years, Quinn explained. But if a woman was screened for<br />
ovarian cancer using a gene test and the result was positive, screening her close family members<br />
for the same gene isn’t screening in the traditional sense of the term, he said. “There’s nothing in<br />
Medicare’s language that captures that subtlety at all,” Quinn said.<br />
Faced with key questions about desirable evidence for evaluating genetic test screening in the<br />
Medicare population, the 18-member MED<strong>CAC</strong> panel said that for the most part they would<br />
want genetic screening evidence to have the same characteristics as other screening tests already<br />
used.<br />
As for analytical validity of screening genetic tests, much of the panel recommended high<br />
analytical sensitivity and specificity as well repeatability. Elizabeth Mansfield, senior genomics<br />
advisor for the FDA Office of the Chief Scientist, said all possible variations being tested for<br />
would need to be adequately represented in analytical validation.<br />
From a lab geneticist’s perspective, Allingham-Hawkins said, it was disturbing that many on the<br />
panel assumed analytical validity was a given. “A lab’s competence depends on a lot of things,”<br />
she said after the meeting. And there are “less than stringent regulatory requirements of genetic<br />
testing” so it’s important to ensure the analytical validity has been established, Allingham-<br />
Hawkins said.<br />
Because these tests often look only at a region of the genome, FDA would also need to be<br />
involved to ensure the repeatability of the test, said John Spertus, director of cardiovascular<br />
education and outcomes research at the Mid America Heart Institute in the University of<br />
Missouri.<br />
Desirable outcomes, accuracy of the tests and the degree of certainty screening genetic tests<br />
provide when determining the therapy also remained priorities among panel members.<br />
Additional findings in those areas would aid in determining whether there should be Medicare<br />
coverage, MED<strong>CAC</strong> members said. -- Ashley Richards (arichards@iwpnews.com)
CMS Manual System<br />
Pub 100-02 Medicare Benefit Policy<br />
Department of Health &<br />
Human Services (DHHS)<br />
Centers for Medicare &<br />
Medicaid Services (CMS)<br />
Transmittal 96 Date: October 24, 2008<br />
Change Request 6191<br />
SUBJECT: Compendia as Authoritative Sources for Use in the Determination of a "Medically<br />
Accepted Indication" of Drugs and Biologicals Used Off-Label in an Anti-Cancer Chemotherapeutic<br />
Regimen<br />
I. SUMMARY OF CHANGES: CMS is recognizing four authoritative compendia and listing them in<br />
chapter 15, section 50.4.5 of the Medicare Benefit Policy Manual for use in the determination of a medically<br />
accepted indication of drugs and biologicals used off-label in an anti-cancer chemotherapeutic regimen.<br />
New / Revised Material<br />
Effective Date: June 5, 2008 - NCCN Drugs and Biologics Compendium<br />
June 10, 2008 - Thomson Micromedex DrugDex<br />
July 2, 2008 - Clinical Pharmacology<br />
Implementation Date: November 25, 2008<br />
Disclaimer for manual changes only: The revision date and transmittal number apply only to red<br />
italicized material. Any other material was previously published and remains unchanged. However, if this<br />
revision contains a table of contents, you will receive the new/revised information only, and not the entire<br />
table of contents.<br />
II. CHANGES IN MANUAL INSTRUCTIONS: (N/A if manual is not updated)<br />
R=REVISED, N=NEW, D=DELETED.<br />
R/N/D CHAPTER/SECTION/SUBSECTION/TITLE<br />
R 15/Table of Contents<br />
R 15/50.4.5/Off-Label Use of Anti-Cancer Drugs and Biologicals<br />
R 15/50.4.5.1/Process for Amending the List of Compendia for Determination of<br />
Medically Accepted Indications for Off-Label Uses of Drugs and Biologicals<br />
in an Anti-Cancer Chemotherapeutic Regimen<br />
III. FUNDING:<br />
SECTION A: For Fiscal Intermediaries and <strong>Carrier</strong>s:<br />
No additional funding will be provided by CMS; contractor activities are to be carried out within their<br />
operating budgets.<br />
SECTION B: For Medicare Administrative Contractors (MACs):<br />
The Medicare Administrative Contractor is hereby advised that this constitutes technical direction as defined<br />
in your contract. CMS does not construe this as a change to the MAC Statement of Work. The contractor is<br />
not obligated to incur costs in excess of the amounts allotted in your contract unless and until specifically<br />
authorized by the contracting officer. If the contractor considers anything provided, as described above, to<br />
be outside the current scope of work, the contractor shall withhold performance on the part(s) in question
and immediately notify the contracting officer, in writing or by e-mail, and request formal directions<br />
regarding continued performance requirements.<br />
IV. ATTACHMENTS:<br />
Business Requirements<br />
Manual Instruction<br />
*Unless otherwise specified, the effective date is the date of service.
Attachment - Business Requirements<br />
Pub. 100-02 Transmittal: 96 Date: October 24, 2008 Change Request: 6191<br />
SUBJECT: Compendia as Authoritative Sources for Use in the Determination of a “Medically-Accepted<br />
Indication” of Drugs and Biologicals Used Off-label in an Anti-Cancer Chemotherapeutic Regimen<br />
Effective Dates: Existing American Hospital Formulary Service-Drug Information<br />
June 5, 2008-National Comprehensive Cancer Network Drugs and Biologics<br />
Compendium<br />
June 10, 2008 -Thomson Micromedex DrugDex<br />
July 2, 2008-Clinical Pharmacology<br />
Implementation Date: November 25, 2008<br />
I. GENERAL INFORMATION<br />
A. Background: Section 1861(t)(2)(B)(ii)(I) of the Social Security Act (the Act), as amended by section<br />
6001(f)(1) of the Deficit Reduction Act of 2005, Pub. Law 109-171, recognizes three compendia-- American<br />
Medical Association Drug Evaluations (AMA-DE), United States Pharmacopoeia-Drug Information (USP-DI)<br />
or its successor publication, and American Hospital Formulary Service-Drug Information (AHFS-DI)-- as<br />
authoritative sources for use in the determination of a "medically-accepted indication" of drugs and biologicals<br />
used off-label in an anti-cancer chemotherapeutic regimen, unless the Secretary has determined that the use is<br />
not medically appropriate or the use is identified as not indicated in one or more such compendia.<br />
Due to changes in the pharmaceutical reference industry, AHFS-DI was the only remaining statutorily-named<br />
compendia available for our reference; the AMA-DE and the USP-DI are no longer published. Consequently,<br />
the Centers for Medicare & Medicaid Services (CMS) received requests from the stakeholder community for a<br />
process to revise the list of compendia. In the Physician Fee Schedule final rule for calendar year 2008, CMS<br />
established a process for revising the list of compendia, as authorized under section 1861(t)(2) of the Act, and<br />
also established a definition for “compendium.” See 72 FR 66222, 66303-66306, 66404. Under 42 CFR<br />
414.930(a), a compendium is defined “as a comprehensive listing of FDA-approved drugs and biologicals or a<br />
comprehensive listing of a specific subset of drugs and biologicals in a specialty compendium, for example, a<br />
compendium of anti-cancer treatment.” A compendium: (1) includes a summary of the pharmacologic<br />
characteristics of each drug or biological and may include information on dosage, as well as recommended or<br />
endorsed uses in specific diseases; and, (2) is indexed by drug or biological. See 42 CFR 414.930(a); 72 FR<br />
66222, 66404.<br />
In addition, CMS increased the transparency of the process by incorporating a list of desirable compendium<br />
characteristics outlined by the Medicare Evidence Development and Coverage <strong>Advisory</strong> <strong>Committee</strong> (Med<strong>CAC</strong>)<br />
as criteria for decision-making. The list of desirable compendium characteristics was developed by the<br />
Med<strong>CAC</strong> during a public session on March 30, 2006. The goal of this session was to review the evidence and<br />
advise CMS on the desirable characteristics of compendia for use in the determination of medically-accepted<br />
indications of drugs and biologicals in anti-cancer therapy. As a result of this meeting, the Med<strong>CAC</strong> generated<br />
a list of desirable characteristics to use when reviewing a compendium.<br />
CMS generated one internal request to delete AMA-DE which is no longer published, and received four<br />
external requests from stakeholders for additions to the authoritative list: NCCN, Micromedex DrugDex,<br />
Micromedex DrugPoints, and Clinical Pharmacology. CMS staff conducted a review of specific compendia<br />
comparing the qualities with the Med<strong>CAC</strong> desirable characteristics.
B. Policy: CMS is recognizing the following as authoritative compendia and listing them in Pub. 100-02 of<br />
the Medicare Benefit Policy Manual, chapter 15, section 50.4.5 for use in the determination of a “medicallyaccepted<br />
indication” of drugs and biologicals used off-label in an anti-cancer chemotherapeutic regimen:<br />
• American Hospital Formulary Service-Drug Information (AHFS-DI)<br />
• NCCN Drugs and Biologics Compendium<br />
• Thomson Micromedex DrugDex<br />
• Clinical Pharmacology<br />
Contractors shall recognize medically accepted indications as those that:<br />
• are favorably listed in one or more of the compendia listed above, or,<br />
• the contractor determines from a review of the peer-reviewed literature as described above that it is a<br />
medically accepted indication,<br />
unless CMS has determined that the use is not medically accepted, or any of the listed compendia list the use as<br />
not medically accepted, or words to that effect.<br />
CMS is aware that the listed compendia employ various rating and recommendation systems that may not be<br />
readily cross-walked from compendium to compendium. In general, a use is identified by a compendium as<br />
medically accepted if the:<br />
1. indication is a Category 1 or 2A in NCCN, or Class I, Class IIa, or Class IIb in DrugDex; or,<br />
2. narrative text in AHFS or Clinical Pharmacology is supportive.<br />
A use is not medically accepted by a compendium if the:<br />
1. indication is a Category 3 in NCCN or a Class III in DrugDex; or,<br />
2. narrative text in AHFS or Clinical Pharmacology is “not supportive.”<br />
The complete absence of narrative text on a use is considered neither supportive nor non-supportive.<br />
NOTE: Referencing compendia for off-label anti-cancer chemotherapeutic drug use is an ongoing contractor<br />
instruction. The Secretary has the authority under section 1861(t)(2) of the Act to revise the compendia list as is<br />
appropriate for identifying medically acceptable off-label drug use. This instruction constitutes an update to the<br />
existing compendia list found at Pub. 100-02, Medicare Benefit Policy Manual, chapter 15, section 50.4.5.<br />
NOTE: The contractor may maintain its own subscriptions to the listed compendia updates or peer-reviewed<br />
publications to determine the medically accepted indication of drugs or biologicals used off-label in an anticancer<br />
chemotherapeutic regimen. Compendia documentation or peer-reviewed literature supporting off-label<br />
use by the treating physician may also be requested of the physician by the contractor.
II. BUSINESS REQUIREMENTS TABLE<br />
Use “Shall" to denote a mandatory requirement<br />
Number Requirement Responsibility (place an “X” in each applicable<br />
column)<br />
6191.1 Effective with the dates noted above in processing claims,<br />
contractors shall be aware of the additions and deletions to<br />
the list of compendia as authoritative sources for use in the<br />
determination of a "medically-accepted indication" of<br />
drugs and biologicals used off-label in an anti-cancer<br />
chemotherapeutic regimen, unless the Secretary has<br />
determined that the use is not medically appropriate or the<br />
use is identified as not indicated in one or more such<br />
compendia as described in Pub. 100-02, chapter 15, section<br />
50.4.5.<br />
III. PROVIDER EDUCATION TABLE<br />
A<br />
/<br />
B<br />
M<br />
A<br />
C<br />
D<br />
M<br />
E<br />
M<br />
A<br />
C<br />
F<br />
I<br />
C<br />
A<br />
R<br />
R<br />
I<br />
E<br />
R<br />
X X X X<br />
R<br />
H<br />
H<br />
I<br />
Shared-System<br />
Maintainers<br />
F M V C<br />
I C M W<br />
S<br />
S<br />
S S F<br />
Number Requirement Responsibility (place an “X” in each applicable<br />
column)<br />
6191.2 A provider education article related to this instruction will<br />
be available at<br />
http://www.cms.hhs.gov/MLNMattersArticles/ shortly<br />
after the CR is released. You will receive notification of<br />
the article release via the established "MLN Matters"<br />
listserv. Contractors shall post this article, or a direct link<br />
to this article, on their Web site and include information<br />
about it in a listserv message within 1 week of the<br />
availability of the provider education article. In addition,<br />
the provider education article shall be included in your<br />
next regularly scheduled bulletin. Contractors are free to<br />
supplement MLN Matters articles with localized<br />
information that would benefit their provider community in<br />
billing and administering the Medicare program correctly.<br />
A<br />
/<br />
B<br />
M<br />
A<br />
C<br />
D<br />
M<br />
E<br />
M<br />
A<br />
C<br />
F<br />
I<br />
C<br />
A<br />
R<br />
R<br />
I<br />
E<br />
R<br />
X X X X<br />
R<br />
H<br />
H<br />
I<br />
Shared-System<br />
Maintainers<br />
F M V C<br />
I C M W<br />
S<br />
S<br />
S S F<br />
OTHER<br />
OTHER
IV. SUPPORTING INFORMATION<br />
Section A: For any recommendations and supporting information associated with listed requirements,<br />
use the box below:<br />
Use "Should" to denote a recommendation.<br />
X-Ref<br />
Requirement<br />
Number<br />
Recommendations or other supporting information:<br />
N/A<br />
Section B: For all other recommendations and supporting information, use this space:<br />
V. CONTACTS<br />
Pre-Implementation Contact(s): Kate Tillman, coverage, 410-786-9252, Katherine.tillman@cms.hhs.gov,<br />
Brijet Burton, coverage, 410-786-7364, Brijet.burton@cms.hhs.gov<br />
Post-Implementation Contact(s): Appropriate CMS RO<br />
VI. FUNDING<br />
Section A: For Fiscal Intermediaries (FIs), <strong>Carrier</strong>s, and Regional Home Health <strong>Carrier</strong>s (RHHIs) use only<br />
one of the following statements: No additional funding will be provided by CMS; contractor activities are to<br />
be carried out within their operating budgets.<br />
Section B: For Medicare Administrative Contractors (MACs), use the following statement:<br />
The Medicare Administrative Contractor is hereby advised that this constitutes technical direction as defined in<br />
your contract. CMS does not construe this as a change to the MAC Statement of Work. The contractor is not<br />
obligated to incur costs in excess of the amounts allotted in your contract unless and until specifically<br />
authorized by the contracting officer. If the contractor considers anything provided, as described above, to be<br />
outside the current scope of work, the contractor shall withhold performance on the part(s) in question and<br />
immediately notify the contracting officer, in writing or by e-mail, and request formal directions regarding<br />
continued performance requirements.
Medicare Benefit Policy Manual<br />
Chapter 15 – Covered Medical and Other Health<br />
Services<br />
Table of Contents<br />
(Rev.96, 10-24-08)<br />
50.4.5 - Off Label Use of Drugs and Biologicals in an Anti-Cancer Chemotherapeutic<br />
Regimen
50.4.5 - Off-Label Use of Drugs and Biologicals in an Anti-Cancer<br />
Chemotherapeutic Regimen<br />
(Rev.96, Issued: 10-24-08, Effective: 06-05-08 NCCN/06-10-08 Thomson<br />
Micromedex/07-02-08 Clinical Pharmacology, Implementation: 11-25-08)<br />
A. Overview<br />
Effective January 1, 1994, off-label, medically accepted indications of Food and Drug<br />
Administration-(FDA) approved drugs and biologicals used in an anti-cancer<br />
chemotherapeutic regimen are identified under the conditions described below. A<br />
regimen is a combination of anti-cancer agents clinically recognized for the treatment of<br />
a specific type of cancer. Off-label, medically accepted indications are supported in<br />
either one or more of the compendia or in peer-reviewed medical literature. The<br />
contractor may maintain its own subscriptions to the listed compendia or peer-reviewed<br />
publications to determine the medically accepted indication of drugs or biologicals used<br />
off-label in an anti-cancer chemotherapeutic regimen. Compendia documentation or<br />
peer-reviewed literature supporting off-label use by the treating physician may also be<br />
requested of the physician by the contractor.<br />
B. Recent Revisions to the Compendia List<br />
Do not deny coverage based solely on the absence of FDA-approved labeling for the use,<br />
if the use is supported by any of the following compendia and the use is not listed as<br />
unsupported, not indicated, not recommended, or equivalent terms, in any of the<br />
following compendia:<br />
Existing - American Hospital Formulary Service-Drug Information (AHFS-DI)<br />
Effective June 5, 2008 - National Comprehensive Cancer Network (NCCN) Drugs and<br />
Biologics Compendium<br />
Effective June 10, 2008 - Thomson Micromedex DrugDex<br />
Effective July 2, 2008 - Clinical Pharmacology<br />
The listed compendia employ various rating and recommendation systems that may not<br />
be readily cross-walked from compendium to compendium. In general, a use is identified<br />
by a compendium as medically accepted if the:<br />
1. indication is a Category 1 or 2A in NCCN, or Class I, Class IIa, or Class IIb in<br />
DrugDex; or,<br />
2. narrative text in AHFS-DI or Clinical Pharmacology is supportive.<br />
A use is not medically accepted by a compendium if the:
1. indication is a Category 3 in NCCN or a Class III in DrugDex; or,<br />
2. narrative text in AHFS or Clinical Pharmacology is “not supportive.”<br />
The complete absence of narrative text on a use is considered neither supportive nor nonsupportive.<br />
C. Use Supported by Clinical Research That Appears in Peer-Reviewed Medical<br />
Literature<br />
Contractors may also identify off-label uses that are supported by clinical research under<br />
the conditions identified in this section. Peer-reviewed medical literature may appear in<br />
scientific, medical, and pharmaceutical publications in which original manuscripts are<br />
published, only after having been critically reviewed for scientific accuracy, validity, and<br />
reliability by unbiased, independent experts prior to publication. In-house publications<br />
of entities whose business relates to the manufacture, sale, or distribution of<br />
pharmaceutical products are excluded from consideration. Abstracts (including meeting<br />
abstracts) are excluded from consideration.<br />
In determining whether an off-label use is supported, the contractors will evaluate the<br />
evidence in published, peer-reviewed medical literature listed below. When evaluating<br />
this literature, they will consider (among other things) the following:<br />
• Whether the clinical characteristics of the beneficiary and the cancer are<br />
adequately represented in the published evidence<br />
• Whether the administered chemotherapy regimen is adequately represented in the<br />
published evidence.<br />
• Whether the reported study outcomes represent clinically meaningful outcomes<br />
experienced by patients.<br />
• Whether the study is appropriate to address the clinical question. The contractor<br />
will consider:<br />
1. whether the experimental design, in light of the drugs and conditions under<br />
investigation, is appropriate to address the investigative question. (For example, in some<br />
clinical studies, it may be unnecessary or not feasible to use randomization, double blind<br />
trials, placebos, or crossover.);<br />
2. that non-randomized clinical trials with a significant number of subjects may be a<br />
basis for supportive clinical evidence for determining accepted uses of drugs; and,<br />
3. that case reports are generally considered uncontrolled and anecdotal information and<br />
do not provide adequate supportive clinical evidence for determining accepted uses of<br />
drugs.
The contractor will use peer-reviewed medical literature appearing in the regular editions<br />
of the following publications, not to include supplement editions privately funded by<br />
parties with a vested interest in the recommendations of the authors:<br />
American Journal of Medicine;<br />
Annals of Internal Medicine;<br />
Annals of <strong>Oncology</strong>;<br />
Annals of Surgical <strong>Oncology</strong>;<br />
Biology of Blood and Marrow Transplantation;<br />
Blood;<br />
Bone Marrow Transplantation;<br />
British Journal of Cancer;<br />
British Journal of <strong>Hematology</strong>;<br />
British Medical Journal;<br />
Cancer;<br />
Clinical Cancer Research;<br />
Drugs;<br />
European Journal of Cancer (formerly the European Journal of Cancer and Clinical<br />
<strong>Oncology</strong>);<br />
Gynecologic <strong>Oncology</strong>;<br />
International Journal of Radiation, <strong>Oncology</strong>, Biology, and Physics;<br />
The Journal of the American Medical Association;<br />
Journal of Clinical <strong>Oncology</strong>;<br />
Journal of the National Cancer Institute;<br />
Journal of the National Comprehensive Cancer Network (NCCN);<br />
Journal of Urology;<br />
Lancet;<br />
Lancet <strong>Oncology</strong>;<br />
Leukemia;<br />
The New England Journal of Medicine; or<br />
Radiation <strong>Oncology</strong><br />
D. Generally<br />
FDA-approved drugs and biologicals may also be considered for use in the<br />
determination of medically accepted indications for off-label use if determined by the<br />
contractor to be reasonable and necessary.<br />
If a use is identified as not indicated by the Centers for Medicare and Medicaid Services<br />
(CMS) or the FDA, or if a use is specifically identified as not indicated in one or more of<br />
the compendia listed, or if the contractor determines, based on peer-reviewed medical<br />
literature, that a particular use of a drug is not safe and effective, the off-label usage is not<br />
supported and, therefore, the drug is not covered.
50.4.5.1 - Process for Amending the List of Compendia for<br />
Determination of Medically-Accepted Indications for Off-Label Uses of<br />
Drugs and Biologicals in an Anti-Cancer Chemotherapeutic Regimen<br />
(Rev.96, Issued: 10-24-08, Effective: 06-05-08 NCCN/06-10-08 Thomson<br />
Micromedex/07-02-08 Clinical Pharmacology, Implementation: 11-25-08)<br />
A. Background<br />
In the Physician Fee Schedule final rule for calendar year 2008, the CMS established a<br />
process for revising the list of compendia, as authorized under section 1861(t)(2) of the<br />
Social Security Act, and also established a definition for “compendium.” See 72 FR<br />
66222, 66303-66306, 66404. At 42 CFR 414.930(a), a compendium is defined “as a<br />
comprehensive listing of FDA-approved drugs and biologicals or a comprehensive listing<br />
of a specific subset of drugs and biologicals in a specialty compendium, for example, a<br />
compendium of anti-cancer treatment.” A compendium: (1) includes a summary of the<br />
pharmacologic characteristics of each drug or biological and may include information on<br />
dosage, as well as recommended or endorsed uses in specific diseases; and, (2) is indexed<br />
by drug or biological. See 42 CFR 414.930(a); 72 FR 66222, 66404.<br />
B. Desirable Characteristics of Compendia<br />
In addition, CMS increased the transparency of the process by incorporating a list of<br />
desirable compendium characteristics outlined by the Medicare Evidence Development<br />
and Coverage <strong>Advisory</strong> <strong>Committee</strong> (Med<strong>CAC</strong>) as criteria for decision-making. The list<br />
of desirable compendium characteristics was developed by the Med<strong>CAC</strong> during a public<br />
session on March 30, 2006. The goal of this session was to review the evidence and<br />
advise CMS on the desirable characteristics of compendia for use in the determination of<br />
medically accepted indications of drugs and biologicals in anti-cancer therapy. As a<br />
result of this meeting, the Med<strong>CAC</strong> generated the following list of desirable<br />
characteristics:<br />
• Extensive breadth of listings,<br />
• Quick processing from application for inclusion to listing,<br />
• Detailed description of the evidence reviewed for every individual listing,<br />
• Use of pre-specified published criteria for weighing evidence,<br />
• Use of prescribed published process for making recommendations,<br />
• Publicly transparent process for evaluating therapies,<br />
• Explicit "Not Recommended" listing when validated evidence is appropriate,<br />
• Explicit listing and recommendations regarding therapies, including sequential use or<br />
combination in relation to other therapies,<br />
• Explicit "Equivocal" listing when validated evidence is equivocal, and,<br />
• Process for public identification and notification of potential conflicts of interest of<br />
the compendias’ parent and sibling organizations, reviewers, and committee<br />
members, with an established procedure to manage recognized conflicts.
C. Process for Changing List of Compendia<br />
CMS will provide an annual 30-day open request period starting January 15 for the public<br />
to submit requests for additions or deletions to the compendia list contained on the CMS<br />
Web site at http://www.cms.hhs.gov/CoverageGenInfo/02_compendia.asp.<br />
Complete requests as defined in section 50.4.5.1.D will be posted to the Web site by<br />
March 15 for public notice and comment. The request will identify the requestor and the<br />
requested action to the list. Public comments will be accepted for a 30-day period<br />
beginning on the day the request is posted on the Web site. In addition to the annual<br />
process, CMS may generate a request for changes to the list at any time an urgent action<br />
is needed to protect the interests of the Medicare program and its beneficiaries.<br />
D. Content of Requests<br />
For a request to be considered complete, and therefore accepted for review, it must<br />
include the following information:<br />
• The full name and contact information (including the mailing address, e-mail<br />
address, and telephone number) of the requestor. If the requestor is not an<br />
individual person, the information shall identify the officer or other representative<br />
who is authorized to act for the requestor on all matters related to the request.<br />
• Full identification of the compendium that is the subject of the request, including<br />
name, publisher, edition if applicable, date of publication, and any other<br />
information needed for the accurate and precise identification of the specific<br />
compendium.<br />
• A complete, written copy of the compendium that is the subject of the request. If<br />
the complete compendium is available electronically, it may be submitted<br />
electronically in place of hard copy. If the compendium is available online, the<br />
requestor may provide CMS with electronic access by furnishing at no cost to the<br />
Federal Government sufficient accounts for the purposes and duration of the<br />
review of the application in place of hard copy.<br />
• The specific action that the requestor wishes CMS to take, for example to add or<br />
delete a specific compendium.<br />
• Detailed, specific documentation that the compendium that is the subject of the<br />
request does or does not comply with the conditions of this rule. Broad, nonspecific<br />
claims without supporting documentation cannot be efficiently reviewed;<br />
therefore, they will not be accepted.<br />
A request may have only a single compendium as its subject. This will provide greater<br />
clarity to the scope of the Agency’s review of a given request. A requestor may submit<br />
multiple requests, each requesting a different action.
E. Submission of Requests<br />
Requests must be in writing and submitted in one of the following two ways (no<br />
duplicates please):<br />
1. Electronic requests are encouraged to facilitate administrative efficiency. Each<br />
solicitation will include the electronic address for submissions.<br />
2. Hard copy requests can be sent to:<br />
Centers for Medicare & Medicaid Services<br />
Coverage and Analysis Group<br />
Mailstop C1–09–06<br />
7500 Security Boulevard<br />
Baltimore, MD 21244<br />
Allow sufficient time for hard copies to be received prior to the close of the open request<br />
period.<br />
F. Review of Requests<br />
CMS will consider a compendium’s attainment of the desirable characteristics specified<br />
in 50.4.5.1.B when reviewing requests. CMS may consider additional, reasonable factors<br />
in making a determination. For example, CMS may consider factors that are likely to<br />
impact the compendium’s suitability for this use, such as a change in ownership or<br />
affiliation, the standards applicable to the evidence considered by the compendium, and<br />
any relevant conflicts of interest. CMS may consider that broad accessibility by the<br />
general public to the information contained in the compendium may assist beneficiaries,<br />
their treating physicians, or both, in choosing among treatment options. CMS will also<br />
consider a compendiums’ grading of evidence used in making recommendations<br />
regarding off-label uses, and the process by which the compendium grades the evidence.<br />
CMS may, at its discretion, combine and consider multiple requests that refer to the same<br />
compendium, even if those requests are for different actions. This facilitates<br />
administrative efficiency in the review of requests.<br />
G. Publishing Review Results<br />
CMS will publish decisions on the CMS Web site within 90 days after the close of the<br />
public comment period.<br />
(This instruction was last reviewed by CMS in September 2008.)
NCCN Compendium Revision Request - CAG-00389<br />
Date<br />
2/8/2008<br />
Public Comment Period<br />
2/8/2008 - 3/9/2008 - View Public Comments<br />
Issue The Social Security Act Section 1861(t)(2)(B)(ii)(I) recognizes the<br />
following compendia: American Medical Association Drug Evaluations<br />
(AMA-DE), United States Pharmacopoeia-Drug Information (USP-DI) or<br />
its successor publication [amended in Section 6001 (f)(1) of the DRA]<br />
and American Hospital Formulary Service-Drug Information (AFHS-DI) as<br />
authoritative sources for use in the determination of a “medicallyaccepted<br />
indication” of drugs and biologicals used off-label in an<br />
anticancer chemotherapeutic regimen. However, AFHS-DI is the only<br />
originally named compendium currently in publication.<br />
CMS received a timely complete request for the addition of the National<br />
Comprehensive Cancer Network (NCCN) Drugs & Biologics Compendium<br />
to the list of compendia for this use.<br />
Requestor National Comprehensive Cancer Network<br />
Name(s) View Requestor Letter<br />
Formal<br />
Request<br />
Accepted<br />
and<br />
Review<br />
Initiated<br />
Expected<br />
Completi<br />
on Date<br />
Lead<br />
Analyst(s<br />
)<br />
Lead<br />
Medical<br />
Officer(s)<br />
February 8, 2008<br />
June 6, 2008<br />
Kate Tillman, RN, MA<br />
Katherine.Tillman@cms.hhs.gov<br />
Brijet Burton, MS, PA-C<br />
Brijet.Burton2@cms.hhs.gov<br />
Lori Paserchia, MD<br />
Actions Februa NCCN formally requested the addition of the NCCN Drugs and
Taken ry 6,<br />
2008<br />
Biologics Compendium to the list of statutorily named<br />
compendia. The public comment period begins the date of this<br />
posting and ends after 30-calendar days. CMS considers all<br />
public comments, and is particularly interested in your feedback<br />
on the addition of NCCN to the list of compendia.<br />
Formal public comments may be submitted through the<br />
highlighted “comment” link located at the top of this web page.<br />
Instructions on how to submit a request to revise the list of<br />
compendia may be found at<br />
http://www.cms.hhs.gov/CoverageGenInfo/02_compendia.asp#<br />
TopOfPage<br />
June 5, CMS posted decision.<br />
2008<br />
To: Administrative File: CAG #00389<br />
From: Steve Phurrough, MD, MPA<br />
Director, Coverage and Analysis Group<br />
Louis Jacques, MD<br />
Director, Division of Items and Devices<br />
Kate Tillman, RN, MA<br />
Analyst<br />
Brijet Burton, PA-C<br />
Analyst<br />
Lori Paserchia, MD<br />
Lead Medical Officer<br />
Subject: The National Comprehensive Cancer Network (NCCN) Drugs<br />
and Biologics Compendium - Request for addition to the list<br />
of compendia for the identification of a medically accepted<br />
indication for the off label uses of drugs and biologicals in an<br />
anticancer chemotherapeutic regimen<br />
Date: June 5, 2008<br />
Background<br />
Section 1861(t)(2)(B)(ii)(I) of the Social Security Act (the Act), as amended by<br />
Section 6001 (f)(1) of the Deficit Reduction Act of 2005, Pub. Law 109-171, recognizes<br />
three compendia American Medical Association Drug Evaluations (AMA-DE), United<br />
States Pharmacopoeia-Drug Information (USP-DI) or its successor publication and<br />
American Hospital Formulary Service-Drug Information (AHFS-DI)as authoritative
sources for use in the determination of a "medically-accepted indication" of drugs and<br />
biologicals used off-label in an anticancer chemotherapeutic regimen, unless the<br />
Secretary has determined that the use is not medically appropriate or the use is<br />
identified as not indicated in one or more such compendia.<br />
Due to changes in the pharmaceutical reference industry, fewer of these statutorilynamed<br />
compendia are available for our reference (e.g., the AMA- DE and the USP-DI<br />
are no longer published; Thomson Micromedex has designated Drug Points as the<br />
successor to the USP-DI.). Consequently, CMS received requests from the stakeholder<br />
community for a process to revise the list of compendia. In the Physician Fee Schedule<br />
final rule for calendar year 2008, CMS established a process for revising the list of<br />
compendia, as authorized under section 1861(t)(2) of the Act, and also established a<br />
definition for “compendium.” See 72 Fed. Reg. 66222, 66303-66306, 66404. Under 42<br />
C.F.R. §.414.930(a), a compendium is defined “as a comprehensive listing of FDAapproved<br />
drugs and biologicals or a comprehensive listing of a specific subset of drugs<br />
and biologicals in a specialty compendium, for example, a compendium of anti-cancer<br />
treatment.” A compendium: (1) includes a summary of the pharmacologic<br />
characteristics of each drug or biological and may include information on dosage, as<br />
well as recommended or endorsed uses in specific diseases; (2) is indexed by drug or<br />
biological; (3) differs from a disease treatment guideline, which is indexed by disease.<br />
See 42 C.F.R. § 414.930(a); 72 Fed. Reg. 66222, 66404.<br />
In addition, CMS increased the transparency of the process by incorporating a list of<br />
desirable compendium characteristics outlined by the Medicare Evidence Development<br />
and Coverage <strong>Advisory</strong> <strong>Committee</strong> (Med<strong>CAC</strong>) as criteria for decision-making. The list<br />
of desirable compendium characteristics was developed by the Med<strong>CAC</strong> during a public<br />
session on March 30, 2006. The goal of this session was to review the evidence and<br />
advise CMS on the desirable characteristics of compendia for use in the determination<br />
of medically-accepted indications of drugs and biologicals in anti-cancer therapy. As a<br />
result of this meeting, the Med<strong>CAC</strong> generated the following list of desirable<br />
characteristics:<br />
Extensive breadth of listings.<br />
Quick processing from application for inclusion to listing.<br />
Detailed description of the evidence reviewed for every individual listing.<br />
Use of pre-specified published criteria for weighing evidence.<br />
Use of prescribed published process for making recommendations.<br />
Publicly transparent process for evaluating therapies.<br />
Explicit "Not recommended" listing when validated evidence is appropriate.<br />
Explicit listing and recommendations regarding therapies, including sequential<br />
use or combination in relation to other therapies.<br />
Explicit "Equivocal" listing when validated evidence is equivocal.<br />
Process for public identification and notification of potential conflicts of interest<br />
of the compendia's parent and sibling organizations, reviewers, and committee<br />
members, with an established procedure to manage recognized conflicts.<br />
We did not in regulation assign relative weights to these characteristics. Nor did we<br />
identify any characteristics as optional requirements, as we believe that all are
necessary to fulfill the purpose for which this designation is made. However, as<br />
provided in regulation, CMS may consider additional reasonable factors in its decision.<br />
See 72 Fed. Reg. at 66306.<br />
The drugs and biologicals used in the treatment of cancer are not benign agents.<br />
Boxed label “black box” warnings, a special FDA regulatory requirement, are<br />
commonly seen in many classes of agents: bevacizumab, rituximab, irinotecan,<br />
doxorubicin, busulfan, capecitabine, fludarabine, cetuximab, trastuzumab,<br />
gemtuzumab and docetaxel are but a few examples. The interests of Medicare<br />
beneficiaries who have cancer are safeguarded not only when appropriate uses of<br />
these agents are supported by Medicare payment, but equally so when inappropriate<br />
uses of these dangerous agents are discouraged by the absence of Medicare payment.<br />
Thus the explicit identification of indications that are not medically accepted is as<br />
necessary as the identification of indications that are medically accepted.<br />
We believe the public should have access to such materials as necessary to determine<br />
if a compendium’s actions are indeed consistent with its stated policies. As Medicare<br />
beneficiaries who have cancer have the greatest personal stake in this issue, indeed<br />
their lives may hang in balance, we believe that public access is less meaningful if it is<br />
not provided broadly. Thus, as provided in regulation, we will consider broad access of<br />
the compendia to the general public as an additional reasonable factor. See 72 Fed.<br />
Reg. at 66306.<br />
Request<br />
The first formal request, submitted by NCCN for the addition of the NCCN Drugs and<br />
Biologics Compendium to the list of compendia for the identification of a medically<br />
accepted indication for the off-label uses of drugs and biologicals in an anticancer<br />
chemotherapeutic regimen, was posted on February 8, 2008 on the CMS website. The<br />
American Society of Clinical <strong>Oncology</strong> (ASCO) submitted its own request for the same<br />
addition.<br />
Materials Reviewed<br />
Requestor Letter<br />
As required by CMS, the application submitted by NCCN includes a detailed description<br />
of how NCCN believes its compendium meets the CMS definition of a compendium and<br />
each of the ten Med<strong>CAC</strong> desirable characteristics. NCCN also discussed the evaluation<br />
of the NCCN Drugs and Biologics Compendium at the 2006 Med<strong>CAC</strong> meeting where it<br />
was ranked the highest amongst all evaluated compendia.<br />
ASCO requested the addition of the NCCN Drugs and Biologics Compendium to the<br />
list of statutorily named compendia. Since it was preceded by NCCN’s own request, we<br />
are considering the ASCO request as a secondary request. In its request ASCO<br />
addressed how this compendium satisfied each Med<strong>CAC</strong> identified desirable<br />
characteristic and how its free online availability offers the additional characteristic of<br />
broad accessibility
The NCCN and ASCO discussed the NCCN’s specific conflict of interest policies and<br />
processes that include but are not limited to the definitions of “conflicting interest”,<br />
“direct relationship”, “indirect relationship”, and “external entity.” In addition, the<br />
NCCN stated that they “publicly disclose a listing of all potential conflicts of interest<br />
[and] provides a full disclosure of every organization that has provided funding to the<br />
NCCN” online.<br />
Public Comments<br />
As required under 42 C.F.R. § 414.930(b), CMS opened a 30 calendar day public<br />
comment period starting on the date this request was posted to receive feedback on<br />
the addition of the NCCN Drugs and Biologics Compendium to the list of compendia.<br />
CMS received one public comment regarding the addition of the NCCN Drugs and<br />
Biologics Compendium to the list of statutorily named compendia. The comment<br />
came from the biopharmaceutical company, ImClone Systems Incorporated, in support<br />
of the addition of the free, web based NCCN Drugs and Biologics Compendium to the<br />
list of statutorily named compendia. ImClone Systems commented that it believes that<br />
the NCCN Drugs and Biologics Compendium meets the compendium definition and<br />
fulfills the Med<strong>CAC</strong> identified desirable characteristics. As an additional characteristic of<br />
consideration, ImClone Systems discussed the strong qualifications of the experts<br />
used on NCCN’s editorial board in the analysis of emerging clinical evidence that may<br />
not have the support of prospective, double-blinded clinical studies.<br />
Other Relevant Comments<br />
CMS received a letter from the Senate Finance <strong>Committee</strong>, signed by Senator Max<br />
Baucus, Senator Charles E. Grassley, Senator John D. Rockefeller and Senator Orrin G.<br />
Hatch. They expressed a particular interest with the CMS compendia review process,<br />
specifically noting “…conflicts of interest on the part of authors who contribute to the<br />
compendia.” In the correspondence, it was requested “…that CMS rely solely on<br />
compendia that are developed under policies of transparency and financial<br />
disclosure…”<br />
The NCCN and ASCO discussed the NCCN’s specific conflict of interest policies and<br />
processes that include but are not limited to the definitions of “conflicting interest”,<br />
“direct relationship”, “indirect relationship”, and “external entity.” In addition, the<br />
NCCN stated that they “publicly disclose a listing of all potential conflicts of interest<br />
[and] provides a full disclosure of every organization that has provided funding to the<br />
NCCN” online.<br />
NCCN Drugs and Biologics Compendium<br />
As part of the compendium application submission, CMS requires access to the<br />
compendium under review. CMS had unlimited access to the NCCN Drugs and<br />
Biologics Compendium during the entire review process, which allowed CMS to<br />
navigate the compendium database in order to assess its infrastructure and content.
Analysis<br />
1.<br />
2. The product known as the NCCN Drugs and Biologics Compendium is a<br />
compendium as defined by CMS in the regulation because it includes a summary<br />
of the pharmacologic characteristics of each drug or biological, information on<br />
dosage, recommended or endorsed uses in specific diseases and is indexed by<br />
drug or biological rather than by disease.<br />
3. The NCCN Drugs and Biologics Compendium addresses each of the Med<strong>CAC</strong><br />
identified desirable characteristics as noted below.<br />
It provides an extensive breadth of listings by including 196 drugs and biologics<br />
that cover all major cancer types. The NCCN addresses all anticancer drugs<br />
recommended in the NCCN Clinical Practice Guidelines in <strong>Oncology</strong>. These<br />
guidelines are estimated to cover 97% of patients with cancer.<br />
It is designed to provide quick processing from application for inclusion to listing<br />
by providing updates usually within two to four weeks of a major new published<br />
study, a major action by the FDA, or other events such as the stopping of a<br />
national trial for positive or negative reasons.<br />
It provides a detailed description of the evidence reviewed for every individual<br />
listing via its seamless linkage to NCCN Guidelines, which cite specific studies<br />
that are the basis for recommendations.<br />
It provides for all to see on the NCCN website pre-specified published criteria for<br />
weighing evidence that focus on the quality of evidence and the degree of<br />
consensus resulting in the creation of a category of evidence and consensus,<br />
which directly guide the process of decision-making leading to recommendations<br />
in the NCCN Drugs and Biologics Compendium.<br />
It uses a prescribed published process for evaluating therapies, which is<br />
available for all to see on its website. When formulating recommendations,<br />
disease-specific expert panels develop initial drafts and circulate to member<br />
institutions for comment. The staff then collates comments and the panel<br />
reconvenes to formulate guidelines. Annual update meetings are held to review<br />
guidelines.<br />
It uses a publicly transparent process for evaluating therapies including a<br />
catalog and description of all changes and updates and a listing of all involved<br />
panel members, which are available to the public on its website. In addition,<br />
ample opportunity to make comments and suggestions is provided to the health<br />
care community via the website as well as via national conferences and regional<br />
symposia. Validity assessment is subjective and based on expert panel<br />
evaluation.<br />
It has a process for delisting an indication and explicitly notes a "Not<br />
recommended" listing when validated evidence is appropriate.<br />
It provides information regarding the appropriate patient population and<br />
appropriate circumstance and time for the use of a drug or biologic alone or in<br />
combination and therefore provides explicit listing and recommendations<br />
regarding therapies, including sequential use or combination in relation to other<br />
therapies.<br />
It institutes a policy and procedure that focuses its recommendations based on a
specific setting; hence it will explicitly note an "Equivocal" listing when validated<br />
evidence is equivocal. This type of listing is available to the public on its website.<br />
It incorporates a process for public identification and notification of potential<br />
conflicts of interest of the compendia's parent and sibling organizations,<br />
reviewers, and committee members, with an established procedure to manage<br />
recognized conflicts. The policy, including definitions for pertinent terms such as<br />
“conflicting interest” and “direct relationship,” and public disclosure the listing of<br />
all potential conflicts of interest and full disclosure of every organization that has<br />
provided funding to NCCN on their website. Member dues pay staff and<br />
operating costs, while industry grants pay distribution costs.<br />
3.<br />
4. The NCCN Drugs and Biologics Compendium is available via the internet<br />
without charge and is updated continually. We note that NCCN’s provision of free<br />
online public is an additional factor that we consider to be a significant positive<br />
attribute. We believe that this broad access supports public transparency and<br />
facilitates the independent review of NCCN’s recommendations by interested<br />
outside public parties.<br />
5. There was only one public comment; we note that it supported the request.<br />
In summary, we have determined that the NCCN Drugs and Biologics Compendium<br />
meets the definition of a compendium as defined by 42 C.F.R. § 414.930(a); 72 Fed.<br />
Reg. 66222, 66404 as well as all of the criteria created by the Med<strong>CAC</strong> and referenced<br />
in regulation. It also provides the additional desirable factor of broad public<br />
accessibility.<br />
Indications that are listed in compendia as “Equivocal” are neither “supported” nor<br />
“identified as not indicated” as described in §1861(t)(2)(B)(ii)(I). Thus we cannot from<br />
such compendia citations identify the use as a “medically accepted indication” nor can<br />
we identify the use as “not indicated.” We believe that such scenarios are most<br />
appropriately addressed by applying the provisions of the succeeding requirements in<br />
§1861(t)(2)(B)(ii)(II), which are manualized in the Medicare Benefit Policy Manual,<br />
Chapter 15, Section 50.4.5, subsection D.<br />
Conclusion<br />
The NCCN Drugs and Biologics Compendium is an authoritative compendium for<br />
such purposes as defined and outlined in 42 C.F.R. § 414.930(a); 72 Fed. Reg. 66222,<br />
66404. Therefore, we are adding the NCCN Drugs and Biologics Compendium to the<br />
list of compendia in Chapter 15, section 50.4.5 of the Medicare Benefit Policy Manual,<br />
for use in the determination of a "medically-accepted indication" of drugs and<br />
biologicals used off-label in an anticancer chemotherapeutic regimen, unless the<br />
Secretary has determined that the use is not medically appropriate or the use is<br />
identified as not indicated in one or more such compendia.<br />
Indications that the NCCN Drugs and Biologics Compendium lists as “Recommended”<br />
will be considered medically accepted indications for the purposes of determining<br />
coverage policy.
Indications that the NCCN Drugs and Biologics Compendium lists as “Not<br />
Recommended” will not be considered medically accepted indications for the purposes<br />
of determining coverage policy.<br />
Medicare contractors, as instructed in subsection D of Chapter 15, section 50.4.5 of<br />
the Medicare Benefit Policy Manual, shall consider the peer reviewed medical literature<br />
for indications that the NCCN Drugs and Biologics Compendium lists as “Equivocal”.
Thomson Micromedex DrugDex ® Compendium Revision Request -<br />
CAG-00391<br />
Date<br />
2/19/2008<br />
Public Comment Period<br />
2/19/2008 - 3/20/2008 - View Public Comments<br />
Issue The Social Security Act Section 1861(t)(2)(B)(ii)(I) recognizes the following<br />
compendia: American Medical Association Drug Evaluations (AMA-DE), United<br />
States Pharmacopoeia-Drug Information (USP-DI) or its successor publication<br />
[amended in Section 6001 (f)(1) of the DRA] and American Hospital<br />
Formulary Service-Drug Information (AFHS-DI) as authoritative sources for<br />
use in the determination of a “medically-accepted indication” of drugs and<br />
biologicals used off-label in an anticancer chemotherapeutic regimen.<br />
However, AFHS-DI is the only originally named compendium currently in<br />
publication..<br />
Requesto<br />
r<br />
Name(s)<br />
Formal<br />
Request<br />
Accepted<br />
and<br />
Review<br />
Initiated<br />
Expected<br />
Completi<br />
on Date<br />
Lead<br />
Analyst(s<br />
)<br />
CMS received a timely complete request for the addition of the Thomson<br />
Micromedex compendium DrugDex ® to the list of compendia for this use in<br />
the Medicare program. DrugDex ® is on the list of statutorily named<br />
compendia in the Medicaid program for use in the determination of a<br />
“medically-accepted indication” of an off-label drug.<br />
Thomson Micromedex<br />
View Requestor Letter<br />
February 19, 2008<br />
June 17, 2008<br />
Kate Tillman, RN, MA<br />
Katherine.Tillman@cms.hhs.gov<br />
Brijet Burton, MS, PA-C<br />
Brijet.Burton2@cms.hhs.gov<br />
Lead Lori Paserchia, MD
Medical<br />
Officer(s)<br />
Actions<br />
Taken<br />
Februar<br />
y 19,<br />
2008<br />
June<br />
10,<br />
2008<br />
Thomson Micromedex requested the formal addition of DrugDex ®<br />
to the list of compendia used by the Medicare program in the<br />
determination of a “medically accepted indication” for off-label<br />
drugs and biologics used in an anticancer chemotherapeutic<br />
treatment regimen. The public comment period begins the date of<br />
this posting and ends after 30-calendar days. CMS considers all<br />
public comments, and is particularly interested in your feedback on<br />
the addition of DrugDex ® to this list of compendia.<br />
Formal public comments may be submitted through the highlighted<br />
“comment” link located at the top of this web page.<br />
Instructions on how to submit a request to revise the list of<br />
compendia may be found<br />
at http://www.cms.hhs.gov/CoverageGenInfo/02_compendia.asp#T<br />
opOfPage<br />
Posted decision.<br />
To: Administrative File: CAG #00391<br />
From: Steve Phurrough, MD, MPA<br />
Director, Coverage and Analysis Group<br />
Louis Jacques, MD<br />
Director, Division of Items and Devices<br />
Kate Tillman, RN, MA<br />
Analyst<br />
Brijet Burton, PA-C<br />
Analyst<br />
Lori Paserchia, MD<br />
Lead Medical Officer<br />
Subject: Thomson Micromedex DrugDex ® - Request for addition to the list<br />
of compendia for the identification of a medically accepted<br />
indication for the off-label uses of drugs and biologicals in an<br />
anticancer chemotherapeutic regimen<br />
Date: June 10, 2008<br />
Background
Section 1861(t)(2)(B)(ii)(I) of the Social Security Act (the Act), as amended by Section<br />
6001 (f)(1) of the Deficit Reduction Act of 2005, Pub. Law 109-171, recognizes three<br />
compendia American Medical Association Drug Evaluations (AMA-DE), United States<br />
Pharmacopoeia-Drug Information (USP-DI) or its successor publication and American<br />
Hospital Formulary Service-Drug Information (AHFS-DI) as authoritative sources for use in<br />
the determination of a "medically-accepted indication" of drugs and biologicals used offlabel<br />
in an anticancer chemotherapeutic regimen, unless the Secretary has determined that<br />
the use is not medically appropriate or the use is identified as not indicated in one or more<br />
such compendia.<br />
Due to changes in the pharmaceutical reference industry, fewer of these statutorily-named<br />
compendia are available for our reference (e.g., the AMA- DE and the USP-DI are no longer<br />
published). Consequently, CMS received requests from the stakeholder community for a<br />
process to revise the list of compendia. In the Physician Fee Schedule final rule for calendar<br />
year 2008, CMS established a process for revising the list of compendia, as authorized<br />
under section 1861(t)(2) of the Act, and also established a definition for “compendium.”<br />
See 72 Fed. Reg. 66222, 66303-66306, 66404. Under 42 C.F.R.<br />
§ 414.930(a), a compendium is defined “as a comprehensive listing of FDA-approved drugs<br />
and biologicals or a comprehensive listing of a specific subset of drugs and biologicals in a<br />
specialty compendium, for example, a compendium of anti-cancer treatment.” A<br />
compendium: (1) includes a summary of the pharmacologic characteristics of each drug or<br />
biological and may include information on dosage, as well as recommended or endorsed<br />
uses in specific diseases; (2) is indexed by drug or biological. See 42 C.F.R. § 414.930(a);<br />
72 Fed. Reg. 66222, 66404.<br />
In addition, CMS increased the transparency of the process by incorporating a list of<br />
desirable compendium characteristics outlined by the Medicare Evidence Development and<br />
Coverage <strong>Advisory</strong> <strong>Committee</strong> (Med<strong>CAC</strong>) as criteria for decision-making. The list of<br />
desirable compendium characteristics was developed by the Med<strong>CAC</strong> during a public<br />
session on March 30, 2006. The goal of this session was to review the evidence and advise<br />
CMS on the desirable characteristics of compendia for use in the determination of<br />
medically-accepted indications of drugs and biologicals in anti-cancer therapy. As a result<br />
of this meeting, the Med<strong>CAC</strong> generated the following list of desirable characteristics:<br />
Extensive breadth of listings.<br />
Quick processing from application for inclusion to listing.<br />
Detailed description of the evidence reviewed for every individual listing.<br />
Use of pre-specified published criteria for weighing evidence.<br />
Use of prescribed published process for making recommendations.<br />
Publicly transparent process for evaluating therapies.<br />
Explicit "Not recommended" listing when validated evidence is appropriate.<br />
Explicit listing and recommendations regarding therapies, including sequential use or<br />
combination in relation to other therapies.<br />
Explicit "Equivocal" listing when validated evidence is equivocal.<br />
Process for public identification and notification of potential conflicts of interest of the<br />
compendia's parent and sibling organizations, reviewers, and committee members,<br />
with an established procedure to manage recognized conflicts.
We did not in regulation assign relative weights to these characteristics. Nor did we identify<br />
any characteristics as optional requirements, as we believe that all are necessary to fulfill<br />
the purpose for which this designation is made. However, as provided in regulation, CMS<br />
may consider additional reasonable factors in its decision. See 72 Fed. Reg. at 66306.<br />
The drugs and biologicals used in the treatment of cancer are not benign agents. Boxed<br />
label “black box” warnings, a special FDA regulatory requirement, are commonly seen in<br />
many classes of agents: bevacizumab, rituximab, irinotecan, doxorubicin, busulfan,<br />
capecitabine, fludarabine, cetuximab, trastuzumab, gemtuzumab and docetaxel are but a<br />
few examples. The interests of Medicare beneficiaries who have cancer are safeguarded not<br />
only when appropriate uses of these agents are supported by Medicare payment, but<br />
equally so when inappropriate uses of these dangerous agents are discouraged by the<br />
absence of Medicare payment. Thus the explicit identification of indications that are not<br />
medically accepted is as necessary as the identification of indications that are medically<br />
accepted.<br />
We believe the public should have access to such materials as necessary to determine if a<br />
compendium’s actions are indeed consistent with its stated policies. As Medicare<br />
beneficiaries who have cancer have the greatest personal stake in this issue, indeed their<br />
lives may hang in balance, we believe that public access is less meaningful if it is not<br />
provided broadly. Thus, as provided in regulation, we will consider broad access of the<br />
compendia to the general public as an additional reasonable factor. See 72 Fed. Reg. at<br />
66306.<br />
Request<br />
A formal request submitted by Thomson Healthcare for the addition of Thomson<br />
Micromedex DrugDex ® to the list of compendia for the identification of a medically<br />
accepted indication for the off-label uses of drugs and biologicals in an anticancer<br />
chemotherapeutic regimen was posted on February 19, 2008 on the CMS website.<br />
Materials Reviewed<br />
Requestor Letter<br />
As required by CMS, the application submitted by Thomson Healthcare includes a detailed<br />
description of how Thomson Healthcare believes its compendium meets the CMS definition<br />
of a compendium and each of the ten Med<strong>CAC</strong> desirable characteristics.<br />
Public Comments<br />
As required under 42 C.F.R. § 414.930(b), CMS opened a 30 calendar day public comment<br />
period starting on the date this request was posted to receive feedback on the addition of<br />
Thomson Micromedex DrugDex ® to the list of compendia.<br />
CMS received a general public comment from the Biotechnology Industry Organization<br />
(BIO) in support of the addition of all compendia for which a request to add such<br />
publication to the list of compendia for the identification of a medically accepted indication
for the off-label uses of drugs and biologicals in an anticancer chemotherapeutic regimen<br />
has been submitted. BIO stated that it recognizes that the content of each compendium<br />
differs “in publication schedules, priorities, review processes, local practices and methods<br />
of describing the evidence of each listing”. However, BIO believes that the addition of all<br />
these compendia is critical to the improvement of Medicare beneficiaries’ access to timesensitive<br />
cancer treatment options.<br />
CMS received a public comment opposing the addition of Thomson Micromedex DrugDex ®<br />
to the list of statutorily named compendia. The American Society of Health-System<br />
Pharmacists (ASHP) stated that it does not support the addition of DrugDex ® to the list of<br />
compendia unless CMS determines that Thomson meets the transparency and conflict of<br />
interest criteria identified by Med<strong>CAC</strong>. ASHP cited in support of this concern one Wall Street<br />
Journal article that discusses “[DrugDex ®] connections with the pharmaceutical industry.”<br />
Following this publication, ASHP notes the deletion of “author attributions in [the DrugDex<br />
®] database.” The only other support ASHP provided was that of author Marcia Angell, MD,<br />
referenced from her book, The Truth about the Drug Companies: How They Deceive Us and<br />
What to Do about It, that according to ASHP is “highly critical of the influence of<br />
pharmaceutical manufacturers on DrugDex ®”. We attempted unsuccessfully to contact Dr.<br />
Angell to determine if this is an accurate representation of her current position on this<br />
issue. In addition, ASHP questioned the authority of CMS to recognize DrugDex ® during<br />
the sub-regulatory compendia review process because “Thomson is requesting that its<br />
DrugDex ® [compendium] be included by the CMS in the list of compendia appropriate for<br />
identifying medically accepted indications for purposes of Medicare Part A and B” even<br />
though ASHP states that the compendia review process is only applicable to Medicare Part<br />
B.<br />
Other Relevant Comments<br />
CMS received a letter from the Senate Finance <strong>Committee</strong>, signed by Senator Max Baucus,<br />
Senator Charles E. Grassley, Senator John D. Rockefeller and Senator Orrin G. Hatch. They<br />
expressed a particular interest with the CMS compendia review process, specifically noting<br />
“…conflicts of interest on the part of authors who contribute to the compendia.” In the<br />
correspondence, the Senators requested “…that CMS rely solely on compendia that are<br />
developed under policies of transparency and financial disclosure…”<br />
Thomson Healthcare submitted a letter responding to the transparency and conflict of<br />
interest issues raised by ASHP pertaining to DrugDex ®. In its response, Thomson refers to<br />
its conflict of interest policy that it states “is consistent with industry standards” and “easily<br />
reviewed on [its] website”. Within the discussion of its conflict of interest policy, Thomson<br />
Healthcare also outlines the disclosure and disqualification requirements for “individuals<br />
involved with literature evaluation and content development” to address the concerns of<br />
ASHP that these individuals “are not influenced by financial conflicts of interest,” such as<br />
those that can originate through ties to the pharmaceutical industry. In addition, Thomson<br />
Healthcare states that Medicare Part A references were only included in its compendia<br />
request to complete its application, not for recognition by CMS in the Medicare Part B<br />
compendia review process.<br />
Thomson Micromedex DrugDex ®
As part of the compendium application submission, CMS requires access to the<br />
compendium under review, which would be available to subscribers of the compendium.<br />
CMS was provided with unlimited access to the Thomson Micromedex DrugDex ® during<br />
the entire review process, which allowed CMS to navigate the compendium database in<br />
order to assess its infrastructure and content.<br />
Analysis<br />
1. The product known as Thomson Micromedex DrugDex ® is a compendium as defined<br />
by CMS in the regulation because it includes a summary of the pharmacologic<br />
characteristics of each drug or biological, information on dosage, recommended or<br />
endorsed uses in specific diseases and is indexed by drug or biological rather than by<br />
disease.<br />
2. Thomson Micromedex DrugDex ® addresses each of the Med<strong>CAC</strong> identified desirable<br />
characteristics as noted below.<br />
o It provides an extensive breadth of listings by listing more than 2300 drugs and<br />
biologics including prescription, non-prescription and investigational products.<br />
FDA-approved indications and off-label uses are presented as well.<br />
o It is designed to provide quick processing from application for inclusion to<br />
listing by conducting an ongoing editorial review of the world’s primary<br />
literature published in thousands of peer-reviewed journals, FDA-approved<br />
product labeling, clinical judgment and recommendations, regulatory standards<br />
and compliance, national healthcare trends, editorial board suggestions,<br />
external requests, and policy changes in health and disease management from<br />
professional health organizations. Online updates of the compendium are<br />
provided weekly.<br />
o It provides a detailed description of the evidence reviewed for every individual<br />
listing and fully cites specific studies that are the basis for recommendations.<br />
o It provides on the DrugDex ® website pre-specified published criteria for<br />
weighing evidence that focus on the efficacy, strength of recommendation and<br />
strength of evidence, which directly guide the process of decision-making<br />
leading to recommendations.<br />
o It uses a prescribed published process for evaluating therapies, which is<br />
available for subscribers to see on its website. When formulating<br />
recommendations, clinical staff develops drafts, which are reviewed by internal<br />
experts and the Chief Medical Officer. The draft may also be reviewed by an<br />
<strong>Oncology</strong> <strong>Advisory</strong> Board if the subject involves a new FDA-unapproved use<br />
related to oncology or a significant ratings change related to oncology. The<br />
staff then collates all comments and formulates the final document.<br />
o It presents the process used for evaluating therapies to subscribers via its<br />
website including a listing of all involved panel members. There is an<br />
opportunity for the public to request the inclusion of information , such as<br />
specific articles or studies, in the compendium; the policy and process<br />
regarding an external request is presented to subscribers via the website.<br />
o It explicitly notes when the use of a drug or biologic is not recommended<br />
(denoted with a “Class III” rating) when validated evidence is appropriate.<br />
o It provides information regarding the appropriate patient population and<br />
appropriate circumstance and time for the use of a drug or biologic alone or in
combination and therefore provides explicit listing and recommendations<br />
regarding therapies, including sequential use or combination in relation to other<br />
therapies.<br />
o It institutes a policy and procedure that focuses its recommendations based on<br />
a specific setting; hence it will explicitly note an "Equivocal" listing (denoted as<br />
“Class indeterminate”) when validated evidence is equivocal. This type of listing<br />
is available to subscribers via its website.<br />
o It incorporates a process for identification and notification of potential conflicts<br />
of interest of the compendia's parent and sibling organizations, internal and<br />
external reviewers and internal and external committee members, with an<br />
established procedure to manage recognized conflicts. The policy and process<br />
are disclosed to subscribers via its website along with a listing of all potential<br />
and real conflicts of interest.<br />
3. DrugDex ® is available to subscribers via the internet.<br />
4. There was only one public comment specific to DrugDex ®; we note that it opposed<br />
the request and made mention that the compendia review process is only applicable<br />
to Medicare Part B. Section 1861(t) of the Act, which defines drugs and biologics for<br />
the Medicare benefit, does not restrict its scope to determinations under Medicare<br />
Part B. Thus, we find that the objection is not pertinent to the question at hand. We<br />
note that the commenter, ASHP, publishes its own compendium, AHFS Drug<br />
Information, which is recognized as an authoritative compendium for the<br />
identification of a medically accepted indication for the off-label uses of drugs and<br />
biologicals in an anticancer chemotherapeutic regimen.<br />
The commenter called attention to potential conflict of interest and transparency<br />
issues pertinent to DrugDex ®. However we were not provided with primary<br />
evidence, i.e. what materials may have been considered by the authors of the<br />
newspaper article and the book. In addition we were unable to confirm that the<br />
opinion of Dr. Angell cited by the commenter is an accurate representation of her<br />
current opinion. Thus, we assign less evidentiary weight to those materials than to<br />
systematic technology assessments and Med<strong>CAC</strong> recommendations. We note that the<br />
2006 Med<strong>CAC</strong>, which considered such a technology assessment as well as broad<br />
public input, expressed overall confidence that DrugDex ® has adequately stated<br />
evidence based criteria and that it adheres to evidence based criteria and processes<br />
in making recommendations.<br />
We would in the future consider additional evidence if provided, as well as a request<br />
to remove DrugDex ® from the list. However we have determined at this time that<br />
the currently available body of evidence does not support the denial of Thomson’s<br />
request.<br />
In summary, we have determined that Thomson Micromedex DrugDex ® meets the<br />
definition of a compendium as defined by 42 C.F.R. § 414.930(a); 72 Fed. Reg. 66222,<br />
66304 as well as all of the criteria created by the Med<strong>CAC</strong> and referenced in regulation.
Conclusion<br />
Thomson Micromedex DrugDex ® is an authoritative compendium for such purposes as<br />
defined and outlined in 42 C.F.R. § 414.930(a); 72 Fed. Reg. 66222, 66404. Therefore, we<br />
are adding Thomson Micromedex DrugDex ® to the list of compendia in Chapter 15,<br />
section 50.4.5 of the Medicare Benefit Policy Manual, for use in the determination of a<br />
"medically-accepted indication" of drugs and biologicals used off-label in an anticancer<br />
chemotherapeutic regimen, unless the Secretary has determined that the use is not<br />
medically appropriate or the use is identified as not indicated in one or more such<br />
compendia.<br />
Indications that DrugDex ® lists as “Class I, Class IIa or Class IIb” recommendations<br />
and/or efficacy will be considered medically accepted indications for the purposes of<br />
determining coverage policy.<br />
Indications that DrugDex ® lists as “Class III” recommendations and/or efficacy will not be<br />
considered medically accepted indications for the purposes of determining coverage policy.<br />
Indications that are listed in the compendia as “Class indeterminate” are neither<br />
“supported” nor “identified as not indicated” as described in §1861(t)(2)(B)(ii)(I). Thus, we<br />
cannot identify whether such compendia citations are “medically accepted indications”<br />
within the meaning of that section. We believe that these situations are most appropriately<br />
addressed under §1861(t)(2)(B)(ii)(II) .
Clinical Pharmacology Compendium Revision Request - CAG-00392<br />
Date<br />
3/4/2008<br />
Public Comment Period<br />
3/4/2008 - 4/3/2008 - View Public Comments<br />
Issue The Social Security Act Section 1861(t)(2)(B)(ii)(I) recognizes the<br />
following compendia: American Medical Association Drug Evaluations<br />
(AMA-DE), United States Pharmacopoeia-Drug Information (USP-DI) or its<br />
successor publication [amended in Section 6001 (f)(1) of the DRA] and<br />
American Hospital Formulary Service-Drug Information (AFHS-DI) as<br />
authoritative sources for use in the determination of a “medically-accepted<br />
indication” of drugs and biologicals used off-label in an anticancer<br />
chemotherapeutic regimen. However, AFHS-DI is the only originally<br />
named compendium currently in publication.<br />
Requestor<br />
Name(s)<br />
Formal<br />
Request<br />
Accepted<br />
and Review<br />
Initiated<br />
Expected<br />
Completion<br />
Date<br />
Lead<br />
Analyst(s)<br />
CMS received a timely complete request for the addition of the Gold<br />
Standard Inc. Clinical Pharmacology compendium to the list of compendia<br />
for this use.<br />
Gold Standard Inc., Elsevier Health Sciences<br />
View Requestor Letter<br />
March 4, 2008<br />
July 2, 2008<br />
Kate Tillman, RN, MA<br />
Katherine.Tillman@cms.hhs.gov<br />
Brijet Burton, MS, PA-C<br />
Brijet.Burton2@cms.hhs.gov<br />
Lead Medical Lori Paserchia, MD<br />
Officer(s)<br />
Actions
Taken<br />
March 4,<br />
2008<br />
Gold Standard Inc. requested the formal addition of Clinical Pharmacology<br />
to the list of statutorily named compendia. The public comment period<br />
begins the date of this posting and ends after 30-calendar days. CMS<br />
considers all public comments, and is particularly interested in your<br />
feedback on the addition of Clinical Pharmacology to the list of compendia.<br />
Formal public comments may be submitted through the highlighted<br />
“comment” link located at the top of this web page.<br />
Instructions on how to submit a request to revise the list of compendia<br />
may be found at<br />
http://www.cms.hhs.gov/CoverageGenInfo/02_compendia.asp#TopOfPage<br />
July 2, 2008 Posted Decision.<br />
To: Administrative File: CAG #00392<br />
From: Steve Phurrough, MD, MPA<br />
Director, Coverage and Analysis Group<br />
Louis Jacques, MD<br />
Director, Division of Items and Devices<br />
Kate Tillman, RN, MA<br />
Analyst<br />
Brijet Burton, PA-C<br />
Analyst<br />
Lori Paserchia, MD<br />
Lead Medical Officer<br />
Subject: Clinical Pharmacology - Request for addition to the list of<br />
compendia for the identification of a medically accepted<br />
indication for the off-label uses of drugs and biologicals in an<br />
anticancer chemotherapeutic regimen<br />
Date: July 2, 2008<br />
Background<br />
Section 1861(t)(2)(B)(ii)(I) of the Social Security Act (the Act), as amended by Section<br />
6001(f)(1) of the Deficit Reduction Act of 2005, Pub. Law 109-171, recognizes three<br />
compendia American Medical Association Drug Evaluations (AMA-DE), United States<br />
Pharmacopoeia-Drug Information (USP-DI) or its successor publication and American<br />
Hospital Formulary Service-Drug Information (AHFS-DI) as authoritative sources for use in<br />
the determination of a "medically-accepted indication" of drugs and biologicals used offlabel<br />
in an anticancer chemotherapeutic regimen, unless the Secretary has determined that
the use is not medically appropriate or the use is identified as not indicated in one or more<br />
such compendia.<br />
Due to changes in the pharmaceutical reference industry, fewer of these statutorily-named<br />
compendia are available for our reference (e.g., the AMA- DE and the USP-DI are no longer<br />
published; Thomson Micromedex has designated Drug Points ® as the successor to USP-<br />
DI). Consequently, CMS received requests from the stakeholder community for a process to<br />
revise the list of compendia. In the Physician Fee Schedule final rule for calendar year<br />
2008, CMS established a process for revising the list of compendia, as authorized under<br />
section 1861(t)(2) of the Act, and also established a definition for “compendium.” See 72<br />
Fed. Reg. 66222, 66303-66306, 66404. Under 42 C.F.R.<br />
§ 414.930(a), a compendium is defined “as a comprehensive listing of FDA-approved drugs<br />
and biologicals or a comprehensive listing of a specific subset of drugs and biologicals in a<br />
specialty compendium, for example, a compendium of anti-cancer treatment.” A<br />
compendium: (1) includes a summary of the pharmacologic characteristics of each drug or<br />
biological and may include information on dosage, as well as recommended or endorsed<br />
uses in specific diseases; (2) is indexed by drug or biological. See 42 C.F.R. § 414.930(a);<br />
72 Fed. Reg. 66222, 66404.<br />
In addition, CMS increased the transparency of the process by incorporating a list of<br />
desirable compendium characteristics outlined by the Medicare Evidence Development and<br />
Coverage <strong>Advisory</strong> <strong>Committee</strong> (Med<strong>CAC</strong>) as criteria for decision-making. The list of<br />
desirable compendium characteristics was developed by the Med<strong>CAC</strong> during a public<br />
session on March 30, 2006. The goal of this session was to review the evidence and advise<br />
CMS on the desirable characteristics of compendia for use in the determination of<br />
medically-accepted indications of drugs and biologicals in anti-cancer therapy. As a result<br />
of this meeting, the Med<strong>CAC</strong> generated the following list of desirable characteristics:<br />
Extensive breadth of listings.<br />
Quick processing from application for inclusion to listing.<br />
Detailed description of the evidence reviewed for every individual listing.<br />
Use of pre-specified published criteria for weighing evidence.<br />
Use of prescribed published process for making recommendations.<br />
Publicly transparent process for evaluating therapies.<br />
Explicit "Not recommended" listing when validated evidence is appropriate.<br />
Explicit listing and recommendations regarding therapies, including sequential use or<br />
combination in relation to other therapies.<br />
Explicit "Equivocal" listing when validated evidence is equivocal.<br />
Process for public identification and notification of potential conflicts of interest of the<br />
compendia's parent and sibling organizations, reviewers, and committee members,<br />
with an established procedure to manage recognized conflicts.<br />
We did not in regulation assign relative weights to these characteristics. Nor did we identify<br />
any characteristics as optional requirements, as we believe that all are necessary to fulfill<br />
the purpose for which this designation is made. However, as provided in regulation, CMS<br />
may consider additional reasonable factors in its decision. See 72 Fed. Reg. at 66306.
The drugs and biologicals used in the treatment of cancer are not benign agents. Boxed<br />
label “black box” warnings, a special FDA regulatory requirement, are commonly seen in<br />
many classes of agents: bevacizumab, rituximab, irinotecan, doxorubicin, busulfan,<br />
capecitabine, fludarabine, cetuximab, trastuzumab, gemtuzumab and docetaxel are but a<br />
few examples. The interests of Medicare beneficiaries who have cancer are safeguarded not<br />
only when appropriate uses of these agents are supported by Medicare payment, but<br />
equally so when inappropriate uses of these dangerous agents are discouraged by the<br />
absence of Medicare payment. Thus the explicit identification of indications that are not<br />
medically accepted is as necessary as the identification of indications that are medically<br />
accepted.<br />
We believe the public should have access to such materials as necessary to determine if a<br />
compendium’s actions are indeed consistent with its stated policies. As Medicare<br />
beneficiaries who have cancer have the greatest personal stake in this issue, indeed their<br />
lives may hang in balance, we believe that public access is less meaningful if it is not<br />
provided broadly. Thus, as provided in regulation, we will consider broad access of the<br />
compendia to the general public as an additional reasonable factor. See 72 Fed. Reg. at<br />
66306.<br />
Request<br />
A formal request submitted by Gold Standard Inc. and Elsevier Health Sciences for the<br />
addition of Clinical Pharmacology to the list of compendia for the identification of a<br />
medically accepted indication for the off-label use of drugs and biologicals in an anti-cancer<br />
therapeutic regimen was posted on March 4, 2008 on the CMS website.<br />
Materials Reviewed<br />
Requestor Letter<br />
As required by CMS, the application submitted by Gold Standard Inc. and Elsevier Health<br />
Sciences includes a detailed description of how Gold Standard Inc. and Elsevier Health<br />
Sciences believes its compendium meets the CMS definition of a compendium and each of<br />
the ten Med<strong>CAC</strong> desirable characteristics.<br />
Public Comments<br />
As required under 42 C.F.R. § 414.930(b), CMS opened a 30 calendar day public comment<br />
period starting on the date this request was posted to receive feedback on the addition of<br />
Clinical Pharmacology to the list of compendia.<br />
CMS received a general public comment from the Biotechnology Industry Organization<br />
(BIO) in support of the addition of all compendia for which a request to add such<br />
publication to the list of compendia for the identification of a medically accepted indication<br />
for the off-label uses of drugs and biologicals in an anticancer chemotherapeutic regimen<br />
had been submitted. BIO commented that the content of each compendium differs “in<br />
publication schedules, priorities, review processes, local practices and methods of<br />
describing the evidence of each listing”. However, BIO commented that it believes that the
addition of all these compendia is critical to the improvement of Medicare beneficiaries’<br />
access to time-sensitive cancer treatment options.<br />
CMS received a total of four comments during the public comment period in regard to the<br />
addition of Clinical Pharmacology to the list of statutorily named compendia. These<br />
comments were representative of industry, a health care facility, and the general public. All<br />
four commenters supported the addition of Clinical Pharmacology to the list of compendia.<br />
The commenters attributed the usefulness of the Clinical Pharmacology compendium for<br />
off-label use to its broad accessibility, timeliness and user-friendly format. Commenters<br />
also noted although they view this compendium as a vital clinical resource, formal<br />
recognition of the Clinical Pharmacology would allow it to be an authoritative resource for<br />
Medicare coverage determinations.<br />
Other Relevant Comments<br />
CMS received a letter from the Senate Finance <strong>Committee</strong>, signed by Senator Max Baucus,<br />
Senator Charles E. Grassley, Senator John D. Rockefeller and Senator Orrin G. Hatch. They<br />
expressed a particular interest with the CMS compendia review process, specifically noting<br />
“…conflicts of interest on the part of authors who contribute to the compendia.” In the<br />
correspondence, it was requested “…that CMS rely solely on compendia that are developed<br />
under policies of transparency and financial disclosure….”<br />
Clinical Pharmacology<br />
As part of the compendium application submission, CMS requires access to the<br />
compendium under review. CMS had unlimited access to the Clinical Pharmacology during<br />
the entire review process, which allowed CMS to navigate the compendium database in<br />
order to assess its infrastructure and content.<br />
Analysis<br />
1. The product known as Clinical Pharmacology is a compendium as defined by CMS in<br />
the regulation because it includes a summary of the pharmacologic characteristics of<br />
each drug or biological, information on dosage, recommended or endorsed uses in<br />
specific diseases and is indexed by drug or biological rather than by disease.<br />
2. Clinical Pharmacology addresses each of the Med<strong>CAC</strong> identified desirable<br />
characteristics as noted below.<br />
o It provides an extensive breadth of listings by including greater than 50,000<br />
products including FDA-approved prescription drugs and biologics, nonprescription<br />
products, many dietary supplements and investigational drug<br />
agents.<br />
o It is designed to provide quick processing of new information about a drug or<br />
biologic by conducting an ongoing editorial review of the primary literature and<br />
regulatory announcements. The review process takes between one to four<br />
weeks. An urgent update can be published within hours of the initial<br />
announcement in the public domain.<br />
o It provides a description of the evidence reviewed for every individual listing<br />
and fully cites specific studies that are the basis for recommendations.
o Using the Strength of Recommendation Taxonomy (SORT) methodology to<br />
assess evidence, Clinical Pharmacology has pre-specified criteria for weighing<br />
evidence that focus on patient-oriented outcomes and evidence quality.<br />
o It uses a prescribed published editorial policy and process for evaluating<br />
therapies. The editorial team is comprised of clinical pharmacists with<br />
experience in drug information; the majority of the editors have a doctorate in<br />
Pharmacy. To formulate a recommendation, the clinical staff develops a draft,<br />
which is reviewed and finalized by the Managing Editor. For oncology<br />
medications, a Senior Editor with expertise in oncology will also review the<br />
draft prior to finalization. An external review may be conducted for certain offlabel<br />
uses of medications.<br />
o It presents the process used for evaluating therapies to subscribers via its<br />
website and also includes a listing of current and past members of the editorial<br />
team. The staff is available to take inquiries regarding the editorial policy and<br />
processes; contact information via phone or email is provided on the website.<br />
o It explicitly notes when validated evidence indicates that the use of a drug or<br />
biologic is not recommended or when evidence for a use is “unsupportive.”<br />
o It provides information regarding the appropriate patient population and<br />
appropriate circumstance and time for the use of a drug or biologic alone or in<br />
combination and therefore provides explicit listing and recommendations<br />
regarding therapies, including sequential use or combination in relation to other<br />
therapies.<br />
o It specifically and explicitly notes when the evidence for an indication is<br />
inconclusive (i.e., when validated evidence is equivocal).<br />
o It incorporates a process for identification and notification of potential conflicts<br />
of interest of the compendia's internal and external reviewers, editors and<br />
committee members, with an established procedure to manage recognized<br />
conflicts. The policy is disclosed to subscribers via its website as is a listing of<br />
all potential and real conflicts of interest.<br />
3. Clinical Pharmacology is available to subscribers via the internet.<br />
4. There were four public comments specific to Clinical Pharmacology; we note that they<br />
all supported the request.<br />
In summary, we have determined that Clinical Pharmacology meets the definition of a<br />
compendium as defined by 42 C.F.R. §414.930(a); 72 Fed. Reg. 66222, 66404 as well as<br />
all of the criteria created by the Med<strong>CAC</strong> and referenced in regulation. It also provides for<br />
broad public accessibility.<br />
Uses that are noted in the compendia as “inconclusive” are neither “supported” nor<br />
“identified as not indicated” as described in §1861(t)(2)(B)(ii)(I). Thus we cannot from<br />
such compendia citations identify the off label use as a “medically accepted indication” nor<br />
can we identify the off label use as “not indicated.”<br />
Conclusion<br />
Clinical Pharmacology is an authoritative compendium for such purposes as defined and<br />
outlined in 42 C.F.R. § 414.930(a); 72 Fed. Reg. 66222, 66404. Therefore, we are adding<br />
Clinical Pharmacology to the list of compendia in Chapter 15, section 50.4.5 of the
Medicare Benefit Policy Manual, for use in the determination of a "medically-accepted<br />
indication" of drugs and biologicals used off-label in an anticancer chemotherapeutic<br />
regimen, unless the Secretary has determined that the use is not medically appropriate or<br />
the use is identified as not indicated in one or more such compendia.<br />
Uses that Clinical Pharmacology lists as “Indications” will be considered medically accepted<br />
indications under Section 1861(t)(2)(B)(ii)(I).<br />
Uses that Clinical Pharmacology notes are “not recommended” or where the evidence is<br />
“unsupportive” will not be considered medically accepted indications under Section<br />
1861(t)(2)(B)(ii)(I).<br />
Medicare contractors, as instructed in subsection D of Chapter 15, section 50.4.5 of the<br />
Medicare Benefit Policy Manual, shall consider the peer reviewed medical literature for<br />
indications that Clinical Pharmacology lists as “inconclusive.”
50.4.5.1 - Process for Amending the List of Compendia for Determination of<br />
Medically-Accepted Indications for Off-Label Uses of Drugs and Biologicals<br />
in an Anti-Cancer Chemotherapeutic Regimen<br />
(Rev. 81; Issued: 02-07-08; Effective: 01-01-08; Implementation: 03-07-08)<br />
A. Background<br />
A compendium is defined as a comprehensive listing of FDA-approved drugs and biologicals or<br />
a comprehensive listing of a specific subset of drugs and biologicals in a specialty compendium,<br />
for example, a compendium of anti-cancer treatment. It includes a summary of the<br />
pharmacologic characteristics of each drug or biological and may include information on dosage,<br />
as well as recommended or endorsed uses in specific diseases; is indexed by drug or biological;<br />
and differs from a disease treatment guideline, which is indexed by disease. The list of<br />
compendia is located on the CMS Web site at<br />
http://www.cms.hhs.gov/CoverageGenInfo/02_compendia.asp.<br />
B. Desirable Characteristics of Compendia<br />
Following are desirable characteristics of compendia to determine medically-accepted<br />
indications of drugs and biologicals in anti-cancer therapy:<br />
•<br />
Extensive breadth of listings.<br />
Quick processing from application for inclusion to listing.<br />
Detailed description of the evidence reviewed for every individual listing.<br />
Use of pre-specified published criteria for weighing evidence.<br />
Use of prescribed published process for making recommendations.<br />
Publicly transparent process for evaluating therapies.<br />
Explicit ‘‘Not recommended’’ listing when validated evidence is appropriate.<br />
Explicit listing and recommendations regarding therapies, including sequential use or<br />
combination in relation to other therapies.<br />
Explicit ‘‘Equivocal’’ listing when validated evidence is equivocal.<br />
Process for public identification and notification of potential conflicts of interest of the<br />
compendia’s parent and sibling organizations, reviewers, and committee members, with an<br />
established procedure to manage recognized conflicts.<br />
C. Process for Changing List of Compendia<br />
CMS will provide an annual 30-day open request period starting January 15th for the public to<br />
submit requests for additions or deletions to the compendia list contained on the CMS Web site<br />
at http://www.cms.hhs.gov/CoverageGenInfo/02_compendia.asp. Complete requests as defined<br />
in section 50.4.5.1.D will be posted to the Web site by March 15th for public notice and
comment. The request will identify the requestor and the requested action to the list. Public<br />
comments will be accepted for a 30-day period beginning on the day the request is posted on the<br />
Web site.<br />
In addition to the annual process, CMS may generate a request for changes to the list at any time<br />
an urgent action is needed to protect the interests of the Medicare program and its beneficiaries.<br />
D. Content of Requests<br />
For a request to be considered complete and therefore accepted for review, it must include the<br />
following information:<br />
The full name and contact information (including the mailing address, e-mail address, and<br />
telephone number) of the requestor. If the requestor is not an individual person, the information<br />
shall identify the officer or other representative who is authorized to act for the requestor on all<br />
matters related to the request.<br />
Full identification of the compendium that is the subject of the request, including name,<br />
publisher, edition if applicable, date of publication, and any other<br />
information needed for the accurate and precise identification of the specific compendium.<br />
A complete written copy of the compendium that is the subject of the request. If the complete<br />
compendium is available electronically, it may be submitted electronically in place of hard copy.<br />
If the compendium is available online, the requestor may provide CMS with electronic access by<br />
furnishing at no cost to the Federal government sufficient accounts for the purposes and duration<br />
of the review of the application in place of hard copy.<br />
The specific action that the requestor wishes CMS to take, for example to add or delete a specific<br />
compendium.<br />
Detailed, specific documentation that the compendium that is the subject of the request does or<br />
does not comply with the conditions of this rule. Broad, nonspecific claims without supporting<br />
documentation cannot be efficiently reviewed; therefore, they will not be accepted.<br />
A request may have only a single compendium as its subject. This will provide greater clarity on<br />
the scope of the agency’s review of a given request. A requestor may submit multiple requests,<br />
each requesting a different action.<br />
E. Submission of Requests<br />
Requests must be in writing and submitted in one of the following two ways (no duplicates<br />
please):<br />
Electronic requests are encouraged to facilitate administrative efficiency. Each solicitation will<br />
include the electronic address for submissions.
Hard copy requests can be sent to:<br />
Centers for Medicare & Medicaid Services<br />
Coverage and Analysis Group<br />
Mailstop C1–09–06<br />
7500 Security Boulevard<br />
Baltimore, MD, 21244<br />
Allow sufficient time for hard copies to be received prior to the close of the open request period.<br />
F. Review of Requests<br />
CMS will consider a compendium’s attainment of the desirable characteristics of compendia<br />
specified in 50.4.5.1.B when reviewing requests. CMS may consider additional reasonable<br />
factors in making a determination. (For example, CMS may<br />
consider factors that are likely to impact the compendium’s suitability for this use, such as a<br />
change in ownership or affiliation, the standards applicable to the evidence considered by the<br />
compendium, and any relevant conflicts of interest. CMS may consider that broad accessibility<br />
by the general public to the information contained in the compendium may assist beneficiaries,<br />
their treating physicians or both in choosing among treatment options.) CMS will also consider a<br />
compendium’s grading of evidence used in making recommendations regarding off-label uses<br />
and the process by which the compendium grades the evidence. CMS may, at its discretion,<br />
combine and consider multiple requests that refer to the same compendium, even if those<br />
requests are for different actions. This facilitates administrative efficiency in the review of<br />
requests.<br />
G. Publishing Review Results<br />
CMS will publish decisions on the CMS Web site within 90 days after the close of the public<br />
comment period.
September 5, 2008<br />
Dear Medicare Contractor Medical Director:<br />
In June and July 2008, the Centers for Medicare & Medicaid Services (CMS)<br />
issued a series of decisions amending the list of authoritative compendia for<br />
purposes of section 1861(t)(2) of the Social Security Act, 42 C.F.R. § 414.930(a),<br />
and Chapter 15, section 50.4.5 of the Medicare Benefits Manual. Medicare Part<br />
B is required to cover uses of drugs in anticancer chemotherapy regimens that are<br />
considered medically accepted by any one of these authoritative compendia even<br />
if the uses have not been approved by the Food and Drug Administration.<br />
The American Society of Clinical <strong>Oncology</strong> (ASCO) is writing to advise you of<br />
CMS”s decisions since the revised list of authoritative compendia is already in<br />
effect. ASCO is the national organization representing physicians who specialize<br />
in the treatment of cancer, and our members are very interested in ensuring that<br />
all medically accepted uses of chemotherapy-related drugs are available to our<br />
Medicare patients.<br />
CMS has recognized three new compendia and deleted one compendium that is<br />
no longer published. In addition, the American Hospital Formulary Service –<br />
Drug Information remains an authoritative compendium. The attachment to this<br />
letter reproduces the “conclusion” section from each of the CMS decision<br />
memoranda on the compendia. 1 These sections specify the criteria for<br />
implementing the listings of each compendium.<br />
We understand that CMS plans to issue a formal transmittal on this issue to<br />
Medicare contractors in the coming weeks, but we urge that you not delay in<br />
recognizing the changes since, as stated above, they are currently in effect.<br />
Please contact ASCO staff Bela Sastry at (571) 483-1616 if you have any<br />
questions.<br />
Sincerely,<br />
Joseph S. Bailes, MD<br />
Chair, Government Relations Council
CMS DECISIONS ON AUTHORITATIVE DRUG COMPENDIA<br />
NCCN Drugs and Biologics Compendium<br />
Effective Date: June 5, 2008<br />
The NCCN Drugs and Biologics Compendium is an authoritative compendium for such<br />
purposes as defined and outlined in 42 C.F.R. § 414.930(a); 72 Fed. Reg. 66222, 66404.<br />
Therefore, we are adding the NCCN Drugs and Biologics Compendium to the list of<br />
compendia in Chapter 15, section 50.4.5 of the Medicare Benefit Policy Manual, for use in the<br />
determination of a "medically-accepted indication" of drugs and biologicals used off-label in an<br />
anticancer chemotherapeutic regimen, unless the Secretary has determined that the use is not<br />
medically appropriate or the use is identified as not indicated in one or more such compendia.<br />
Indications that the NCCN Drugs and Biologics Compendium lists as “Recommended” will be<br />
considered medically accepted indications for the purposes of determining coverage policy.<br />
Indications that the NCCN Drugs and Biologics Compendium lists as “Not Recommended”<br />
will not be considered medically accepted indications for the purposes of determining coverage<br />
policy.<br />
Medicare contractors, as instructed in subsection D of Chapter 15, section 50.4.5 of the Medicare<br />
Benefit Policy Manual, shall consider the peer reviewed medical literature for indications that the<br />
NCCN Drugs and Biologics Compendium lists as “Equivocal”.<br />
Thomson Micromedex DrugDex<br />
Effective Date: June 10, 2008<br />
Thomson Micromedex DrugDex ® is an authoritative compendium for such purposes as defined<br />
and outlined in 42 C.F.R. § 414.930(a); 72 Fed. Reg. 66222, 66404. Therefore, we are adding<br />
Thomson Micromedex DrugDex ® to the list of compendia in Chapter 15, section 50.4.5 of the<br />
Medicare Benefit Policy Manual, for use in the determination of a "medically-accepted<br />
indication" of drugs and biologicals used off-label in an anticancer chemotherapeutic regimen,<br />
unless the Secretary has determined that the use is not medically appropriate or the use is<br />
identified as not indicated in one or more such compendia.<br />
Indications that DrugDex ® lists as “Class I, Class IIa or Class IIb” recommendations and/or<br />
efficacy will be considered medically accepted indications for the purposes of determining<br />
coverage policy.<br />
Indications that DrugDex ® lists as “Class III” recommendations and/or efficacy will not be<br />
considered medically accepted indications for the purposes of determining coverage policy.
Indications that are listed in the compendia as “Class indeterminate” are neither “supported” nor<br />
“identified as not indicated” as described in §1861(t)(2)(B)(ii)(I). Thus, we cannot identify<br />
whether such compendia citations are “medically accepted indications” within the meaning of<br />
that section. We believe that these situations are most appropriately addressed under<br />
§1861(t)(2)(B)(ii)(II) .<br />
Clinical Pharmacology<br />
Effective Date: July 2, 2008<br />
Clinical Pharmacology is an authoritative compendium for such purposes as defined and<br />
outlined in 42 C.F.R. § 414.930(a); 72 Fed. Reg. 66222, 66404. Therefore, we are adding<br />
Clinical Pharmacology to the list of compendia in Chapter 15, section 50.4.5 of the Medicare<br />
Benefit Policy Manual, for use in the determination of a "medically-accepted indication" of<br />
drugs and biologicals used off-label in an anticancer chemotherapeutic regimen, unless the<br />
Secretary has determined that the use is not medically appropriate or the use is identified as not<br />
indicated in one or more such compendia.<br />
Uses that Clinical Pharmacology lists as “Indications” will be considered medically accepted<br />
indications under Section 1861(t)(2)(B)(ii)(I).<br />
Uses that Clinical Pharmacology notes are “not recommended” or where the evidence is<br />
“unsupportive” will not be considered medically accepted indications under Section<br />
1861(t)(2)(B)(ii)(I).<br />
Medicare contractors, as instructed in subsection D of Chapter 15, section 50.4.5 of the Medicare<br />
Benefit Policy Manual, shall consider the peer reviewed medical literature for indications that<br />
Clinical Pharmacology lists as “inconclusive.”<br />
American Medical Association Drug Evaluations<br />
Effective Date: June 5, 2008<br />
The American Medical Association Drug Evaluations compendium is no longer an authoritative<br />
compendium for such purposes as defined and outlined in 42 C.F.R. § 414.930(a); 72 Fed. Reg.<br />
66222, 66404. Therefore, we are removing the American Medical Association Drug Evaluations<br />
compendium from the list of compendia in Chapter 15, section 50.4.5 of the Medicare Benefit<br />
Policy Manual, for use in the determination of a "medically-accepted indication" of drugs and<br />
biologicals used off-label in an anticancer chemotherapeutic regimen.
Centers for Medicare & Medicaid Services<br />
Return to Previous Page<br />
Fact Sheets<br />
Details for: HHS MODIFIES HIPAA CODE SETS (ICD-10) AND ELECTRONIC TRANSACTIONS<br />
STANDARDS<br />
For Immediate Release: Thursday, January 15, <strong>2009</strong><br />
Contact:<br />
CMS Office of Public Affairs<br />
202-690-6145<br />
HHS MODIFIES HIPAA CODE SETS (ICD-10) AND ELECTRONIC TRANSACTIONS STANDARDS<br />
OVERVIEW<br />
http://www.cms.hhs.gov/pf/printpage.asp?ref=http://www.cms.hhs.gov/ap...<br />
The U.S. Department of Health and Human Services (HHS) today announced two final rules that will<br />
facilitate the United States ’ ongoing transition to an electronic health care environment through<br />
adoption of a new generation of diagnosis and procedure codes and updated standards for electronic<br />
health care and pharmacy transactions.<br />
The first rule adopts two medical data code sets as Health Insurance Portability and Accountability Act<br />
of 1996 (HIPAA) standards for use in reporting diagnoses and inpatient hospital procedures in health<br />
care transactions (ICD-10 final rule). The standards adopted under this final rule will replace the<br />
ICD-9-CM code sets, developed nearly 30 years ago, with greatly expanded ICD-10 code sets.<br />
The second final rule adopts updated versions of the standards for certain electronic health care<br />
transactions, under the authority of HIPAA (5010/D.0 final rule). The updated versions replace the<br />
current versions of the standards and will promote greater use of electronic transactions. The final<br />
rule also adopts a standard for Medicaid pharmacy subrogation transactions, a process through which<br />
State Medicaid agencies recoup payments for pharmacy services in cases where a third party payer<br />
has primary financial responsibility.<br />
HHS’ proposed rules, published on Aug. 22, 2008, proposed earlier compliance dates for the transition<br />
to the ICD-10 code set and the updated versions of the transactions standards, but a large majority of<br />
public comments stated that more time would be needed for effective industry implementation. The<br />
final rules accommodate these concerns. Under the transaction standards final rule, covered entities<br />
must comply with Version 5010 (for some health care transactions) and Version D.0 (pharmacy<br />
transactions) on January 1, 2012. Covered entities must comply with the standard for the Medicaid<br />
pharmacy subrogation transaction (Version 3.0) on Jan. 1, 2012. However, for Version 3.0, small<br />
health plans have an additional year and must comply on Jan. 1, 2013. The ICD-10 code sets rule<br />
sets the compliance date at Oct. 1, 2013.<br />
1 of 5 5/20/<strong>2009</strong> 11:45 AM
RELATIONSHIP BETWEEN THE ICD-10 CODE SET AND VERSION 5010 TRANSACTION<br />
STANDARDS<br />
The new version of the standard for electronic health care transactions (Version 5010 of the X12<br />
standard) is essential to the use of ICD-10 codes because the current X12 standard (Version<br />
4010/4010A1), cannot accommodate the use of the greatly expanded ICD-10 code sets. Accordingly,<br />
HHS closely coordinated the development of the final rules, and the rules are being announced<br />
simultaneously.<br />
BACKGROUND ON ICD-10<br />
The ICD-10 final rule concurrently adopts the International Classification of Diseases, Tenth Revision,<br />
Clinical Modification (ICD-10-CM) for diagnosis coding, and the International Classification of<br />
Diseases, Tenth Revision, Procedure Coding System (ICD-10-PCS) for inpatient hospital procedure<br />
coding. These code sets will replace the International Classification of Diseases, Ninth Revision,<br />
Clinical Modification (ICD-9-CM) Volumes 1 and 2, and the International Classification of Diseases,<br />
Ninth Revision, Clinical Modification (CM) Volume 3 for diagnosis and procedure codes, respectively.<br />
Covered entities that use these code sets include health plans, health care clearinghouses, and health<br />
care providers who transmit any health information in electronic form in connection with a transaction<br />
for which HHS has adopted a standard.<br />
Electronic transactions involve the transmission of health care information for specific purposes. Code<br />
sets are collections of codes that are used to identify specific diagnoses and clinical procedures in<br />
claims and other transactions.<br />
The ICD-10-CM code set is maintained by the National Center for Health Statistics (NCHS) of the<br />
Centers for Disease Control and Prevention (CDC) for use in the United States . It is based on<br />
ICD-10, which was developed by the World Health Organization (WHO) and is used internationally.<br />
The ICD-10-PCS code set is maintained by CMS.<br />
RATIONALE FOR ADOPTING ICD-10<br />
http://www.cms.hhs.gov/pf/printpage.asp?ref=http://www.cms.hhs.gov/ap...<br />
ICD-9-CM is the current code sets standard adopted by the Secretary of HHS under HIPAA. ICD-9 is<br />
used by all covered entities to report diagnoses and inpatient hospital procedures on health care<br />
transactions for which HHS has adopted a standard. Shortcomings of ICD-9 include:<br />
ICD-9 is outdated, with only a limited ability to accommodate new procedures and diagnoses;<br />
ICD-9 lacks the precision needed for a number of emerging uses such as pay-for-performance<br />
and biosurveillance. Biosurveillance is the automated monitoring of information sources that<br />
may help in detecting an emerging epidemic, whether naturally occurring or as the result of<br />
bioterrorism;<br />
ICD-9 limits the precision of diagnosis-related groups (DRGs) as a result of very different<br />
procedures being grouped together in one code;<br />
ICD-9 lacks specificity and detail, uses terminology inconsistently, cannot capture new<br />
technology, and lacks codes for preventive services; and<br />
2 of 5 5/20/<strong>2009</strong> 11:45 AM
ICD-9 will eventually run out of space, particularly for procedure codes.<br />
Adoption of the ICD-10 code sets is expected to:<br />
Support value-based purchasing and Medicare’s anti-fraud and abuse activities by accurately<br />
defining services and providing specific diagnosis and treatment information;<br />
Support comprehensive reporting of quality data;<br />
Ensure more accurate payments for new procedures, fewer rejected claims, improved disease<br />
management, and harmonization of disease monitoring and reporting worldwide; and<br />
Allow the United States to compare its data with international data to track the incidence and<br />
spread of disease and treatment outcomes because the United States is one of the few<br />
developed countries not using ICD-10.<br />
BACKGROUND ON THE 5010 ELECTRONIC TRANSACTIONS STANDARDS<br />
HIPAA requires the Secretary of HHS to adopt standards that covered entities must use in<br />
electronically conducting certain health care administrative transactions, such as claims, remittance,<br />
eligibility, claims status requests and responses, and others. Covered entities include health plans,<br />
health care clearinghouses, and certain health care providers. The Transactions and Code Sets final<br />
rule published on Aug. 17, 2000, adopted standards for the statutorily identified transactions.<br />
Modifications to some of the standards adopted in that first final rule were made in a subsequent final<br />
rule published on Feb. 20, 2003. Covered entities must use only the standards that have been<br />
adopted by HHS, and are not permitted to use newer versions of the standards until they are adopted<br />
by HHS.<br />
The current versions of the standards, the Accredited Standards <strong>Committee</strong> X12 Version<br />
4010/4010A1 (Version 4010/4010A1) for health care transactions, and the National Council for<br />
Prescription Drug Programs Version 5.1 (Version 5.1) for pharmacy transactions, are widely<br />
recognized as outdated and lacking certain functionality needed by the health care industry. The final<br />
rule replaces the current versions with Version 5010 and Version D.0, respectively.<br />
The 5010/D.0 rule also adopts a standard for the Medicaid pharmacy subrogation transaction.<br />
Medicaid pharmacy subrogation is the process by which State Medicaid agencies recoup funds for<br />
payments they have made for pharmacy services for Medicaid recipients, in cases where another third<br />
party payer has primary financial responsibility. No HIPAA standard had been adopted for this<br />
transaction before. Adoption of a standard for this transaction will also increase efficiencies and<br />
reduce costs in this sector.<br />
Version 5010 (Health Care Transactions)<br />
http://www.cms.hhs.gov/pf/printpage.asp?ref=http://www.cms.hhs.gov/ap...<br />
The new version of the HIPAA standards - Version 5010 - includes structural, front matter, technical,<br />
and data content improvements. Because the updated version is more specific in requiring the data<br />
that is needed, collected, and transmitted in a transaction, its adoption will reduce ambiguities.<br />
Version 5010 also addresses a variety of currently unmet business needs, including, for example,<br />
providing on institutional claims an indicator for conditions that were “present on admission.” Version<br />
5010 also accommodates the use of the ICD-10 code sets, which are not supported by Version<br />
3 of 5 5/20/<strong>2009</strong> 11:45 AM
4010/4010A1.<br />
Version D.0 (Pharmacy Claims)<br />
The updated version of the pharmacy claims transactions standard, Version D.0, replaces the current<br />
Version 5.1. Version D.0 specifically addresses business needs that have evolved with the<br />
implementation of the Medicare prescription drug benefit (Part D) as well as changes within the health<br />
care industry. New data elements and rejection codes in Version D.0 will facilitate both coordination<br />
of benefits claims processing and Medicare Part D claims processing. In addition, Version D.0:<br />
Provides more complete eligibility information for Medicare Part D and other insurance<br />
coverage;<br />
Better identifies patient responsibility, benefits stages, and coverage gaps on secondary claims;<br />
and<br />
Facilitates the billing of multiple ingredients in processing claims for compounded drugs.<br />
Medicaid Pharmacy Subrogation Standard<br />
Currently there is no adopted standard for the Medicaid pharmacy subrogation transaction. Many<br />
States presently conduct this transaction electronically, and employ a variety of standards with<br />
different payors. The adoption of a standard for use across the industry will improve efficiencies while<br />
reducing costs for Medicaid programs.<br />
The compliance date for implementing Version 5010 and Version D.0 is Jan. 1, 2012. For the<br />
Medicaid pharmacy subrogation standard, the compliance date is also Jan. 1, 2012, except for small<br />
health plans, which have an additional year to comply and must be compliant on Jan. 1, 2013.<br />
Both regulations are on display today at the Federal Register and may be viewed at<br />
http://www.archives.gov/federal-register/public-inspection/index.html.<br />
Click on View the Regular Filing Documents.<br />
Both regulations will be published on Jan. 16, <strong>2009</strong>, and may be viewed that day and thereafter at<br />
http://www.gpoaccess.gov/fr/browse.html. Click “Go” next to where <strong>2009</strong> appears in the year<br />
selection box for “Back Issues (HTML Only).”<br />
A news release on both final rules may be viewed at. http://www.cms.hhs.gov/apps/media<br />
/press_releases.asp<br />
# # #<br />
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sroberts on PROD1PC70 with RULES<br />
3328 Federal Register / Vol. 74, No. 11 / Friday, January 16, <strong>2009</strong> / Rules and Regulations<br />
October 2007, ASC X12N/<br />
005010X223A1. (Incorporated by<br />
reference in § 162.920.)<br />
(c) For the period on and after January<br />
1, 2012, the standards identified in<br />
paragraph (b)(2) of this section.<br />
■ 18. Add a new Subpart S to read as<br />
follows:<br />
Subpart S—Medicaid Pharmacy<br />
Subrogation<br />
Sec.<br />
162.1901 Medicaid pharmacy subrogation<br />
transaction.<br />
162.1902 Standard for Medicaid pharmacy<br />
subrogation transaction.<br />
§ 162.1901 Medicaid pharmacy<br />
subrogation transaction.<br />
The Medicaid pharmacy subrogation<br />
transaction is the transmission of a<br />
claim from a Medicaid agency to a payer<br />
for the purpose of seeking<br />
reimbursement from the responsible<br />
health plan for a pharmacy claim the<br />
State has paid on behalf of a Medicaid<br />
recipient.<br />
§ 162.1902 Standard for Medicaid<br />
pharmacy subrogation transaction.<br />
The Secretary adopts the Batch<br />
Standard Medicaid Subrogation<br />
Implementation Guide, Version 3,<br />
Release 0 (Version 3.0), July 2007,<br />
National Council for Prescription Drug<br />
Programs, as referenced in § 162.1902<br />
(Incorporated by reference at § 162.920):<br />
(a) For the period on and after January<br />
1, 2012, for covered entities that are not<br />
small health plans;<br />
(b) For the period on and after January<br />
1, 2013 for small health plans.<br />
(Catalog of Federal Domestic Assistance<br />
Program No. 93.778, Medical Assistance<br />
Program) (Catalog of Federal Domestic<br />
Assistance Program No. 93.773, Medicare—<br />
Hospital Insurance; and Program No. 93.774,<br />
Medicare—Supplementary Medical<br />
Insurance Program)<br />
Approved: December 11, 2008.<br />
Michael O. Leavitt,<br />
Secretary.<br />
[FR Doc. E9–740 Filed 1–15–09; 8:45 am]<br />
BILLING CODE 4150–28–P<br />
DEPARTMENT OF HEALTH AND<br />
HUMAN SERVICES<br />
Office of the Secretary<br />
45 CFR Part 162<br />
[CMS–0013–F]<br />
RIN 0958–AN25<br />
HIPAA Administrative Simplification:<br />
Modifications to Medical Data Code Set<br />
Standards To Adopt ICD–10–CM and<br />
ICD–10–PCS<br />
AGENCY: Office of the Secretary, HHS.<br />
ACTION: Final rule.<br />
SUMMARY: This final rule adopts<br />
modifications to two of the code set<br />
standards adopted in the Transactions<br />
and Code Sets final rule published in<br />
the Federal Register pursuant to certain<br />
provisions of the Administrative<br />
Simplification subtitle of the Health<br />
Insurance Portability and<br />
Accountability Act of 1996 (HIPAA).<br />
Specifically, this final rule modifies the<br />
standard medical data code sets<br />
(hereinafter ‘‘code sets’’) for coding<br />
diagnoses and inpatient hospital<br />
procedures by concurrently adopting<br />
the International Classification of<br />
Diseases, 10th Revision, Clinical<br />
Modification (ICD–10–CM) for diagnosis<br />
coding, including the Official ICD–10–<br />
CM Guidelines for Coding and<br />
Reporting, as maintained and<br />
distributed by the U.S. Department of<br />
Health and Human Services (HHS),<br />
hereinafter referred to as ICD–10–CM,<br />
and the International Classification of<br />
Diseases, 10th Revision, Procedure<br />
Coding System (ICD–10–PCS) for<br />
inpatient hospital procedure coding,<br />
including the Official ICD–10–PCS<br />
Guidelines for Coding and Reporting, as<br />
maintained and distributed by the HHS,<br />
hereinafter referred to as ICD–10–PCS.<br />
These new codes replace the<br />
International Classification of Diseases,<br />
9th Revision, Clinical Modification,<br />
Volumes 1 and 2, including the Official<br />
ICD–9–CM Guidelines for Coding and<br />
Reporting, hereinafter referred to as<br />
ICD–9–CM Volumes 1 and 2, and the<br />
International Classification of Diseases,<br />
9th Revision, Clinical Modification,<br />
Volume 3, including the Official ICD–9–<br />
CM Guidelines for Coding and<br />
Reporting, hereinafter referred to as<br />
ICD–9–CM Volume 3, for diagnosis and<br />
procedure codes, respectively.<br />
DATES: The effective date of this<br />
regulation is March 17, <strong>2009</strong>. The<br />
effective date is the date that the<br />
policies herein take effect, and new<br />
policies are considered to be officially<br />
adopted. The compliance date, which is<br />
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different than the effective date, is the<br />
date on which entities are required to<br />
have implemented the policies adopted<br />
in this rule. The compliance date for<br />
this regulation is October 1, 2013.<br />
FOR FURTHER INFORMATION CONTACT:<br />
Denise M. Buenning, (410) 786–6711 or<br />
Shannon L. Metzler, (410) 786–3267.<br />
I. Background<br />
A. Statutory Background<br />
The Congress addressed the need for<br />
a consistent framework for electronic<br />
transactions and other administrative<br />
simplification issues in the Health<br />
Insurance Portability and<br />
Accountability Act of 1996 (HIPAA),<br />
Public Law 104–191, enacted on August<br />
21, 1996. HIPAA has helped to improve<br />
the Medicare and Medicaid programs,<br />
and the efficiency and effectiveness of<br />
the health care system in general, by<br />
encouraging the development of<br />
standards and requirements to facilitate<br />
the electronic transmission of certain<br />
health information.<br />
Through subtitle F of title II of that<br />
statute, the Congress added to title XI of<br />
the Social Security Act (the Act) a new<br />
Part C, titled ‘‘Administrative<br />
Simplification.’’ Part C of title XI of the<br />
Act now consists of sections 1171<br />
through 1180. Section 1172 of the Act<br />
and the implementing regulations make<br />
any standard adopted under Part C<br />
applicable to: (1) Health plans; (2)<br />
health care clearinghouses; and (3)<br />
health care providers who transmit any<br />
health information in electronic form in<br />
connection with a transaction for which<br />
the Secretary has adopted a standard.<br />
Section 1172(c)(1) of the Act requires<br />
any standard adopted by the Secretary<br />
of the Department of Health and Human<br />
Services (HHS) to be developed,<br />
adopted, or modified by a standard<br />
setting organization (SSO), except in the<br />
cases identified under section 1172(c)(2)<br />
of the Act. Under section 1172(c)(2)(A)<br />
of the Act, the Secretary may adopt a<br />
standard that is different from any<br />
standard developed by an SSO if it will<br />
substantially reduce administrative<br />
costs to health care providers and health<br />
plans compared to the alternatives, and<br />
the standard is promulgated in<br />
accordance with the rulemaking<br />
procedures of subchapter III of chapter<br />
5 of Title 5 of the United States Code.<br />
Under section 1172(c)(2)(B) of the Act,<br />
if no SSO has developed, adopted, or<br />
modified any standard relating to a<br />
standard that the Secretary is authorized<br />
or required to adopt, section 1172(c)(1)<br />
does not apply.<br />
Section 1172 of the Act also sets forth<br />
consultation requirements that must be<br />
met before the Secretary may adopt
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Federal Register / Vol. 74, No. 11 / Friday, January 16, <strong>2009</strong> / Rules and Regulations<br />
standards. The SSO must consult with<br />
the following organizations in the<br />
course of the development, adoption, or<br />
modification of the standard: National<br />
Uniform Billing <strong>Committee</strong> (NUBC), the<br />
National Uniform Claim <strong>Committee</strong><br />
(NUCC), the Workgroup for Electronic<br />
Data Interchange (WEDI), and the<br />
American Dental Association (ADA).<br />
For a standard that was not developed<br />
by an SSO, the Secretary is required to<br />
consult with each of the above-named<br />
groups before adopting the standard.<br />
Under section 1172(f) of the Act, the<br />
Secretary must also rely on the<br />
recommendations of the National<br />
<strong>Committee</strong> on Vital and Health<br />
Statistics (NCVHS) and consult with<br />
appropriate Federal and State agencies<br />
and private organizations.<br />
Section 1173(a) of the Act requires the<br />
Secretary to adopt transaction standards<br />
and data elements for the electronic<br />
exchange of health information for<br />
certain health care transactions. Under<br />
sections 1173(b) through (f) of the Act,<br />
the Secretary is required to adopt<br />
standards for: Unique health identifiers,<br />
code sets, security standards for health<br />
information, electronic signatures, and<br />
the transfer of information among health<br />
plans.<br />
Section 1174 of the Act requires the<br />
Secretary to review the adopted<br />
standards and adopt modifications as<br />
appropriate, but not more frequently<br />
than once every 12 months in a manner<br />
which minimizes disruption and cost of<br />
compliance. The same section requires<br />
the Secretary to ensure that procedures<br />
exist for the routine maintenance,<br />
testing, enhancement, and expansion of<br />
code sets, along with instructions on<br />
how data elements encoded before any<br />
modification may be converted or<br />
translated to preserve the information<br />
value of any pre-existing data elements.<br />
Section 1175(b) of the Act provides<br />
for a compliance date not later than 24<br />
months after the date on which an<br />
initial standard or implementation<br />
specification is adopted for all covered<br />
entities except small health plans, for<br />
which the statute provides for a<br />
compliance date not later than 36<br />
months after the date on which an<br />
initial standard or implementation<br />
specification is adopted. If the Secretary<br />
adopts a modification to a HIPAA<br />
standard or implementation<br />
specification, the compliance date for<br />
the modification may not be earlier than<br />
the 180th day of the period beginning<br />
on the date such modification is<br />
adopted. The Secretary may consider<br />
the nature and extent of the<br />
modification when determining<br />
compliance dates. The Secretary may<br />
extend the time for compliance for small<br />
health plans.<br />
B. Regulatory Background: Adoption<br />
and Modification of HIPAA Code Sets<br />
The Transactions and Code Sets final<br />
rule (65 FR 50312) published in the<br />
Federal Register on August 17, 2000<br />
(hereinafter referred to as the ‘‘August<br />
17, 2000 final rule’’) implemented some<br />
of the requirements of the<br />
Administrative Simplification subtitle<br />
of HIPAA, by adopting standards for<br />
eight electronic transactions for use by<br />
covered entities (health plans, health<br />
care clearinghouses, and those health<br />
care providers who transmit any health<br />
information in electronic form in<br />
connection with a transaction for which<br />
the Secretary has adopted a standard).<br />
We established these standards at 45<br />
CFR parts 160, subpart A, and 162,<br />
subparts A, and I through R. The<br />
‘‘Modifications to Electronic Data<br />
Transaction Standards and Code Sets’’<br />
final rule, published on February 20,<br />
2003 (68 FR 8381) (hereinafter referred<br />
to as the ‘‘February 20, 2003 final rule’’),<br />
modified the implementation<br />
specifications for several adopted<br />
transactions standards, among other<br />
provisions. Please refer to the August<br />
17, 2000 final rule and the February 20,<br />
2003 final rule for detailed discussions<br />
of electronic data interchange and an<br />
analysis of the public comments<br />
received during the promulgation of<br />
both rules.<br />
In the August 17, 2000 final rule, we<br />
also adopted standard code sets for use<br />
in those transactions, including:<br />
• International Classification of<br />
Diseases, 9th Revision, Clinical<br />
Modification (ICD–9–CM) Volumes 1<br />
and 2 (including the Official ICD–9–CM<br />
Guidelines for Coding and Reporting) as<br />
maintained and distributed by the<br />
Department of Health and Human<br />
Services (HHS), for coding diseases,<br />
injuries, impairments, other health<br />
problems and their manifestations, and<br />
causes of injury, disease, impairment, or<br />
other health problems.<br />
• ICD–9–CM Volume 3 (including the<br />
Official ICD–9–CM Guidelines for<br />
Coding and Reporting) as maintained<br />
and distributed by HHS, for procedures<br />
or other actions taken for diseases,<br />
injuries, and impairments on hospital<br />
inpatients reported by hospitals<br />
regarding prevention, diagnosis,<br />
treatment, and management.<br />
ICD–9–CM Volumes 1 and 2, and<br />
ICD–9–CM Volume 3 were already<br />
widely used in administrative<br />
transactions when we promulgated the<br />
August 17, 2000 final rule, and we<br />
decided that adopting these existing<br />
code sets would be less disruptive for<br />
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3329<br />
covered entities than modified or new<br />
code sets. Please refer to the August 17,<br />
2000 final rule for details of that<br />
discussion, as well as a discussion of<br />
utilizing ICD–10–CM and ICD–10–PCS<br />
as a future HIPAA standard code set (65<br />
FR 50327). Please refer to the August 17,<br />
2000 final rule; ‘‘Standards for Privacy<br />
of Individually Identifiable Health<br />
Information’’ (65 FR 82462), published<br />
in the Federal Register on December 28,<br />
2000; Standards for Privacy of<br />
Individually Identifiable Health<br />
Information; Final Rule (67 FR 53182)<br />
published in the Federal Register on<br />
August 14, 2002; and ‘‘the Modification<br />
to Code Set Standards To Adopt ICD–<br />
10–CM and ICD–10–PCS’’ proposed rule<br />
(hereinafter referred to as the ‘‘August<br />
22, 2008 proposed rule’’) (73 FR 49796),<br />
published in the Federal Register on<br />
August 22, 2008 for further information<br />
about electronic data interchange and<br />
the regulatory background.<br />
II. ICD–9–CM<br />
The 9th revision of the International<br />
Classification of Diseases (ICD–9) was<br />
originally developed and maintained by<br />
the World Health Organization (WHO).<br />
While it was originally designed to<br />
classify causes of death (mortality), the<br />
scope of ICD–9 was expanded, through<br />
the development of the U.S. clinical<br />
modification, to include non-fatal<br />
diseases (morbidity). The Centers for<br />
Disease Control and Prevention (CDC)<br />
developed and maintains a clinical<br />
modification of ICD–9 for diagnosis<br />
codes which is called ‘‘ICD–9–CM<br />
Volumes 1 and 2.’’ The Centers for<br />
Medicare & Medicaid Services (CMS)<br />
maintains an additional clinical<br />
modification of ICD–9 for inpatient<br />
hospital procedure codes, which is<br />
called ‘‘ICD–9–CM Volume 3.’’ The<br />
Secretary adopted CDC’s ICD–9–CM in<br />
1979 for morbidity applications. ICD–9–<br />
CM has been used since 1983 as the<br />
basic input for assigning diagnosisrelated<br />
groups for Medicare’s Inpatient<br />
Prospective Payment System. ICD–9–<br />
CM Volumes 1 and 2, and ICD–9–CM<br />
Volume 3 were adopted as HIPAA code<br />
sets in 2000 for reporting diagnoses,<br />
injuries, impairments, and other health<br />
problems and their manifestations, and<br />
causes of injury, disease, impairment, or<br />
other health problems in standard<br />
transactions.<br />
A. ICD–9–CM, Volumes 1 and 2<br />
(Diagnosis)<br />
CDC developed ICD–9–CM, Volumes<br />
1 and 2. It produced a clinical<br />
modification to the WHO’s ICD–9 by<br />
adding more specificity to its diagnosis<br />
codes. ICD–9–CM diagnosis codes are<br />
three to five digits long, and are used by
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all types of health care providers,<br />
including hospitals and physician<br />
practices. The code set is organized into<br />
chapters by body system. For a<br />
discussion of the structure of the ICD–<br />
9–CM diagnosis code sets, please refer<br />
to the August 22, 2008 proposed rule<br />
(73 FR 49798).<br />
B. ICD–9–CM, Volume 3 (Procedures)<br />
Inpatient hospital services procedures<br />
are currently coded using ICD–9–CM<br />
Volume 3, which was adopted as a<br />
HIPAA standard in 2000 for reporting<br />
inpatient hospital procedures. Current<br />
Procedural Terminology, 4th Edition<br />
(CPT–4) and Healthcare Common<br />
Procedure Coding System (HCPCS) are<br />
used to code all other procedures. The<br />
ICD–9–CM procedure codes, which are<br />
maintained by CMS, are three to four<br />
digits long and organized into chapters<br />
by body system (for example,<br />
musculoskeletal, urinary and circulatory<br />
systems, etc.). For a discussion of the<br />
structure of the ICD–9–CM procedure<br />
code set, please refer to the August 22,<br />
2008 proposed rule (73 FR 49798).<br />
C. Limitations of ICD–9–CM<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49799), we discussed the<br />
shortcomings of ICD–9–CM. The ICD–9–<br />
CM code set is 29 years old, its<br />
approximately 16,000 procedure and<br />
diagnosis codes are insufficient to<br />
continue to allow for the addition of<br />
new codes, and, because it cannot<br />
accommodate new procedures, its<br />
capacity as a fully functioning code set<br />
is diminished. Many chapters of ICD–9–<br />
CM are full, and in others the<br />
hierarchical structure of the ICD–9–CM<br />
procedure code set is compromised.<br />
This means that some chapters can no<br />
longer accommodate new codes, so any<br />
additional codes must be assigned to<br />
other, topically unrelated chapters (for<br />
example, inserting a heart procedure<br />
code in the eye chapter of the code set).<br />
The ICD–9–CM code set was never<br />
designed to provide the increased level<br />
of detail needed to support emerging<br />
needs, such as biosurveillance and payfor-performance<br />
programs (P4P), also<br />
known as value-based purchasing or<br />
competitive purchasing. For a detailed<br />
discussion of the shortcomings of the<br />
ICD–9–CM code set, please refer to the<br />
August 22, 2008 proposed rule (75 FR<br />
49799).<br />
D. Maintaining/Updating ICD–9–CM<br />
(Volumes 1, 2, and 3)<br />
Recognizing the need for ICD–9–CM<br />
to be a flexible, dynamic statistical tool<br />
to meet expanding classification needs,<br />
the ICD–9–CM Coordination and<br />
Maintenance <strong>Committee</strong> was created in<br />
1985 as an open forum for receiving<br />
public comments on proposed code<br />
revisions, deletions, and additions. The<br />
<strong>Committee</strong> is co-chaired by CDC and<br />
CMS; CDC maintains ICD–9–CM<br />
Diagnosis Codes (Volumes 1 and 2), and<br />
CMS maintains ICD–9–CM Procedure<br />
Codes (Volume 3).<br />
As discussed in the August 22, 2008<br />
proposed rule (73 FR 49805), we will rename<br />
the ICD–9–CM Coordination and<br />
Maintenance <strong>Committee</strong> as the ICD–10<br />
Coordination and Maintenance<br />
<strong>Committee</strong> at the point when ICD–10<br />
becomes the new HIPAA standard. Until<br />
that time, the ICD–9–CM Coordination<br />
and Maintenance <strong>Committee</strong> will<br />
continue to update and maintain ICD–<br />
9–CM. For a discussion of maintaining<br />
and updating code sets, please refer to<br />
the August 22, 2008 proposed rule (73<br />
FR 49798–49799).<br />
III. ICD–10 and the Development of<br />
ICD–10–CM and PCS<br />
The ICD–10 code sets provide a<br />
standard coding convention that is<br />
flexible, providing unique codes for all<br />
substantially different health<br />
conditions. It also allows new<br />
procedures and diagnoses to be easily<br />
incorporated as new codes for both<br />
existing and future clinical protocols.<br />
ICD–10–CM and ICD–10–PCS provide<br />
specific diagnosis and treatment<br />
information that can improve quality<br />
measurements and patient safety, and<br />
the evaluation of medical processes and<br />
outcomes. ICD–10–PCS has the<br />
capability to readily expand and capture<br />
new procedures and technologies.<br />
A. ICD–10–CM Diagnosis Codes<br />
CDC’s National Center for Health<br />
Statistics (NCHS) developed the ICD–<br />
10–CM code set, following a voluntary<br />
consensus-based process and working<br />
closely with specialty societies to<br />
ensure clinical utility and subject matter<br />
expert input into the process of creating<br />
the clinical modifications, with<br />
comments from a number of prominent<br />
specialty groups and organizations that<br />
addressed specific concerns or<br />
perceived unmet clinical needs<br />
encountered with ICD–9–CM. NCHS<br />
also had discussions with other users of<br />
the ICD–10 code set, specifically<br />
nursing, rehabilitation, primary care<br />
providers, the National <strong>Committee</strong> for<br />
Quality Assurance (NCQA), long-term<br />
care and home health care providers,<br />
and managed care organizations to<br />
solicit their comments about the ICD–10<br />
code set. There are approximately<br />
68,000 ICD–10–CM codes. ICD–10–CM<br />
diagnosis codes are three to seven<br />
alphanumeric characters. The ICD–10–<br />
CM code set provides much more<br />
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information and detail within the codes<br />
than ICD–9–CM, facilitating timely<br />
electronic processing of claims by<br />
reducing requests for additional<br />
information.<br />
ICD–10–CM also includes significant<br />
improvements over ICD–9–CM in<br />
coding primary care encounters,<br />
external causes of injury, mental<br />
disorders, neoplasms, and preventive<br />
health. The ICD–10–CM code set reflects<br />
advances in medicine and medical<br />
technology, as well as accommodates<br />
the capture of more detail on<br />
socioeconomics, ambulatory care<br />
conditions, problems related to lifestyle,<br />
and the results of screening tests. It also<br />
provides for more space to<br />
accommodate future expansions,<br />
laterality for specifying which organ or<br />
part of the body is involved as well as<br />
expanded distinctions for ambulatory<br />
and managed care encounters.<br />
B. ICD–10–PCS Procedure Codes<br />
CMS developed a procedure coding<br />
system, ICD–10–PCS. ICD–10–PCS has<br />
no direct relationship to the basic ICD–<br />
10 diagnostic classification, which does<br />
not include procedures, and has a<br />
totally different structure from ICD–10–<br />
CM. ICD–10–PCS is sufficiently detailed<br />
to describe complex medical<br />
procedures. This becomes increasingly<br />
important when assessing and tracking<br />
the quality of medical processes and<br />
outcomes, and compiling statistics that<br />
are valuable tools for research. ICD–10–<br />
PCS has unique, precise codes to<br />
differentiate body parts, surgical<br />
approaches, and devices used. It can be<br />
used to identify resource consumption<br />
differences and outcomes for different<br />
procedures, and describes precisely<br />
what is done to the patient. ICD–10–PCS<br />
codes have seven alphanumeric<br />
characters and group together services<br />
into approximately 30 procedures<br />
identified by a leading alpha character.<br />
There are 16 sections of tables that<br />
determine code selection, with each<br />
character having a specific meaning.<br />
(See section V of the August 22, 2008<br />
proposed rule (73 FR 49802–49803) for<br />
a chart that compares ICD–9–CM, ICD–<br />
10–CM, and ICD–10–PCS codes.)<br />
As explained in the August 22, 2008<br />
proposed rule (73 FR 49801), to our<br />
knowledge, no SSO has developed,<br />
adopted, or modified a standard code<br />
set that is suitable for reporting medical<br />
diagnoses and hospital inpatient<br />
procedures for purposes of<br />
administrative transactions.
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IV. Summary of Proposed Provisions<br />
and Analysis of and Responses to<br />
Public Comments<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49796), we solicited comments<br />
from stakeholders and other interested<br />
parties on the proposed adoption of<br />
ICD–10–CM and ICD–10–PCS code sets.<br />
We received 3,115 timely public<br />
submissions from all segments of the<br />
health care industry including<br />
providers, physician practices,<br />
hospitals, coders, standards<br />
development organizations, vendors,<br />
State Medicaid agencies, State agencies,<br />
corporations, tribal representatives,<br />
healthcare professional and industry<br />
trade associations, and disease-related<br />
advocacy groups.<br />
Some comments were received<br />
timely, but were not relevant to the<br />
August 22, 2008 proposed rule and were<br />
not considered in our responses. Those<br />
comments referred to general Medicare<br />
program operations; a call for the<br />
development of a single payer health<br />
care system in the United States; general<br />
economic issues; a request for<br />
finalization of HIPAA standards that<br />
were not included in the August 22,<br />
2008 proposed rule; a request to adopt<br />
coding guidelines for CPT codes;<br />
comments on another unrelated notice<br />
of proposed rulemaking; and other<br />
issues that are outside of the purview of<br />
the August 22, 2008 proposed rule. The<br />
relevant and timely submissions within<br />
the scope of the August 22, 2008<br />
proposed rule that we received tended<br />
to provide multiple detailed comments<br />
on our proposals.<br />
Brief summaries of each proposed<br />
provision, a summary of the public<br />
comments we received (with the<br />
exception of specific comments on the<br />
economic impact analysis), and our<br />
responses to the comments are set forth<br />
below:<br />
A. Adoption of ICD–10–CM and ICD–10–<br />
PCS as Medical Data Code Sets Under<br />
HIPAA<br />
In § 162.1002(c)(2), we proposed to<br />
adopt ICD–10–CM (including the<br />
official guidelines) to replace ICD–9–CM<br />
Volumes 1 and 2 (including the official<br />
coding guidelines), for coding diseases;<br />
injuries; impairments; other health<br />
problems and their manifestations; and<br />
causes of injury, disease and<br />
impairment, or other health problems.<br />
In § 162.1002(c)(3), we proposed to<br />
adopt ICD–10–PCS (including the<br />
official guidelines) to replace ICD–9–CM<br />
Volume 3 (including the official coding<br />
guidelines) for the following procedures<br />
or other actions taken for diseases,<br />
injuries, and impairments on hospital<br />
inpatients reported by hospitals:<br />
prevention, diagnosis, treatment, and<br />
management.<br />
Comment: Commenters<br />
overwhelmingly supported our proposal<br />
to adopt ICD–10–CM and ICD–10–PCS<br />
as code sets under HIPAA, replacing the<br />
ICD–9–CM Volumes 1 and 2, and the<br />
ICD–9–CM Volume 3 code sets,<br />
respectively, citing the benefits we<br />
described in the August 22, 2008<br />
proposed rule. Some commenters<br />
pointed out that the United States, with<br />
its continued use of ICD–9–CM, is<br />
behind the rest of the world which has<br />
already migrated to ICD–10, and that<br />
ICD–9–CM’s basic structure is flawed<br />
and outdated, and cannot accommodate<br />
new medical technology and<br />
terminology. Commenters agreed that<br />
ICD–9–CM Volume 3 is running out of<br />
space, and that this space limitation<br />
curtails the ability to capture accurate<br />
reimbursement and quality data for<br />
health care documentation. A few<br />
commenters noted that, as providers<br />
migrate toward the use of electronic<br />
health records (EHRs), use of the more<br />
robust ICD–10–CM and ICD–10–PCS<br />
codes will be necessary to support<br />
EHRs’ more detailed information<br />
requirements. Another commenter<br />
noted that waiting to move to ICD–10–<br />
CM and ICD–10–PCS incurs its own<br />
costs as the underlying data used for<br />
patient care improvement, institutional<br />
quality reviews, medical research and<br />
reimbursement becomes increasingly<br />
unreliable.<br />
Response: We are amending<br />
§ 162.1002 to adopt ICD–10–CM and<br />
ICD–10–PCS as medical data code sets<br />
under HIPAA, replacing ICD–9–CM,<br />
Volumes 1 and 2, and ICD–9–CM<br />
Volume 3.<br />
Comment: We also received a number<br />
of comments stating that we should not<br />
adopt ICD–10–CM and ICD–10–PCS as<br />
code sets under HIPAA. Several<br />
commenters said that the ICD–9–CM<br />
code set is adequate to meet current<br />
coding needs, making ICD–10–CM and<br />
ICD–10–PCS unnecessary. These<br />
commenters said that current ICD–9–<br />
CM codes do not have serious<br />
limitations, and perhaps simply need<br />
some modifications to alleviate any<br />
limitations that ICD–9–CM might have.<br />
A number of commenters said that we<br />
should not adopt ICD–10–CM and ICD–<br />
10–PCS because the cost associated with<br />
the transition from ICD–9–CM to ICD–<br />
10–CM and ICD–10–PCS would be a<br />
burden to industry. However, they did<br />
not offer specific alternative solutions.<br />
Other commenters offered a number<br />
of different alternatives, including:<br />
• Create additional space in ICD–9–<br />
CM through the annual elimination and<br />
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3331<br />
reassignment of codes that are no longer<br />
used.<br />
• Modify the structure of ICD–9–CM<br />
to provide for the assignment of<br />
additional codes.<br />
• Continue to assign new procedures<br />
to the two, previously unassigned<br />
overflow chapters of ICD–9–CM,<br />
chapters 00 and 17, and once those<br />
chapters are filled, no new codes should<br />
be created that cannot be assigned to the<br />
appropriate body system chapter.<br />
• Adopt the American Medical<br />
Association’s Physicians’ Current<br />
Procedural Terminology (CPT) for<br />
coding inpatient hospital procedures.<br />
• Wait and adopt the ICD–11 code<br />
set. Two commenters stated that by the<br />
time the United States has achieved<br />
proficiency using ICD–10–CM and ICD–<br />
10–PCS, the rest of the world will be<br />
using ICD–11, and our nation’s coding<br />
reporting system will once again be<br />
incompatible with that of other<br />
countries.<br />
• Decouple the coding of diseases at<br />
the point of patient care from the<br />
classification of diseases for secondary<br />
uses of medical record data by<br />
developing a U.S. Disease-Entity Coding<br />
System (USDECS) instead of adopting<br />
ICD–10–CM.<br />
One commenter erroneously<br />
interpreted our proposed adoption of<br />
ICD–10–PCS as a proposal to replace<br />
CPT codes in the ambulatory setting.<br />
Another commenter said we should<br />
recognize that hospital outpatient<br />
departments are currently required to<br />
report using HCPCS and CPT codes, but<br />
that some hospitals have elected to code<br />
these hospital outpatient medical<br />
records using ICD–9–CM procedure<br />
codes.<br />
Response: None of the suggested<br />
alternatives adequately address the<br />
shortcomings of ICD–9–CM that were<br />
identified and discussed in the August<br />
22, 2008 proposed rule. The majority of<br />
commenters supported our analysis of<br />
these shortcomings. As we noted in the<br />
August 22, 2008 proposed rule (73 FR<br />
49827), we do not believe that extending<br />
the life of ICD–9–CM by assigning codes<br />
to unrelated chapters or purging and<br />
reassigning codes that are no longer<br />
used is a long-term solution, and it<br />
would perpetuate confusion for coders<br />
and data users if hierarchy and code set<br />
structure were to continue to be set<br />
aside in the issuance of new codes.<br />
Gaining space in ICD–9–CM by annually<br />
purging codes that are not used is<br />
problematic because, while it creates<br />
space, this space may not necessarily be<br />
in the same chapters in which codes are<br />
needed. As no one asserted that this<br />
purging process would open up<br />
sufficient capacity to assign new codes
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in the hierarchical sections in which the<br />
new codes ought to be placed, purging<br />
and reassigning might only lead to coder<br />
confusion and further contribute to the<br />
hierarchical instability of the code set.<br />
Moreover, such action would destroy<br />
the ability to perform longitudinal<br />
research.<br />
Modifying the existing ICD–9–CM<br />
code sets by adding more digits and/or<br />
alpha characters was discussed as a<br />
possible alternative to adoption of the<br />
ICD–10–CM and ICD–10–PCS code sets<br />
at public meetings of the ICD–9–CM<br />
Coordination and Maintenance<br />
<strong>Committee</strong>; however, there appears to<br />
be little industry support for this<br />
alternative. The disruption resulting<br />
from adding a digit and/or alpha<br />
character to the ICD–9–CM code set, and<br />
then trying to both refine and modify<br />
approaches to assigning codes would<br />
result in nearly the same costs in<br />
infrastructure and systems changes as a<br />
transition to ICD–10–PCS, but with no<br />
significant improvement in the coding<br />
system.<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49804), we explained that we did<br />
not consider the CPT–4 coding system<br />
to be a viable alternative to ICD–10–CM<br />
and ICD–10–PCS code sets because CPT<br />
does not adequately capture facility-<br />
based, non-physician services, and<br />
commenters did not offer any new<br />
information to support that approach.<br />
In the August 22, 2008 proposed rule,<br />
we did not propose the replacement of<br />
CPT with ICD–10–PCS in the<br />
ambulatory setting. In the August 17,<br />
2000 final rule (65 FR 50312), we<br />
adopted the HCPCS and CPT codes as<br />
the official procedure coding systems<br />
for outpatient reporting. ICD–9–CM<br />
procedure codes are not a HIPAA<br />
standard for coding in these settings,<br />
and while some hospitals may elect to<br />
double code their outpatient records<br />
using both HCPCS and CPT, as well as<br />
ICD–9–CM procedure codes for internal<br />
purposes, this is not a requirement. We<br />
do not encourage this type of double<br />
coding, and do not believe that this<br />
voluntary practice impacts the analysis<br />
of whether or not ICD–10–PCS should<br />
be adopted.<br />
We discussed waiting to adopt the<br />
ICD–11 code set in the August 22, 2008<br />
proposed rule (73 FR 49805), noting that<br />
the World Health Organization (WHO)<br />
has only begun preliminary work on<br />
ICD–11. There are no firm timeframes<br />
established for completion of the ICD–<br />
11 developmental work, testing or<br />
release for use date. We are aware of<br />
reports that the WHO’s alpha version of<br />
ICD–11 may be available for testing in<br />
2010, with possible approval of ICD–11<br />
for general worldwide use in 2014.<br />
However, work cannot begin on<br />
developing the necessary U.S. clinical<br />
modification to the ICD–11 diagnosis<br />
codes or the ICD–11 companion<br />
procedure codes until ICD–11 is<br />
officially released. Development and<br />
testing of a clinical modification to ICD–<br />
11 to make it usable in the United States<br />
will take an estimated additional 5 to 6<br />
years. We estimated that the earliest<br />
projected date to begin rulemaking for<br />
implementation of a U.S. clinical<br />
modification of ICD–11 would be the<br />
year 2020.<br />
The suggestion that we wait and<br />
adopt ICD–11 instead of ICD–10–CM<br />
and ICD–10–PCS does not consider that<br />
the alpha-numeric structural format of<br />
ICD–11 is based on that of ICD–10,<br />
making a transition directly from ICD–<br />
9 to ICD–11 more complex and<br />
potentially more costly. Nor would<br />
waiting until we could adopt ICD–11 in<br />
place of the adopted standards address<br />
the more pressing problem of running<br />
out of space in ICD–9–CM Volume 3 to<br />
accommodate new procedure codes.<br />
Finally, the development of a United<br />
States Disease-Entity Coding System<br />
(USDECS), which would involve<br />
developing a totally new classification<br />
system not based on any previous<br />
classification system platforms, would<br />
require even more time than<br />
implementing ICD–11, and would also<br />
hamper efforts to evaluate United States<br />
data in the context of other countries’<br />
experiences.<br />
Comment: A few commenters stated<br />
that HHS needs to ensure that the use<br />
of ICD–10–CM and ICD–10–PCS code<br />
sets will not conflict with other<br />
federally recognized standards.<br />
Response: We assume the commenter<br />
is referring to Secretarially recognized<br />
interoperability standards<br />
recommended by the Healthcare<br />
Information Technology Standards<br />
Panel (HITSP), a cooperative<br />
partnership between the public and<br />
private sectors formed to harmonize and<br />
integrate standards that will meet<br />
clinical and business needs for sharing<br />
information among organizations and<br />
systems. In some HITSP interoperability<br />
specifications, including those for<br />
Electronic Health Records, Laboratory<br />
Results Reporting and Biosurveillance,<br />
HITSP has defined or identified specific<br />
interoperability standards, including<br />
use of SNOMED–CT ® , to support<br />
interoperability of systems. As<br />
discussed in the August 22, 2008<br />
proposed rule (73 FR 49803), ICD–10–<br />
CM and ICD–10–PCS are classification<br />
coding systems while SNOMED–CT ® is<br />
a clinically complex terminology<br />
standard. As we noted in the August 22,<br />
2008 proposed rule, we do not believe<br />
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that SNOMED–CT ® is a suitable<br />
standard for reporting medical<br />
diagnoses and hospital inpatient<br />
procedures for purposes of<br />
administrative transactions. The<br />
numerous codes would be impractical<br />
to assign manually and are not suited to<br />
the secondary purposes for which<br />
classification systems like ICD–10 codes<br />
are used because of their size and<br />
considerable granularity, complex<br />
hierarchies, and lack of reporting rules.<br />
(See 73 FR 49803–49804). SNOMED–<br />
CT ® is not a substitute for ICD–10 as a<br />
coding system, but, as further noted in<br />
the August 22, 2008 proposed rule, the<br />
benefits of using SNOMED–CT ®<br />
increase if such use is linked to a<br />
classification system such as ICD–10–<br />
CM and ICD–10–PCS. Mapping would<br />
be used to link SNOMED–CT ® to ICD–<br />
10 code sets. Plans are underway to<br />
develop these crosswalks, so a transition<br />
to ICD–10 code sets will ultimately<br />
facilitate realizing the benefits of using<br />
the specified interoperability standards<br />
including SNOMED–CT ® . Moreover, it<br />
is the promulgation of regulations, and<br />
not the HITSP process, that dictates<br />
which standards are ultimately to be<br />
used for administrative transactions.<br />
Comment: A number of commenters<br />
stated that quality performance<br />
measures currently used for programs<br />
such as the Physician Quality Reporting<br />
Initiative (PQRI) are based on ICD–9–<br />
CM diagnosis codes, and it is unclear<br />
how the change to ICD–10 would<br />
impact those programs.<br />
Response: We anticipate that the use<br />
of ICD–10–CM, with its greater detail<br />
and granularity, will greatly enhance<br />
our capability to measure quality<br />
outcomes. We acknowledge that quality<br />
performance outcome measures are<br />
currently used for high-profile<br />
initiatives such as the hospital pay-for-<br />
reporting program. The greater detail<br />
and granularity of ICD–10–CM and ICD–<br />
10–PCS will also provide more<br />
precision for claims-based, value-based<br />
purchasing initiatives such as the<br />
hospital-acquired conditions (HAC)<br />
payment policy. Crosswalks that allow<br />
the industry to convert ICD–9–CM codes<br />
into ICD–10–CM and ICD–10–PCS codes<br />
(and vice versa) are already in existence.<br />
These crosswalks and others that are<br />
developed during the implementation<br />
period will allow the industry to<br />
convert payment systems, HAC payment<br />
policies, and quality measures to ICD–<br />
10. We note that, under this rule, ICD–<br />
10 codes will not be implemented as a<br />
HIPAA code set until 2013. Programs<br />
that offer incentives that are based on<br />
performance outcome measures that<br />
may be impacted by the changeover<br />
from ICD–9–CM to ICD–10–CM will
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have sufficient time to plan for a smooth<br />
transition to ICD–10 coding. Our own<br />
such preparation will include ICD–10<br />
updates to the quality measures as part<br />
of our routine regulatory process.<br />
B. Compliance Date<br />
In the August 22, 2008 proposed rule,<br />
we proposed October 1, 2011 as the<br />
compliance date for ICD–10–CM and<br />
ICD–10–PCS code sets for all HIPAA<br />
covered entities. To illustrate our<br />
implementation timeline for<br />
preliminary planning purposes, we also<br />
published in the proposed rule (73 FR<br />
49807) a draft implementation timeline<br />
for both Version 5010 and ICD–10–CM<br />
and ICD–10–PCS.<br />
Comment: While an overwhelming<br />
majority of commenters favored<br />
adoption of ICD–10–CM and ICD–10–<br />
PCS, they expressed many different<br />
positions regarding the compliance date.<br />
Most commenters disagreed with the<br />
proposed October 1, 2011 compliance<br />
date, stating that it did not provide<br />
adequate time for industry to train<br />
coders and complete systems<br />
changeovers and testing.<br />
In general, commenters expressed<br />
particular concern about the industry’s<br />
ability to implement both ICD–10 and<br />
the concurrently proposed X12 Version<br />
5010 transactions standards (Version<br />
5010) in the proposed timeframe. The<br />
commenters pointed out that this<br />
timeframe would jeopardize plans’<br />
ability to process claims and could<br />
therefore result in more unpaid or<br />
improperly paid claims. They also<br />
pointed out that this compliance date<br />
would provide less time for adopting<br />
ICD–10–CM and ICD–10–PCS than the<br />
actual amount of time it took industry<br />
to implement other HIPAA standards,<br />
including the National Provider<br />
Identifier. One commenter proposed<br />
incentive payments to HIPAA covered<br />
entities to help them achieve<br />
compliance given the short compliance<br />
timeframe.<br />
NCVHS’ September 26, 2007<br />
recommendation on the implementation<br />
of Version 5010 and ICD–10 was<br />
frequently cited by commenters as being<br />
the benchmark against which they<br />
measured their own recommendations.<br />
Some commenters stated that we should<br />
further consider the NCVHS<br />
recommendation to the Secretary that<br />
there be a 2-year time gap between the<br />
finalization of the implementation of<br />
Version 5010, and compliance with<br />
ICD–10. A number of commenters<br />
interpreted the NCVHS<br />
recommendation as being that of a 3-<br />
year time gap, and cited that as their<br />
basis for supporting a 2013 or in some<br />
instances, a 2014 compliance date for<br />
ICD–10.<br />
In fulfillment of part of its HIPAA-<br />
mandated responsibilities, NCVHS<br />
submitted recommendations to HHS<br />
that suggested establishing two different<br />
levels of compliance for the<br />
implementation of ICD–10–CM and<br />
ICD–10–PCS codes sets relative to<br />
compliance with Version 5010. ‘‘Level 1<br />
compliance,’’ as interpreted by NCVHS,<br />
would mean that the HIPAA covered<br />
entity could demonstrate that it could<br />
create and receive ICD–10–CM and ICD–<br />
10–PCS compliant transactions. ‘‘Level<br />
2 compliance,’’ as interpreted by<br />
NCVHS, would mean that HIPAA<br />
covered entities had completed end-to-<br />
end testing with all of their trading<br />
partners. NCVHS further recommended<br />
that no more than one implementation<br />
of a HIPAA transaction or coding<br />
standard be in Level 1 at any given time,<br />
which tacitly suggests that Level 2<br />
testing for Version 5010 could, in<br />
NCVHS’ estimation, reasonably take<br />
place concurrently with initial Level 1<br />
activities associated with ICD–10<br />
implementation.<br />
As commenters noted, the NCVHS<br />
letter stated that ‘‘it is critical that the<br />
industry is afforded the opportunity to<br />
test and verify Version 5010 up to two<br />
years prior to the adoption of ICD–10.’’<br />
The letter’s Recommendation 2.2 further<br />
states that ‘‘HHS should take under<br />
consideration testifier feedback<br />
indicating that for Version 5010, two<br />
years will be needed to achieve Level 1<br />
compliance.’’<br />
A small number of commenters<br />
supported the proposed October 1, 2011<br />
implementation date. They believed that<br />
the date was achievable, and stressed<br />
that the benefits of ICD–10 are so<br />
significant that an aggressive<br />
implementation timetable was justified<br />
because it would make additional<br />
information available that would<br />
support health care transparency, and<br />
thereby benefit patients, and that further<br />
delays in implementation would result<br />
in increased implementation costs.<br />
Others simply stated that the time had<br />
come for the U.S. to catch up with the<br />
rest of the world in using ICD–10.<br />
A smaller number of commenters<br />
supported an implementation date of<br />
October 1, 2012. They, too, cited the<br />
benefits of ICD–10, and argued that a<br />
one-year postponement of the proposed<br />
October 2011 date would provide<br />
sufficient time in which the industry<br />
could achieve compliance with ICD–10–<br />
CM and ICD–10–PCS. A few<br />
commenters explicitly noted that a 2012<br />
implementation date would allow them<br />
adequate time to budget and plan for the<br />
changeover. Other commenters stated<br />
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3333<br />
that ICD–10 compliance should come no<br />
earlier than October 2012; and still<br />
others recommended an October 2012<br />
compliance date if such a compliance<br />
date would allow for a 3-year<br />
implementation timetable for ICD–10<br />
following the Version 5010 compliance<br />
date.<br />
A number of commenters suggested a<br />
compliance date of October 2013, citing<br />
insufficient time in which to install and<br />
test ICD–10–CM and ICD–10–PCS<br />
within their claims processing and other<br />
related IT systems, the need for coder<br />
and provider education and outreach,<br />
and the time needed for implementation<br />
of previous HIPAA standards. These<br />
commenters stated that an October 2013<br />
date would afford them with the<br />
minimum of 2 years after implementing<br />
Version 5010 that they said they needed<br />
in order to comply with ICD–10–CM<br />
and ICD–10–PCS. The compliance date<br />
must occur on October 1 of any given<br />
year in order to coincide with the<br />
effective date of the annual Medicare<br />
Inpatient Prospective Payment System<br />
(IPPS). A number of commenters<br />
supported a 2013 compliance date as<br />
more realistic than the proposed 2011<br />
date, and urged that we move quickly to<br />
publish a final rule to adopt ICD–10–CM<br />
and ICD–10–PCS. Other commenters<br />
simply noted that 2013 was a reasonable<br />
date that would allow more time for<br />
effective implementation and training<br />
on the proper use of code sets.<br />
Commenters noted that this date should<br />
give HIPAA covered entities sufficient<br />
time to fully implement Version 5010<br />
before moving on to ICD–10. A few<br />
other commenters noted that the<br />
compliance date for ICD–10 should not<br />
be any earlier than 2013.<br />
The majority of commenters,<br />
including individual providers and<br />
industry associations, supported a<br />
compliance date of October 1, 2014<br />
which they said could be less costly,<br />
allow more time for education, and<br />
would better ensure that the desired<br />
benefits of the ICD–10–CM and ICD–10–<br />
PCS code sets are achieved. The<br />
majority of submissions that supported<br />
a 2014 compliance date were form<br />
letters submitted by members<br />
representing the position of one<br />
industry professional association.<br />
A few commenters suggested an<br />
implementation date of October 1, 2015<br />
or beyond, once again citing their<br />
perceptions of the high cost of the<br />
transition to ICD–10–CM and ICD–10–<br />
PCS, and the need for extensive<br />
education and training.<br />
Other commenters did not propose a<br />
specific compliance date, but rather<br />
indicated the need for 3 years after the<br />
Version 5010 compliance date. Other
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commenters suggested that 95 percent of<br />
covered entities be successfully<br />
converted to Version 5010 prior to the<br />
start of ICD–10 implementation.<br />
One commenter stated that the<br />
adoption of ICD–10–CM should be<br />
delayed until the Diagnostic and<br />
Statistical Manual of Mental Disorders,<br />
Fifth Edition (DSM–V) has been<br />
released.<br />
Response: We recognize that the<br />
compliance date issue is crucial to the<br />
successful implementation of ICD–10.<br />
We have assessed the comments<br />
carefully, balancing the benefits of<br />
earlier implementation against the<br />
potential risk of establishing a deadline<br />
that does not provide adequate time for<br />
successful implementation and<br />
thorough testing. We cannot consider a<br />
compliance date for ICD–10 without<br />
considering the dependencies between<br />
implementing Version 5010 and ICD–<br />
10. We recognize that any delay in<br />
attaining compliance with Version 5010<br />
would negatively impact ICD–10<br />
implementation and compliance. The<br />
lack of information on cost estimate<br />
impacts also supports a later ICD–10<br />
compliance date to allow the industry to<br />
spread out any unanticipated costs over<br />
a longer period of time.<br />
Pursuant to a regulation published in<br />
this same edition of the Federal<br />
Register, the Version 5010 compliance<br />
date has now been established as<br />
January 2012, to afford the industry an<br />
additional year, for a total of 3 years to<br />
achieve compliance with Version 5010.<br />
From our review of the industry<br />
testimony presented to NCVHS and<br />
comments received on our August 22,<br />
2008 proposed rule, it appears that 24<br />
months (2 years) is the minimum<br />
amount of time that the industry needs<br />
to achieve compliance with ICD–10<br />
once Version 5010 has moved into<br />
external (Level 2) testing.<br />
We believe that the spirit and intent<br />
of the NCVHS letter recommends that<br />
the Secretary move the industry forward<br />
on the adoption and implementation of,<br />
and compliance with, Version 5010 and<br />
the ICD–10–CM and ICD–10–PCS code<br />
sets. At the same time, NCVHS<br />
recognizes the wide-reaching impacts of<br />
the transition to ICD–10–CM and ICD–<br />
10–PCS, and in doing so, implies that<br />
any implementation plans and<br />
timetables should be structured as to be<br />
realistic for the industry as a whole.<br />
In establishing the ICD–10<br />
compliance date, we have sought to<br />
select a date that achieves a balance<br />
between the industry’s need to<br />
implement ICD–10 within a feasible<br />
amount of time, and our need to begin<br />
reaping the benefits of the use of these<br />
code sets; stop the hierarchical<br />
deterioration and other problems<br />
associated with the continued use of the<br />
ICD–9–CM code sets; align ourselves<br />
with the rest of the world’s use of ICD–<br />
10 to achieve global health care data<br />
compatibility; plan and budget for the<br />
transition to ICD–10 appropriately; and<br />
mitigate the cost of further delays.<br />
We believe that an October 1, 2013<br />
ICD–10 compliance date achieves that<br />
balance, being 2 years later than our<br />
proposed October 2011 ICD–10<br />
compliance date and providing a total of<br />
nearly 5 years from the publication of<br />
the Version 5010 final rule through final<br />
compliance with ICD–10. The 32<br />
months from completion of Level 1<br />
testing for Version 5010 in January 2011<br />
(at which point Level 1 ICD–10<br />
activities can begin) to the October 1,<br />
2013 compliance date for ICD–10<br />
should allow the industry ample time to<br />
effect systems changeovers and testing<br />
so as to become fully compliant with the<br />
ICD–10–CM and ICD–10–PCS code sets.<br />
We note that those requesting<br />
compliance dates of 2014 and later did<br />
not suggest methods for mitigating the<br />
negative effects of delaying compliance,<br />
including the increased implementation<br />
costs which may result from the<br />
increase in the number and size of<br />
legacy systems that will need to be<br />
updated; delay in achieving the benefits<br />
identified in the August 22, 2008<br />
proposed rule; and the impacts of<br />
continued degradation of the code sets.<br />
TIMELINE FOR IMPLEMENTING VERSIONS 5010/D.0 AND ICD–10<br />
Version 5010/D.0 ICD–10<br />
01/09: Publish final rule ............................................................................................ 01/09: Publish Final Rule<br />
01/09: Begin Level 1 testing period activities (gap analysis, design, development,<br />
internal testing) for Versions 5010 and D.0.<br />
01/10: Begin internal testing for Versions 5010 and D.0.<br />
12/10: Achieve Level 1 compliance (Covered Entities have completed internal<br />
testing and can send and receive compliant transactions) for Versions 5010<br />
and D.0.<br />
01/11: Begin Level 2 testing period activities (external testing with trading partners<br />
and move into production; dual processing mode) for Versions 5010 and<br />
D.0.<br />
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We further note that many health plans<br />
supported a 2013 compliance date.<br />
Since the complexity of ICD–10<br />
implementation will be much higher for<br />
health plans (because after health plans<br />
update systems to utilize ICD–10 codes,<br />
they will also have to develop claims<br />
processing edits based on those codes)<br />
than for individual providers and<br />
coders, we take the support of health<br />
plans for a 2013 compliance date as an<br />
indication of the reasonableness of this<br />
timeline.<br />
It is also important to note that, while<br />
NCVHS recommended that Level 1<br />
activities for Version 5010 and ICD–10<br />
should not overlap, it is inevitable that,<br />
as covered entities embark on<br />
requirements analysis for Version 5010,<br />
they will identify ICD–10 issues as a<br />
natural offshoot of those efforts. Thus,<br />
even if entities choose not to begin fullscale<br />
ICD–10 implementation efforts<br />
until Version 5010 has reached Level 2<br />
compliance, they will likely begin that<br />
phase with a preexisting knowledge<br />
base about ICD–10, and will also have<br />
identified lessons learned and best<br />
practices that will inform those later<br />
activities.<br />
We also note that the Diagnostic and<br />
Statistical Manual of Mental Disorders,<br />
Fifth Edition (DSM–V) is projected to be<br />
released in 2012 by the American<br />
Psychiatric Association (APA). CDC is<br />
working with APA to ensure that ICD–<br />
10–CM and DSM–V codes match, and<br />
that the timing of this projected release<br />
would conform with the commenter’s<br />
request that the ICD–10 compliance date<br />
occur after the release of DSM–V.<br />
We are adopting the ICD–10–CM and<br />
ICD–10–PCS as medical data code sets<br />
under HIPAA, replacing ICD–9–CM<br />
Volumes 1 and 2, and Volume 3, with<br />
a compliance date of October 1, 2013,<br />
and have updated the draft ICD–10/<br />
Version 5010 implementation timeline<br />
which previously appeared in the<br />
proposed rule (73 FR 49807) to read as<br />
follows:<br />
01/11: Begin initial compliance activities (gap analysis, design,<br />
development, internal testing).
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TIMELINE FOR IMPLEMENTING VERSIONS 5010/D.0 AND ICD–10—Continued<br />
Version 5010/D.0 ICD–10<br />
01/12: Achieve Level 2 compliance; Compliance date for all covered entities. This<br />
is also the compliance date for Version 3.0 for all covered entities except small<br />
health plans*.<br />
10/13: Compliance date for all covered entities.<br />
3335<br />
Note: Level 1 and Level 2 compliance requirements only apply to Version 5010, NCPDP Telecommunication Standard Version D.0, and<br />
NCPDP Medicaid Subrogation Standard Version 3.0.<br />
Comment: One commenter stated that<br />
the October 1 compliance date should<br />
be changed to better align with the<br />
health care industry’s regularly<br />
scheduled annual system changeovers.<br />
Response: The commenter did not<br />
reference specific system changeovers,<br />
suggest an alternative date, or specify<br />
the regularly scheduled system changes<br />
to which it refers, so we are unable to<br />
assess the validity of the comment. We<br />
received no other comments opposed to<br />
an October 1 date. The October 1 date<br />
was selected to ensure that the ICD–10<br />
compliance date would coincide with<br />
the effective date of the Medicare IPPS<br />
update.<br />
Comment: A number of commenters<br />
urged that the compliance date for the<br />
HIPAA health care claims attachment<br />
standard not coincide with the Level 1<br />
implementation activities related to<br />
either Version 5010 or ICD–10.<br />
Response: We will take this into<br />
consideration in establishing a<br />
compliance date in the health care<br />
claims attachment standard final rule.<br />
C. Implementation Period<br />
Comment: A minority of commenters<br />
disagreed with our proposal to establish<br />
a single compliance date for ICD–10.<br />
Some commenters suggested a variety of<br />
alternatives for phased-in or staggered<br />
implementation of the ICD–10–CM and<br />
ICD–10–PCS code sets in order to<br />
alleviate the impact of implementation.<br />
A number of these commenters<br />
suggested that we allow ‘‘dual<br />
processing’’: in other words, acceptance<br />
of either ICD–9 or ICD–10 code sets on<br />
any given claim for a specified period of<br />
time. They expressed concern about<br />
having a single date on which all<br />
covered entities would have to convert<br />
to ICD–10, and stressed the need for<br />
testing between trading partners to<br />
ensure that claims are properly<br />
processed. They also pointed out that<br />
covered entities would have to maintain<br />
dual processes in any case to process<br />
old claims.<br />
Other commenters proposed that the<br />
ICD–10–CM diagnosis and ICD–10–PCS<br />
procedure codes be implemented at<br />
different times. A few commenters<br />
suggested adopting other nations’<br />
approaches to implementing ICD–10<br />
such as those used in Canada and<br />
Australia, specifically, staggered<br />
implementation of the new codes either<br />
by geographic region, by covered entity<br />
category, and/or allowing for a later<br />
implementation date for small entities.<br />
Other commenters pointed out that<br />
diagnosis and procedure codes affect the<br />
amount of payment, and that dual<br />
processing (that is, the possibility that a<br />
claim for services provided on a given<br />
date being processed for reimbursement<br />
at two different rates based on two code<br />
sets) would add significant complexity.<br />
Response: Implementation of ICD–10<br />
will require significant business and<br />
technical changes for all covered<br />
entities.<br />
We acknowledge that ICD–9–CM<br />
codes will continue to be used only for<br />
the period of time during which old<br />
claims (those with dates of service prior<br />
to October 1, 2013) continue through the<br />
payment cycle. We do not believe that<br />
this period during which covered<br />
entities will be maintaining the ability<br />
to work in two code systems is what<br />
commenters meant by ‘‘dual<br />
processing.’’ Rather, we believe that<br />
commenters utilized the term ‘‘dual<br />
processing’’ to mean the provider’s<br />
ability to use their own discretion in<br />
deciding whether to submit claims<br />
using ICD–9 or ICD–10 code sets after<br />
the October 1, 2013 compliance date.<br />
Such use of more than one code set for<br />
coding diagnoses or procedures,<br />
whether in a medical record or claim,<br />
would cause significant business<br />
process duplication. It could result in<br />
different information being shared about<br />
a patient because the ICD–10 code set is<br />
so much more robust than ICD–9, and<br />
the code for a given diagnosis/procedure<br />
does not necessarily match one code to<br />
one code between the code sets.<br />
While HHS could elect to provide for<br />
some sort of ‘‘staggered’’<br />
implementation dates, we have<br />
concluded that it would be in the health<br />
care industry’s best interests if all<br />
entities were to comply with the ICD–<br />
10 code set standards at the same time<br />
to ensure the accuracy and timeliness of<br />
claims and transaction processing.<br />
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We agree with commenters that<br />
maintenance of two code sets for a<br />
significant span of time such that, on<br />
any specific date of service in that time<br />
frame one could submit, process and/or<br />
receive payment on a claim based on<br />
ICD–9–CM or the ICD–10–CM and ICD–<br />
10–PCS code sets would raise<br />
considerable logistical issues and add to<br />
the complexity of the ICD–10 code set<br />
implementation. One would need to<br />
employ/operate duplicate coding staffs<br />
and systems. For example, we<br />
understand that Medicare’s systems will<br />
not allow the use of two different code<br />
sets for services provided on the same<br />
date, and we presume that other covered<br />
entities’ systems were likewise not<br />
designed with such capacities. Even if<br />
such coding and processing capabilities<br />
were available, the biller would have to<br />
ensure that claims indicated the coding<br />
system under which they were<br />
generated, and the recipient would need<br />
to put measures in place to avoid<br />
processing on the wrong system. We<br />
believe that this would impose a very<br />
significant burden on plans and<br />
providers/suppliers. The availability<br />
and use of crosswalks, mappings and<br />
guidelines should assist entities in<br />
making the switchover from ICD–9 to<br />
ICD–10 code sets on October 1, 2013,<br />
without the need for the concurrent use<br />
of both code sets in claims processing,<br />
medical record and related systems with<br />
respect to claims for services provided<br />
on the same day. Furthermore, although<br />
the Act gives the Secretary the authority<br />
to extend the time for compliance for<br />
small health plans if the Secretary<br />
determines that it is appropriate, we<br />
believe that different compliance dates<br />
based on the size of a health plan would<br />
also be problematic, since a provider<br />
has no way of knowing if a health plan<br />
qualifies as a small health plan or not.<br />
As stated in the August 22, 2008<br />
proposed rule (73 FR 49806), a phased-<br />
in implementation of ICD–10 that<br />
allows for payment systems to accept<br />
both ICD–9 and ICD–10 codes for<br />
services rendered on the same day<br />
would constitute a significant burden on<br />
the industry. We continue to believe<br />
that, based on our previous HIPAA<br />
standards implementation experience
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and in consideration of the complexities<br />
of the U.S. health care system’s multi-<br />
payer system, allowing both code<br />
systems to be used and reported at the<br />
same time (i.e., for services/procedures<br />
performed on the same day) would<br />
create confusion in processing and<br />
interpreting coded data, and claims<br />
could likely be denied for services, or<br />
returned as errors if processing errors<br />
resulted in edits that indicated too many<br />
or too few digits. It would be more<br />
costly for the various health care<br />
payment systems used in the United<br />
States to accept and process claims with<br />
both ICD–9 and ICD–10 code sets.<br />
Providers would have to maintain both<br />
coding systems, and there would be<br />
significant system implications in trying<br />
to determine which coding system was<br />
being used to report the coded data.<br />
Adopting diagnosis and procedure<br />
codes at different times would result in<br />
similar system problems, namely<br />
pairing an ICD–9 diagnosis code with an<br />
ICD–10 procedure code, or vice versa.<br />
For more examples of problems<br />
associated with maintaining the two<br />
coding systems concurrently, please<br />
refer to the August 22, 2008 proposed<br />
rule (73 FR 49806).<br />
Allowing the industry to use ICD–10–<br />
CM and ICD–10–PCS codes voluntarily<br />
would also result in confusion. Systems<br />
would not be able to recognize whether<br />
the code was an error made in an ICD–<br />
9 code entry, or actually an ICD–10<br />
code, again causing rejection errors.<br />
We continue to believe it is in the<br />
industry’s best interest, and that<br />
includes small health plans, to have a<br />
single compliance date for ICD–10–CM<br />
and ICD–10–PCS. This will reduce the<br />
burden on both providers and insurers<br />
who will be able to edit on a single new<br />
coding system for claims received for<br />
encounters and discharges occurring on<br />
or after October 1, 2013, instead of<br />
having to maintain two coding systems<br />
over an extended period of time.<br />
Providers and insurers would use ICD–<br />
9–CM edits and payment logic for<br />
claims relating to encounters and<br />
discharges occurring prior to the date of<br />
compliance, and the ICD–10–CM and<br />
ICD–10–PCS edits and payment logic for<br />
all claims relating to encounters and<br />
discharges occurring on or after the<br />
ICD–10 compliance date. They would<br />
not have the burden of selectively<br />
applying either the ICD–9–CM or ICD–<br />
10–CM edits and logic to claims before<br />
the compliance date, and as a result, we<br />
have not established dates for Level 1<br />
and Level 2 testing compliance for ICD–<br />
10 implementation. We encourage all<br />
industry segments to be ready to test<br />
their systems with ICD–10 as soon as it<br />
is feasible. We believe that the October<br />
1, 2013 compliance date will allow<br />
various payment systems to correctly<br />
edit the codes and make payments<br />
based on the payment and coding<br />
system in effect at that time, and is<br />
sufficiently far in the future to provide<br />
all sectors of the industry adequate time<br />
to implement the code sets.<br />
As described in section XI.D of the<br />
August 22, 2008 proposed rule (73 FR<br />
49827), a number of phase-in<br />
compliance options for ICD–10–CM and<br />
ICD–10–PCS were considered and<br />
rejected because of the nature of the<br />
U.S. multi-payer system. Phased-in<br />
ICD–10–CM and ICD–10–PCS<br />
compliance based on staggered dates set<br />
by geography over extended periods of<br />
time would require plans (especially<br />
national plans), and possibly multi-state<br />
chain or national providers/suppliers or<br />
health care entities that were vertically<br />
integrated, to maintain and operate both<br />
ICD–9 and ICD–10 coding systems for<br />
an extended period of time. The time<br />
frame during which covered entities<br />
will need to learn and use the new ICD–<br />
10 codes, while at the same time<br />
continuing to work with the old ICD–9<br />
codes, should be minimized because<br />
during this period there is an increase<br />
in the chance of errors in payments, and<br />
such confusion and uncertainty in the<br />
provider/supplier community could<br />
result in undesirable delays in<br />
processing claims that should be<br />
avoided to the extent possible. We<br />
believe that maintaining dual systems<br />
concurrently for an extended period of<br />
time would impose a very significant<br />
burden on plans and providers/<br />
suppliers. In the August 22, 2008<br />
proposed rule (73 FR 49827), we also<br />
referenced the Canadian and Australian<br />
experience with their geographic<br />
phased-in ICD–10 implementation<br />
approach, and the problems they<br />
reported that were inherent in that<br />
approach. We have received no new<br />
information on other countries’<br />
experience with the implementation of<br />
their respective version of ICD–10 that<br />
would lead us to reverse our initial<br />
conclusion that a phased-in approach<br />
based on geographic boundaries is not<br />
in the best interests of the industry.<br />
Therefore, in consideration of the many<br />
problems inherent with these phased-in<br />
and/or staggered implementation<br />
alternatives, we are adopting October 1,<br />
2013 as the compliance date for the<br />
ICD–10–CM and ICD–10–PCS medical<br />
data code sets.<br />
D. Date of Admission Versus Date of<br />
Discharge Coding<br />
Comment: We proposed to follow the<br />
current practice of implementing new<br />
code set versions effective with the date<br />
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of service, which for purposes of<br />
inpatient facilities means the medical<br />
codes in effect at the time of patient<br />
discharge. For example, if a patient is<br />
admitted in September and the patient<br />
is discharged on or after the October 1<br />
compliance date, the hospital would<br />
have to assign the codes in effect on<br />
October 1. Several commenters<br />
requested that inpatient hospital<br />
facilities use the version of the codes in<br />
effect at the date of admission instead of<br />
the date of discharge because this would<br />
benefit inpatient facilities that use<br />
interim billing. They proposed that<br />
hospitals that did not use interim billing<br />
could continue to use the date of<br />
discharge for determining the version of<br />
ICD code sets to be used for coding.<br />
Response: It has been a long standing<br />
practice for inpatient facilities to use the<br />
version of ICD codes in effect on the<br />
date of discharge. Most hospitals do not<br />
code their records for billing purposes<br />
until the patient is discharged. Much<br />
information is gathered through the<br />
process of inpatient treatment. Tests are<br />
performed, surgeries may be completed,<br />
and additional diagnoses may be<br />
assigned. Therefore, the documentation<br />
is more complete by the time a patient<br />
is discharged. At this point the hospital<br />
coder assigns the codes that are in effect<br />
on the date of discharge. All of our<br />
national inpatient data is based on this<br />
practice. We do not agree that changing<br />
this practice would be of benefit to<br />
hospitals, and maintain that the<br />
opposite would be true, and is counter<br />
to the implementation of a single,<br />
consistent ICD–10 implementation date.<br />
Furthermore, using the date of<br />
admission for some types of claims<br />
coding, and date of discharge for other<br />
types of claims coding would also<br />
greatly disrupt national data and create<br />
problems in analyzing what has, until<br />
this point in time, been a consistent<br />
approach to coding medical records.<br />
Hospitals engaged in interim billing will<br />
not see any change from their current<br />
practices. They will continue to use the<br />
code set in effect for services occurring<br />
prior to October 1, 2013 and will use the<br />
next year’s update (in this case, ICD–10–<br />
CM and ICD–10–PCS for 2013) for<br />
services occurring on or after October 1,<br />
2013.<br />
Therefore, we will not change the<br />
current practice followed by inpatient<br />
facilities of coding based on the date of<br />
discharge.<br />
E. Coding Guidelines<br />
Comment: Several commenters<br />
expressed the need for ICD–10 coding<br />
guidelines to be developed and<br />
maintained. Some commenters<br />
incorrectly pointed out that guidelines
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were not available, while others were<br />
aware of the ICD–10 guidelines that are<br />
posted on the CMS and CDC Web sites.<br />
Commenters expressed concern that the<br />
ICD–10–CM guidelines on CDC’s Web<br />
page were created in 2003, and stated<br />
that they are ‘‘draft’’ guidelines that<br />
have not been updated. Commenters<br />
further indicated that this lack of<br />
finalized coding guidelines will make it<br />
difficult for software and systems<br />
vendors to develop ICD–10 products<br />
and for covered entities to begin training<br />
staff. Commenters also stated that there<br />
should be a single, authoritative source<br />
for ICD–10 coding guidelines to avoid<br />
variations in the interpretation and use<br />
of the codes. These commenters<br />
questioned whether the implementation<br />
of ICD–10 should be delayed until such<br />
time as the guidelines can be updated.<br />
Response: We agree that it is<br />
important to have an official set of ICD–<br />
10 coding guidelines, and that they be<br />
properly maintained. CMS, CDC, AHA<br />
and AHIMA joined forces some time ago<br />
under a long-standing memorandum of<br />
understanding to develop and approve<br />
the guidelines for ICD–9–CM code set<br />
coding and reporting. These<br />
‘‘Cooperating Parties’’ conduct annual<br />
reviews of these guidelines and develop<br />
new guidelines as needed, considering<br />
stakeholder input obtained through<br />
public meetings of the ICD–9–CM<br />
Coordination and Maintenance<br />
<strong>Committee</strong>, and through input<br />
submitted from AHA and AHIMA<br />
members. Only those guidelines<br />
approved by the Cooperating Parties are<br />
official and posted to CDC and CMS<br />
Web sites, and this has proven to be an<br />
effective approach to guideline<br />
development and maintenance. The<br />
Cooperating Parties will finalize a <strong>2009</strong><br />
version of the Official ICD–10–CM<br />
coding guidelines, which will be posted<br />
to CDC’s Web site in January <strong>2009</strong>.<br />
Updated coding guidelines for ICD–10–<br />
PCS are included in the Reference<br />
Manual already posted to CMS’ Web site<br />
at http://www.cms.hhs.gov/ICD10/<br />
Downloads/pcs_refman.pdf. Given the<br />
imminent availability of updated coding<br />
guidelines, we do not believe that it<br />
would be appropriate to further delay<br />
the adoption of the ICD–10 code sets<br />
pending the issuance of the updated<br />
guidelines.<br />
F. ICD–10 Mappings and Crosswalks<br />
Comment: Many commenters<br />
emphasized the importance of reliable<br />
crosswalks between ICD–9–CM and<br />
ICD–10–CM and ICD–10–PCS. Some<br />
commenters incorrectly stated that there<br />
were no crosswalks available between<br />
ICD–9–CM and ICD–10–CM and ICD–<br />
10–PCS diagnosis and procedure codes<br />
and pointed out the importance of such<br />
crosswalks for implementation. Other<br />
commenters stated that they would<br />
require ‘‘additional bi-directional<br />
mapping developed by a single<br />
authoritative national source prior to<br />
implementation,’’ to prevent loss of data<br />
integrity. Commenters expressed<br />
concern about possible crosswalk and<br />
mapping errors, the lack of a crosswalk<br />
between ICD–10–CM and the ICD–10<br />
code set for international data<br />
comparability, and about the ability of<br />
available crosswalks to serve as a useful<br />
tool in data conversion. Some<br />
commenters stated there should be an<br />
extension of the timeline for ICD–10<br />
compliance due to the limited<br />
availability and utility of the existing<br />
crosswalks. Several commenters<br />
recommended that HHS inform industry<br />
stakeholders how often these mappings<br />
will be updated and how they will be<br />
maintained. One commenter asked<br />
whether companies may develop their<br />
own proprietary mapping systems and if<br />
this could impact the compliance dates.<br />
We also received a comment that, if<br />
ICD–10 is implemented, we should<br />
provide a crosswalk between the<br />
Ambulatory Payment Classification<br />
(APC) groups and the Medicare<br />
Severity—Diagnosis Related Groups<br />
(MS–DRGs).<br />
Response: We agree that crosswalks<br />
between ICD–9–CM and ICD–10–CM<br />
and ICD–10–PCS will be critical.<br />
Section 1174(b)(2)(B)(ii) of the Act states<br />
that if a code set is modified under this<br />
subsection, the modified code set shall<br />
include instructions on how data<br />
elements of health information that<br />
were encoded prior to the modification<br />
may be converted or translated so as to<br />
preserve the informational value of the<br />
data elements that existed before the<br />
modification. Any modification to a<br />
code set under this subsection shall be<br />
implemented in a manner that<br />
minimizes the disruption and cost of<br />
complying with such modification.<br />
In anticipation of that possible need<br />
if/when ICD–10 code sets were to be<br />
adopted, authoritative, detailed bi-<br />
directional (that is, they can be used to<br />
translate from the old code to the new,<br />
or from the new to the old) crosswalks,<br />
or mappings, which we refer to as<br />
General Equivalency Mappings (GEMs),<br />
have been developed between ICD–9–<br />
CM Volumes 1 and 2 and ICD–10–CM<br />
and the ICD–9–CM Volume 3 and ICD–<br />
10–PCS. These mappings were<br />
developed with stakeholder input into<br />
their creation and maintenance, and<br />
discussed at public meetings of the ICD–<br />
9 Coordination and Maintenance<br />
<strong>Committee</strong>.<br />
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3337<br />
CDC developed one such bi-<br />
directional mapping between ICD–9–<br />
CM diagnosis codes and ICD–10–CM.<br />
This mapping, and an accompanying<br />
guide explaining how to use the<br />
mapping, are available on CDC’s Web<br />
page at http://www.cdc.gov/nchs/about/<br />
otheract/icd9/icd10cm.htm, as well as<br />
the CMS Web page at http://<br />
www.cms.hhs.gov/ICD10/02_ICD–10-<br />
PCS.asp.<br />
CMS developed bi-directional<br />
mappings between ICD–9–CM Volume 3<br />
and ICD–10–PCS, along with an<br />
accompanying guide explaining how to<br />
use the 2008 mappings, which are<br />
posted to the CMS Web page at http://<br />
www.cms.hhs.gov/ICD10/<br />
01m_<strong>2009</strong>_ICD–10-PCS.asp#TopOfPage.<br />
CDC’s mapping was highly successful<br />
as a clinical equivalent was reported to<br />
be possible in all but 0.6 percent of ICD–<br />
10–CM codes. In those 0.6 percent of<br />
ICD–10–CM codes, a new diagnosis<br />
concept was introduced into ICD–10–<br />
CM that was not previously found in<br />
ICD–9–CM. Therefore, in 0.6 percent of<br />
the ICD–10–CM codes, there were no<br />
similar codes in ICD–9–CM to which the<br />
ICD–10–CM code could be mapped, and<br />
this is clearly indicated in the GEM<br />
mappings. However, there are general<br />
equivalence mappings for over 99<br />
percent of all ICD–10–CM codes and for<br />
100 percent of the ICD–10–PCS codes.<br />
The ICD–9–CM Coordination and<br />
Maintenance <strong>Committee</strong> reported on the<br />
use of the GEM mapping in converting<br />
the MS–DRGs from ICD–9–CM to ICD–<br />
10–CM codes. A complete report of this<br />
activity is included in the September<br />
24–25, 2008 ICD–9–CM Coordination<br />
and Maintenance <strong>Committee</strong> meeting<br />
summary which can be found at<br />
http://www.cms.hhs.gov/<br />
ICD9ProviderDiagnosticCodes/<br />
03_meetings.asp#TopOfPage.<br />
The use of the GEM mappings to<br />
convert the MS–DRGs from ICD–9–CM<br />
to ICD–10 codes demonstrates that the<br />
GEM mappings are extremely accurate<br />
and useful. The GEM mappings were<br />
able to convert 95 percent of the ICD–<br />
9–CM diagnosis codes in the digestive<br />
part of the MS–DRGs to the appropriate<br />
ICD–10–CM and ICD–10–PCS codes. For<br />
these digestive system MS–DRGs, the<br />
GEM mappings automatically converted<br />
99 percent of the ICD–9–CM digestive<br />
system diagnoses codes and 91 percent<br />
of the ICD–10–PCS procedure codes to<br />
the appropriate digestive system ICD–10<br />
codes. Five percent required some<br />
additional analysis, and we believe that<br />
future experience will increase that rate<br />
of conversion. We trust that these will<br />
be of great assistance to the industry in<br />
converting payment, quality and other<br />
types of systems from ICD–9–CM to
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ICD–10–CM and ICD–10–PCS and vice<br />
versa.<br />
There may be value in annually<br />
revising these bidirectional mappings to<br />
allow for conversions between ICD–9–<br />
CM codes and the ICD–10–CM and ICD–<br />
10–PCS codes as the ICD–10 code sets<br />
are updated annually after their<br />
adoption. The ICD–9–CM Coordination<br />
and Maintenance <strong>Committee</strong> is the<br />
public forum used to discuss updates to<br />
ICD–9–CM and it will be used to discuss<br />
updates to the ICD–10 coding system, as<br />
well as the mapping between the<br />
systems. As previously discussed, this<br />
<strong>Committee</strong> will be re-named the ICD–10<br />
Coordination and Maintenance<br />
<strong>Committee</strong> once ICD–10 is<br />
implemented. The <strong>Committee</strong> will<br />
continue to discuss issues such as<br />
mappings to the prior coding system,<br />
ICD–9–CM. The <strong>Committee</strong> will discuss<br />
the need to continue updating these<br />
mappings for a minimum of 3 years after<br />
the ICD–10–CM and ICD–10–PCS final<br />
compliance date. Should the industry<br />
recommend that this period be extended<br />
by several years, then we would<br />
anticipate that the mappings will<br />
continue to be updated through the<br />
auspices of the <strong>Committee</strong>, and will<br />
seek input from industry stakeholders<br />
through the <strong>Committee</strong> as to whether<br />
these mappings are beneficial to<br />
industry, and whether mappings to<br />
ICD–9–CM should be updated for an<br />
additional period of time.<br />
CMS also has developed a<br />
reimbursement mapping that can be<br />
used to update payment systems that<br />
gives the ICD–10–CM code that best<br />
matches the previously used ICD–9–CM<br />
code. This reimbursement mapping will<br />
allow other payers to more quickly<br />
determine how they want to classify a<br />
particular ICD–10 code within their<br />
payment system. Should payers want to<br />
consider refinements to their payment<br />
systems based on the additional detail<br />
provided by ICD–10, they may do so.<br />
The complete ICD–10–CM and ICD–10–<br />
PCS GEMs may also assist in those cases<br />
where additional information is needed,<br />
which is not found in the more<br />
streamlined reimbursement mapping.<br />
For details of the discussion of the<br />
reimbursement mappings at the ICD–9–<br />
CM Coordination and Maintenance<br />
<strong>Committee</strong>, please access the CMS Web<br />
site at http://www.cms.hhs.gov/<br />
ICD9ProviderDiagnosticCodes/<br />
03_meetings.asp#TopOfPage.<br />
CMS will post to this same Web site<br />
the reimbursement mapping file along<br />
with the <strong>2009</strong> versions of the GEMS and<br />
the <strong>2009</strong> version of ICD–10–PCS by the<br />
end of <strong>2009</strong>. CDC will be posting the<br />
<strong>2009</strong> version of the ICD–10–CM GEMs<br />
to their Web site at http://www.cdc.gov/<br />
nchs/about/otheract/icd9/icd10cm.htm<br />
by the end of <strong>2009</strong>.<br />
CMS will use mappings to convert the<br />
Medicare-Severity Diagnosis Related<br />
Groups (MS–DRGs) from ICD–9–CM to<br />
ICD–10–CM and ICD–10–PCS. MS–<br />
DRGs are used by Medicare to<br />
determine hospital payments under the<br />
Inpatient Prospective Payment System<br />
(IPPS). This conversion was discussed<br />
at the September 24, 2008 ICD–9–CM<br />
Coordination and Maintenance<br />
<strong>Committee</strong> meeting. This presentation<br />
can be found at: http://<br />
www.cms.hhs.gov/<br />
ICD9ProviderDiagnosticCodes/<br />
03_meetings.asp#TopOfPage. We expect<br />
that CMS will have converted all MS–<br />
DRGs to ICD–10 by October <strong>2009</strong>, and<br />
will share those results with payers and<br />
providers at a future ICD–9–CM<br />
Coordinating and Maintenance<br />
<strong>Committee</strong> meeting. The adoption of the<br />
final ICD–10 version of MS–DRGs will<br />
be subject to rulemaking. We encourage<br />
anyone who has particular concerns<br />
about possible errors in the crosswalks<br />
and/or mappings to share them with<br />
CMS and CDC through the ICD–9–CM<br />
Coordination and Maintenance<br />
<strong>Committee</strong> so that mappings can be<br />
updated as we move forward toward<br />
implementation.<br />
We disagree that we should develop<br />
a crosswalk between APCs and MS–<br />
DRGs when ICD–10 is implemented. We<br />
do not have a crosswalk between the<br />
current APCs, which are based on CPT<br />
codes, and MS–DRGs, which are based<br />
on ICD–9–CM codes. The IPPS, which<br />
relies on MS–DRGs, and the hospital<br />
outpatient prospective payment system<br />
(OPPS), which relies on APCs, were<br />
developed to reimburse providers in<br />
different settings, are maintained<br />
separately, and undergo separate formal<br />
rulemaking each year.<br />
Finally, CDC fully intends to produce<br />
a crosswalk between ICD–10 and ICD–<br />
10–CM, addressing the need for<br />
international data comparability, and<br />
this crosswalk will be completed and<br />
made available one year prior to the<br />
ICD–10 compliance date. CDC already<br />
uses ICD–10 to report cause of death,<br />
and it is anticipated that this crosswalk<br />
will be of great interest to those engaged<br />
in international data reporting.<br />
Any additional tools will certainly<br />
assist in the implementation of ICD–10,<br />
and both CMS and CDC will continue to<br />
make improvements and refinements to<br />
their publicly available mappings and<br />
post them for others to use. Other<br />
vendors may develop products to assist<br />
in analyzing codes or converting data,<br />
but we do not see any reason why the<br />
availability of such products, whether<br />
proprietary or non-proprietary, would<br />
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have any bearing on the determination<br />
of a final compliance date for ICD–10–<br />
CM and ICD–10–PCS.<br />
G. ICD–10 Education and Outreach<br />
Comment: Many commenters stated<br />
that the proposed October 2011 ICD–10<br />
compliance date would not allow for<br />
proper industry education and outreach<br />
and that the tight timeline would<br />
constitute a major burden to the<br />
industry. Commenters expect that<br />
certified coders would need detailed<br />
education in order to identify the proper<br />
codes for accurate billing. Some<br />
commenters said regular physician<br />
office staff would need to become<br />
certified coders, and current certified<br />
coders would need to get recertified,<br />
incurring a costly exam fee.<br />
Many commenters recommended that<br />
significant education and outreach for<br />
ICD–10 would be needed, and they<br />
suggested a number of strategies,<br />
including the need for national<br />
associations to collaborate on education<br />
efforts; a need for a consistent set of<br />
messages and/or materials from a<br />
national authoritative source;<br />
recognition that different audiences/<br />
entities (for example, inpatient hospital<br />
coders) may need different levels of<br />
training; that in-person training should<br />
supplement Internet training and<br />
printed documents; and that CMS<br />
should provide funding for ICD–10<br />
training for State Medicaid program<br />
staff.<br />
Response: As stated in the August 22,<br />
2008 proposed rule (73 FR 49807), with<br />
the publication of this final rule, we will<br />
begin to proactively conduct outreach<br />
and education activities which include,<br />
but are not limited to, roundtable<br />
conference calls with industry<br />
stakeholders, development of FAQs, fact<br />
sheets, and other supporting education<br />
and outreach materials for industry<br />
partner dissemination. We also<br />
anticipate that there will be extensive<br />
industry-sponsored educational<br />
opportunities through various<br />
stakeholder associations. As part of our<br />
education and outreach efforts, we will<br />
work closely with industry stakeholders<br />
to make subject matter experts available<br />
to them, and to expeditiously help<br />
stakeholders disseminate relevant<br />
information at the national, regional and<br />
local level that will be useful to them in<br />
educating their respective members.<br />
Comment: One commenter expressed<br />
the belief that implementing ICD–10<br />
will exacerbate the current shortage of<br />
clinical coders. Other commenters<br />
stated that we did not account for the<br />
impact to formal training programs for<br />
degree and national certificates that will<br />
need to be updated or redeveloped.
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Response: We have received no<br />
indication from industry and/or<br />
technical school representatives that the<br />
changeover from ICD–9 to ICD–10 codes<br />
might contribute to the existing shortage<br />
of clinical coders and, in fact, increased<br />
marketplace demand for coders as a<br />
result of the adoption of ICD–10–CM<br />
and ICD–10–PCS may lead to more<br />
enrollment in coding curriculums.<br />
School representatives have indicated<br />
their readiness to adapt to any needed<br />
ICD–10 curriculum changes and<br />
anticipate that they will be able to<br />
produce ‘‘ICD–10 ready’’ clinical coders<br />
upon graduation from their respective<br />
institutions. We anticipate that<br />
educational venues offering coding<br />
courses are already familiar with<br />
making annual updates to curriculums<br />
to reflect yearly code set revisions. The<br />
final compliance date of October 1, 2013<br />
should afford educational institutions<br />
ample time to change their curriculums,<br />
seek out appropriate educational<br />
materials and related resources, and<br />
graduate ICD–10 competent coders.<br />
Some hospitals may require coders to<br />
have a certification from a national<br />
professional association. While<br />
desirable, this does not appear to be a<br />
requirement for coders working in<br />
physician offices or other ambulatory<br />
settings. We understand that many<br />
certified coders must meet annual<br />
continuing educational requirements or<br />
authorities to maintain their<br />
certifications. As we have no coding<br />
certification requirements or authorities,<br />
we recommend that those concerned<br />
with future certification standards<br />
contact the applicable professional<br />
organizations.<br />
We agree with commenters that it is<br />
important that consistent and accurate<br />
ICD–10–CM and ICD–10–PCS materials<br />
are developed to assist with national<br />
training and education. We also agree<br />
that it is important that educational<br />
training be a collaborative effort among<br />
all interested stakeholders. We will<br />
continue to collaborate with other<br />
stakeholder organizations on outreach<br />
and education on the transition from<br />
ICD–9 to ICD–10, taking into<br />
consideration the contextual and timing<br />
needs of different industry segments,<br />
including hospitals, providers, coders,<br />
etc., in a way that will ensure all<br />
affected entities have the resources<br />
needed to properly code.<br />
Both AHA and AHIMA will take lead<br />
roles in developing additional, more<br />
detailed technical training materials for<br />
coders. AHA also plans to continue<br />
their training support activities by<br />
updating their education materials to<br />
ICD–10 and will change the name of<br />
their publication to Coding Clinic for<br />
ICD–10. AHA has announced that it will<br />
begin to include ICD–10 information in<br />
its Coding Clinic in advance of the<br />
actual ICD–10–CM and ICD–10–PCS<br />
implementation date.<br />
CMS has been working collaboratively<br />
with the Cooperating Parties to develop<br />
additional ICD–10 educational materials<br />
which will be posted at: http://<br />
www.cms.hhs.gov/ICD10/05_<br />
Educational_Resources.asp#TopOfPage.<br />
H. Testing<br />
Comment: A minority of commenters<br />
stated that ICD–10–CM and ICD–10–<br />
PCS need more testing prior to<br />
implementation. Some commenters<br />
recommended pilot testing, with one of<br />
those commenters stating that pilot<br />
testing should take place before the<br />
issuance of a final rule, on the<br />
assumption that information gained<br />
through pilot testing could be used to<br />
inform the development of a final rule.<br />
A few commenters stated that more<br />
internal and external training would be<br />
needed beyond that which we described<br />
in the August 22, 2008 proposed rule.<br />
Another commenter said that additional<br />
time—between six months to a year—<br />
should be added to the final Version<br />
5010 compliance date to allow for<br />
testing.<br />
Response: Any pilot testing of ICD–<br />
10–CM and ICD–10–PCS would<br />
demonstrate its integration into business<br />
processes and/or systems, and not the<br />
appropriateness of its adoption as a<br />
HIPAA standard through the notice and<br />
comment rulemaking process.<br />
Furthermore, were pilot testing to<br />
demonstrate a need for additional codes,<br />
etc., these changes could be handled<br />
through the code set maintenance<br />
process, without the need for further<br />
rulemaking to accomplish such changes.<br />
Therefore, we see no reason to pilot test<br />
ICD–10–CM and ICD–10–PCS before<br />
issuing a final rule.<br />
In the development of the August 22,<br />
2008 proposed rule (73 FR 49807) draft<br />
timetable, we accounted for testing with<br />
both internal and external partners as<br />
part of the generally accepted industry<br />
implementation process for the<br />
implementation of these medical data<br />
code sets as adopted HIPAA standards.<br />
This follows similar implementation<br />
plans undertaken for previously<br />
adopted and implemented HIPAA<br />
standards. Such testing is a way to<br />
determine whether, once systems<br />
changeovers are in place, transactions<br />
using the ICD–10–CM and ICD–10–PCS<br />
code sets would be successfully and<br />
accurately processed within a HIPAA<br />
covered entity’s own systems, as well as<br />
whether that entity can successfully<br />
transmit such information from its own<br />
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3339<br />
system to a trading partner. We<br />
welcome the opportunity to work with<br />
industry on any voluntary testing of the<br />
workflows, productivity, and other<br />
practical considerations of the<br />
changeover from ICD–9–CM to ICD–10–<br />
CM in the ambulatory setting that could<br />
result in the development of ‘‘lessons<br />
learned’’ that might be disseminated to<br />
assist this industry segment with a<br />
smooth transition to ICD–10.<br />
With regard to testing the utility of the<br />
ICD–10–CM and ICD–10–PCS code sets<br />
themselves, we refer to the results of the<br />
AHA–AHIMA ICD–10–CM field testing<br />
reported to NCVHS on September 23,<br />
2003, involving 6,177 medical records<br />
coded by credentialed coding<br />
professionals. A copy of this report can<br />
be found at http://www.ncvhs.hhs.gov/<br />
030923ag.htm.<br />
We believe that there has been<br />
successful, independent field testing of<br />
the utility and functionality of ICD–10–<br />
CM and ICD–10–PCS, and that no<br />
additional testing of this nature is<br />
necessary.<br />
I. ICD–10 Code Set Development and<br />
Utility<br />
Comment: Several commenters stated<br />
that countries such as Canada and<br />
Australia have not developed such<br />
extensive clinical modifications to<br />
medical code sets compared to those<br />
used in the U.S. because their versions<br />
of the ICD–10 code sets are not used in<br />
ambulatory settings. Commenters<br />
recommended that a process be<br />
undertaken to streamline and/or<br />
significantly reduce the number of ICD–<br />
10 codes to make adoption easier.<br />
Response: Unlike the United States,<br />
other countries do not use ICD–10 codes<br />
for reimbursement purposes. The level<br />
of detail in the United States’ clinical<br />
modification version of the ICD–10 code<br />
set has resulted in an increased number<br />
of codes, and is commensurate with the<br />
complexities of our multi-payer health<br />
care system. The United States’ clinical<br />
modifications have been derived in part<br />
with the input of clinical specialty<br />
groups that have requested this level of<br />
specificity. If the United States is<br />
moving toward an electronic healthcare<br />
system and increasingly using codes for<br />
quality purposes, there is a need to<br />
capture more precise information, not<br />
less. ICD–10–CM and ICD–10–PCS will<br />
greatly support these efforts.<br />
The Canadian health care system and<br />
the United States health care system are<br />
very different. Canada does not have the<br />
same data needs as the United States.<br />
The Canadian version of ICD–10, called<br />
ICD–10–CA, has been implemented in<br />
hospitals, hospital-based ambulatory<br />
care centers, day surgery centers and
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high-cost clinics (for example, dialysis<br />
and cancer clinics). National ambulatory<br />
care reporting has not been fully<br />
implemented in Canada, but some<br />
provinces have already expanded the<br />
use of ICD–10–CA beyond hospital-<br />
based ambulatory care. ICD–9–CM was<br />
never implemented in physician offices<br />
in Canada because each province had its<br />
own billing system, but the provinces<br />
now fully intend to do so, and are<br />
moving in that direction.<br />
Each country uses its respective<br />
version of ICD–10 for its own purpose,<br />
but common threads from other<br />
countries’ ICD–10 implementation<br />
experiences, such as systems<br />
changeovers, business process issues<br />
and the timing of their conversions to<br />
ICD–10, can help inform our ICD–10<br />
implementation experience in the<br />
United States. An increased number of<br />
codes does not necessarily result in<br />
increased complexity in using the<br />
coding system. Though training would<br />
be required in order to make full use of<br />
the increased number and granularity of<br />
the codes, greater specificity can mean<br />
the correct code is easier to determine<br />
because there is less ambiguity. Not all<br />
HIPAA covered entities will use all of<br />
the ICD–10–CM and ICD–10–PCS codes.<br />
Similar to the way a dictionary is<br />
utilized, ICD–10–CM and ICD–10–PCS<br />
make available a full spectrum of codes,<br />
and entities will selectively use only<br />
those codes that are germane to their<br />
specific clinical area of practice or<br />
healthcare operations.<br />
We are also aware that, in many<br />
instances in the ICD–10–CM code set,<br />
the 7th character is repetitive in nature.<br />
Taking this into account, the remainder<br />
of the core codes amount to far fewer<br />
new codes to learn. Therefore, we do<br />
not believe that reducing the number of<br />
ICD–10–CM and ICD–10–PCS codes to<br />
make adoption easier is warranted, nor<br />
do we believe that the code sets’ size is<br />
a justification for not implementing<br />
ICD–10–CM and ICD–10–PCS in a<br />
timely manner.<br />
Comment: Some commenters stated<br />
that the ability to demonstrate laterality<br />
already exists through modifiers<br />
available for use with ICD–9–CM that<br />
allow the capture of duplicate claims.<br />
Response: In the August 22, 2008<br />
proposed rule (73 FR 49801), we<br />
defined laterality as the ability to<br />
specify which organ or part of the body<br />
is involved when the location could be<br />
on the right, left or bilateral. The<br />
advantage of ICD–10–CM over ICD–9–<br />
CM code sets is that ICD–10–CM<br />
accounts for laterality in the code set<br />
coding itself. ICD–9–CM only allows for<br />
laterality indicators through means of an<br />
extra modifier. These modifiers can only<br />
be used on outpatient claims to further<br />
describe the HCPCS codes, which are<br />
used for reporting physician and<br />
ambulatory procedures. HCPCS codes<br />
will continue to be used for reporting<br />
physician and ambulatory procedures.<br />
Current claim forms and systems do not<br />
allow for modifiers on the diagnosis<br />
codes in any setting or for procedures in<br />
the inpatient setting. This problem is<br />
corrected with both the ICD–10–CM and<br />
ICD–10–PCS codes. This improved<br />
ability to convey laterality can reduce<br />
duplicate payments and/or claims, and<br />
better inform research on conditions<br />
that may affect only one area of the<br />
body; for example, a stroke.<br />
We believe that the laterality inherent<br />
in ICD–10–CM provides another reason<br />
to adopt ICD–10–CM and ICD–10–PCS<br />
code sets as HIPAA standards.<br />
Comment: Several commenters stated<br />
that there is a discrepancy between the<br />
number of ICD–10–CM diagnosis codes<br />
stated in the August 22, 2008 proposed<br />
rule, and other previous citations. A<br />
commenter asked if the ICD–9–CM<br />
13,000 diagnosis codes and 3,000<br />
procedure codes referred to in the<br />
August 22, 2008 proposed rule are those<br />
that are currently in use or include<br />
potential space for use in the future.<br />
Response: The June 2003 version of<br />
ICD–10–CM contained 120,000 codes.<br />
That figure was used in both CMS and<br />
other industry presentations because<br />
that was the number of codes in ICD–<br />
10–CM at that time. A draft of the ICD–<br />
10–CM code set was posted to CDC’s<br />
Web site and CDC solicited comments<br />
on how to update and/or revise the<br />
coding system. Based on those<br />
submitted comments, CDC made<br />
revisions to ICD–10–CM that led to a<br />
reduction in the total number of ICD–<br />
10–CM codes for use in the clinical<br />
modification developed for use in the<br />
United States. A similar, annual process<br />
has been undertaken for ICD–10–PCS,<br />
resulting in changes to the number of<br />
ICD–10–PCS codes as well.<br />
The ICD–9–CM 13,000 diagnosis<br />
codes and 3,000 procedure codes<br />
referenced in the August 22, 2008<br />
proposed rule (73 FR 49802), represent<br />
those codes that are currently in use.<br />
These codes are updated each year by<br />
the ICD–9 Coordination and<br />
Maintenance <strong>Committee</strong> and, therefore,<br />
the number of codes changes annually.<br />
For FY <strong>2009</strong>, there are 14,025 ICD–9–<br />
CM diagnosis codes and 3,824 ICD–9–<br />
CM procedure codes in use.<br />
Comment: Commenters stated that the<br />
annual ICD–9–CM code set updates<br />
should cease one year prior to the<br />
implementation of ICD–10. Also, they<br />
stated that such a ‘‘freeze’’ on code set<br />
updates would allow for instructional<br />
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and/or coding software programs to be<br />
designed and purchased early, without<br />
concern that an upgrade would take<br />
place just immediately before the<br />
compliance date, necessitating<br />
additional updates and/or purchases.<br />
Response: The ICD–9–CM<br />
Coordination and Maintenance<br />
<strong>Committee</strong> has jurisdiction over any<br />
action impacting the code sets.<br />
Therefore, the issue of consideration of<br />
a moratorium on updates to the ICD–9–<br />
CM, ICD–10–CM and ICD–10–PCS code<br />
sets in anticipation of adoption of ICD–<br />
10–CM and ICD–10–PCS will be<br />
addressed through the <strong>Committee</strong> at a<br />
future public meeting.<br />
Comment: One commenter noted that,<br />
while ICD–10–CM will incorporate<br />
needed specificity and clinical<br />
information as compared to the ICD–9–<br />
CM code set, the ICD–10–CM diagnosis<br />
code set in general does not include<br />
‘‘function diagnosis,’’ the performance<br />
deficit for which an occupational<br />
therapy intervention is provided. The<br />
commenter strongly urged CMS to<br />
include in the ICD–10–CM code set a<br />
method of coding the functional<br />
impairments of patients requiring<br />
rehabilitation services, add specific<br />
functional diagnoses to ICD–10–CM<br />
codes, or adopt the use of the<br />
International Classification of<br />
Functioning, Disability and Health<br />
(ICF).<br />
Another commenter stated that ICD–<br />
10–CM codes do not address the need<br />
to stratify the level of severity of<br />
traumatic brain injuries.<br />
Response: We agree with the<br />
commenter that ICD–10–CM, like ICD–<br />
9–CM, does not include concepts that<br />
relate to difficulties with activities of<br />
daily living, functional impairments,<br />
and disability. Those concepts are found<br />
in the ICF, published by the World<br />
Health Organization. The wide scale<br />
incorporation of ICF concepts, with<br />
structural and definitional differences,<br />
into ICD–10–CM would be<br />
inappropriate. The WHO acknowledged<br />
this when developing ICF as a separate<br />
and distinct classification within the<br />
WHO Family of International<br />
Classifications. While we agree that ICF<br />
has great ability to more accurately and<br />
completely describe functioning and<br />
disability concepts, its adoption as a<br />
HIPAA code set is beyond the scope of<br />
this final rule.<br />
The issue of coding of traumatic brain<br />
injury was discussed at the<br />
September 24–25, 2008 meeting of the<br />
ICD–9–CM Coordination and<br />
Maintenance <strong>Committee</strong>. It was stated at<br />
that time that the <strong>Committee</strong> would<br />
address any changes to be made to ICD–<br />
9–CM for traumatic brain injuries, and
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those changes would also be<br />
incorporated into ICD–10–CM as<br />
necessary.<br />
V. Provisions of the Final Regulations<br />
For the most part, this final rule<br />
incorporates the provisions of the<br />
August 22, 2008 proposed rule. Those<br />
provisions of this final rule that differ<br />
from the August 22, 2008 proposed rule<br />
are discussed as follows.<br />
In § 162.1002(b), we have revised the<br />
year ‘‘2011’’ to read ‘‘2013’’ in this<br />
regulation.<br />
In § 162.1002(c), we have revised the<br />
year ‘‘2011’’ to read ‘‘2013’’ in this<br />
regulation.<br />
In § 162.1002(c)(3), we have removed<br />
the term ‘‘Classification’’ and replaced it<br />
with ‘‘Coding’’ in this regulation.<br />
VI. Collection of Information<br />
Requirements<br />
Under the Paperwork Reduction Act<br />
of 1995, we are required to provide 30day<br />
notice in the Federal Register and<br />
solicit public comment before a<br />
collection of information requirement is<br />
submitted to the Office of Management<br />
and Budget (OMB) for review and<br />
approval. In order to fairly evaluate<br />
whether an information collection<br />
should be approved by OMB, section<br />
3506(c)(2)(A) of the Paperwork<br />
Reduction Act of 1995 requires that we<br />
solicit comment on the following issues:<br />
• The need for the information<br />
collection and its usefulness in carrying<br />
out the proper functions of our agency.<br />
• The accuracy of our estimate of the<br />
information collection burden.<br />
• The quality, utility, and clarity of<br />
the information to be collected.<br />
• Recommendations to minimize the<br />
information collection burden on the<br />
affected public, including automated<br />
collection techniques.<br />
Section 162.1002 of 45 CFR explains<br />
the implementation and continued use<br />
of the International Classification of<br />
Diseases, Tenth Revision, Clinical<br />
Modification (ICD–10–CM) for diagnosis<br />
coding, and the International<br />
Classification of Diseases, Tenth<br />
Revision, Procedure Coding System<br />
(ICD–10–PCS) for inpatient hospital<br />
procedure coding for the period on and<br />
after October 1, 2013. The burden<br />
associated with the implementation and<br />
continued use of ICD–10–CM and ICD–<br />
10–PCS is the time and effort required<br />
to update information systems for use<br />
with updated HIPAA transaction and<br />
code set standards. Specifically, the<br />
entities must comply with the ASC X12<br />
Technical Reports Type 3, Version<br />
005010 (Version 5010) standards, which<br />
accommodate the use of the ICD–10–CM<br />
and ICD–10–PCS code set. The burden<br />
associated with meeting the ICD–10–CM<br />
and ICD–10–PCS code set standards is<br />
not discussed in this final rule;<br />
however, the burden associated with<br />
these standards is accounted for in the<br />
Version 5010 final rule, CMS–0009–F,<br />
published elsewhere in this Federal<br />
Register. The inclusion of other<br />
standards referenced in the Version<br />
5010 final rule, namely the National<br />
Council of Prescription Drug Programs<br />
(NCPDP) Telecommunications Standard<br />
Version D.0, and the NCPDP Batch<br />
Standard Medicaid Subrogation<br />
Implementation Guide, Version 3,<br />
Release 0, has no impact on that<br />
analysis’ ability to address the PRA<br />
burden of ICD–10–CM and ICD–10–PCS.<br />
The burden associated with meeting<br />
the Version 4010 standards is contained<br />
in the following affected sections:<br />
§ 162.1102, § 162.1202, § 162.1301,<br />
§ 162.1302, § 162.1401, § 162.1402,<br />
§ 162.1501, § 162.1502, § 162.1602,<br />
§ 162.1702, and § 162.1802. The affected<br />
sections are currently approved under<br />
OCN 0938–0866 with an expiration date<br />
of July 31, 2011; however, the Version<br />
5010 final rule provides for the revision<br />
of the requirements contained in the<br />
aforementioned affected sections to<br />
update the adopted HIPAA transaction<br />
standard to Version 5010. As OCN<br />
0938–0866 was issued for the current<br />
version of this HIPAA standard, we<br />
have submitted to OMB a revised<br />
version of information collection<br />
request (OCN 0938–0866) for its review<br />
and approval of the information<br />
collection requirements associated with<br />
the implementation of the Version 5010<br />
standards, and ultimately, the<br />
implementation of ICD–10–CM and<br />
ICD–10–PCS. Included as part of the<br />
revised Information Collection<br />
Requirement (ICR) are detailed<br />
instructions on the implementation of<br />
ICD–10–CM and ICD–10–PCS. These<br />
information collection requirements are<br />
not effective until approved by OMB.<br />
VII. Regulatory Impact Analysis (RIA)<br />
Statement of Need<br />
The objective of this regulatory<br />
impact analysis (RIA) is to summarize<br />
the costs and benefits of moving from<br />
ICD–9–CM to ICD–10–CM and ICD–10–<br />
PCS code sets in the context of the<br />
current health care environment.<br />
The following are the three key issues<br />
that we believe necessitate the need to<br />
update from ICD–9–CM to ICD–10–CM<br />
and ICD–10–PCS:<br />
• ICD–9–CM is out of date and<br />
running out of space for new codes.<br />
• ICD–10 is the international standard<br />
to report and monitor diseases and<br />
mortality, making it important for the<br />
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3341<br />
U.S. to adopt ICD–10 classifications for<br />
reporting and surveillance.<br />
• ICD codes are core elements of<br />
many HIT systems, making the<br />
conversion to ICD–10 necessary to fully<br />
realize benefits of HIT adoption.<br />
For a more detailed discussion of the<br />
limitations of ICD–9–CM, please refer to<br />
section III.B in the preamble of the<br />
August 22, 2008 proposed rule (73 FR<br />
49799). As noted in the August 22, 2008<br />
proposed rule, no other viable<br />
alternatives to adopting ICD–10 were<br />
identified. The costs and benefits for<br />
moving from ICD–9–CM to ICD–10–CM<br />
and ICD–10–PCS were assessed within<br />
the requirements of the Executive<br />
Orders and Acts cited in the regulatory<br />
impact analysis.<br />
A. Overall Impact<br />
We examined the impacts of this final<br />
rule as required by Executive Order<br />
12866 on Regulatory Planning and<br />
Review (September 30, 1993, as further<br />
amended), the Regulatory Flexibility<br />
Act (RFA) (September 19, 1980, Pub. L.<br />
96–354) (as amended by the Small<br />
Business Regulatory Enforcement<br />
Fairness Act of 1996, Pub. L. 104–121),<br />
section 1102(b) of the Social Security<br />
Act, sections 202 and 205 of the<br />
Unfunded Mandates Reform Act of 1995<br />
(Pub. L. 104–4), Executive Order 13132<br />
on Federalism (August 4, 1999), and the<br />
Congressional Review Act (5 U.S.C.<br />
804(2)).<br />
Executive Order 12866 (as amended<br />
by Executive Order 13258 and Executive<br />
Order 13422, which modifies the list of<br />
criteria used for regulatory review)<br />
directs agencies to assess all costs and<br />
benefits of available regulatory<br />
alternatives and, if regulation is<br />
necessary, to select regulatory<br />
approaches that maximize net benefits<br />
(including potential economic,<br />
environmental, public health and safety<br />
effects, distributive impacts, and<br />
equity). A regulatory impact analysis<br />
(RIA) must be prepared for major rules<br />
with economically significant effects<br />
($100 million or more in any 1 year). We<br />
consider this to be a major rule, as it<br />
will have an impact of over $100<br />
million on the economy. Accordingly,<br />
we have prepared an RIA.<br />
Section 202 of the Unfunded<br />
Mandates Reform Act of 1995 (UMRA)<br />
also requires that agencies assess the<br />
anticipated costs and benefits before<br />
issuing any rule that includes a Federal<br />
mandate that could result in<br />
expenditures of $100 million in 1995<br />
dollars (updated annually for inflation)<br />
in any 1 year by State, local, or tribal<br />
governments, in the aggregate, or by the<br />
private sector. That threshold level is<br />
currently approximately $130 million.
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Based on our analysis, we anticipate<br />
that the private sector would incur costs<br />
exceeding $130 million per year<br />
beginning 3 years after the publication<br />
of the final rule, and ending 3 years after<br />
implementation. Our analysis indicates<br />
that the States’ share of ICD–10<br />
implementation costs would not exceed<br />
$130 million over a 1-year period. In<br />
addition, local or tribal governments<br />
will not experience costs exceeding<br />
$130 million over a 1-year period. We<br />
base our assessment on the fact that we<br />
received no comments from local<br />
governments indicating cost impacts<br />
exceeding $130 million over a 1-year<br />
period in response to the August 22,<br />
2008 proposed rule, and the Indian<br />
Health Service (IHS) estimate of costs to<br />
tribal governments totaling $12.3<br />
million as detailed in Table 1 of this<br />
final rule.<br />
In addition, under section 205 of the<br />
UMRA (2 U.S.C. 1535), having<br />
considered three alternatives that are<br />
referenced in the preamble of this final<br />
rule, HHS has concluded that the<br />
provisions in this final rule are the most<br />
cost-effective alternative for<br />
implementing HHS’s statutory objective<br />
of administrative simplification.<br />
Executive Order 13132 establishes<br />
certain requirements that an agency<br />
must meet when it promulgates a<br />
proposed rule (and subsequent final<br />
rule), that imposes substantial direct<br />
requirement costs on State and local<br />
governments, preempts State law, or<br />
otherwise has Federalism implications.<br />
Executive Order 13132 requires the<br />
opportunity for meaningful and timely<br />
input by State and local officials in the<br />
development of rules that have<br />
Federalism implications. HHS consulted<br />
with appropriate local, State and<br />
Federal agencies, including tribal<br />
authorities and Native American groups,<br />
as well as private organizations. These<br />
private organizations included, among<br />
others, WEDI, NUCB, NUCC, and the<br />
ADA in accordance with section<br />
1178(c)(3) of the Act.<br />
In order to validate the fiscal and<br />
operational impact of this rule on State<br />
Medicaid agencies, current data on costs<br />
for States to implement a new code set<br />
would be necessary. We reference in the<br />
preamble of this final rule industry<br />
studies that were conducted by both<br />
Nolan and RAND that provide some<br />
insight into this information for States.<br />
HHS has examined the effects of<br />
provisions in this final rule as well as<br />
the opportunities for input by the States.<br />
The Federalism implications of this<br />
final rule are consistent with the<br />
provisions of the Administrative<br />
Simplification subtitle of HIPAA by<br />
which HHS is required by the Congress<br />
to promulgate standards for the<br />
interchange of certain health care<br />
information through electronic means.<br />
Under section 1178(a)(1) of the Act,<br />
these standards generally preempt<br />
contrary State law.<br />
The States were invited to submit<br />
comment on this section and all<br />
sections of the August 22, 2008<br />
proposed rule.<br />
The objective of this regulatory<br />
impact analysis is to summarize the<br />
costs and benefits of moving from ICD–<br />
9–CM to ICD–10–CM and ICD–10–PCS<br />
code sets in the context of the current<br />
health care environment.<br />
We received numerous comments on<br />
our analysis of the costs and benefits of<br />
transitioning from ICD–9 to ICD–10. In<br />
the August 22, 2008 proposed rule (73<br />
FR 49830), we solicited additional data<br />
that would help us determine more<br />
accurately the impact of ICD–10<br />
implementation on the various<br />
categories of entities affected by the<br />
proposed rule. We solicited, but did not<br />
receive, comments regarding certain<br />
assumptions upon which we based our<br />
impact analysis in the August 22, 2008<br />
proposed rule, including the inflation<br />
factor we applied to our assumed costs,<br />
and the growth factor we applied to our<br />
assumed benefits. We also did not<br />
receive comments regarding the number<br />
of, or specific impacts to, third party<br />
administrators or design firms that may<br />
need to update their systems or business<br />
processes to accommodate the ICD–10<br />
code set. In those cases where we did<br />
not alter our assumptions from those<br />
made in the August 22, 2008 proposed<br />
rule, the relevant tables are referenced<br />
but not reprinted in this final rule.<br />
Detailed summary tables are provided<br />
herein with all of the costs and benefits<br />
recalculated to reflect changes that were<br />
made in response to comments.<br />
Although many commenters stated<br />
that we overstated the benefits of<br />
transitioning from ICD–9 to ICD–10,<br />
they provided no data or information to<br />
substantiate their assertions or to refute<br />
our benefits analysis; therefore, this RIA<br />
continues to rely on the benefit<br />
assumptions outlined in the proposed<br />
rule’s RIA.<br />
Many commenters stated that we<br />
underestimated the costs of<br />
transitioning from ICD–9 to ICD–10.<br />
In some instances, commenters<br />
included the cost of transition to<br />
Version 5010 in their discussion of the<br />
costs for transitioning to ICD–10. In<br />
those instances, we were unable to<br />
separate Version 5010 implementation<br />
costs from ICD–10 implementation<br />
costs. In other instances, they provided<br />
Version 5010 implementation costs, but<br />
not ICD–10 implementation costs.<br />
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Regardless, in the majority of cases,<br />
commenters did not provide data or<br />
information to substantiate their cost<br />
estimates or to refute our cost estimates<br />
and regulatory impact analysis. Where<br />
new information was provided that<br />
allowed us to improve our cost<br />
estimates, we have outlined our<br />
rationale for the changes in the<br />
following narrative and summary tables.<br />
1. Use of the Rand Report<br />
Comment: A few commenters stated<br />
that the RAND report should not have<br />
been used as the basis for the impact<br />
analysis in the August 22, 2008<br />
proposed rule because they asserted that<br />
the RAND report underestimates ICD–<br />
10’s systems impacts and the laborintensive<br />
nature of implementation<br />
activities. One commenter suggested<br />
that the Nolan report, and not the RAND<br />
report, was the more accurate study, and<br />
suggested that it should have been used<br />
as the primary source of data for the<br />
August 22, 2008 proposed rule’s impact<br />
analysis.<br />
Response: The 2004 RAND and Nolan<br />
reports are considered by the industry to<br />
be the benchmark studies for the<br />
transition from ICD–9–CM to ICD–10,<br />
and both have been cited by other<br />
reports as the basis for their ICD–10 cost<br />
assumptions. In the proposed rule (74<br />
FR 49811), we detailed the differences<br />
between RAND and Nolan’s data<br />
sources, assumptions and cost estimates<br />
on a wide variety of elements, including<br />
training, productivity, system changes,<br />
contract renegotiations and benefits.<br />
Each report considers some factors that<br />
the other does not, uses different data<br />
gathered from a variety of sources at<br />
different times, and cites some data that<br />
are not substantiated. The HHS intraagency<br />
workgroup analyzed both reports<br />
prior to developing its own assumptions<br />
and conclusions, which served as the<br />
basis for the proposed rule’s analysis.<br />
2. Estimated Costs—General<br />
Comment: Many commenters<br />
expressed their general perceptions<br />
regarding the costs of implementing<br />
ICD–10–CM and ICD–10–PCS. Some<br />
commenters stated that they thought it<br />
was simply too expensive for industry<br />
to implement ICD–10–CM and ICD–10–<br />
PCS in the current economic climate.<br />
Several commenters suggested that more<br />
analysis of the costs is needed, and<br />
recommended a variety of mechanisms,<br />
including a provider office/hospital<br />
panel. Others expressed the need to<br />
monitor and publicly report on the<br />
costs, benefits, and industry readiness<br />
through an independent party such as<br />
NCVHS.
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Response: The estimates we<br />
developed for the August 22, 2008<br />
proposed rule were based upon<br />
extensive analysis of publicly available<br />
data by an HHS intra-agency workgroup<br />
representing many areas of expertise.<br />
While the provisions and analysis<br />
offered in the August 22, 2008 proposed<br />
rule represented the best available<br />
information, we solicited input on our<br />
assumptions, and anticipated that<br />
commenters would provide any<br />
additional available data that was<br />
available that would enable us to refine<br />
our estimates of the impacts associated<br />
with the implementation of ICD–10–CM<br />
and ICD–10–PCS. While we did receive<br />
input regarding specific assumptions,<br />
most commenters did not substantiate<br />
their assertions that we underestimated<br />
costs and overstated benefits with data<br />
that we could use to produce more<br />
accurate estimates. In the cases where<br />
commenters provided updated,<br />
substantiated data, we have discussed<br />
the new information and revised our<br />
estimates accordingly.<br />
We agree with commenters that<br />
NCVHS is an appropriate public body<br />
through which to solicit and share<br />
industry information on costs and<br />
implementation of, and compliance<br />
with, electronic transactions and code<br />
sets. We trust that it will continue to be<br />
a valuable resource to HHS and the<br />
industry as these code sets and other<br />
HIPAA standards are implemented.<br />
3. Training—Number of Coders<br />
Comment: A number of commenters<br />
disagreed with our estimate of the<br />
number of inpatient, full-time coders. In<br />
the August 22, 2008 proposed rule, we<br />
estimated that there are 50,000 full-time,<br />
inpatient coders based on AHIMA<br />
membership, and 179,230 part time<br />
coders, based on NAIC data as shown on<br />
Table 7 of the August 22, 2008 proposed<br />
rule (73 FR 49815). We assumed that<br />
full-time coders likely work in the<br />
hospital setting, and therefore would<br />
require training on both ICD–10–CM<br />
and ICD–10–PCS. We further assumed<br />
that part time coders likely work in the<br />
ambulatory setting, and therefore would<br />
require training only on ICD–10–CM.<br />
Commenters representing two national<br />
coder associations disagreed with the<br />
estimate that there are only 50,000 fulltime<br />
inpatient coders in the United<br />
States. Five members of a national coder<br />
association commented that it is likely<br />
that the total number of coders<br />
nationwide is approximately 150,000, of<br />
which 100,000 are certified coders.<br />
However, they did not substantiate their<br />
assertion, nor distinguish between the<br />
number of full-time inpatient and parttime<br />
outpatient coders in this 150,000<br />
figure. The other national coder<br />
association stated that they did not have<br />
a more accurate estimate of the number<br />
of full-time inpatient hospital coders,<br />
but simply wanted to note that, in their<br />
opinion, the basis of the number of full-<br />
time, inpatient coders used for our<br />
estimates in the proposed rule was<br />
flawed. This commenter stated that our<br />
assumption that part-time coders work<br />
in ambulatory settings, and that full-<br />
time coders work in hospitals was<br />
inaccurate because there are many full-<br />
time coders who practice in outpatient<br />
settings. They also recognized that<br />
estimating the number of coders in the<br />
U.S. is very difficult, and that current<br />
statistics for occupational classifications<br />
may not permit a fully accurate estimate<br />
of the number of coders, or the settings<br />
in which they work. Several<br />
commenters stated that there are other<br />
clinical specialty organizations that<br />
certify their members as coders and that<br />
those coders should also be included in<br />
our estimates.<br />
A few commenters suggested that all<br />
coders would need additional<br />
physiology and anatomy training in<br />
order to use the ICD–10 code sets.<br />
Response: In the proposed rule (73 FR<br />
49815), we discussed our estimate of the<br />
number of full-time, inpatient coders.<br />
The Nolan study estimated<br />
approximately 142,170 coders, but did<br />
not differentiate between hospital<br />
coders (inpatient) and coders working in<br />
ambulatory settings, and also did not<br />
provide the source for these data.<br />
Assuming that full-time, inpatient<br />
coders were employed primarily by<br />
hospitals and that these individuals<br />
would be represented by AHIMA’s<br />
50,000 membership, we used that<br />
number in calculating the number of<br />
full-time, inpatient coders who would<br />
require training on both ICD–10–CM<br />
and ICD–10–PCS.<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49815), we also estimated, based<br />
on NAIC codes from the 2005 Statistics<br />
of U.S. Businesses, that there are<br />
approximately 179,267 part-time coders.<br />
This was based on our assumption that,<br />
for every 20 employees in an<br />
ambulatory setting, there would be one<br />
part-time coder. We calculated the<br />
estimated number of part-time coders in<br />
outpatient ambulatory practices with 20<br />
to 499 employees. This total of part-time<br />
coders, 179,267, plus the<br />
aforementioned 50,000 full-time,<br />
inpatient coders, accounted for a total<br />
estimated coder universe of 229,267<br />
coders who would require ICD–10–CM<br />
and/or ICD–10–PCS training.<br />
We also do not believe that coders<br />
will need additional training in anatomy<br />
and physiology in order to use ICD–10<br />
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3343<br />
codes. Most, if not all, coders already<br />
possess basic knowledge of anatomy<br />
and physiology either through formal<br />
training or through on-the-job<br />
experience.<br />
We understand that many hospitals<br />
require their coders to be certified<br />
through an examination program and<br />
annual continuing medical coding<br />
education offered by their professional<br />
associations and other educational<br />
entities. If we were to assume, as some<br />
national coder association members<br />
commented, that there are an estimated<br />
100,000 certified coders, that they all<br />
are employed by hospitals, and that<br />
there are 5,700 hospitals in the United<br />
States, we would conclude that there are<br />
approximately 26 certified coders per<br />
hospital. We cannot confirm that all<br />
hospitals require their coders to be<br />
certified, and believe that the average of<br />
26 certified coders per hospital is likely<br />
too high and would skew our analysis<br />
of these estimated costs.<br />
We acknowledge that while there may<br />
be more than 50,000 inpatient coders,<br />
the 150,000 total coder estimate offered<br />
by some coder association commenters<br />
does not distinguish between how many<br />
of those may be inpatient coders versus<br />
outpatient coders. We also do not know<br />
how many other clinical specialty<br />
certified coders may exist. We do agree<br />
with both the commenters’ and the<br />
RAND report’s contention that, because<br />
inpatient coders must also learn ICD–<br />
10–PCS in addition to ICD–10–CM, we<br />
need to account for their increased<br />
training costs and productivity losses,<br />
and therefore, we must attempt to assign<br />
a value to the number of inpatient<br />
coders if we are to establish valid cost<br />
estimates.<br />
Therefore, we will retain our estimate<br />
of 229,267 coders in total from the<br />
proposed rule. However, we will<br />
increase our estimate of hospital coders<br />
from 50,000 to 60,000 coders. This shift<br />
decreases the number of outpatient<br />
coders as shown in the proposed rule by<br />
10,000, to 169,267, but still accounts for<br />
a total number of 229,267 coders. The<br />
basis for these revised assumptions is<br />
derived from our research of the U.S.<br />
Bureau of Labor Statistics (BLS) data.<br />
The BLS data show that, in the category<br />
‘‘Medical Records and Health<br />
Information Technicians’’, which<br />
includes many coders, 60,000 of the<br />
individuals accounted for in this<br />
category are employed by hospitals. We<br />
acknowledge concerns that current<br />
statistics for occupational classifications<br />
may be inaccurate, but absent other<br />
substantiated data, we must rely on the<br />
information that is currently available<br />
and use our best judgment in arriving at<br />
a conclusion based on that data.
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We note that our estimate of 229,267<br />
coders in total is higher than the<br />
estimates from the Nolan report and<br />
commenters. We considered reducing<br />
our estimate accordingly, but decided to<br />
retain the higher number to assure we<br />
have adequately addressed this cost.<br />
4. Number of Coder Training Hours/<br />
Costs<br />
Comment: In the August 22, 2008<br />
proposed rule (FR 73 49815), we had<br />
estimated that, based on RAND data,<br />
approximately 50,000 inpatient coders<br />
who would need to learn both ICD–10–<br />
CM and ICD–10–PCS would require<br />
about 40 hours of training. We also<br />
estimated that ambulatory coders who<br />
would need to learn only ICD–10–CM<br />
would need only about 8 hours of<br />
training. We calculated the cost of ICD–<br />
10 code set training for inpatient coders<br />
at $2,750 per coder, assuming $550 in<br />
training costs and $2,200 in lost<br />
productivity, for a total of $137.51<br />
million. For the proposed rule’s 179,000<br />
coders in the ambulatory setting, we<br />
estimated a cost of $110 in training costs<br />
and $440 each for lost work time, for a<br />
total of $98.5 million.<br />
Many commenters offered widely<br />
varying estimates as to the amount of<br />
time required, and associated costs, for<br />
coding training. A few commenters<br />
stated that the training time for coders<br />
outlined in the proposed rule appeared<br />
to be reasonable. Another commenter<br />
stated that we overstated training costs,<br />
and that ‘‘train the trainer’’ programs<br />
could be effectively used to train coding<br />
leaders who would then disseminate<br />
information to other colleagues,<br />
replacing the costs already being<br />
incurred by hospitals to keep up with<br />
changes in ICD–9–CM.<br />
One commenter stated that an<br />
experienced coder would need as little<br />
as 5 hours of ICD–10 training. The<br />
majority of commenters estimated that it<br />
would take more than 40 hours of<br />
training, and more likely between 40 to<br />
60 hours for coders to train in ICD–10.<br />
Still another commenter estimated that<br />
it would take between 60 to 80 hours of<br />
ICD–10 training for a coder in an<br />
ambulatory setting. Another commenter<br />
stated that coders must attend anywhere<br />
from 10 to 30 hours of training annually<br />
to earn continuing education credits to<br />
maintain their professional credentials,<br />
and that this time and expense would<br />
offset any ICD–10 training time and<br />
expense projections.<br />
Commenters stated that coder training<br />
costs ranged from $150 per coder to over<br />
$96,000 to train a health plan’s coding<br />
staff. One commenter stated that our<br />
estimated training cost of $31 per hour<br />
per coder was too low, and can vary<br />
greatly depending on geographic region.<br />
One commenter stated that we did not<br />
account for coder training-related travel.<br />
Another commenter stated that our<br />
estimate of $550 per coder for a week of<br />
training is low by industry standards,<br />
but that the return on investment<br />
justifies any training expense.<br />
Response: Commenters’ estimates of<br />
the amount of time needed for coder<br />
training, based on whether they worked<br />
full-time in inpatient settings or part-<br />
time in ambulatory settings, varied<br />
greatly. Estimates for coder training<br />
involve five distinct areas of<br />
consideration: The training<br />
methodology; the clinical specialty; the<br />
number of inpatient and outpatient<br />
coders; the number of hours for coder<br />
training; and the cost per hour of<br />
training.<br />
ICD–10 code set training will likely be<br />
offered by both commercial entities and/<br />
or industry associations or other<br />
interested stakeholders, and training can<br />
take many forms—self-directed internet<br />
or intranet, webinars, video conferences,<br />
correspondence courses, seminars,<br />
technical school and community college<br />
courses, seminars, etc. The longer and<br />
more detailed the training and the<br />
setting (for example, in person versus<br />
on-line training), the greater the impact<br />
on the cost of training. However, more<br />
‘‘convenient’’ training, such as that<br />
offered on-line or through webinar, may<br />
also charge attendees a premium price<br />
for training based on the convenience of<br />
on-line or webinar programs. As one<br />
commenter noted, the use of a ‘‘train the<br />
trainer’’ approach to training would<br />
greatly reduce training costs for a larger<br />
organization that employs a number of<br />
coders and/or personnel who perform<br />
coding functions and require ICD–10<br />
code set training. Also, training may or<br />
may not require travel and as such,<br />
there is no way to estimate travel<br />
expenses as a result of attending<br />
training for ICD–10 coding.<br />
We recognize that perhaps as many as<br />
100,000 coders may be certified, and<br />
already spend from 10 to 30 hours a<br />
year attending training for which they<br />
receive continuing education credits to<br />
maintain their certifications. These costs<br />
would likely already be accounted for as<br />
part of that ongoing educational process,<br />
but again, we have no way of knowing<br />
if these certified coders work in<br />
inpatient and/or outpatient settings.<br />
Absent such data, an attempt on our<br />
part to assign numbers of certified<br />
coders to one setting versus another<br />
would likely be inaccurate.<br />
We have carefully considered the<br />
comments received, and we generally<br />
believe that some adjustments to our<br />
estimates for the number of hours and<br />
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costs of ICD–10 training for coders may<br />
be necessary.<br />
Based on industry feedback regarding<br />
the need for more time than the 40<br />
hours of training we estimated for<br />
inpatient coders to learn both ICD–10–<br />
CM and IC–10–PCS, we will increase<br />
our estimate of the number of hours of<br />
training that inpatient coders will need<br />
to learn ICD–10–CM and ICD–10–PCS<br />
from 40 hours to 50 hours, well within<br />
the commenters’ suggested range of as<br />
little as 5 hours of training, to a<br />
maximum of 80 hours. As discussed<br />
above, we have estimated that there are<br />
60,000 inpatient coders who would<br />
require these 50 hours of training. To<br />
account for geographic variations in<br />
costs, we will increase our training costs<br />
only, by 15 percent, to a cost of<br />
$3,218.75 per coder, including $2,500<br />
for lost productivity (based on the<br />
increased number of training hours) and<br />
$718.75 in training costs, for a total of<br />
$212.06 million, annualized at 3 percent<br />
and 7 percent, as reflected in Table 4.<br />
Based on similar feedback from the<br />
industry expressing concern about the<br />
complexity of ICD–10–CM due to its<br />
size and structural changes, and coder<br />
unfamiliarity, we also will increase from<br />
8 to 10 hours the time that outpatient<br />
coders will need for ICD–10–CM<br />
training, and calculate that 169,267<br />
outpatient coders will require 10 hours<br />
of ICD–10–CM training at a cost per<br />
coder of $644 ($500 in lost productivity<br />
due to the increase in hours, and<br />
$143.75 in training, the latter of which<br />
includes a 15 percent increase in<br />
estimated training costs from the August<br />
22, 2008 proposed rule), or a total of<br />
$119.69 million, annualized at 3 percent<br />
and 7 percent, as shown in Table 4.<br />
We considered reducing the estimates<br />
in recognition of the fact that almost<br />
half of the total number of coders are<br />
likely to receive some ICD–10 training<br />
as part of their continuing education<br />
requirements for maintaining<br />
certification. However, we elected to<br />
retain the higher number to ensure that<br />
we have adequately addressed this cost.<br />
5. Physician Training<br />
Comment: In the August 22, 2008<br />
proposed rule, we estimated, based on<br />
RAND’s assumption, that ten percent of<br />
all physicians, or about 150,000, would<br />
seek ICD–10 code set training. We made<br />
the assumption that this training would<br />
take up to 4 hours, instead of RAND’s<br />
estimate of 8 hours, at a cost per hour<br />
of $137. Many commenters stated that<br />
we underestimated the number of<br />
physicians that would need training on<br />
the ICD–10 code sets, and the amount of<br />
time that training would take. Some<br />
professional associations stated that all
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physicians will need ICD–10 code set<br />
training. A few commenters, citing an<br />
industry-sponsored report on ICD–10<br />
costs for physician practices, estimated<br />
12 hours of ICD–10 code set training<br />
would be required for physicians.<br />
In contrast, another national<br />
professional coder association<br />
referenced their own study, showing<br />
that almost half of the respondents<br />
reported that none of the physicians in<br />
their offices performed coding, and of<br />
those physicians who did, they<br />
performed coding on only a small<br />
portion of the ICD–9–CM code set.<br />
Other commenters confirmed that many<br />
physicians do not code themselves, but<br />
rather rely on billers or other staff, or<br />
use superbills for coding. However,<br />
several commenters stated that, at a<br />
minimum, all physicians will need to be<br />
aware of the basic guidelines and<br />
construct of the ICD–10 code set, or<br />
‘‘awareness training’’, provided through<br />
existing physician continuing education<br />
and hospital-sponsored in-service<br />
training.<br />
Response: In the August 22, 2008<br />
proposed rule (73 FR 49809), we<br />
discussed the differences between the<br />
RAND and Nolan report assumptions<br />
relative to ICD–10 code set training for<br />
physicians. We also discussed our<br />
rationale for our decision to base our<br />
estimates on 4 hours versus RAND’s 8<br />
hours for physician ICD–10 training,<br />
because we assumed that the majority of<br />
physicians used superbills and would<br />
not require 8 hours of training.<br />
There appears to be a wide variance<br />
of opinions across all industry segments<br />
as to how many physicians would need<br />
and/or want ICD–10 code set training,<br />
and the length of that training. As<br />
discussed in the coder training section<br />
of this impact analysis, we believe that<br />
there are many factors that may<br />
influence this estimate, including<br />
geographic region; clinical specialty;<br />
size of practice; and available resources<br />
(superbills, electronic medical records,<br />
etc.)<br />
We agree that physicians will want<br />
training on ICD–10 code sets, but it is<br />
clear from commenters that the RAND<br />
estimate of only 10 percent of<br />
physicians wanting ICD–10 code set<br />
training may be too low. In an effort to<br />
better estimate the costs of ICD–10<br />
training for physicians, while<br />
acknowledging commenters who stated<br />
that not all physicians will need<br />
training due to use of superbills, staff<br />
and other coding mechanisms, we will<br />
accept the Nolan study estimate of<br />
754,000 physicians seeking a midpoint<br />
of 8 hours of ICD–10 training, at a cost<br />
of $157.55 per hour (reflecting a 15<br />
percent increase over the per hour cost<br />
estimate of $137.00 per hour used in the<br />
August 22, 2008 proposed rule), or<br />
$1,043.14 million, annualized at 3<br />
percent and 7 percent as shown in Table<br />
4. We also will assume that the<br />
remainder of physicians will either not<br />
seek ICD–10 code set training, or will<br />
need less intensive ‘‘awareness<br />
training’’ which we anticipate will be<br />
available through continuing medical<br />
education opportunities of which they<br />
likely would have availed themselves<br />
absent the transition from ICD–9 to ICD–<br />
10.<br />
6. Training for Auxiliary Staff<br />
Comment: In the August 22, 2008<br />
proposed rule (73 FR 49816), we<br />
estimated that, based on RAND data,<br />
there were some 250,000 code users. We<br />
assume that, of these 250,000, only<br />
150,000 work directly with codes and<br />
would require 8 hours of training for an<br />
total training cost of approximately $250<br />
($31.25 per hour × 8 hours). Some<br />
commenters mentioned that we did not<br />
account for other staff that may need<br />
training other than coders and<br />
physicians. Commenters stated that<br />
many health care settings, especially<br />
small physician practices, do not<br />
employ professional coders, but rather<br />
office staff who, along with other duties,<br />
provide the coding needed for claim<br />
submission and reimbursement<br />
purposes.<br />
Commenters cited billing/<br />
administrative staff; clinicians and nonphysicians;<br />
clinical support staff,<br />
analytical and IT professionals; coding<br />
specialists; labs; and ancillary staff as<br />
those additional staff who will require<br />
training on the new codes. One<br />
commenter estimated that for a health<br />
plan/payer, staff training could amount<br />
to $96,156, not counting the cost of<br />
reference materials or training costs<br />
from outside sources.<br />
One commenter mentioned that code<br />
users can also include those who use<br />
the codes for medical decisions and that<br />
they will need extensive training on the<br />
new codes. Another commenter stated<br />
that the category of ‘‘code users’’<br />
represents individuals with a wide<br />
variety of roles and responsibilities, so<br />
the level of training needed would<br />
depend on how and to what extent the<br />
individual health professional use<br />
coded data and potentially how the<br />
training is delivered. One commenter<br />
disagreed with the number of code users<br />
that we outline in the proposed rule,<br />
estimating that there are only 20,000<br />
code users, but did not substantiate the<br />
source of their information.<br />
Response: In the August 22, 2008<br />
proposed rule (73 FR 49815), we used<br />
RAND data to define code users as<br />
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3345<br />
people outside of health care facilities—<br />
researchers, epidemiologists,<br />
consultants, auditors, claims<br />
adjudicator, etc. Users could also<br />
include people within health care<br />
facilities in areas such as senior<br />
management, clinicians, quality<br />
improvement, utilization management,<br />
accounting, business office, clinical<br />
departments, data analysis, performance<br />
improvement, corporate compliance,<br />
data quality, etc. Additionally AHIMA<br />
defines a user of coded data as anyone<br />
who needs to have some level of<br />
understanding of the coding system,<br />
because they review coded data, rely on<br />
reports that contain coded data, etc., but<br />
are not people who actually assign<br />
codes. These could include the<br />
additional staff that will require training<br />
as cited above.<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49816), we estimated that there<br />
are approximately 250,000 code users,<br />
most likely employed by payers but<br />
that, based on RAND data, only about 60<br />
percent, or 150,000, would require ICD–<br />
10 code set training for the purpose of<br />
actually assigning and/or interpreting<br />
codes. We believe that, given all the<br />
categories of coders, both professional<br />
and non-professional, physicians, other<br />
clinicians, auxiliary staff and the code<br />
users definitions as shown above, we<br />
have adequately accounted for a broad<br />
universe of potential code users and we<br />
maintain our original assumption of the<br />
number and costs of training for code<br />
users.<br />
As stated in the August 22, 2008<br />
proposed rule (73 FR 49814), we based<br />
our estimates on 2004 dollars because<br />
we used RAND study figures based on<br />
2004 dollars. For purposes of this<br />
analysis, we are updating the value to<br />
2007 dollars to be consistent with the<br />
updates to our benefits analysis by<br />
applying the increases in the Consumer<br />
Price Index (CPI–U) from 2004 to 2007.<br />
For the costs estimates, we divide the<br />
CPI–U annual index for 2007 (the most<br />
recent data available) by 2004’s index to<br />
determine the adjustment factor in<br />
which to apply to each cost estimate.<br />
This adjustment factor equals<br />
approximately 1.098. Since the cost<br />
estimates for implementing ICD–10 are<br />
not tied to medical services, we feel that<br />
the CPI–U is reasonable to use for<br />
adjusting these 2004 costs for inflation.<br />
We are adjusting our estimate for code<br />
user training costs that were based on<br />
RAND data from the estimate shown in<br />
the August 22, 2008 proposed rule<br />
update to 2007 dollars for a revised total<br />
of $41.18 million over 4 years,<br />
annualized at 3 percent and 7 percent,<br />
as shown in Table 4.
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7. Productivity Losses<br />
Comment: In the August 22, 2008<br />
proposed rule (73 FR 49814), we<br />
acknowledged that, while RAND did not<br />
consider the cost of cash flow<br />
interruptions as a result of the adoption<br />
of ICD–10–CM and ICD–10–PCS, we<br />
agreed with the Nolan study that the<br />
implementation of the new code sets<br />
may cause serious cash flow problems<br />
for providers, and assumed that payers<br />
would develop temporary payment<br />
policies to mitigate this risk.<br />
Many commenters agreed that, with<br />
the introduction of ICD–10, for a period<br />
of time, we may see an increase in<br />
returned or rejected claims which may<br />
cause physician practices and/or<br />
hospitals to spend more time fixing<br />
billing problems. Many commenters<br />
mentioned that ICD–10 will cause an<br />
increase of improperly paid claims and<br />
denied and/or rejected claims, which<br />
will require additional audit work and<br />
investigation to find and fix problems.<br />
One commenter stated we<br />
underestimated the projected claim<br />
rejection rate in the August 22, 2008<br />
proposed rule, and that they<br />
experienced a higher (20 to 30 percent)<br />
rejection rate when implementing the<br />
NPI. Commenters disagreed with our<br />
statement in the August 22, 2008<br />
proposed rule (73 FR 49814) that it was<br />
the plans’ practice to advance periodic<br />
interim payments (PIPs) to providers<br />
who might be affected by a claims<br />
processing slowdown. A few<br />
commenters, citing an industrysponsored<br />
report on ICD–10 costs,<br />
stated that significant changes in<br />
reimbursement patterns according to<br />
severity of diagnosis (which are<br />
determined based on ICD–10–CM codes)<br />
will disrupt provider cash flows, and<br />
estimated the cost of cash flow<br />
disruption per physician practice to be<br />
between $19,500 and $650,000.<br />
Commenters stated that CMS should<br />
monitor and publish claim rejection<br />
rates, issue clear and flexible Medicare<br />
advance payment guidelines and<br />
mitigation strategies if provider cash<br />
flow is adversely affected, and consider<br />
interim Medicare payments to hospitals<br />
if payments are disrupted.<br />
Response: In the August 22, 2008<br />
proposed rule (FR 73 49817), we<br />
accounted for the fact that the<br />
implementation of the new code sets is<br />
expected to produce a temporary<br />
increase in coding errors on the part of<br />
physicians, resulting in rejected and/or<br />
returned claims. We used Medicare<br />
returned claims data for FYs 2004<br />
through 2006, and identified a spike<br />
pattern in Medicare returned claims 3 to<br />
6 months following introduction of<br />
annual ICD–9 code updates. We noted<br />
that we anticipated that the percent of<br />
returned claims following the ICD–10<br />
implementation could be more than<br />
double the previous years’ increase, and<br />
that returned claims may peak at around<br />
6–10 percent of pre-implementation<br />
levels. We estimated a cost range from<br />
between $274 million to $1,100 million.<br />
We believe that our assumptions, based<br />
on three years’ worth of Medicare<br />
returned claims data, more closely<br />
reflects returned claims experience, and<br />
therefore is more accurate than reliance<br />
on NPI experience, which was likely<br />
caused by plans’ inability to link<br />
incoming NPIs with legacy identifiers.<br />
We also reject the notion that<br />
significant changes in reimbursement<br />
patterns based on severity of diagnosis<br />
will disrupt provider cash flows. We do<br />
not anticipate that there will be any<br />
immediate changes to reimbursements<br />
with the initial implementation of ICD–<br />
10–CM. Data drives changes in<br />
reimbursements, and this data likely<br />
will not be available for quite some time<br />
after the implementation of ICD–10–CM,<br />
and thus reimbursement changes will be<br />
accomplished on an incremental basis.<br />
States have prompt payment laws that<br />
require that penalties be assessed<br />
against health plans who do not issue<br />
payments for properly submitted claims<br />
in a timely manner, and Medicare is<br />
also subject to similar requirements.<br />
Therefore, it is in the best interests of all<br />
plans to pay promptly to avoid these<br />
penalties. Moreover, the October 2013<br />
compliance date for ICD–10 provides<br />
ample time for plans to prepare and test<br />
their payment systems to allow for an<br />
orderly transition.<br />
As stated in the proposed rule (73 FR<br />
49817), the implementation of the new<br />
code sets is expected to produce a<br />
temporary increase of physician coding<br />
errors. We received many concurrences<br />
with this assumption but no additional<br />
or substantiated data to counter our<br />
quantitative analysis at this time.<br />
Therefore, we maintain our estimate<br />
based on our original costs, as stated in<br />
the August 22, 2008 proposed rule.<br />
Comment: One commenter disagreed<br />
with our analysis of coding productivity<br />
in the August 22, 2008 proposed rule<br />
(73 FR 49817) because they stated that<br />
the use of preprinted forms or touch-<br />
screens does not constitute coding. One<br />
commenter also took issue with our<br />
estimate that productivity losses during<br />
the first six months of ICD–10–CM<br />
implementation will be reversed, stating<br />
instead that it will be a long-term<br />
productivity loss. One commenter<br />
mentioned that the August 2008<br />
proposed rule suggests an outpatient<br />
productivity rate of 3,525 claims per<br />
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hour and that this is 100 times greater<br />
than what is customary in some<br />
specialties and more than 10 times what<br />
is performed in the most highly<br />
automated computer assisted coding<br />
operation.<br />
Other commenters disagreed with our<br />
assumption that the average time to<br />
code an outpatient claim could take<br />
one-hundredth of the time for a hospital<br />
inpatient claim. Commenters stated that<br />
physician offices would suffer<br />
productivity losses because ICD–10–CM<br />
training would take physicians away<br />
from patient care, looking up new codes<br />
will take more time, it will take longer<br />
to process notes and billings, and<br />
practice workflows in general will be<br />
disrupted.<br />
Response: In the August 22, 2008<br />
proposed rule (73 FR 49816), we<br />
acknowledged that coders’ productivity<br />
will be directly affected because of the<br />
need to learn new codes and definitions,<br />
and undoubtedly some claims will<br />
require resubmission to payers as both<br />
providers and payers adjust to the new<br />
codes. For outpatient productivity<br />
losses, we assume the average time to<br />
code an outpatient claim could take<br />
one-hundredth of the time for a hospital<br />
inpatient claim, taking into account the<br />
wide variety of outpatient settings and<br />
coding forms. Although commenters<br />
disagreed with this assumption, they<br />
did not substantiate their comments<br />
with data that contradicted our<br />
assumptions or analysis.<br />
As stated in the August 22, 2008<br />
proposed rule (73 FR 49816), many<br />
physicians use, and will continue to use<br />
super-bills, which reduces the coding<br />
time. We disagree with the commenter<br />
who stated that the use of superbills or<br />
touch screens does not constitute<br />
coding. Coding is the assignment of a<br />
code to a specific clinical condition or<br />
procedure; the mechanisms used to do<br />
this, whether electronic or manual, may<br />
differ, but codes are still assigned. We<br />
considered the variety of settings in<br />
which coding is done and noted that<br />
most only focus on one or two medical<br />
conditions (which would likely be<br />
clearly identified for the coders by the<br />
physician) in our analysis in the August<br />
22, 2008 proposed rule.<br />
We are adjusting our cost estimate for<br />
outpatient productivity losses from the<br />
estimate shown in the August 22, 2008<br />
proposed rule to account to update to<br />
2007 dollars, for a revised total of $9.40<br />
million in 2014, the year after ICD–10<br />
implementation, and this annualized<br />
cost at 3 percent and 7 percent is<br />
reflected in Table 4.<br />
Comment: A few commenters<br />
questioned our estimate of an additional<br />
1.7 minutes to code an inpatient claim
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in the first month of ICD–10–CM and<br />
ICD–10–PCS compliance, and the<br />
associated productivity losses. None of<br />
the commenters stated whether they<br />
deemed that estimate to be too high or<br />
too low.<br />
Response: In the August 22, 2008<br />
proposed rule (73 FR 49816), we<br />
estimated an additional 1.7 minutes to<br />
code an inpatient claim that includes an<br />
inpatient procedure in the first month of<br />
ICD–10–CM and ICD–10–PCS<br />
compliance. This estimate was based<br />
upon analysis reported in the RAND<br />
report. According to RAND, ICD–10–<br />
PCS was tested by two clinical data-<br />
abstracting centers. One center found<br />
that ICD–10–PCS which is used in<br />
inpatient settings, generated more codes<br />
and that each record, on average, took<br />
longer to code than did ICD–9–CM (3.6<br />
minutes versus 1.9 minutes, or a<br />
difference of 1.7 minutes). We applied<br />
this 1.7 minute loss to 1.8 million<br />
inpatient claims requiring procedures<br />
coding per month (20,000,000 claims<br />
per year divided by 12 months) at $50<br />
per hour, or $1.41 per claim, resulting<br />
in a productivity loss of $2.7 million in<br />
the first month. After accounting for a<br />
monthly increase in productivity of<br />
$450,000, and subtracting this from each<br />
month’s lost productivity, we arrived at<br />
a total inpatient productivity loss of<br />
$8.90 million in 2014, the year after<br />
ICD–10 implementation.<br />
None of the commenters indicated<br />
whether this estimate was too low or too<br />
high. Therefore, we maintain our<br />
assumptions and our productivity loss<br />
estimates as outlined in the proposed<br />
rule. We are adjusting our estimate for<br />
inpatient productivity losses from that<br />
shown in the August 22, 2008 proposed<br />
rule to update to 2007 dollars, for a<br />
revised estimate of $9.77 million in<br />
inpatient coder productivity losses, and<br />
annualized at 3 percent and 7 percent,<br />
as shown in Table 4.<br />
Comment: Some commenters stated<br />
that the August 22, 2008 proposed rule<br />
did not adequately account for the cost<br />
of updates to the CMS–1500 claim form<br />
and superbills. One commenter noted<br />
that, while 50 percent of all physician<br />
practices use superbills, the conversion<br />
to the larger ICD–10–CM code set will<br />
make superbills cumbersome and<br />
impractical. A few commenters stated<br />
that the $55 superbill revision cost cited<br />
in the proposed rule was too low.<br />
Another commenter stated that it took<br />
more than 2 hours to convert a sample<br />
family practice superbill from ICD–9 to<br />
ICD–10, resulting in an unusable 9-page<br />
document. Another commenter stated<br />
that superbill conversion could take up<br />
to 6 hours, with an additional 4–6 hours<br />
for physician review, costs of $500 to<br />
$1,000 for editing and new batch<br />
printing, and additional costs for<br />
disposal of outdated superbills. A few<br />
commenters, citing an industry-<br />
sponsored report on ICD–10 costs,<br />
estimated the expense for revising<br />
superbills to be from between $2,985 for<br />
a small physician practice, to $99,500<br />
for a large practice.<br />
Response: Commenters erroneously<br />
interpreted our reference to superbill<br />
costs in the August 22, 2008 proposed<br />
rule (73 FR 49817). In that proposed<br />
rule, we estimated that the total cost of<br />
lost productivity (time) for a coder to<br />
convert a practice’s superbill would be<br />
only about 2 hours’ time or<br />
approximately $55, not the entire cost of<br />
reprinting a supply of superbills. The<br />
2003 field study conducted by the<br />
American Health Information<br />
Management Association (AHIMA) and<br />
the American Hospital Association<br />
(AHA) demonstrated that a superbill can<br />
be converted to ICD–10–CM in a few<br />
hours, and that they are no larger than<br />
existing superbills. Superbills generally<br />
do not list all of the specific codes<br />
relevant to a particular condition but if<br />
this was the case, the existing ICD–9–<br />
CM superbills would also be pages long.<br />
The reprinting of superbills is an<br />
annual expense incurred by providers.<br />
For example, one form manufacturer<br />
might charge a provider anywhere from<br />
$100 for 2,500 1-part, white bond<br />
superbills, to $600 for 10,000, 3-part<br />
carbonless superbills. We also know<br />
that one major medical center incurred<br />
an annual cost of approximately $93,000<br />
for their reprinting of superbills.<br />
However, because ICD–9–CM code sets<br />
are updated annually, providers and<br />
hospitals would likely still incur<br />
revision and reprinting, as well as<br />
disposal costs for unusable superbills as<br />
an annual cost of doing business<br />
whether or not there was a changeover<br />
from the ICD–9–CM code sets to the<br />
ICD–10–CM and ICD–10–PCS code sets.<br />
With respect to the CMS–1500 claim<br />
form, the National Uniform Claim<br />
<strong>Committee</strong> (NUCC) which maintains<br />
this claim form, already expanded the<br />
field for reporting diagnosis codes to<br />
accommodate the ICD–10 format in their<br />
August 2005 revision of the claim form.<br />
It is therefore ready for ICD–10 use with<br />
no additional cost.<br />
Therefore, because we maintain that<br />
there will not be any substantive<br />
additional costs for reprinting of<br />
superbills, and none for the CMS–1500<br />
claim forms resulting from the transition<br />
to ICD–10, we will not make any<br />
revisions to our impact analysis based<br />
on superbill and/or 1500 claim form<br />
costs. However, we are adjusting our<br />
cost estimate to update to 2007 dollars,<br />
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for a revised cost of $12.08 million in<br />
2014, the year after ICD–10<br />
implementation, annualized at 3 percent<br />
and 7 percent as shown in Table 4.<br />
Comment: The industry’s perceived<br />
need for increased medical<br />
documentation was not addressed in the<br />
proposed rule because we did not<br />
consider it to be a relevant cost. We<br />
received several comments that the use<br />
of ICD–10–CM and ICD–10–PCS would<br />
cause physicians to order unnecessary<br />
medical tests to provide more precise<br />
diagnoses or require more<br />
documentation to the medical record,<br />
wasting medical resources, and greatly<br />
increasing provider costs. Commenters<br />
stated that one must use the most<br />
precise ICD–10 code every time to<br />
achieve the full benefits of ICD–10.<br />
Another commenter stated that local<br />
claims determination adjudication rules<br />
require claims coded with<br />
‘‘unspecified’’ codes to be rejected.<br />
Response: We agree that ICD–10–CM<br />
and ICD–10–PCS offer significantly<br />
greater detail and specificity reflecting<br />
the nature of a patient’s medical<br />
condition. We also agree that there are<br />
substantial benefits to be derived from<br />
the greater detail of ICD–10–CM when a<br />
coder selects the most accurate code<br />
based on the available documentation.<br />
This is true whether one is using ICD–<br />
9–CM codes or ICD–10–CM codes. If<br />
one cannot assign a precise code, it is<br />
because the medical record<br />
documentation is not available or<br />
because a clear diagnosis has not been<br />
made and in that case, a more general,<br />
non-specific code would be selected.<br />
Such codes are available in both ICD–<br />
9 and ICD–10. However, we disagree<br />
that physicians will be pressured to<br />
perform unnecessary medical tests or<br />
include additional medical<br />
documentation because they are using<br />
ICD–10–CM and ICD–10–PCS code sets.<br />
Physicians adhere to standards of care<br />
which, according to the AMA, ‘‘is a duty<br />
determined by a given set of<br />
circumstances that present in a<br />
particular patient, with a specific<br />
condition, at a definite time and place.’’<br />
These standards of care include full<br />
documentation which, according to the<br />
American Academy of Family<br />
Physicians (AAFP), ‘‘includes fully<br />
describing the patient’s medical history,<br />
physical findings, (the physician’s)<br />
diagnosis, the treatment plan and care<br />
rendered.’’ Physicians select codes that<br />
reflect the information that they have<br />
available to them through patient<br />
history, physical findings and clinically<br />
appropriate testing, which they have<br />
documented in the patient’s medical<br />
record based on the aforementioned<br />
standards of care. Patient care and
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treatment are not pre-determined by<br />
diagnostic coding; in fact, diagnostic<br />
coding is determined from best practice<br />
patient care. A poorly documented<br />
medical record can be problematic for a<br />
number of reasons, but such deficient<br />
medical records are an issue of and by<br />
themselves, and not contingent upon<br />
whether the code assigned is an ICD–9–<br />
CM or an ICD–10–CM code.<br />
Improved medical documentation is<br />
not predicated on the change from ICD–<br />
9–CM to ICD–10–CM. Rather, improved<br />
medical documentation is being driven<br />
by initiatives such as quality<br />
measurement reporting, value-based<br />
purchasing and patient safety.<br />
We view any potential improvements<br />
in medical record documentation as a<br />
positive outcome of the move to ICD–<br />
10–CM and ICD–10–PCS. With better<br />
and more accurate data, patient care can<br />
only be improved.<br />
For some services, such as a particular<br />
drug or surgical procedure, there may be<br />
a National Coverage Decision (NCD) or<br />
a Local Coverage Decision (LCD) that<br />
requires the reporting of a list of specific<br />
diagnosis codes. These coverage<br />
decisions sometimes include<br />
unspecified codes but oftentimes they<br />
do not. In a handful of cases, the<br />
coverage decision will list several<br />
specific diagnosis codes needed in order<br />
to make payments, and physicians are<br />
aware of the services or surgeries to<br />
which they apply. Under MS–DRGs,<br />
sometimes a lower payment results from<br />
reporting an unspecified code. An<br />
unspecified code will still result in a<br />
payment, but it might be a lower<br />
payment. The number of such cases will<br />
not necessarily increase as a result of<br />
the adoption of ICD–10.<br />
8. System Changes—Provider/Vendor<br />
Comment: Commenters stated they<br />
would incur costs to implement ICD–<br />
10–CM, including updating and/or<br />
replacing software and hardware.<br />
Commenters disagreed with our<br />
assumption in the proposed rule that<br />
vendors might provide their clients with<br />
updated ICD–10-compatible software at<br />
little to no charge. One commenter<br />
stated that some vendors charge<br />
upwards of $10,000 for similar software<br />
updates.<br />
Response: In the August 22, 2008<br />
proposed rule (73 FR 49818), we<br />
assumed that large provider groups,<br />
chain providers and institutions, such<br />
as large hospitals, are most likely to<br />
require changes to their billing systems,<br />
patient record systems, reporting<br />
systems and associated system<br />
interfaces. We also noted that the new<br />
codes may also require the redesign of<br />
standard and special reports.<br />
Additionally, small providers, who rely<br />
on superbills, as well as their home-<br />
grown systems for capturing patient<br />
information and claims submission,<br />
may only need to update their systems<br />
to accommodate the length of the new<br />
code fields. Costs of updating provider<br />
systems will depend on the degree of<br />
system integration; the need for outside<br />
technical assistance; and the number of<br />
systems and system interfaces that must<br />
be updated. Physician practices (and all<br />
providers) should begin looking at their<br />
use of ICD–9–CM and use the transition<br />
to ICD–10 as an opportunity to consider<br />
changes that will improve their<br />
processes and workflows.<br />
Although commenters do not agree<br />
that vendor-supplied software will be<br />
provided to providers free-of-charge, we<br />
maintain that, for small providers that<br />
are PC-based or have client-server<br />
systems, the provider may not bear any<br />
immediate costs for the software<br />
upgrades. Practice management systems<br />
will need to be revised to accommodate<br />
ICD–10 codes, but this change will take<br />
place as a part of the migration to the<br />
Version 5010 standards, and these costs<br />
have been accounted for in that impact<br />
analysis.<br />
Although we recognize that providers’<br />
systems will require updating, we did<br />
not receive substantial information or<br />
data during the August 22, 2008<br />
proposed rule’s public comment period<br />
that would lead us to revise our cost<br />
analysis in this area. We are adjusting<br />
our cost estimate as shown in the<br />
August 22, 2008 proposed rule to<br />
update to 2007 dollars, for a revised cost<br />
of $150.64 million over 4 years,<br />
annualized at 3 percent and 7 percent as<br />
shown in Table 4.<br />
Comment: In the August 22, 2008<br />
proposed rule (73 FR 49805), we cited<br />
a November 2002 joint letter to NCVHS<br />
from the AHA, Federation of American<br />
Hospitals (FAH) and AdvaMed<br />
supporting the implementation of ICD–<br />
10–CM and ICD–10–PCS as national<br />
standards. We also noted in the<br />
proposed rule (73 FR 49818) that large<br />
institutions such as hospitals will need<br />
to transition their systems to both ICD–<br />
10–CM and ICD–10–PCS, at a cost<br />
ranging from $55 million to $220<br />
million. One commenter stated that few<br />
hospitals were aware of the impending<br />
transition to ICD–10, and have not<br />
developed the multi-disciplinary teams<br />
necessary for a successful transition.<br />
Other hospital commenters noted that<br />
they use a combination of purchased<br />
software and in-house applications, and<br />
both will require modifications for ICD–<br />
10 code sets for functions such as code<br />
assignment, medical records abstraction,<br />
claims submission, and other financial<br />
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functions, at a heavy financial burden to<br />
them. However, they did not contest our<br />
systems cost estimates. One commenter<br />
noted that this large transition will<br />
require at minimum two hospital budget<br />
cycles in order to properly plan and<br />
allocate resources.<br />
Response: Hospital commenters did<br />
not submit any new data that<br />
substantiated their assertions and would<br />
predispose us to revising our large<br />
provider group cost projections, so we<br />
will continue to rely on our estimate as<br />
outlined in the August 22, 2008<br />
proposed rule. Given the change of the<br />
ICD–10 compliance date to October<br />
2013, we anticipate that hospitals will<br />
have ample budget cycle time during<br />
which to plan for their systems<br />
implementation of ICD–10–CM and<br />
ICD–10–PCS. Moreover, the conversion<br />
of billing systems to accommodate ICD–<br />
10 codes will take place as part of the<br />
migration to the Version 5010 standards,<br />
and these billing system conversion<br />
costs have been accounted for in that<br />
impact analysis.<br />
Comment: We stated in the August 22,<br />
2008 proposed rule (73 FR 49818) that,<br />
while many providers who use vendor-<br />
supplied software may be able to defer<br />
the costs of software upgrades, the<br />
vendor industry may have to bear, at<br />
least initially, the costs of such<br />
upgrades. Using RAND’s analysis, based<br />
on interviews conducted with industry<br />
experts, we estimated cost of system<br />
changes for software vendors of<br />
transitioning to ICD–10 to include the<br />
wide range of information and billing<br />
systems and the configurations of<br />
provider systems. Commenters stated<br />
we underestimated or did not account<br />
for all vendor software and systems<br />
revision costs. These include patient<br />
accounting, practice management and<br />
billing systems; encoders and grouper<br />
software; contract management and<br />
reimbursement modeling programs;<br />
quality measurement systems; software<br />
components of emergency departments,<br />
and ambulatory and physician office<br />
systems that must be revised to<br />
accommodate the use of the ICD–10<br />
code sets. Commenters also stated that<br />
systems used to model or calculate<br />
acuity, staffing needs, patient risk and<br />
patient care; decision support systems<br />
and content; presentation of clinical<br />
content for support of plans of care; and<br />
selection criteria within electronic<br />
medical records would be impacted by<br />
the use of ICD–10 code sets.<br />
Commenters stated that specifications<br />
for data file extracts, reporting programs<br />
and external interfaces, analytic<br />
software that performs business analysis<br />
or that provides decision support<br />
analytics for financial and clinical
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management; and business rules guided<br />
by patient condition or procedure<br />
would also need to be revised for ICD–<br />
10 use. Commenters estimated an<br />
average of 24 months for product<br />
development, and that vendor product<br />
release cycles, typically between 18 to<br />
36 months, do not usually match<br />
regulatory compliance dates and the<br />
transition to ICD–10 may negatively<br />
impact these cycles.<br />
Response: While some commenters<br />
provided additional examples of vendor<br />
systems that will need to be updated for<br />
the transition to ICD–10, they did not<br />
provide us with any costs associated<br />
with those systems. We are unable to<br />
determine at this point if those<br />
additional systems can be applied to all<br />
vendors since vendors deal with many<br />
types and sizes of providers and<br />
provider organizations.<br />
We agree with commenters that there<br />
will be impacts to vendor systems, and<br />
that it may be difficult to initially<br />
account for all system changes because<br />
of the varying needs of individual<br />
providers.<br />
We again point out that a portion of<br />
these costs will take place as part of the<br />
migration to the Version 5010 standards<br />
and these system costs have been<br />
accounted for in that impact analysis.<br />
However, based on the comments we<br />
received which stated that the proposed<br />
rule did not account for all of the<br />
vendor systems that will need to be<br />
updated to accommodate the new code<br />
set, we have increased our estimate of<br />
software vendor systems by 20 percent.<br />
Subsequently, we have increased our<br />
software vendor system costs from the<br />
previous $96.05 million to $115.29<br />
million over a 4-year period, annualized<br />
at 3 percent and 7 percent as shown in<br />
Table 4.<br />
9. System Changes—Plans<br />
Comment: In the August 22, 2008<br />
proposed rule (73 FR 49818), we<br />
acknowledged that revisions to payer<br />
systems may be one of the largest ICD–<br />
10 cost categories, at approximately<br />
$164.64 million, with a range of $110<br />
million to a $274 million cost, based on<br />
data from the RAND report. We also<br />
acknowledged that not all payer system<br />
changes may have been identified in our<br />
impact analysis. Commenters stated that<br />
payer business process impacts<br />
resulting from implementation of ICD–<br />
10–CM and ICD–10–PCS would include,<br />
among others, impacts to medical<br />
policy; benefit design and coding;<br />
vendor management; data reporting;<br />
disease and case management; trend<br />
analysis and quality assurance.<br />
Commenters noted that edits will need<br />
to be updated to accommodate ICD–10’s<br />
impact on auto-adjudication systems.<br />
One commenter cited a 2000 industry<br />
white paper that stated for each 100<br />
hours spent on programming, payers<br />
must spend an addition 30–35 hours<br />
preparing specifications, conducting<br />
analysis and design sessions,<br />
performing testing and conducting other<br />
implementation-related activities.<br />
Another commercial payer estimated<br />
8,000 programming hours for their<br />
transition from ICD–9 to ICD–10, not<br />
including specification changes or<br />
testing, while another plan estimated<br />
that it would cost between $3.00 and<br />
$5.80 per plan member to cover the cost<br />
of ICD–10 implementation. One<br />
commenter stated that integrating the<br />
expanded ICD–10 code sets into their<br />
business systems would be difficult,<br />
while another stated that detailed<br />
information on how reimbursement<br />
programs will be affected should be<br />
made available to payers at least one<br />
year before ICD–10–CM and ICD–10–<br />
PCS implementation so that payers can<br />
plan for training, financial analysis and<br />
modeling.<br />
Response: Commenters did not<br />
provide substantiated data that would<br />
allow us to update our payer system<br />
cost estimates at this time.<br />
We agree with commenters that there<br />
will be an impact to payer systems, and<br />
that it may be difficult to initially<br />
pinpoint all of the system changes<br />
because of the pervasive use of ICD–9<br />
codes within payer systems. As part of<br />
our internal analysis of CMS payment<br />
systems that currently use ICD–9 code<br />
set data and would likely use ICD–10<br />
code set data, we conducted interviews<br />
with all CMS components and<br />
identified no less than 20 systems across<br />
30 business processes/areas that<br />
potentially would be impacted. As an<br />
example of the internal investigative<br />
process CMS undertook as part of our<br />
ongoing ICD–10 planning and analysis,<br />
CMS has shared this information with<br />
the industry through its summary report<br />
at http://www.cms.hhs.gov/<br />
TransactionCodeSetsStands/<br />
Downloads/AHIMASummary.pdf. We<br />
expect that once payers initiate similar<br />
ICD–10 planning and analysis activities,<br />
they will identify both known and<br />
heretofore unknown impacts to their<br />
payer systems, and can better evaluate<br />
them in terms of minimal, medium, and<br />
high impacts relative to cost and risk.<br />
As discussed in the August 22, 2008<br />
proposed rule (73 FR 49800), there are<br />
multiple ways for entities to integrate<br />
the ICD–10 code sets into their business<br />
settings. As the codes are incorporated<br />
into systems and processes, some<br />
providers, plans, and vendors may<br />
decide to populate the new codes<br />
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3349<br />
throughout their entire system all at<br />
once, or translate the codes on a flow<br />
basis as they are used. Integration of the<br />
codes in many cases will be determined<br />
by the extent to which the available<br />
granularity is needed in transactions.<br />
For purposes of this analysis, we<br />
acknowledge that the estimated payer<br />
systems costs may exceed those<br />
identified in the August 22, 2008<br />
proposed rule. Recognizing that these<br />
payer system costs may be difficult to<br />
ascertain, and considering the<br />
comments submitted that expressed<br />
concern regarding underestimation of<br />
payer system costs, we have increased<br />
our estimate of payer systems costs by<br />
20 percent based on comments which<br />
stated that the August 22, 2008<br />
proposed rule did not account for all of<br />
the systems that will need to be updated<br />
to accommodate the new code set. We<br />
believe that a 20 percent increase in our<br />
estimate of payer system costs will<br />
recognize these potential unaccounted<br />
system costs and better estimate ICD–10<br />
implementation costs. Therefore, we<br />
have increased our payer system costs<br />
from the previous $164.64 million to<br />
$197.64 million over 4 years,<br />
annualized at 3 percent and 7 percent as<br />
shown in Table 4.<br />
As information becomes available<br />
from industry, we anticipate that it will<br />
be shared through advisory bodies such<br />
as NCVHS, and other industry<br />
communication vehicles such as<br />
association Web sites, newsletters, open<br />
door forums, conferences, etc. As<br />
information on the impact of ICD–10<br />
transition to CMS programs becomes<br />
available, CMS plans to share<br />
information through official CMS<br />
communication vehicles as appropriate,<br />
for purposes of informing the industry’s<br />
ICD–10 implementation planning.<br />
10. System Changes—Government<br />
Comment: In the August 22, 2008<br />
proposed rule (73 FR 49819), we<br />
discussed potential costs to State<br />
Medicaid programs associated with the<br />
transition from ICD–9 to ICD–10. We<br />
noted the limitations of our analysis,<br />
and we estimated that it would cost<br />
approximately $102 million or about $2<br />
million per State to transition their<br />
systems to ICD–10–CM and ICD–10–<br />
PCS. The majority of comments focused<br />
on costs of ICD–10–CM and ICD–10–<br />
PCS implementation to State Medicaid<br />
programs. A number of commenters<br />
stated that the August 22, 2008<br />
proposed rule did not fully account for<br />
the impact of ICD–10–CM and ICD–10–<br />
PCS on State Medicaid programs. In<br />
light of those additional unaccounted<br />
for costs, some State Medicaid agencies<br />
stated that they would not be ready to
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accept the new ICD–10 code sets by the<br />
proposed October 2011 compliance<br />
date, resulting in rejected claims, claims<br />
paid inappropriately, and an increase in<br />
adjustments and re-billing. Of the<br />
comments received regarding the ICD–<br />
10–CM and ICD–10–PCS conversion<br />
costs for State Medicaid agencies, none<br />
were able to offer any data to support<br />
their assertions that these conversion<br />
costs were underestimated in the<br />
August 22, 2008 proposed rule. Another<br />
commenter stated that Medicaid paper<br />
claim forms will need to be reprinted for<br />
ICD–10 codes. Four States stated that<br />
the transition to ICD–10 will increase<br />
their Medicaid Management Information<br />
Systems (MMIS) replacement costs, and<br />
that these updates could be jeopardized<br />
if their system transition from ICD–9 to<br />
ICD–10 is made too quickly. They noted<br />
that changes to MMIS, as well as legacy<br />
systems, may force them to initially run<br />
dual systems. One State Medicaid<br />
agency recommended a provision that<br />
would waive implementation of the<br />
ICD–10 code sets in any legacy system<br />
scheduled for replacement.<br />
One commenter stated the August 22,<br />
2008 proposed rule did not account for<br />
system conversions and training<br />
required for public programs outside of<br />
Medicaid, including the use of ICD–10<br />
in public health reporting and<br />
surveillance systems. The commenter<br />
stated that implementation of ICD–10<br />
would result in legacy system migration<br />
costs, and changes to longitudinal<br />
analysis for downstream data users,<br />
including State employee health plans,<br />
some social service programs, State<br />
health care, and university research and<br />
training programs. While the commenter<br />
noted these impacts, they did not<br />
provide any data that would cause us to<br />
further revise our analysis at this time.<br />
Tribal government representatives<br />
expressed concern about their costs<br />
associated with the implementation of<br />
ICD–10–CM and ICD–10–PCS, asking<br />
that the ICD–10 compliance date be<br />
moved forward to October 2013 to allow<br />
them time to achieve compliance.<br />
A few commenters stated that we did<br />
not consult with local governments on<br />
the impacts that might result from the<br />
transition from ICD–9–CM to ICD–10–<br />
CM as required by Executive Order<br />
13132.<br />
Change<br />
Systems/Software Modifications and Updates:<br />
Response: We agree with commenters<br />
that ICD–10 Medicaid cost estimates<br />
were understated because they were<br />
based on a very limited State survey. We<br />
anticipated that State Medicaid agencies<br />
would respond with more accurate and<br />
complete data, but they were unable to<br />
do so, with some citing current State<br />
budget uncertainties.<br />
The ICD–10 compliance date of<br />
October 1, 2013 addresses State<br />
Medicaid agencies’ concerns about not<br />
being able to be ready to accept claims<br />
with the new ICD–10 code set by the<br />
proposed October 1, 2011 date. State<br />
Medicaid agencies can approach the<br />
transition from ICD–9–CM to ICD–10–<br />
CM and ICD–10–PCS either through<br />
installation of a new MMIS system (of<br />
which 18 States are currently in various<br />
stages of procurement) that would<br />
already accommodate the ICD–10–CM<br />
and ICD–10–PCS codes; or through<br />
remediation of their current systems.<br />
Either way, States are reimbursed by the<br />
Federal government for 90 percent of<br />
the cost of ICD–10–CM and ICD–10–PCS<br />
modification to the State’s Medicaid<br />
system design, development,<br />
installation or enhancement, leaving 10<br />
percent as the state’s share of the<br />
expense.<br />
This updated information, and<br />
discussions with Medicaid subject<br />
matter experts regarding our experience<br />
with similar Medicaid implementations<br />
with the States (Y2K and NPI, for<br />
example) leads us to revise our<br />
estimates of the States’ Medicaid<br />
program cost of ICD–10 implementation<br />
from $102 million, to a range of between<br />
$200 million to $400 million. Taking the<br />
midpoint of that range, or $300,000,000,<br />
we estimate that the average ICD–10<br />
cost per State Medicaid program, at<br />
their 10 percent cost share, to be<br />
$588,235, for a State Medicaid program<br />
cost of $30 million. We estimate the<br />
remaining 90 percent cost share to the<br />
Federal Medicaid program as an average<br />
of $5.294 million per State, or a Federal<br />
Medicaid share of $270 million.<br />
Therefore, based on this new<br />
information, we have increased by $270<br />
million the Federal government’s share<br />
of the Medicaid system cost estimates,<br />
and revised the State’s 10 percent cost<br />
share to $30 million, with costs<br />
annualized at 3 percent and 7 percent,<br />
respectively, as shown in Table 1.<br />
TABLE 1—GOVERNMENT COSTS $ MILLION<br />
Government<br />
agency<br />
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At some Tribal programs, Medicare<br />
and Medicaid collections represent half<br />
of the operating budget of the facility<br />
and any delay or decrease in collections<br />
as a result of the transition from ICD–<br />
9–CM to ICD–10–CM will have an<br />
impact on Tribal programs’ ability to<br />
provide services. The Indian Health<br />
Service (IHS) has jurisdiction over<br />
Tribal health care programs and<br />
provides the Tribes with necessary<br />
system upgrades to their Resource and<br />
Patient Management Systems (RPMS).<br />
IHS will need to invest in systems<br />
changes for all 60 RPMS software<br />
packages, integrate ICD–10–CM and<br />
ICD–10–PCS codes into their reports,<br />
train staff on new codes, and test data<br />
transmissions with payers. IHS was one<br />
of the first Federal agencies to recognize<br />
the impact of ICD–10 on their support<br />
of Tribal health services, and has taken<br />
these expenses into consideration in<br />
their estimate of their ICD–10 costs, of<br />
which the latest data were included in<br />
the proposed rule at 73 FR 49819.<br />
HHS actively participated in NCVHS’<br />
public and open process for soliciting<br />
input on ICD–10. In the August 22, 2008<br />
proposed rule (73 FR 49799), we<br />
discussed the number of NCVHS<br />
hearings on ICD–10, and the wide array<br />
of testifiers and comment submitters,<br />
including public health representatives.<br />
The Public Health Data Standards<br />
Consortium (PHDSC), which includes<br />
local and county health departments<br />
among their members, as well as the<br />
National Association of City and County<br />
Health Officials (NACCHO) were invited<br />
to testify. Their issues were addressed<br />
by the National Association of Health<br />
Data Organizations (a not-for-profit<br />
organization that addresses the<br />
collection, analysis, dissemination,<br />
public availability, and use of health<br />
data) which testified strongly in favor of<br />
moving to ICD–10 code set. The PHDSC<br />
and the U.S. Joint Public Health<br />
Informatics Task Force, which includes<br />
NACCHO, both submitted positive<br />
comments on our proposed rule, calling<br />
for implementation of ICD–10 by no<br />
later than October 2012. NCVHS<br />
considered all of this input, and made<br />
recommendations to adopt ICD–10–CM<br />
and ICD–10–PCS to the Secretary. These<br />
recommendations were all taken into<br />
consideration by HHS as it developed<br />
this rule.<br />
Cost annualized<br />
3%, 7%<br />
3.00% 7.00%
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Change<br />
TABLE 1—GOVERNMENT COSTS $ MILLION—Continued<br />
Government<br />
agency<br />
Cost annualized<br />
3%, 7%<br />
3.00% 7.00%<br />
3351<br />
CMS ......... $31.41 $41.17<br />
IHS ........... 0.67 0.88<br />
VA ............ 1.60 2.09<br />
Subtotal ....................................................................................................... .................. 33.68 44.14<br />
Training:<br />
CMS ......... 0.80 1.04<br />
IHS ........... 0.11 0.14<br />
VA ............ 3.94 5.16<br />
Subtotal ....................................................................................................... .................. 4.84 6.35<br />
Planning:<br />
CMS ......... 0.34 0.44<br />
IHS ........... 0.25 0.33<br />
VA ............ 0.21 0.27<br />
Subtotal ....................................................................................................... .................. 0.80 1.04<br />
Other (contractor provider inquiries) .................................................................. .................. 1.06 1.38<br />
State Medicaid Agencies ................................................................................... .................. 2.51 3.29<br />
Total ..................................................................................................... .................. 42.89 56.21<br />
Comment: A commenter stated that<br />
we should consider suspending<br />
Medicare Administrative Contractor<br />
(MAC) and RAC auditing for at least 12<br />
months following the ICD–10<br />
compliance date. One commenter stated<br />
that during the transition from ICD–9 to<br />
ICD–10, provider coding errors should<br />
not be used as a basis for prosecution<br />
under the False Claims Act. Another<br />
commenter noted that CMS should not<br />
unfairly penalize providers if the agency<br />
adopts a prospective budget neutrality<br />
adjustment (BNA).<br />
Response: These comments relate<br />
specifically to ICD–10–CM and ICD–10–<br />
PCS implementation issues that will<br />
impact the Medicare program. We will<br />
take these comments under<br />
consideration, and inform the industry<br />
and other interested stakeholders<br />
through normal CMS communication<br />
channels of any decisions made relative<br />
to these issues as we plan for the<br />
transition from ICD–9–CM to ICD–10–<br />
CM and ICD–10–PCS.<br />
11. Impact on Clinical Laboratories<br />
Comment: A few commenters stated<br />
that neither the proposed rule nor the<br />
RAND and Nolan ICD–10 reports<br />
addressed the impacts of ICD–10<br />
adoption on clinical laboratories.<br />
Commenters stated that clinical<br />
laboratories submit a large volume of<br />
small claims and rely on providers to<br />
submit correct codes but that obtaining<br />
missing codes, following up on and/or<br />
correcting invalid codes submitted by<br />
providers is a large administrative<br />
burden. Commenters stated that, by<br />
using ICD–10 codes, providers will be<br />
more likely to submit incorrect codes or<br />
will fail to submit them at all.<br />
Commenters also mentioned that<br />
pathologists will have to be trained in<br />
how they document the diagnoses they<br />
submit in their pathology reports, which<br />
would require an increase in medical<br />
documentation.<br />
One commenter stated that, although<br />
they perceived an impact of the<br />
adoption of ICD–10 on clinical<br />
laboratories, the 60-day public comment<br />
period was not enough time for them to<br />
gather substantive data on that impact.<br />
One commenter suggested that<br />
clinical labs be exempt from the<br />
requirement to adopt ICD–10–CM or at<br />
least not be required to utilize the<br />
highest degree of specificity in diagnosis<br />
coding when submitting claims.<br />
According to some commenters,<br />
clinical laboratory systems that will be<br />
impacted include: Order entry;<br />
laboratory billing, reporting, and data<br />
warehousing; and programs, screens,<br />
reports, requisitions, forms (printed and<br />
electronic), interfaces, contracts and<br />
policy manuals. Additionally,<br />
commenters stated that use of ICD–10–<br />
CM will require more highly qualified<br />
and more expensive specialists to<br />
translate physicians’ narratives into the<br />
appropriate ICD–10–CM coding.<br />
Commenters also stated that clinical<br />
labs will be responsible for educating<br />
providers as to the proper submission of<br />
diagnosis codes as well as conducting<br />
business rule development,<br />
programming, testing and<br />
implementation for hundreds of internal<br />
software programs, remapping hundreds<br />
of external interfaces as well as<br />
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conducting end-to-end testing with<br />
trading partners.<br />
An industry-sponsored report on ICD–<br />
10–CM and ICD–10–PCS costs<br />
acknowledged that ICD–10 would have<br />
an impact on clinical laboratories, but<br />
provided no substantiated data in<br />
support of that statement. The report<br />
does mention that one large national<br />
laboratory has estimated its up-front<br />
cost of implementing ICD–10–CM to be<br />
about $40 million, including IT and<br />
education costs. However it does not<br />
provide how that cost was derived, and<br />
we are unable to assess the basis for this<br />
estimate or the extent to which it may<br />
include costs already included in our<br />
assumptions.<br />
Response: We addressed the impact of<br />
the adoption of ICD–10–CM on clinical<br />
laboratories in two areas, part-time<br />
coders and laboratories as small entities,<br />
and used the public information<br />
available to us at the time of the<br />
development of the August 22, 2008<br />
proposed rule as a basis for our<br />
assumptions and our cost/benefit<br />
analysis. In the August 22, 2008<br />
proposed rule (73 FR 49815), we<br />
acknowledged in Table 7 (‘‘Ambulatory<br />
Entities Assumed To Employ Part-Time<br />
Coders Based on the 2005 Statistics of<br />
U.S. Businesses’’) that 6,080 coders<br />
were likely employed by medical and<br />
diagnostic laboratories (designated as<br />
North American Industry Classification<br />
System or NAICS code 6215), and<br />
included them in our estimate of the<br />
costs of coder training. We assumed that<br />
these 6,080 coders would have training<br />
costs per coder of $550, for an estimated<br />
cost of $3.344 million.
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In the August 22, 2008 proposed rule<br />
(73 FR 49828), we also noted that<br />
approximately 92 percent of medical<br />
laboratories are assumed to be small<br />
entities, with annual receipts below $9<br />
million, and considered them in our<br />
analysis of the impact on small entities.<br />
In Table 9 (‘‘Estimated Impact of ICD–<br />
10 Transition Cost on Inpatient and<br />
Outpatient Providers and Suppliers,<br />
Adjusted for Inflation’’), we had<br />
included NAICS code 6215, which was<br />
erroneously labeled ‘‘Medical<br />
Diagnostic and Imaging Services’’ but is<br />
actually ‘‘Medical and Diagnostic<br />
Laboratories’’, for which we allocated a<br />
portion of provider systems costs based<br />
on a percent of laboratory revenues. In<br />
the August 22, 2008 proposed rule, we<br />
estimated this cost to be $5 million, for<br />
a combined cost of $8.344 million<br />
($3.344 million based upon 6,080<br />
laboratory coders in Table 7 in the<br />
August 22, 2008 proposed rule at $550<br />
per coder + $5 million from Table 9 in<br />
the August 22, 2008 proposed rule). The<br />
August 22, 2008 proposed rule’s Table<br />
9 data for medical and diagnostic<br />
laboratories is updated in this final rule<br />
from $5 million to $13.14 million to<br />
account for the increase in costs, and is<br />
reflected in Table 2 and our Table 6 cost<br />
summary (which includes annualized<br />
costs at 3 percent and 7 percent), both<br />
of which appear in this final rule. This<br />
accounts for provider follow-up<br />
productivity losses as described by the<br />
commenters. Although commenters<br />
provided a great deal of qualitative<br />
information as to the impact of the ICD–<br />
10–CM transition on the clinical<br />
laboratory industry, and again, we<br />
acknowledge that it will be impacted,<br />
we did not receive any quantitative data<br />
from commenters to support a revision<br />
of our analysis of the quantitative<br />
impact of the adoption of ICD–10–CM<br />
on clinical laboratories.<br />
Clinical laboratories cannot be<br />
exempted from the requirement to adopt<br />
ICD–10–CM. All HIPAA covered entities<br />
need to be ICD–10–ready at the same<br />
time to not disrupt claims payment and<br />
processing. Since clinical laboratories<br />
utilize ICD codes for reimbursement and<br />
submit claims to various payers, it is<br />
imperative that they implement ICD–10<br />
at the same time as the rest of the health<br />
care industry. As to one commenter’s<br />
suggestion that laboratories not use the<br />
highest degree of specificity in diagnosis<br />
coding when submitting claims, the use<br />
of the ICD–10 codes do not drive the<br />
clinical care, as previously discussed in<br />
this RIA. Laboratories should continue<br />
to code based on the information at<br />
hand, or supplied by the provider or<br />
based on the clinical test being<br />
conducted.<br />
As we previously indicated in our<br />
discussion on medical documentation<br />
in this final rule, we also disagree with<br />
commenters who stated that<br />
pathologists would need additional<br />
training to provide correct diagnosis as<br />
a result of using ICD–10 codes. While<br />
laboratories will be responsible for<br />
working with providers to ensure proper<br />
programming and testing, these are<br />
activities that they would undertake on<br />
an ongoing basis with any new provider<br />
clients. The implementation of ICD–10<br />
in hundreds of internal software<br />
programs, and the remapping hundreds<br />
of external interfaces as well as end-toend<br />
testing with trading partners are<br />
similar processes that all HIPAA<br />
covered entities will be undertaking as<br />
they implement ICD–10, and are part of<br />
the generally accepted ICD–10 system<br />
implementation process. Other than the<br />
cost estimates for coder training and<br />
productivity losses, absent other<br />
quantitative data from clinical<br />
laboratories on costs, we cannot at this<br />
time project any more specific cost<br />
estimate relative to clinical laboratories’<br />
transition from ICD–9–CM to ICD–10–<br />
CM and ICD–10–PCS.<br />
12. Impact on Pharmacies<br />
Comment: Some commenters stated<br />
that the ICD–10 proposed rule did not<br />
account for the impact that the<br />
transition to ICD–10–CM and ICD–10–<br />
PCS would have on the pharmacy<br />
industry. One commenter stated that the<br />
adoption of the National Council of<br />
Prescription Drug Plans’<br />
Telecommunications Standard Version<br />
D.0, and increased adoption of e-<br />
prescribing, will cause an increase in<br />
diagnosis code use required by payers.<br />
A few commenters stated that<br />
between 40 and 50 percent of<br />
prescription claim volume is associated<br />
with prescription refills. Some<br />
commenters recommended that there be<br />
a one year staggered transition period<br />
for pharmacies to implement ICD–10–<br />
CM so that authorized prescription<br />
medication refill orders can complete<br />
the reorder cycle uninterrupted. A<br />
commenter stated that for refills,<br />
pharmacies will not be able to use an<br />
ICD–9 to ICD–10 crosswalk because of<br />
the lack of one-to-one relationships but<br />
will have to contact physicians to obtain<br />
the ICD–10–CM code the prescriber has<br />
assigned to the patient. Another<br />
commenter stated that all prescription<br />
refills written prior to the compliance<br />
date for ICD–10–CM should be<br />
exempted from having to use the ICD–<br />
10–CM codes. Commenters also stated<br />
that ICD–9–CM codes are used by<br />
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pharmacy benefit managers (PBMs) for<br />
disease management reporting, and for<br />
client reporting, benchmarking, and<br />
patient stratification. Commenters stated<br />
that ICD–10–CM would impact the<br />
pharmacy industry for training, systems<br />
and business process revisions, manual<br />
review of systems, outreach to<br />
providers, consumer education, cost of<br />
manual provider contact, and other<br />
considerations. Conversely, two other<br />
commenters stated that ICD–9 codes are<br />
not heavily used in pharmacies, and<br />
that impact would be minimal. None of<br />
the commenters were able to provide<br />
substantiated data to support their<br />
qualitative impact claims.<br />
Response: NCVHS held multiple<br />
hearings and solicited comments from<br />
all industry segments regarding the<br />
potential impacts of ICD–10–CM on<br />
their respective business processes and<br />
systems. During the ongoing NCVHS<br />
process, representatives of the pharmacy<br />
industry did not indicate that the<br />
transition from ICD–9–CM to ICD–10–<br />
CM codes would be problematic and,<br />
therefore, we did not identify<br />
pharmacies as an impacted industry<br />
segment in the August 22, 2008<br />
proposed rule’s regulatory impact<br />
analysis. We now understand that ICD–<br />
9–CM codes are currently used in<br />
pharmacy settings when the patient’s<br />
drug benefit plan may require a<br />
diagnosis code for purposes of prior<br />
authorization. However, the pharmacist<br />
does not assign this diagnosis code; it<br />
must be obtained by the pharmacist<br />
from the prescriber, just as it would if<br />
ICD–9–CM codes were still in use. The<br />
adoption of NCPDP<br />
Telecommunications Standard Version<br />
D.0 was overwhelmingly favored by the<br />
pharmacy industry for its ability to<br />
better support Medicare Part D<br />
requirements. We do not anticipate that<br />
the use of NCPDP Telecommunication<br />
Standard Version D.0 or the ICD–10–CM<br />
code sets in pharmacy settings will<br />
cause an increase in the requirement to<br />
use codes to report supplies/services in<br />
e-prescribing transactions and that, in<br />
fact, the use of such standards will<br />
enhance retail pharmacy transactions<br />
through their greater specificity,<br />
reducing pharmacy call-backs to<br />
physicians, and improving the<br />
efficiency of pharmacy claims<br />
submissions and accurate payments. As<br />
with other coding situations, ICD–9–CM<br />
codes will continue to be used up to and<br />
until the October 1, 2013 compliance<br />
date, at which time ICD–10–CM and<br />
ICD–10–PCS code sets will be required.<br />
With regard to ongoing prescription<br />
refills that are written prior to, and<br />
refilled after the October 1, 2013<br />
compliance date, we anticipate that
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pharmacies will be able to use the<br />
reimbursement mappings posted to the<br />
CMS Web site to translate ICD–9–CM<br />
codes into ICD–10–CM. These mappings<br />
provide a one-to-one match of the<br />
closest ICD–9–CM to ICD–10–CM and<br />
ICD–10–PCS codes for reimbursement<br />
purposes. We also anticipate that, given<br />
the new compliance date of October<br />
2013, this will afford the pharmacy<br />
industry ample additional time to<br />
identify and fix any outstanding refill<br />
issues.<br />
Although commenters provided<br />
qualitative information as to the impact<br />
of the ICD–10 transition on the<br />
pharmacy industry, we did not receive<br />
any data that would allow us to offer<br />
any refined estimates of quantitative<br />
impacts to the pharmacy industry.<br />
13. Contract Renegotiation<br />
Comment: A number of commenters<br />
stated that the cost of contract<br />
renegotiations was not addressed in the<br />
proposed rule, and that once contracts<br />
are opened to accommodate the ICD–10<br />
transition, many providers will want to<br />
review their negotiated rates based on<br />
revised fee schedules. Other<br />
commenters stated that it is more cost<br />
effective for payers and providers to<br />
renegotiate contracts in conjunction<br />
with their renewal dates, whereas offcycle<br />
negotiations demand additional<br />
resources, analysis and time, which<br />
would be required under the transition<br />
to ICD–10.<br />
A commenter mentioned that for an<br />
entire network of hospital contracts, 25<br />
to 30 percent may be up for renewal in<br />
any given year. Another commenter<br />
stated many high-volume providers<br />
have multi-year agreements with<br />
negotiations taking months, and<br />
reimbursement terms can be the most<br />
time-consuming part of the process.<br />
Other commenters mentioned that<br />
extensive pricing analysis will be<br />
required prior to entering contract<br />
renegotiations. One commenter stated it<br />
will be difficult to price contracts<br />
because unknown provider billing<br />
patterns will create financial<br />
uncertainty for providers and payers.<br />
Other commenters mentioned that the<br />
new coding system will cause<br />
differences in the classification of<br />
provider services and the reporting of<br />
utilization patterns. Provider contracts<br />
will require modification to account for<br />
subsequent reimbursement changes to<br />
achieve budget neutrality.<br />
Response: In the August 22, 2008<br />
proposed rule (73 FR 49814), we<br />
discussed the different approaches<br />
taken by RAND and Nolan with regard<br />
to the cost of contract renegotiations.<br />
RAND stated that periodic contract<br />
renegotiations are the norm in the<br />
health care payer industry, with 1-year<br />
and 3-year contract cycles being quite<br />
common. RAND assumed that the<br />
conversion to ICD–10–CM and ICD–10–<br />
PCS would introduce more issues to<br />
negotiation, but would be far less likely<br />
to spur negotiations when there<br />
otherwise would have been none.<br />
Nolan assumed that, because ICD–10–<br />
CM and ICD–10–PCS represents changes<br />
in the underlying diagnostic and<br />
procedural coding, many if not all<br />
contracts based on code definitions and<br />
their associated reimbursement rates<br />
will require development, negotiation,<br />
review and ultimately agreement. Nolan<br />
assumed this will be a costly and timeconsuming<br />
process shared by payers<br />
and providers alike. The number of<br />
contracts Nolan used for their analysis—<br />
5 to 20 per entity—is much smaller than<br />
the millions of contracts the industry<br />
has estimated because Nolan assumed<br />
that many contracts for physicians and<br />
provider groups would be standardized<br />
and would be negotiated by contracting<br />
staff rather than by physicians<br />
themselves. Nolan did not provide any<br />
separate estimates for the costs of<br />
contract renegotiation to health plans,<br />
assuming that these costs would be<br />
included in the health plans’ overall<br />
costs of ICD–10–CM and ICD–10–PCS<br />
implementation.<br />
As discussed in the August 22, 2008<br />
proposed rule (73 FR 49814), we did not<br />
account for the costs of contract renegotiations<br />
because we shared RAND’s<br />
assumption that providers and payers<br />
must regularly renegotiate contracts in<br />
response to new policies. Contracts are<br />
renegotiated to revise the terms of the<br />
contract, usually in response to changes<br />
in policy that affect rates of<br />
reimbursement, and as we have already<br />
noted, we do not anticipate that the<br />
ICD–10–CM and ICD–10–PCS data that<br />
would constitute the basis for changes<br />
in reimbursement will be available until<br />
some time after the initial<br />
implementation of ICD–10–CM.<br />
Therefore, we believe that any cost of<br />
renegotiating contracts will be spread<br />
out over time, be undertaken at the time<br />
of the regularly scheduled contract<br />
renewal, and should be accounted for as<br />
a cost of doing business.<br />
14. Impact on Electronic Medical<br />
Records<br />
Comment: In the August 22, 2008<br />
proposed rule (73 FR 49829), we<br />
discussed the impact of ICD–10 on<br />
electronic medical record (EMR)<br />
systems. Many commenters stated that<br />
the EMRs systems will be too costly to<br />
reprogram for ICD–10 code sets, but<br />
offered no examples of what those costs<br />
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3353<br />
might be. However, one commenter<br />
estimated that only 4 percent of<br />
physicians have an extensive, fully<br />
functioning EMR system, and only 13<br />
percent have a basic EMR system.<br />
Commenters stated the complexity of<br />
system changeovers will delay EMR<br />
adoption, put stress on practice<br />
operations and increase costs. One<br />
industry group stated that, unlike other<br />
systems, not all ICD–10 hardware and<br />
software changes for EMRs will be<br />
accommodated by the Version 5010<br />
upgrade of vendor applications.<br />
Response: We agree that there will be<br />
costs associated with reprogramming<br />
electronic medical record systems to<br />
accommodate the use of ICD–10.<br />
However, as both commenters and the<br />
proposed rule noted, the rate of<br />
adoption of EMRs among providers is<br />
currently very low, and the transition to<br />
ICD–10–CM and ICD–10–PCS would<br />
affect only those providers who now<br />
employ EMRs. As those providers have<br />
already made their initial investment in<br />
their EMR system and are enjoying the<br />
benefits associated with its use, we<br />
expect that they will make the necessary<br />
upgrades to allow continued use of their<br />
system. For those providers who<br />
anticipate purchasing EMR systems,<br />
they should verify with their vendors<br />
that the systems they are considering<br />
can accommodate ICD–10–CM and ICD–<br />
10–PCS codes. We also anticipate that<br />
providers who need to migrate their<br />
EMR systems to ICD–10 will work<br />
closely with their vendors to ensure<br />
successful transitions. We also agree<br />
that, for clinical and administrative<br />
functions within EMR systems that are<br />
not integrated into other systems that<br />
use Version 5010, separate hardware<br />
and/or software costs may be incurred.<br />
However, absent data from vendors and<br />
providers, we cannot at this time project<br />
any specific cost estimates relative to<br />
ICD–10 transition and EMRs.<br />
15. General Benefits<br />
Comment: Overall, most commenters<br />
agreed with the benefit categories<br />
outlined in the August 22, 2008<br />
proposed rule (73 FR 49821). Some<br />
commenters stated that, although these<br />
benefits will eventually be seen from the<br />
ICD–10 transition, their size was<br />
overestimated by the August 22, 2008<br />
proposed rule. However, no<br />
substantiated data was provided by<br />
these commenters that would provide<br />
quantifiable information to counter our<br />
assumptions or convince us to change<br />
our analysis at this time.<br />
While many commenters agreed with<br />
the benefits outlined in the proposed<br />
rule, they also suggested other benefits<br />
that could be realized through the
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transition to ICD–10. Commenters stated<br />
that these other benefits included<br />
improvement in medical knowledge and<br />
technology; the ability to substantiate<br />
the medical necessity of diagnostic and<br />
therapeutic services; the ability to<br />
demonstrate the efficacy of using<br />
technology for particular clinical<br />
conditions; and the ability to identify<br />
complications and adverse effects<br />
through the use of technology. Another<br />
commenter specifically mentioned that<br />
ICD–10–CM also permits the<br />
identification of individual fetuses in<br />
multiple gestation pregnancies which<br />
will make it possible for the first time<br />
to link a coded condition to a specific<br />
fetus.<br />
One commenter stated that while the<br />
discussion of the benefit of ‘‘more<br />
accurate payments for new procedures’’<br />
in the proposed rule seems to focus on<br />
Medicare payments, the benefit would<br />
apply to other payers and health plans<br />
as well.<br />
Conversely, some commenters<br />
questioned the benefits of ICD–10. A<br />
few commenters questioned whether<br />
covered entities would really achieve<br />
more accurate payments, fewer rejected<br />
claims and fewer improper claims.<br />
Some commenters expressed doubt as to<br />
whether physician practices specifically<br />
would achieve many of the stated ICD–<br />
10 benefits. Others noted that<br />
conversion to ICD–10 would make<br />
almost 30 years of longitudinal U.S.<br />
morbidity data derived from ICD–9<br />
virtually useless and it would be<br />
difficult to draw conclusions about<br />
trends in ICD–9 or ICD–10 translated<br />
data when aggregate comparisons<br />
assume that all hospitals are coding<br />
consistently. It was also noted that<br />
information or benchmarks were not<br />
available from previous HIPAA<br />
implementations that could validate or<br />
disprove the projected benefit<br />
assumptions.<br />
Some commenters stated that many of<br />
the projected benefits refer to<br />
improvements in the procedure code<br />
classification system (ICD–10–PCS) and<br />
are not directly tied to ICD–10–CM<br />
adoption.<br />
Response: As outlined in the August<br />
22, 2008 proposed rule, we were<br />
conservative in our estimate of benefits.<br />
In many instances, we claimed only a<br />
small percentage of our calculated full<br />
benefit, and in a number of areas where<br />
we did not have quantifiable benefit<br />
data, we declined to claim any benefit<br />
whatsoever. We agree with commenters<br />
who stated that we did not account for<br />
all the benefits that could potentially be<br />
realized through the use of ICD–10–CM<br />
and ICD–10–PCS. If benefits were<br />
overestimated, as some commenters<br />
asserted, those assertions did not<br />
indicate how or to what degree we may<br />
have overestimated benefits, nor did<br />
they provide information that we could<br />
use to revise our benefits estimates.<br />
In the proposed rule, for the benefit<br />
growth factor pre-implementation, we<br />
use the growth in national health care<br />
expenditures for years 2005–2007, with<br />
year 2007 having an estimated growth<br />
rate of 1.212. For the growth projections<br />
for years 2012 and beyond, we use the<br />
compounded growth in the U.S.<br />
population which is projected to grow at<br />
0.008 per year.<br />
In this final analysis we use the same<br />
approach, but rather than 2004 as the<br />
base year for the analysis, we now use<br />
expenditures from 2007 as the base year<br />
of the analysis. We then apply the 1.212<br />
growth rate adjustment to the 100<br />
percent benefit value for each respective<br />
benefit listed in Table 5, and use the<br />
resulting number to pro-rate the phasein<br />
amounts based upon the identified<br />
phase-in percentage assigned for the<br />
first year in which the benefits first<br />
appear. Going forward from the year in<br />
which the regulation is implemented,<br />
we applied the population growth factor<br />
compounded by the number of years<br />
from the implementation year of the<br />
regulation (2014). We now estimate<br />
benefits at $4,539.63 million over 15<br />
years, and annualized at 3 percent and<br />
7 percent, as reflected in Table 7,<br />
compared with $3,950.74 million over<br />
15 years in the August 22, 2008<br />
proposed rule. Since the benefits<br />
estimates are now based in 2007 dollars,<br />
we updated the cost numbers to 2007<br />
dollar for comparability.<br />
16. Education and Outreach<br />
Comment: Commenters stated that<br />
while there should be a set of basic ICD–<br />
10–CM and ICD–10–PCS training<br />
materials with consistent messages,<br />
education should be designed for<br />
different learning levels and audiences.<br />
Other commenters suggested the<br />
development of a detailed provider<br />
education and outreach plan with<br />
emphasis on small physician practices<br />
and software vendors; increasing the<br />
number of Medicare customer service<br />
representatives and creating a separate<br />
toll free hotline for ICD–10 questions;<br />
hosting regularly scheduled regional<br />
calls with rural providers, independent<br />
clinical laboratories, key stakeholders,<br />
physicians, and State and regional<br />
medical societies; designating a central<br />
point person to guide ICD–10–CM and<br />
ICD–10–PCS implementation and<br />
ensure consistency of materials; and<br />
development of a public access Web site<br />
for ICD–10 interpretation and guidance.<br />
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Commenters also stated that academic<br />
medical centers and teaching hospitals<br />
will be impacted by ICD–10–CM and<br />
ICD–10–PCS and should be targeted for<br />
more intense educational outreach.<br />
Commenters recommended that CMS<br />
should fund ICD–10 education and<br />
outreach programs, and pursue both<br />
paid and earned ICD–10 educational<br />
advertising.<br />
Response: In the August 22, 2008<br />
proposed rule (73 FR 49807), we<br />
detailed our intention to provide ICD–<br />
10 education and outreach to a wide<br />
variety of health care entities, including<br />
Medicare contractors; Fiscal<br />
Intermediaries, <strong>Carrier</strong>s, and Medicare<br />
Administrative Contractors; hospitals;<br />
physicians; other providers; and other<br />
stakeholders. We stated that we will<br />
develop and make publicly available a<br />
host of tools, including extensive<br />
‘‘Frequently Asked Questions’’<br />
documents which will be updated as<br />
new questions and/or information arise;<br />
fact sheets; and other supporting<br />
education and outreach materials for<br />
partner dissemination. Other potential<br />
impacted groups will be targeted, and<br />
activities will be developed, based on<br />
this stakeholder input. We acknowledge<br />
that different health care professionals<br />
and entities will have different<br />
information needs, and we are<br />
beginning to address this need through<br />
educational materials posted to http://<br />
www.cms.hhs.gov/MedLearn and http://<br />
www.cms.hhs.gov/ICD10/ Web sites. All<br />
materials go through extensive reviews<br />
from a number of subject matter experts<br />
prior to dissemination to the public to<br />
assure accuracy and consistency. Our<br />
free, ongoing series of roundtable and<br />
open door forum discussions tailored to<br />
specific audiences such as ESRD<br />
providers, rural providers, hospitals,<br />
etc. also address a full spectrum of<br />
stakeholder segments and concerns,<br />
including ICD–10, on a regularly<br />
scheduled basis.<br />
Many stakeholders, through the<br />
August 22, 2008 proposed rule’s public<br />
comment process, expressed their<br />
willingness to assist in disseminating<br />
information to their respective<br />
constituencies, and we will take<br />
advantage of those offers of assistance,<br />
working closely with industry in this<br />
regard.<br />
17. Impacts on Training Programs<br />
Comment: A commenter stated that<br />
the August 22, 2008 proposed rule did<br />
not address possible coder shortages<br />
and the need to re-certify coders. The<br />
commenter noted that implementing<br />
ICD–10 will exacerbate the current<br />
shortage of clinical coders, and did not<br />
account for the impact on formal
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training programs for degree and<br />
national certificates that will need to be<br />
updated or redeveloped. Some<br />
commenters stated regular physician<br />
office staff would need to become<br />
certified coders, and current coders will<br />
need to recertify, incurring a costly<br />
exam fee. Commenters noted that ICD–<br />
10–CM and ICD–10–PCS are too<br />
technical to teach in a short amount of<br />
time. Other commenters stated that the<br />
October 2011 proposed compliance date<br />
did not allow enough time for<br />
publishers to update and revise medical<br />
coding and billing program texts and<br />
curriculum; and allow institutions to<br />
purchase, install and test the new IT<br />
systems needed to train medical coders.<br />
Response: We have received no<br />
indication from industry, and have no<br />
reason to believe, that the changeover<br />
from ICD–9–CM to ICD–10–CM and<br />
ICD–10–PCS codes might contribute to<br />
the existing shortage of clinical coders.<br />
In fact, increased marketplace demand<br />
for coders as a result of adoption of<br />
ICD–10–CM and ICD–10–PCS may lead<br />
to more enrollment in coding<br />
curriculums and, in turn, the graduation<br />
of more and better qualified coders.<br />
Industry trade and technical school<br />
representatives have indicated their<br />
readiness to adapt to any needed<br />
curriculum changes as a result of the<br />
adoption of ICD–10, and anticipate that<br />
they will be able to produce ‘‘ICD–10<br />
ready’’ clinical coders upon graduation<br />
from their respective institutions. As<br />
ICD–9–CM codes are currently updated<br />
annually, we anticipate that educational<br />
venues offering courses in coding would<br />
be familiar with making changes in<br />
curriculum to reflect these revisions.<br />
The final compliance date of October 1,<br />
2013 should afford educational<br />
institutions sufficient time to change<br />
their instructional coding curriculums,<br />
and seek out and obtain appropriate<br />
educational materials and related<br />
resources.<br />
Some hospitals may require their<br />
coders to be certified by certifying<br />
bodies such as the various national<br />
professional associations, and while<br />
desirable in the ambulatory setting, this<br />
does not appear to be a requirement for<br />
coders working in physician offices or<br />
other ambulatory settings. Coders must<br />
maintain annual continuing educational<br />
requirements to maintain their<br />
certifications. As CMS has no coding<br />
certification requirements, we refer<br />
those concerned with future<br />
certification standards to contact their<br />
applicable professional organizations.<br />
18. Impact on Other HIT Initiatives<br />
Comment: In the August 22, 2008<br />
proposed rule (73 FR 49805–49806), we<br />
detailed known health information<br />
technology (HIT) initiatives and their<br />
relation to ICD–10 adoption and timing.<br />
Commenters stated that there are too<br />
many other HIT initiatives that they are<br />
being asked to embrace, creating too<br />
much competition for scant resources<br />
and time, but did not offer any<br />
substantiated data concerning potential<br />
costs associated with these other<br />
initiatives. Commenters noted that the<br />
Medicare Improvements for Patients and<br />
Providers Act (MIPPA) legislation<br />
creates e-prescribing incentives at the<br />
same time as the proposed October 2011<br />
ICD–10 implementation date. A few<br />
health plans stated that there are<br />
multiple statewide requirements that<br />
also place demands on their available<br />
resources that would otherwise be<br />
diverted to ICD–10 implementation, but<br />
did not indicate costs associated with<br />
these requirements. Some commenters<br />
asked that the final rule for claims<br />
attachments be delayed until after the<br />
compliance date for ICD–10–CM and<br />
ICD–10–PCS.<br />
Response: Of the 11 initiatives listed<br />
in the August 22, 2008 proposed rule, 7<br />
of them had compliance deadlines<br />
which have already passed. These<br />
included HITSP interoperability<br />
specifications for use cases; the NPI<br />
compliance date; publication of CCHIT<br />
criteria for inpatient electronic health<br />
record products; publication of CCHIT<br />
criteria for certifying health information<br />
technology networks and systems; the<br />
NPI compliance date for small health<br />
plans; and a second set of e-prescribing<br />
final standards under Medicare Part D<br />
and adoption of the NPI for electronic<br />
prescribing transactions. Of the<br />
remaining 4 initiatives, 2 relate to<br />
compliance dates associated with the<br />
adoption of Version 5010, NCPDP<br />
Telecommunications Standard D.0, and<br />
NCPDP Medicaid Subrogation Standard<br />
3.0, both of which are now projected for<br />
January 2012 (the Medicaid Subrogation<br />
Standard for small health plans only is<br />
projected for January 2013). The two<br />
remaining initiatives, the compliance<br />
date in the proposed rule for a new<br />
HIPAA standard for the healthcare<br />
claims attachment standard, and the<br />
proposed compliance date for the claims<br />
attachment transaction for small health<br />
plans, were scheduled for 2011 and<br />
2012, respectively. We acknowledged in<br />
the August 22, 2008 proposed rule that<br />
implementing ICD–10 codes sets will<br />
require significant effort on the part of<br />
covered entities and their vendors, and<br />
took other HIT initiatives into<br />
consideration in establishing our<br />
proposed ICD–10 compliance date to<br />
sequence compliance in a manner that<br />
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3355<br />
would allow covered entities to<br />
concentrate their efforts on ICD–10<br />
implementation during the relevant<br />
period. For more information on ICD–<br />
10’s relation to and impact on other HIT<br />
initiatives, see the discussion in the<br />
August 22, 2008 proposed rule (73 FR<br />
49805).<br />
We believe that with the new ICD–10<br />
compliance date of October 1, 2013,<br />
there will be ample time—an additional<br />
two years from the proposed October 1,<br />
2011 compliance date, and a year from<br />
the MIPPA 2012 e-prescribing<br />
deadline—for providers to prepare for<br />
the changeover from ICD–9 to ICD–10.<br />
We have stated publicly, and reiterate<br />
once again, that we will not consider<br />
implementing a new HIPAA standard<br />
for claims attachment transactions until<br />
after the compliance date for ICD–10.<br />
With regard to commenters’ assertions<br />
that there are multiple State<br />
requirements that will compete with<br />
implementation of ICD–10, we believe<br />
that these requirements are not new, but<br />
constitute updates to existing State<br />
requirements that would need to be<br />
accomplished whether or not ICD–10<br />
was implemented, and for which<br />
entities affected by these requirements<br />
are already prepared. The later<br />
compliance date of October 1, 2013<br />
should allow ample time for HIPAAcovered<br />
entities to implement ICD–10<br />
while meeting any applicable State<br />
requirements, and should allow for<br />
planning of future health information<br />
technology initiatives to assure there is<br />
no overlap of HIPAA standards<br />
implementations.<br />
19. Impact on Other Entities<br />
Comment: Commenters noted that<br />
other non-HIPAA covered entities<br />
would be impacted by the change from<br />
ICD–9 to ICD–10. They cited worker’s<br />
compensation programs, which would<br />
need to update their systems that<br />
support EDI transactions, as well as the<br />
Version 5010 of the 837 transaction<br />
standard for institutional claims and/or<br />
encounters. Commenters noted that life<br />
insurers will have to enter new<br />
diagnosis codes/conditions into their<br />
underwriting decisions. Commenters<br />
stated that all reports sent from third<br />
party administrators to employer<br />
sponsors of group health plans will<br />
need to be translated into ICD–10 for<br />
longitudinal analysis to track financial<br />
and health care quality performance. A<br />
commenter stated that the OASIS data<br />
set for home health care, the inpatient<br />
rehabilitation patient assessment<br />
instrument (IRF–PAI) and the post-acute<br />
care payment reform demonstration<br />
project plan will all need to account for<br />
the cost of transitioning to ICD–10 code
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sets within their respective instruments.<br />
Commenters also stated that durable<br />
medical equipment (DME) providers<br />
would be impacted because they are<br />
required to submit diagnosis codes<br />
when billing DME supplies and<br />
Medicare Part B covered services.<br />
Response: In the August 22, 2008<br />
proposed rule (73 FR 49805), we<br />
addressed the adoption of ICD–10–CM<br />
and ICD–10–PCS as medical data code<br />
sets under HIPAA and, therefore, did<br />
not specifically address the potential<br />
impacts of ICD–10 adoption on non-<br />
HIPAA entities.<br />
Neither RAND nor Nolan addresses<br />
impacts of ICD–10 on non-HIPAA<br />
entities. On page 2 of the October 2003<br />
Nolan study on ICD–10 implementation<br />
(http://www.renolan.com/healthcare/<br />
icd10study_1003.pdf), it notes that the<br />
study ‘‘excludes many providers such as<br />
nursing homes, clinical labs and durable<br />
medical equipment vendors. Similarly,<br />
a large number of payer organizations<br />
have been excluded such as third party<br />
administrators, clearinghouses, and<br />
many small and medium insurers.<br />
These providers and payer entities were<br />
excluded because they were unable to<br />
develop initial cost estimates needed in<br />
the study.’’ We believe that, as with<br />
Nolan’s observations in their 2003<br />
report, this is still the case. We heard<br />
from a handful of commenters who<br />
stated that the adoption of ICD–10 will<br />
have a ripple effect on life insurers,<br />
worker’s compensation programs, third<br />
party administrators and similar<br />
entities, but they did not offer any<br />
quantitative data that could be used to<br />
refine the impact analysis calculation of<br />
their costs associated with the adoption<br />
of ICD–10. According to our analysis of<br />
2005 data from the National Academy of<br />
Social Insurance’s report on benefits,<br />
coverage and costs of worker’s<br />
compensation programs, more than<br />
$26.2 billion in medical benefits were<br />
paid out in 2005, at an employer cost of<br />
$88.8 billion, but the administrative<br />
costs associated with worker’s<br />
compensation programs are not<br />
available from this source.<br />
From a benefits perspective, we do<br />
know that Chapter 20 of ICD–10,<br />
‘‘External Causes of Morbidity (V01–<br />
Y98),’’ provides for the classification of<br />
environmental events and external<br />
circumstances as the cause of injury,<br />
and other adverse effects. These codes<br />
are more precise and describe a wider<br />
range of causes of injuries, which<br />
should be quite helpful to worker’s<br />
compensation programs in determining<br />
the exact cause of an injury.<br />
With regard to OASIS, IRF–PAI and<br />
the post-acute care payment reform<br />
demonstration project, the business<br />
process and systems impacts of ICD–9–<br />
CM, and subsequently ICD–10–CM and<br />
ICD–10–PCS, on these and similar<br />
instruments have already been<br />
identified. The costs associated with the<br />
implementation of ICD–10 relative to<br />
these instruments will be accounted for<br />
through CMS’s ongoing ICD–1CM and<br />
ICD–10–PCS internal planning and<br />
analysis activities and will be shared<br />
with the industry once these costs have<br />
been projected.<br />
We acknowledge that many<br />
uncertainties exist regarding the<br />
transition to ICD–10–CM and ICD–10–<br />
PCS, and that the costs and benefits<br />
associated with the transition as<br />
outlined in this final rule may not fully<br />
capture all of the impacts to the<br />
industry. In order to account for this<br />
uncertainty, we included low, high and<br />
primary estimates of the costs and<br />
benefits of transitioning to ICD–10–CM<br />
and ICD–10–PCS. These estimates may<br />
also include some uncertainty in that<br />
the costs and benefits may be higher or<br />
lower than even our low and high<br />
estimates.<br />
Some examples of uncertainty include<br />
the acknowledgment that our estimates<br />
for physician training may not<br />
accurately reflect the number of<br />
physicians who may require or request<br />
training on ICD–10–CM and ICD–10–<br />
PCS, because we received conflicting<br />
estimates from stakeholders during the<br />
ICD–10–CM and ICD–10–PCS proposed<br />
rule comment period. Additionally,<br />
some industry studies have determined<br />
that productivity losses will be time-<br />
limited, while others have opined that<br />
productivity losses may be continuous.<br />
We also recognize that the ICD–10–<br />
CM and ICD–10–PCS proposed rule did<br />
not account for all of the systems that<br />
may be impacted by the ICD–10–CM<br />
and ICD–10–PCS transition. Due to the<br />
complexity of the U.S. health care<br />
system, it is very difficult to determine<br />
the number and all the types of systems<br />
that will need to be updated for ICD–<br />
10–CM and ICD–10–PCS use. However,<br />
we anticipate that, upon publication of<br />
this final rule, the industry will begin its<br />
requirements gathering, development<br />
and planning activities for the ICD–10–<br />
CM and ICD–10–PCS transition. We also<br />
acknowledge that the ICD–10–CM and<br />
ICD–10–PCS benefits estimates may<br />
include some uncertainty. We did not<br />
receive many comments on the benefits<br />
estimates that were provided in the<br />
August 22, 2008 proposed rule.<br />
However, we fully anticipate that once<br />
the ICD–10–CM and ICD–10–PCS code<br />
sets are implemented, and the industry<br />
becomes more familiar and comfortable<br />
with their use, benefits may be easier to<br />
measure.<br />
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B. Regulatory Flexibility Analysis<br />
1. Final Regulatory Flexibility Analysis<br />
Section 604 of the Regulatory<br />
Flexibility Act (RFA) requires agencies<br />
to analyze options for regulatory relief<br />
of small entities if a final rule has a<br />
significant impact on a substantial<br />
number of small entities. For purposes<br />
of the RFA, small entities include small<br />
businesses, nonprofit organizations, and<br />
small governmental jurisdictions. Most<br />
hospitals and most other providers and<br />
suppliers are small entities, either by<br />
being nonprofit status or by qualifying<br />
as small businesses under the Small<br />
Business Administration’s (SBA’s) size<br />
standards (having revenues of $7.0<br />
million to $34.5 million in any 1 year).<br />
For details, see the SBA’s Web site at<br />
http://sba.gov/idc/groups/public/<br />
documents/sba_homepage/<br />
serv_sstd_tablepdf.pdf (refer to Sector<br />
62).<br />
In addition, section 1102(b) of the Act<br />
requires us to prepare a regulatory<br />
impact analysis if a rule may have a<br />
significant impact on the operations of<br />
a substantial number of small rural<br />
hospitals. This analysis must conform to<br />
the provisions of section 604 of the<br />
RFA. For purposes of section 1102(b) of<br />
the Act, we define a small rural hospital<br />
as a hospital that is located outside of<br />
a metropolitan statistical area and has<br />
fewer than 100 beds.<br />
As stated in the August 22, 2008<br />
proposed rule (73 FR 49828), we<br />
determined that about 200 nonprofit<br />
health care organizations that offer 213<br />
health plans are considered small<br />
entities under the RFA because of their<br />
non-profit status, and that 97 percent of<br />
all physicians’ practices and clinics also<br />
qualify as small entities under the RFA.<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49819), we showed the<br />
distribution of the transition costs to the<br />
ICD–10 codes for providers, suppliers,<br />
payers and software and system design<br />
firms. For calculating the impact on<br />
small entities, entities were grouped by<br />
the North American Industry<br />
Classification System (NAICS) and were<br />
presented at the firm level. The NAICS<br />
figures were adjusted based on the<br />
medical inflation factor we applied to<br />
all costs. Data were collected primarily<br />
by inpatient and outpatient categories.<br />
To allocate the transition costs, we used<br />
an available base which served as a<br />
proxy to the sub-groupings of inpatient<br />
and outpatient providers and suppliers.<br />
For the task of allocating the transition<br />
costs, we used the revenue-receipts<br />
reported in the Services Annual Survey<br />
and the National Health Expenditure<br />
Accounts, published by the U.S. Census<br />
Bureau. We grouped providers and
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suppliers by inpatient and outpatient<br />
groups reflecting the level at which the<br />
data was available. In Column 3, we<br />
presented the revenue-receipts for each<br />
type of provider-supplier, insurance<br />
carrier-third party administrator, and<br />
computer design firm expected to bear<br />
transition costs. Column 4 showed the<br />
percent of the two groups’ revenue-<br />
receipts each provider-supplier type<br />
comprised of the group’s total. In<br />
Column 5, we applied the percentages<br />
to the total ICD–10 transition costs for<br />
each provider-supplier type.<br />
ICD–10–CM and ICD–10–PCS<br />
transition costs per entity are calculated<br />
based on overall costs. As discussed in<br />
this final rule, we have revised our<br />
August 22, 2008 proposed rule estimates<br />
for ICD–10–CM and ICD–10–PCS<br />
training, productivity loss, and systems<br />
changes based on industry comments<br />
received during the proposed rule’s<br />
comment period. We also have revised<br />
the data shown in the August 22, 2008<br />
proposed rule’s Table 9 (73 FR 49820)<br />
to account for inflation. We applied our<br />
revised costs to the number of firms and<br />
total revenue/receipts for each provider-<br />
3357<br />
supplier type depicted in Table 2 below<br />
in order to more accurately reflect the<br />
increase in the distribution of costs<br />
across industry segments.<br />
Table 2 ICD–10–CM and ICD–10–PCS<br />
costs for these provider-supplier types<br />
now reflect a cost of $1,878.68 million,<br />
versus $1,087.70 million in the<br />
August 22, 2008 proposed rule’s Table<br />
9 (73 FR 49420). We also have now<br />
correctly designated NAICS Code 6512<br />
as ‘‘Medical and Diagnostic<br />
Laboratories’’ to reflect inclusion of<br />
laboratory data in our regulatory impact<br />
analysis.<br />
TABLE 2—ESTIMATED IMPACT OF ICD–10 TRANSITION COST ON INPATIENT AND OUTPATIENT PROVIDERS AND SUPPLIERS<br />
[Adjusted for Inflation]<br />
NAICS Provider/supplier type Firms<br />
622 ................... Hospitals (General Medical and Surgical, Psychiatric<br />
and Drug and Alcohol Treatment, Other<br />
Specialty).<br />
623 ................... Nursing Facilities (Nursing care facilities, Residential<br />
mental retardation, mental health and substance<br />
abuse facilities, Residential mental retardation<br />
facilities, Residential mental health and<br />
substance abuse facilities, Community care facilities<br />
for the elderly, Continuing care retirement<br />
communities).<br />
Revenue/<br />
receipts<br />
($ millions)<br />
Percent of<br />
revenue<br />
receipts<br />
ICD–10<br />
costs<br />
($ millions)<br />
Percent<br />
ICD-10<br />
costs of<br />
revenue<br />
receipts<br />
4,409 653,033 81.45 254.14 0.03<br />
22,867 148,716 18.55 57.88 0.03<br />
Subtotal ............ ................................................................................... 27,276 801,749 100 312.02 0.03<br />
6211 ................. Office of Physicians (firms) ....................................... 189,542 330,889 61.60 1,171.92 0.03<br />
6214 ................. Outpatient Care Centers (Family Planning Centers,<br />
Outpatient Mental Health and Drug Abuse Centers,<br />
Other Outpatient Health Centers, HMO<br />
Medical Centers, Kidney Dialysis Centers, Freestanding<br />
Ambulatory Surgical and Emergency<br />
Centers, All Other Outpatient Care Centers).<br />
13,624 73,966 13.80 26.09 0.03<br />
6215 ................. Medical and Diagnostic Laboratories ....................... 7,811 37,253 6.93 13.14 0.03<br />
6216 ................. Home Health Services .............................................. 14,512 47,007 8.75 16.58 0.03<br />
6219 ................. Other Ambulatory Care Services (Ambulance and<br />
Other).<br />
5,872 24,593 4.58 8.67 0.03<br />
N/A .................... Durable Medical Equipment ...................................... 404,293 23,709 4.41 8.36 0.03<br />
Subtotal ............ ................................................................................... 635,654 537,417 100 1,244.76 0.03<br />
524114, 524292 Health Insurance <strong>Carrier</strong>s and Third Party Administrators<br />
4 .<br />
4,578 723,412 100 197.60 0.01<br />
5415 ................. Computer System Design and Related Services ..... 97,556 200,695 100 115.30 0.01<br />
Subtotal ............ ................................................................................... 102,134 924,107 .................... 312.90 0.01<br />
Total ................. ................................................................................... 765,064 2,263,273 .................... 1,878.68<br />
Table notes: Data for this table comes from the Statistics of U.S. Businesses 2005 tables for firms and establishments presented by employee<br />
size, and from the Bureau of the Census Services Annual Survey for 2006 that provides annual receipt-revenues by NAICS. Both data sets are<br />
available from http://www.census.gov/econ/www.index.html. Data on the number of Durable Medical Equipment suppliers comes from the 2007b<br />
CMS Data Compendium http://cms/hhs.gov/DataCompendium/17_2007_Data_Compendium.asp#TopOfPage.<br />
Revenue data comes from the National Health Expenditures tables, 1960–2006, http://www.cms.hhs.gov/NationalHealthExpendData/<br />
02_NationalHealthAccountsHistorical.asp#TopOfPage. All accessed on 8–12–08. Firms data come from http://www.census.gov/svsd/www/<br />
services/sas/sas_data/sas54.htm, accessed 8–12–08. Revenue and receipts for each industry sector and sub-sector come from the Census Bureau<br />
Services Annual Survey for 2006 at B29. Revenue/receipt data for NAICS codes 6211–6219, 622 and 623 come from tables 8.1–8.10. Data<br />
for codes 5415 come from tables 6.1–6.21. Revenue/receipts are used to allocate ICD–10 implementation costs. Revenue/receipts were subtotaled<br />
by ambulatory provider plus DME suppliers (NAICS 62111–6219) and inpatient providers (NAICS 622, 623) and the percent of the subtotaled<br />
revenue/receipts for the provider/supplier was computed and applied to the total ICD–10 implementation costs for each of two subtotaled<br />
groupings. ICD–10 costs for ambulatory provider do not include the cost of system changes. Some costs, however, are included with inpatient<br />
system changes since large multi-campus, integrated health care facilities are likely to include their ambulatory care facilities in the cost of upgrading<br />
their information systems.<br />
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Practices of doctors of osteopathy,<br />
podiatry, chiropractors, mental health<br />
independent practitioners with annual<br />
revenues of less than $6.5 million are<br />
considered to be small entities. We<br />
estimated that 92 percent of medical<br />
laboratories, 100 percent of dental<br />
laboratories and 90 percent of durable<br />
medical equipment suppliers are also<br />
small entities under the RFA.<br />
We also accounted for the impact of<br />
ICD–10 adoption on small insurance<br />
carriers, third party administrators and<br />
system design and related service firms.<br />
We first determined the number of<br />
entities that meet the SBA size standard.<br />
For insurance carriers and third party<br />
administrators, the SBA size standard is<br />
annual receipts of $6.5 million. For<br />
system design and related services<br />
firms, the SBA size standard is annual<br />
receipts of $23 million.<br />
The Statistics of U.S. Businesses data<br />
(http://www.census.gov/econ/<br />
www.index.html) used in the August 22,<br />
2008 proposed rule at 73 FR 49820<br />
shows 97,556 system design and related<br />
services firms (NAICS code 5415),<br />
providing software services, data<br />
processors, computer facilities<br />
management services, computer system<br />
design services, custom programming<br />
TABLE 3—IMPACT ON PAYERS AND COMPUTER DESIGN AND RELATED SERVICES<br />
NAICS Payers and system design and related services Firms<br />
Small<br />
entities<br />
Revenue/<br />
receipt<br />
($ millions)<br />
Small entity<br />
receipts<br />
(in millions<br />
$)<br />
services as well as other computer-<br />
related services. Table 3 below outlines<br />
the impact of ICD–10–CM and ICD–10–<br />
PCS on payers and computer design and<br />
related services. We have updated these<br />
data to reflect our cost revisions and<br />
include them in our calculations of our<br />
cost summary which appears in Table 6<br />
of this final rule. We believe that our<br />
analysis supports the conclusion that<br />
implementation of ICD–10–CM and<br />
ICD–10–PCS will not impose a<br />
significant economic burden on payers<br />
and computer design and related<br />
services firms.<br />
% Small<br />
entity<br />
receipts<br />
of total<br />
receipts<br />
Total ICD–<br />
10 costs<br />
(in<br />
millions $)<br />
Annual<br />
small entity<br />
share of<br />
ICD–10<br />
costs<br />
(in<br />
millions $)<br />
% Small<br />
entity implementation<br />
cost/<br />
revenuereceipts<br />
524114,<br />
524292<br />
Health Insurance <strong>Carrier</strong>s and Third Party Administrators ....... 4,578 3,449 723,412 18,309 2.53 197.60 1.2 0.01<br />
5415 Computer Systems Design and Related Services ................... 97,556 96,948 200,695 107,048 53.34 115.3 15.4 0.01<br />
Because most medical providers are<br />
either non-profit or meet the SBA’s size<br />
requirements for ‘‘small entities’’ for<br />
purpose of regulatory impact analyses,<br />
we generally consider all health care<br />
providers and suppliers to be small<br />
entities. Table 9 in the August 22, 2008<br />
proposed rule and the associated<br />
discussion (73 FR 49820) showed that<br />
the transition to ICD–10–CM and ICD–<br />
10–PCS will not have a significant<br />
impact on a substantial number of small<br />
health care entities.<br />
To come to this conclusion, as stated<br />
in the August 22, 2008 proposed rule,<br />
we estimated that small insurance<br />
carriers and third party administrators<br />
would have an ICD–10 implementation<br />
cost of $4 million, or approximately $1<br />
million per year, for the four years that<br />
they would incur implementation costs.<br />
A similar exercise for system design<br />
and related computer services firms<br />
yielded a cost of $51.5 million over 4<br />
years, or $12.9 million per year. We<br />
stated that it is possible that we could<br />
be including more firms than will<br />
actually be implementing the codes.<br />
In the August 22, 2008 proposed rule,<br />
to test our analysis, we assumed that<br />
burden would equal 3 percent of small<br />
entity revenue. This is based on HHS’<br />
May 2003 guidance on proper<br />
consideration of small entities in rule<br />
making (http://www.hhs.gov/execsec/<br />
smallbus.pdf.pdf) that states that if a<br />
rule imposes a burden equal to or<br />
greater than 3 percent of a firm’s<br />
revenues, it is significant. We assumed<br />
small business market share would<br />
remain constant at 53 percent of the<br />
overall business market for their NAIC<br />
classification, and that the $12.9 million<br />
costs described above would be equally<br />
distributed among the small entities. In<br />
describing our calculation we stated that<br />
we took 3 percent of the total cost and<br />
computed the number of small entities<br />
for which the cost of implementing the<br />
ICD–10–CM and ICD–10–PCS codes<br />
would be a significant burden. This<br />
description of the calculation was in<br />
error. What we did was to calculate the<br />
revenue amount, of which the small<br />
entity share of the ICD–10–CM and ICD–<br />
10–PCS implementation costs would<br />
equal 3 percent. That is, we divided<br />
$12.9 million by 3 percent to yield $430<br />
million. Then, dividing the number of<br />
small entities into the total small entity<br />
share of revenues yields an average<br />
revenue amount per small entity of<br />
$1.104 million. Finally, dividing the<br />
$430 million by the average revenue per<br />
small entity of $1.104 million yields the<br />
number of small entities of 389. This<br />
number represented the maximum<br />
number of small entities, if only that<br />
many participated in the ICD–10–CM<br />
and ICD–10–PCS implementation, for<br />
which the costs would be a significant<br />
burden.<br />
Based on our revised estimate of costs<br />
for ICD–10 implementation, computer<br />
systems design and related services’ cost<br />
share has been increased from $12.9<br />
million to $15.4 million, the revenue<br />
level for which the costs would equal 3<br />
percent is increased to $513 million.<br />
Again, dividing the average small entity<br />
revenue amount of $1.104 million into<br />
the $513 million yields the number of<br />
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small entities (465) for which the ICD–<br />
10–CM and ICD–10–PCS<br />
implementation would become a<br />
significant burden if only that number<br />
of entities took part.<br />
From this analysis we now estimate<br />
that if 465 or fewer small firms provide<br />
computer systems design and related<br />
services, the burden of ICD–10–CM and<br />
ICD–10–PCS implementation on them<br />
could be significant.<br />
We also developed a scenario for a<br />
typical community hospital with 100<br />
beds, 4,000 annual discharges and gross<br />
revenues of $200 million (see 73 FR<br />
49830 for the details on how we<br />
calculated this implementation cost).<br />
We assumed that the hospital would<br />
experience a productivity loss in the<br />
first 6 months after implementation<br />
(based on the AHA/AHIMA 2003 ICD–<br />
10 field study and other countries’ ICD–<br />
10 implementation experiences),<br />
totaling $1,233. We applied a similar<br />
methodology to determine outpatient<br />
productivity losses, using RAND’s<br />
estimate that it would take 1 ⁄100 of the<br />
time it takes to code an inpatient claim<br />
to code an outpatient claim because<br />
outpatient claims do not require the use<br />
of the ICD–10–PCS code set. We applied<br />
0.17 extra minutes per claim, at a labor<br />
charge of $50 an hour, and a cost per<br />
claim of $0.014. For the first month, the<br />
productivity loss for inpatient coding is<br />
$15.28, with a total 6-month<br />
productivity loss of $53. For systems<br />
changes and software upgrades, based<br />
on comments that claimed our system<br />
implementation costs were too low, we<br />
increased the costs to implement the
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required changes from $300,000 to<br />
$1,000,000. For the sake of presenting a<br />
‘‘worse case’’ scenario, we assume all<br />
implementation costs will be incurred<br />
or expensed within a 1-year period. This<br />
contrasts with our assumption as<br />
outlined in this final rule’s RIA where<br />
we expect the costs to be incurred over<br />
a 4-year period. Along with training and<br />
productivity losses, the cost for a typical<br />
community hospital to implement the<br />
ICD–10 code sets will be $1,003,986. To<br />
determine the percent of the hospital’s<br />
revenue diverted to funding its ICD–10<br />
conversion, we divided the hospital’s<br />
revenues of $200 million by the cost to<br />
convert their systems to use the ICD–10<br />
code sets to obtain a result of 0.50<br />
percent.<br />
As previously discussed in this final<br />
rule, we considered alternatives for<br />
small entities to adopting the ICD–10–<br />
CM and ICD–10–PCS code sets. These<br />
included assigning new ICD–9–CM<br />
diagnosis and procedure codes where<br />
needed using the remaining unassigned<br />
codes and ignoring the hierarchy of the<br />
ICD–9–CM code set; using CPT–4 for<br />
coding hospital inpatient procedures;<br />
and skipping ICD–10 and waiting until<br />
ICD–11 is ready for use in the United<br />
States and adopting ICD–11 at that time.<br />
We also considered phasing in the<br />
implementation of the new codes by<br />
geographic region or by large versus<br />
small entities. Another option was for<br />
small entities to maintain dual coding<br />
systems for a period of time; or to delay<br />
implementation for small entities. All of<br />
these options were reviewed and<br />
rejected for the reasons discussed in the<br />
August 22, 2008 proposed rule at 73 FR<br />
49826.<br />
2. Response to Comments on Small<br />
Entities<br />
Comment: For purposes of our<br />
analysis pursuant to the RFA, nonprofit<br />
organizations are generally considered<br />
small entities; however, individuals and<br />
states are not included in the definition<br />
of a small entity. Because most medical<br />
providers are either nonprofit or meet<br />
the SBA’s size standard for small<br />
businesses for purposes of regulatory<br />
analysis, we treat all medical providers<br />
as small entities.<br />
Many commenters representing small<br />
physician practices and healthcarerelated<br />
associations stated that the cost<br />
of implementing ICD–10-CM as early as<br />
October 2011, shortly after the NPI<br />
implementation, might bankrupt small<br />
physician practices. Some commenters<br />
disputed our cost estimates for small<br />
entities as being too low, but none<br />
offered quantitative data on the impact<br />
of ICD–10 on their small practices.<br />
Commenters generally made vague<br />
references to anticipated costs due to<br />
delayed reimbursements, lost<br />
productivity and costs of training, and<br />
outlays for software and hardware, and<br />
asked that the compliance date be<br />
pushed back. Some commenters stated<br />
that they will have difficulty integrating<br />
ICD–10 codes into their systems and<br />
business functions.<br />
One commenter stated that the<br />
number of ICD–10 codes makes printing<br />
the code set in book form prohibitive,<br />
and that because of this, small providers<br />
will be forced to purchase electronic<br />
systems and software. Some<br />
commenters from small practices stated<br />
that they do not have electronic systems<br />
to support ICD–10, and cannot afford to<br />
hire additional staff or re-train existing<br />
staff in ICD–10 coding. A few small<br />
practices stated that they will need<br />
additional time in which to become<br />
compliant with the new code sets, while<br />
others disagreed, and stated that<br />
allowing small practices to continue to<br />
use ICD–9 while other industry<br />
segments use ICD–10 code sets would<br />
cause serious claims processing and<br />
reimbursement problems.<br />
Response: As detailed in the August<br />
22, 2008 proposed rule (73 FR 49808),<br />
the Regulatory Flexibility Act (RFA)<br />
requires agencies to analyze options for<br />
the regulatory relief of small entities. As<br />
previously explained, our analysis<br />
presumed that all medical providers<br />
were small entities. While we did not<br />
estimate that the cost of ICD–10<br />
implementation per small physician<br />
practice would be substantial, we did<br />
acknowledge that, given the large<br />
number of affected entities, the<br />
aggregate total cost to the industry as a<br />
whole could be substantial.<br />
Of those commenters identifying<br />
themselves as small practices, all but<br />
one did not dispute the need to move<br />
to ICD–10, but stated the timing of our<br />
proposed October 2011 compliance date<br />
was problematic because small practices<br />
do not have the financial and/or other<br />
resources (staff, technology, etc.) to<br />
quickly make the move from ICD–9–CM<br />
to ICD–10–CM. As the compliance date<br />
has been moved to October 2013, we<br />
anticipate that this will afford small<br />
practices the time they need to spread<br />
any costs associated with the<br />
implementation of ICD–10 in their<br />
practices over a longer period of time.<br />
As discussed previously in this final<br />
rule, there are multiple ways for small<br />
entities to integrate the ICD–10 code sets<br />
into their business settings, either<br />
populating the new codes throughout<br />
their entire system all at once, or<br />
integrating the codes on a flow basis as<br />
they are used.<br />
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3359<br />
Additionally, any small practices may<br />
continue to submit paper claims, using<br />
preprinted forms that include all of the<br />
appropriate codes required for use in<br />
such practices. In most instances,<br />
practitioners in small practices may<br />
assign the diagnosis themselves and<br />
may include the ICD–10 code on the<br />
paper billing form. The use of the ICD–<br />
10 code sets is not predicated on the use<br />
of electronic hardware and software.<br />
The ICD–10 code set has already been<br />
produced in a book version of ICD–10–<br />
CM that measures only 2 inches in<br />
depth; the book version of ICD–10–PCS<br />
measures 1 inch in depth. Vendors have<br />
indicated that they are in the process of<br />
developing both paper-based and<br />
software products for purchase once<br />
ICD–10 is implemented. For those small<br />
practices that have already migrated to<br />
electronic systems and wish to purchase<br />
software, a CD of the ICD–10 code set<br />
will be made available through the U.S.<br />
Government Printing Office (GPO). The<br />
ICD–9–CM CD, also sold through the<br />
GPO, has been priced at less than $30<br />
for many years, and we expect an ICD–<br />
10–CM CD, when available, to be<br />
comparably priced. We do not believe<br />
this purchase price to be burdensome to<br />
small providers.<br />
Also, as previously noted in this final<br />
rule, the ICD–10–PCS code set is<br />
available at no charge on the CMS Web<br />
site at http://www.cms.hhs.gov/ICD10/<br />
02_ICD-10-PCS.asp#TopOfPage. The<br />
ICD–10–CM code set is also available<br />
free of charge on the NCHS Web site at<br />
http://www.cdc.gov/nchs/about/<br />
otheract/icd9/icd10cm.htm. Both of<br />
these Web sites also feature the<br />
previously referenced tools such as<br />
crosswalks and guidelines for<br />
downloading at no charge.<br />
As previously discussed in this<br />
impact analysis, we believe that there<br />
will be a plethora of training<br />
opportunities through the Internet, in-<br />
services, hospital-based training,<br />
association educational programs,<br />
medical and medical specialty<br />
associations, etc., and that the<br />
marketplace will make the appropriate<br />
ICD–10 training available to small<br />
providers in the most efficient manner<br />
possible, recognizing that solo<br />
practitioners and their staffs cannot<br />
afford extensive amounts of time away<br />
from their offices to partake in training.<br />
Finally, as previously discussed in<br />
this final rule, we agree with<br />
commenters who stated a phased-in<br />
approach to ICD–10 implementation to<br />
allow more time for small entities to<br />
transition to ICD–10 is not feasible<br />
because the use of dual coding systems<br />
would result in burdensome costs to<br />
industry, confusion as to which code set
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3360 Federal Register / Vol. 74, No. 11 / Friday, January 16, <strong>2009</strong> / Rules and Regulations<br />
was being used in claims submission,<br />
and which payers are capable of<br />
accepting the new codes. The result<br />
would be massive claims processing<br />
delays and lagging reimbursements to<br />
providers.<br />
Training:<br />
Productivity<br />
Losses:<br />
Systems<br />
Changes:<br />
3. Conclusion<br />
We did not receive any data or<br />
information to substantiate arguments<br />
that our impact analysis of the potential<br />
effects of ICD–10 implementation on<br />
small entities was flawed. We, therefore,<br />
maintain our small entity ICD–10<br />
TABLE 4—SUMMARY OF ESTIMATED COSTS IN $ MILLIONS ANNUALIZED 3%, 7%<br />
impact assumptions based on the<br />
Regulatory Flexibility Analysis section<br />
of the proposed rule at 73 FR 49827.<br />
Based on the foregoing analysis, the<br />
Secretary certifies that this final rule<br />
will not have a significant economic<br />
impact on a substantial number of small<br />
entities.<br />
Low High Primary<br />
3.00% 7.00% 3.00% 7.00% 3.00% 7.00%<br />
Inpatient Coders ............................. $8.88 $11.64 $35.53 $46.57 $17.76 $23.28<br />
Outpatient Coders ........................... 5.01 6.57 20.05 26.28 10.03 13.14<br />
Code Users ..................................... 2.26 2.96 4.61 6.04 3.45 4.52<br />
Physicians ....................................... 43.69 57.27 235.07 308.11 87.38 114.53<br />
Inpatient .......................................... 0.00 0.00 4.61 6.04 0.82 1.07<br />
Outpatient ....................................... 0.00 0.00 4.61 6.04 0.79 1.03<br />
Physician Practices ......................... 0.46 0.60 2.26 2.96 1.01 1.33<br />
Improper and returned claims ........ 22.95 30.08 92.14 120.77 45.53 59.67<br />
Providers ......................................... 4.61 6.04 18.43 24.15 12.62 16.54<br />
Software Vendors ........................... 4.83 6.33 19.31 25.32 9.66 12.66<br />
Payers ............................................. 8.28 10.85 33.11 43.40 16.56 21.70<br />
Government Systems ..................... 21.44 28.11 85.77 112.42 42.89 56.21<br />
TABLE 5—SUMMARY OF ESTIMATED BENEFITS IN $ MILLIONS ANNUALIZED 3%, 7%<br />
Low estimate High estimate Primary estimate<br />
3% 7% 3% 7% 3% 7%<br />
More accurate payments for new procedures ................. $49.77 $65.24 $199.09 $260.95 $99.54 $130.47<br />
Fewer rejected claims ...................................................... 48.88 64.07 195.51 256.26 97.76 128.13<br />
Fewer improper claims .................................................... 24.44 32.03 97.75 128.12 48.87 64.06<br />
Better understanding of new procedures ........................ 41.32 54.15 165.26 216.61 82.63 108.31<br />
Improved disease management ...................................... 25.73 33.73 102.93 134.91 51.46 67.45<br />
BILLING CODE 4120–01–P<br />
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Federal Register / Vol. 74, No. 11 / Friday, January 16, <strong>2009</strong> / Rules and Regulations<br />
TABLE 7—ANNUAL ESTIMATED BENEFITS OVER 15 YEARS FOR ICD–10 (IN $ MILLIONS) DISCOUNTED 3%, 7%<br />
Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025<br />
Present<br />
value<br />
(3%)<br />
3361<br />
More-accurate payment for new procedures ...... 0 0 0 0 21.88 58.41 72.89 85.12 97.46 109.93 122.55 135.34 148.32 161.51 174.94 $854.27 $564.25<br />
Fewer rejected claims ......................................... 0 0 0 0 30.42 60.89 97.51 121.59 122.08 122.17 122.27 122.37 122.47 122.57 122.66 854.29 577.50<br />
Fewer improper claims ........................................ 0 0 0 0 15.22 30.44 48.75 60.79 61.03 61.08 61.13 61.18 61.23 61.28 61.33 427.12 288.73<br />
Better understanding of new procedures ............ 0 0 0 0 29.18 77.88 97.19 97.5 97.58 97.66 97.74 97.81 97.89 97.97 98.05 727.42 496.71<br />
Improved disease management .......................... 0 0 0 0 9.92 19.86 52.99 66.08 66.34 66.4 66.45 66.5 66.56 66.61 66.66 447.49 300.31<br />
Total Benefits (in millions) ............................ $0.00 $0.00 $0.00 $0.00 $106.62 $247.48 $369.33 $431.08 $444.49 $457.24 $470.14 $483.20 $496.47 $509.94 $523.64 $3,310.58 $2,227.51<br />
TABLE 8—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM FY 2011 TO FY 2025<br />
Category<br />
[in millions]<br />
Primary estimate<br />
(millions)<br />
Low<br />
estimate<br />
(millions)<br />
High<br />
estimate<br />
(millions)<br />
BENEFITS:<br />
Annualized monetized benefits:<br />
7% Discount ........................................................... $244.6 .................................................................... $90.0 $269.4 RIA<br />
3% Discount ........................................................... $277.3 .................................................................... $102.2 $305.4 RIA<br />
Qualitative (unquantified) benefits ......................... Improved biosurveillance and global disease .................... .................... RIA<br />
management.<br />
COSTS:<br />
Annualized monetized costs:<br />
7% Discount ........................................................... $253.4 .................................................................... $59.7 $278.8 RIA<br />
3% Discount ........................................................... $222.5 .................................................................... $51.9 $24.8 RIA<br />
Qualitative (unquantified) costs ............................. None ...................................................................... None None<br />
Transfers:<br />
Annualized monetized transfers: ‘‘on budget’’ ....... N/A ......................................................................... N/A N/A<br />
From whom to whom? ........................................... N/A ......................................................................... N/A N/A<br />
Annualized monetized transfers: ‘‘off-budget’’ ....... N/A ......................................................................... N/A N/A<br />
From whom to whom? ........................................... N/A ......................................................................... N/A N/A<br />
List of Subjects in 45 CFR Part 162<br />
Administrative practice and<br />
procedures, Electronic transactions,<br />
Health facilities, Health Insurance,<br />
Hospitals, Incorporation by reference,<br />
Medicaid, Medicare, Reporting and<br />
recordkeeping requirements.<br />
Present<br />
value<br />
(7%)<br />
Source<br />
citation<br />
(RIA,<br />
preamble,<br />
etc.)<br />
■ For the reasons set forth in this<br />
preamble, the Department of Health and<br />
Human Services amends 45 CFR part<br />
162 as follows:<br />
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3362 Federal Register / Vol. 74, No. 11 / Friday, January 16, <strong>2009</strong> / Rules and Regulations<br />
PART 162—ADMINISTRATIVE<br />
REQUIREMENTS<br />
■ 1. The authority citation for part 162<br />
is amended to read as follows:<br />
Authority: Secs. 1171 through 1180 of the<br />
Social Security Act (42 U.S.C. 1320d–1320d–<br />
9), as added by sec. 262 of Pub. L. 104–191,<br />
110 Stat. 2021–2031, and sec. 105 of Pub. L.<br />
110–233, 122 Stat. 881–922, and sec. 264 of<br />
Pub. L. 104–191, 110 Stat. 2033–2034 (42<br />
U.S.C. 1320d–2(note)).<br />
■ 2. Section 162.1002 is amended by<br />
revising paragraph (b) introductory text<br />
and adding paragraph (c) to read as<br />
follows.<br />
§ 162.1002 Medical data code sets.<br />
* * * * *<br />
(b) For the period on and after<br />
October 16, 2003 through September 30,<br />
2013:<br />
* * * * *<br />
(c) For the period on and after October<br />
1, 2013:<br />
(1) The code sets specified in<br />
paragraphs (a)(4), (a)(5), (b)(2), and (b)(3)<br />
of this section.<br />
(2) International Classification of<br />
Diseases, 10th Revision, Clinical<br />
Modification (ICD–10–CM) (including<br />
The Official ICD–10–CM Guidelines for<br />
Coding and Reporting), as maintained<br />
and distributed by HHS, for the<br />
following conditions:<br />
(i) Diseases.<br />
(ii) Injuries.<br />
(iii) Impairments.<br />
(iv) Other health problems and their<br />
manifestations.<br />
(v) Causes of injury, disease,<br />
impairment, or other health problems.<br />
(3) International Classification of<br />
Diseases, 10th Revision, Procedure<br />
Coding System (ICD–10–PCS)<br />
(including The Official ICD–10–PCS<br />
Guidelines for Coding and Reporting),<br />
as maintained and distributed by HHS,<br />
for the following procedures or other<br />
actions taken for diseases, injuries, and<br />
impairments on hospital inpatients<br />
reported by hospitals:<br />
(i) Prevention.<br />
(ii) Diagnosis.<br />
(iii) Treatment.<br />
(iv) Management.<br />
(Catalog of Federal Domestic Assistance<br />
Program No. 93.778, Medical Assistance<br />
Program) (Catalog of Federal Domestic<br />
Assistance Program No. 93.773, Medicare—<br />
Hospital Insurance; and Program No. 93.774,<br />
Medicare—Supplementary Medical<br />
Insurance Program)<br />
Dated: December 11, 2008.<br />
Michael O. Leavitt,<br />
Secretary.<br />
[FR Doc. E9–743 Filed 1–15–09; 8:45 am]<br />
BILLING CODE 4120–01–P<br />
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3296 Federal Register / Vol. 74, No. 11 / Friday, January 16, <strong>2009</strong> / Rules and Regulations<br />
DEPARTMENT OF HEALTH AND<br />
HUMAN SERVICES<br />
Office of the Secretary<br />
45 CFR Part 162<br />
[CMS–0009–F]<br />
RIN 0938–AM50<br />
Health Insurance Reform;<br />
Modifications to the Health Insurance<br />
Portability and Accountability Act<br />
(HIPAA) Electronic Transaction<br />
Standards<br />
AGENCY: Office of the Secretary, HHS.<br />
ACTION: Final rule.<br />
SUMMARY: This final rule adopts updated<br />
versions of the standards for electronic<br />
transactions originally adopted under<br />
the Administrative Simplification<br />
subtitle of the Health Insurance<br />
Portability and Accountability Act of<br />
1996 (HIPAA). This final rule also<br />
adopts a transaction standard for<br />
Medicaid pharmacy subrogation. In<br />
addition, this final rule adopts two<br />
standards for billing retail pharmacy<br />
supplies and professional services, and<br />
clarifies who the ‘‘senders’’ and<br />
‘‘receivers’’ are in the descriptions of<br />
certain transactions.<br />
DATES: Effective Dates: These<br />
regulations are effective March 17, <strong>2009</strong><br />
except for the provisions of 45 CFR part<br />
162 Subpart S, which are effective<br />
January 1, 2010. The incorporation by<br />
reference of certain publications listed<br />
in the regulations is approved by the<br />
Director of the Federal Register as of<br />
March 17, <strong>2009</strong>.<br />
Compliance Dates: Compliance with<br />
the provisions of §§ 162.1102(c),<br />
162.1202(c), 162.1302(c), 162.1402(c),<br />
162.1502(c), 162.1602(c), 162.1702(c),<br />
and 162.1802(c) is required on January<br />
1, 2012. Compliance with the provisions<br />
of § 162.1902 is required on January 1,<br />
2013.<br />
FOR FURTHER INFORMATION CONTACT:<br />
Lorraine Tunis Doo, (410) 786–6597.<br />
I. Background<br />
HIPAA mandated the adoption of<br />
standards for electronically conducting<br />
certain health care administrative<br />
transactions between certain entities.<br />
Through subtitle F of title II of HIPAA,<br />
the Congress added to title XI of the<br />
Social Security Act (the Act) a new Part<br />
C, entitled ‘‘Administrative<br />
Simplification.’’ Part C of title XI of the<br />
Act now consists of sections 1171<br />
through 1180. These sections define<br />
various terms and impose several<br />
requirements on HHS, health plans,<br />
health care clearinghouses, and certain<br />
health care providers concerning the<br />
electronic transmission of health<br />
information. On August 17, 2000, we<br />
published a final rule entitled, ‘‘Health<br />
Insurance Reform: Standards for<br />
Electronic Transactions’’ in the Federal<br />
Register (65 FR 50312) (hereinafter<br />
referred to as the Transactions and Code<br />
Sets rule). That rule implemented some<br />
of the HIPAA Administrative<br />
Simplification requirements by adopting<br />
standards for eight electronic<br />
transactions and for code sets to be used<br />
in those transactions. Those transactions<br />
were: Health care claims or equivalent<br />
encounter information; health care<br />
payment and remittance advice;<br />
coordination of benefits; eligibility for a<br />
health plan; health care claim status;<br />
enrollment and disenrollment in a<br />
health plan; referral certification and<br />
authorization; and health plan premium<br />
payments. We defined these<br />
transactions and specified the adopted<br />
standards at 45 CFR part 162, subparts<br />
I and K through R.<br />
Since the time of compliance with the<br />
first set of HIPAA standards, a number<br />
of technical issues with the standards,<br />
including issues resulting from new<br />
business needs, have been identified.<br />
Industry stakeholders submitted<br />
hundreds of change requests to the<br />
standards maintenance organizations,<br />
with recommendations for<br />
improvements to the standards. These<br />
requests were considered, and many<br />
were accepted, resulting in the<br />
development and approval of newer<br />
TABLE 1—HIPAA STANDARD AND TRANSACTIONS<br />
Standard Transaction<br />
versions of the standards for electronic<br />
transactions. However, covered entities<br />
are not permitted to use those newer<br />
versions until the Secretary of Health<br />
and Human Services (HHS) adopts them<br />
by regulation for HIPAA transactions.<br />
In addition to technical issues and<br />
business developments necessitating<br />
consideration of the new versions of the<br />
standards, there remain a number of<br />
unresolved policy issues that were<br />
identified by the industry early in the<br />
implementation period for the first set<br />
of standards, and those issues were<br />
never addressed through regulation.<br />
This final rule addresses those<br />
outstanding issues.<br />
We refer readers to review the<br />
following regulations for a more<br />
detailed discussion of the changes to the<br />
standards for electronic transactions; the<br />
Transactions and Code Sets rule; the<br />
Modifications to Electronic Data<br />
Transaction Standards and Code Sets<br />
rule (68 FR 8381), published in the<br />
Federal Register on February 20, 2003<br />
(hereinafter the Modifications rule);<br />
Standards for Privacy of Individually<br />
Identifiable Health Information (65 FR<br />
82462), published in the Federal<br />
Register on December 28, 2000;<br />
Standards for Privacy of Individually<br />
Identifiable Health Information; Final<br />
Rule (67 FR 53182) published in the<br />
Federal Register on August 14, 2002;<br />
and the Modifications to the Health<br />
Insurance Portability and<br />
Accountability Act (HIPAA) Electronic<br />
Transaction Standards proposed rule<br />
(73 FR 49796), published in the Federal<br />
Register on August 22, 2008 (hereinafter<br />
the August 22, 2008 proposed rule) for<br />
further information about electronic<br />
data interchange, the statutory<br />
background and the regulatory history.<br />
In the August 22, 2008 proposed rule,<br />
we included a table that shows the full<br />
set of HIPAA transaction standards<br />
adopted in the Transactions and Code<br />
Sets rule, as we proposed to modify<br />
them in the August 22, 2008 proposed<br />
rule (73 FR 49744), and adopt in this<br />
final rule. The list is reproduced here in<br />
Table 1:<br />
ASC X12 837 D ............................... Health care claims—Dental.<br />
ASC X12 837 P ............................... Health care claims—Professional.<br />
ASC X12 837 I ................................. Health care claims—Institutional.<br />
NCPDP D.0 ...................................... Health care claims—Retail pharmacy drug.<br />
ASC X12 837 P and NCPDP D.0 .... Health care claims—Retail pharmacy supplies and professional services.<br />
NCPDP D.0 ...................................... Coordination of Benefits—Retail pharmacy drug.<br />
ASC X12 837 D ............................... Coordination of Benefits—Dental.<br />
ASC X12 837 P ............................... Coordination of Benefits—Professional.<br />
ASC X12 837 I ................................. Coordination of Benefits—Institutional.<br />
ASC X12 270/271 ............................ Eligibility for a health plan (request and response)—dental, professional and institutional.<br />
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TABLE 1—HIPAA STANDARD AND TRANSACTIONS—Continued<br />
Standard Transaction<br />
NCPDP D.0 ...................................... Eligibility for a health plan (request and response)—Retail pharmacy drugs.<br />
ASC X12 276/277 ............................ Health care claim status (request and response).<br />
ASC X12 834 ................................... Enrollment and disenrollment in a health plan.<br />
ASC X12 835 ................................... Health care payment and remittance advice.<br />
ASC X12 820 ................................... Health plan premium payment.<br />
ASC X12 278 ................................... Referral certification and authorization (request and response).<br />
NCPDP D.0 ...................................... Referral certification and authorization (request and response)—Retail pharmacy drugs.<br />
NCPDP 5.1 and NCPDP D.0 ........... Retail pharmacy drug claims (telecommunication and batch standards).<br />
NCPDP 3.0 ...................................... Medicaid pharmacy subrogation (batch standard).<br />
II. Provisions of the Proposed<br />
Regulations and Responses to<br />
Comments<br />
On August 22, 2008 we proposed to<br />
adopt updated standards for the eight<br />
adopted electronic transactions<br />
standards. We proposed to revise<br />
§ 162.1102, § 162.1202, § 162.1302,<br />
§ 162.1402, § 162.1502, § 162.1602,<br />
§ 162.1702, and § 162.1802 to adopt the<br />
ASC X12 Technical Reports Type 3<br />
(TR3), Version 005010 (hereinafter<br />
referred to as Version 5010) as a<br />
modification of the current X12 Version<br />
4010 standards (hereinafter referred to<br />
as Version 4010/4010A) for the HIPAA<br />
transactions. In some cases, the<br />
Technical Reports Type 3 have been<br />
modified by Type 1 Errata, and these<br />
Errata were also included in our<br />
proposal. The full discussion of our<br />
proposal to revise each of the abovereferenced<br />
provisions can be found in<br />
the August 22, 2008 proposed rule (73<br />
FR 49745–49750).<br />
We proposed to revise § 162.1102,<br />
§ 162.1202, § 162.1302, and § 162.1802<br />
by adding new paragraphs (c)(1) to each<br />
of those sections to adopt the NCPDP<br />
Telecommunication Standard<br />
Implementation Guide, Version D,<br />
Release 0 (Version D.0) and equivalent<br />
NCPDP Batch Standard Implementation<br />
Guide, Version 1, Release 2 (Version<br />
1.2) (hereinafter collectively referred to<br />
as Version D.0) in place of the NCPDP<br />
Telecommunication Standard<br />
Implementation Guide, Version 5,<br />
Release 1 and equivalent NCPDP Batch<br />
Standard Implementation Guide,<br />
Version 1, Release 1 (hereinafter<br />
collectively referred to as Version 5.1),<br />
for the following retail pharmacy drug<br />
transactions: Health care claims or<br />
equivalent encounter information;<br />
eligibility for a health plan; referral<br />
certification and authorization; and<br />
coordination of benefits. The full<br />
discussion of our proposal to revise<br />
each of the above-referenced provisions<br />
can be found in the August 22, 2008<br />
proposed rule (73 FR 49751).<br />
We proposed to add a new subpart S<br />
to 45 CFR part 162 to adopt a standard<br />
for the subrogation of pharmacy claims<br />
paid by Medicaid. The transaction is the<br />
Medicaid pharmacy subrogation<br />
transaction, defined at proposed<br />
§ 162.1901, and the new standard is the<br />
NCPDP Batch Standard Medicaid<br />
Subrogation Implementation Guide,<br />
Version 3, Release 0 (Version 3.0), July<br />
2007 (hereinafter referred to as Version<br />
3.0) at proposed § 162.1902. The<br />
standard would be applicable to<br />
Medicaid agencies in their role as health<br />
plans, as well as to other health plans<br />
that are covered entities under HIPAA,<br />
but not to providers because this<br />
transaction is not utilized by them. For<br />
a complete discussion of the Medicaid<br />
pharmacy subrogation transaction and<br />
the proposed adoption of Version 3.0,<br />
see the August 22, 2008 proposed rule<br />
(73 FR 49751–49752).<br />
We proposed to revise § 162.1102 to<br />
adopt both Version D.0 and the 837<br />
Health Care Claim: Professional ASC<br />
X12 Technical Report Type 3 for billing<br />
retail pharmacy supplies and<br />
professional services. We proposed that<br />
the use of either standard would be<br />
determined by trading partner<br />
agreements. The full discussion of the<br />
proposed change can be found in the<br />
August 22, 2008 proposed rule (73 FR<br />
49752–49754).<br />
We proposed to revise the<br />
descriptions of the transactions at<br />
§ 162.1301, § 162.1401, and § 162.1501<br />
to more clearly specify the senders and<br />
receivers of those transactions. See the<br />
August 22, 2008 proposed rule for a full<br />
discussion of this proposal (73 FR<br />
49754). For Versions 5010 and D.0, we<br />
proposed a compliance date of April 1,<br />
2010 for all covered entities. For<br />
Version 3.0, we proposed a compliance<br />
date 24 months after the effective date<br />
of the final rule, except for small health<br />
plans, which would have to be in<br />
compliance 36 months after the effective<br />
date of the final rule. Finally, we<br />
proposed to revise § 162.923 to resolve<br />
the problem of different compliance<br />
dates for different entities, such that the<br />
requirement for covered entities to use<br />
the standards applies only when the<br />
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3297<br />
covered entity conducts transactions<br />
with another entity that is also required<br />
to comply with the transaction<br />
standards.<br />
In response to the August 22, 2008<br />
proposed rule, we received 192 timely<br />
public comments from all segments of<br />
the health care industry, including<br />
providers, physician practices,<br />
hospitals, pharmacies, other health care<br />
professionals, health plans,<br />
clearinghouses, vendors, standards<br />
development organizations, professional<br />
associations, consultants, and State and<br />
Federal government agencies. We<br />
reviewed each submission, and grouped<br />
similar or related comments together to<br />
address in this final rule, which also<br />
enabled us to identify the areas of the<br />
proposed rule that required review in<br />
terms of policy, consistency or clarity.<br />
In the following sections, we present<br />
comments and responses generally in<br />
the order in which the topics were<br />
presented in the August 22, 2008<br />
proposed rule. There were a number of<br />
comments on topics that were not<br />
addressed in the proposed rule, and our<br />
responses to those comments are<br />
provided at the end of this section.<br />
Some comments we considered out of<br />
scope of the August 22, 2008 proposed<br />
rule, and we list several of them at the<br />
end of this section as well.<br />
A. Adoption of X12 Version 5010<br />
Technical Reports Type 3 for HIPAA<br />
Transactions<br />
In the August 22, 2008 proposed rule,<br />
we proposed to revise § 162.1102,<br />
§ 162.1202, § 162.1302, § 162.1402,<br />
§ 162.1502, § 162.1602, § 162.1702, and<br />
§ 162.1802 to adopt Version 5010. In<br />
some cases, the version was modified by<br />
Type 1 Errata, and these Errata were<br />
also proposed for adoption. In general,<br />
deficiencies inherent in the current<br />
standards continue to cause industrywide<br />
difficulties to such a degree that<br />
much of the industry rely on<br />
‘‘companion guides’’ and proprietary<br />
‘‘work-arounds.’’ The four types of<br />
changes in Version 5010 are structural,<br />
front matter, technical improvements
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and data content changes. The complete<br />
discussion of this proposal can be found<br />
in the August 22, 2008 proposed rule<br />
(73 FR 49745–49749).<br />
Comment: Commenters<br />
overwhelmingly supported our proposal<br />
to adopt Version 5010 because of the<br />
technical and business improvements<br />
made to the standards. With respect to<br />
the specific changes made to Version<br />
5010, commenters expressed their<br />
appreciation for the tightened, clear<br />
situational rules which will reduce<br />
analysis time for everyone, and<br />
minimize the need for companion<br />
guides. Commenters said that the<br />
improved eligibility responses and<br />
better search options will improve<br />
efficiency for providers and reduce<br />
phone calls for both providers and<br />
health plans. Commenters also said that<br />
the detailed clarifications of commonly<br />
misunderstood areas such as corrections<br />
and reversals, refund processing, and<br />
recoupments should result in a<br />
consistent implementation of the X12<br />
835 (remittance advice), which is not<br />
the case today. They noted that<br />
incorrect implementations of the X12<br />
835 have prevented providers from<br />
implementing electronic posting, or<br />
automating the data entry of<br />
reimbursement information, as widely<br />
as they might otherwise. Correct<br />
implementation of the X12 835 will<br />
reduce phone calls to health plans,<br />
reduce appeals due to incomplete<br />
information, eliminate unnecessary<br />
customer support, and reduce the cost<br />
of sending and processing paper<br />
remittance advices. Commenters also<br />
noted that the greatly improved X12 278<br />
for referrals and authorizations could<br />
encourage wider implementation and<br />
save labor costs. Commenters noted that<br />
the new claims transaction standard<br />
contained in Version 5010 significantly<br />
improves the reporting of clinical data,<br />
enabling the reporting of ICD–10–CM<br />
diagnosis codes and ICD–10–PCS<br />
procedure codes, and distinguishes<br />
between principal diagnosis, admitting<br />
diagnosis, external cause of injury and<br />
patient reason for visit codes.<br />
Commenters noted that these<br />
distinctions will improve the<br />
understanding of clinical data and<br />
enable better monitoring of mortality<br />
rates for certain illnesses, outcomes for<br />
specific treatment options, and hospital<br />
length of stay for certain conditions, as<br />
well as the clinical reasons for why the<br />
patient sought hospital care.<br />
Commenters also noted that another<br />
improvement in the updated claims<br />
standard is the ability to handle<br />
identification of the ‘‘Present on<br />
Admission’’ (POA) indicator to the<br />
diagnoses.<br />
Response: We appreciate the<br />
overwhelming support of commenters<br />
for the adoption of Version 5010.<br />
Comment: We received a few<br />
comments urging X12 to publish an all-<br />
inclusive list of changes made to the<br />
standards. Commenters said that a<br />
change log is issued after each year’s<br />
changes are approved. Since Version<br />
5010 incorporates multiple years of<br />
changes, users would be required to<br />
consolidate multiple change logs. A<br />
cumulative change log that includes<br />
changes from each interim year should<br />
be provided so that all of the changes<br />
are contained in one document.<br />
Response: We agree that it would be<br />
helpful to have a comprehensive list of<br />
the changes made to a current version<br />
of the standards, and that it would make<br />
it easier for covered entities to identify<br />
all of the changes that have occurred<br />
since the last version of the standard<br />
was adopted. We have made this<br />
recommendation to the X12 work group<br />
as well as the Designated Standards<br />
Maintenance Organizations (DSMO).<br />
Many commenters submitted<br />
technical comments relating to Version<br />
5010. The comments included highly<br />
technical issues and suggested<br />
structural changes to the standards,<br />
definitional issues requiring<br />
clarification, and interpretational issues<br />
regarding routine usage of the standards.<br />
In total, there were over 470 technical<br />
comments. We provided all of the<br />
technical comments to X12, which had<br />
convened a committee of subject matter<br />
experts to review the technical<br />
comments and provide us with<br />
technical input. The workgroup<br />
reviewed each comment and categorized<br />
them into several groups as follows: (1)<br />
The committee agrees with the comment<br />
and the change will be made in the next<br />
version of the TR3s (212 comments); (2)<br />
the committee does not agree with the<br />
comment and believes that a change is<br />
not appropriate (156 comments); (3) the<br />
functionality already exists elsewhere in<br />
the TR3s; commenter requires<br />
explanation and references (5<br />
comments); and (4) the comment is a<br />
request for interpretation and/or<br />
training, and not a request for a change<br />
in the TR3s (43 comments). There were<br />
29 comments that were not requests for<br />
action, but rather statements of opinion<br />
about Version 5010. Of the 212<br />
comments falling into the first category,<br />
most were clarifications that would<br />
improve usability of the TR3s, but<br />
would not adversely affect business<br />
processes. Therefore, we will not<br />
request that X12 accommodate these<br />
changes in Version 5010, but rather<br />
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would address them in the course of<br />
developing later versions of the<br />
standards.<br />
After publication of the final rule, all<br />
of the technical comments reviewed by<br />
the X12 workgroup, with the<br />
dispositions, will be posted on the CMS<br />
Web site at http://www.cms.hhs.gov, in<br />
the Regulations and Guidance section,<br />
as well as on the X12 portal at http://<br />
www.x12.org. Where education and/or<br />
additional communication are needed<br />
about the functionality of the<br />
transactions, X12 will provide that in<br />
future programs, in collaboration with<br />
appropriate industry groups. These<br />
Standards Development Organizations<br />
(SDO)-sponsored efforts will specifically<br />
address the third category of comments<br />
in which the committee stated that the<br />
functionality exists elsewhere in the<br />
TR3s, or the fourth category of<br />
comments where the commenter<br />
specifically requested additional<br />
interpretation guidance.<br />
During the comment review process,<br />
X12 provided input to HHS, and we<br />
selected several comments to include in<br />
this final rule as examples of the types<br />
of technical issues that were submitted<br />
during the public comment period. In<br />
general, suggested corrections,<br />
clarifications, and definitional changes<br />
to Version 5010 transaction standards<br />
will be reserved for future versions of<br />
the standards. Any suggested changes to<br />
the structure of the standard will need<br />
to be evaluated through the standards<br />
development process and considered for<br />
future versions of the standard. All<br />
comments submitted during the<br />
comment period for the August 22, 2008<br />
proposed rule will automatically be<br />
included in the X12 process for<br />
considering change requests. Submitters<br />
will not need to re-submit those<br />
comments.<br />
Comment: We received a few<br />
comments requesting clarification of a<br />
statement in the August 22, 2008<br />
proposed rule regarding the field size<br />
issue in Version 4010/4010A to<br />
accommodate ICD–10. In the August 22,<br />
2008 proposed rule, we said that<br />
Version 4010/4010A does not provide a<br />
means for identifying ICD–10 procedure<br />
or diagnosis codes on an institutional<br />
claim, and that Version 5010 anticipates<br />
the eventual use of ICD–10 procedure<br />
and diagnosis codes by adding a<br />
qualifier as well as the space needed to<br />
report the number of characters that<br />
would permit reporting of ICD–10<br />
procedure and diagnosis codes on<br />
institutional health care claims.<br />
Commenters pointed out that the more<br />
accurate explanation for why Version<br />
4010/4010A cannot accommodate ICD–<br />
10 is because of the lack of a qualifier
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or indicator for the code set name rather<br />
than the size of the field for the codes.<br />
Response: We note the correction.<br />
Comment: One commenter<br />
recommended a correction to Version<br />
5010, specific to the claims transactions,<br />
to enable it to support the creation of a<br />
proposed National Joint Replacement<br />
Registry.<br />
Response: Because of the technical<br />
nature of this comment, we consulted<br />
with the X12 work group to better<br />
understand the context of the comment<br />
and the stated concern. Based on our<br />
current understanding of the comment,<br />
we agreed with the X12 workgroup on<br />
this recommendation for the next<br />
version of its TR3s, once the registry is<br />
finalized. This means that Version 5010<br />
will not have changes made to it for this<br />
purpose at this time, but that the next<br />
version of the standards will likely have<br />
addressed and resolved this issue.<br />
Comment: We received several<br />
comments regarding the external code<br />
sets used in the standards, such as<br />
claims adjustment reason codes. Several<br />
commenters wrote about the X12 835<br />
remittance advice code mapping<br />
requirements, stating that providers<br />
continue to struggle with<br />
implementation of the X12 835 as many<br />
health plans struggle to provide quality<br />
mapping from proprietary to standard<br />
codes in the health care payment and<br />
remittance advice transaction.<br />
Commenters requested that guidelines<br />
for mapping be provided.<br />
Response: During our consideration of<br />
these comments, which we believe<br />
apply to the technical standards<br />
maintenance process, and which we feel<br />
are outside of the scope of this rule, we<br />
consulted with the WEDI 835 special<br />
work group (SWG) to confirm that the<br />
stated concerns were being addressed in<br />
its standards revision process. The<br />
WEDI 835 SWG indicated that it is<br />
developing a recommended set of<br />
mapping instructions and information<br />
for the industry. In addition, the WEDI<br />
835 SWG has adopted recommendations<br />
that will assist in facilitating a more<br />
standard implementation of the X12<br />
835.<br />
Comment: We received a comment<br />
from a large specialty association<br />
representing anesthesiology. This group<br />
responded to a discussion in the August<br />
22, 2008 proposed rule in which we<br />
indicate that efficiencies are gained by<br />
allowing only the reporting of minutes<br />
for anesthesia time in Version 5010,<br />
whereas Version 4010/4010A allows for<br />
reporting of anesthesia time in either<br />
units or minutes. The commenter stated<br />
that this change to Version 5010 will not<br />
add efficiency and/or cost savings to the<br />
submission and processing of claims for<br />
anesthesia care, and requested that units<br />
continue to be permitted, or<br />
alternatively, that additional time be<br />
allowed to implement this change<br />
because of its impact on business<br />
processes and contracts.<br />
Response: Due to the nature of this<br />
comment, which addresses potential<br />
efficiencies resulting from a technical<br />
provision in the Version 5010<br />
implementation guide, we consulted<br />
with the X12 workgroup. Based on our<br />
discussion with the X12 workgroup, we<br />
think that the appropriate course for the<br />
commenter to follow would be to<br />
submit a change request to the<br />
workgroup because the X12<br />
development cycle is ongoing, and<br />
change requests will continue to be<br />
accepted and reviewed for consideration<br />
for the next version of the standards.<br />
Given the change in this final rule in the<br />
compliance date for Version 5010, we<br />
believe the commenter’s request for<br />
more time to implement the data<br />
requirement is addressed.<br />
Comment: Several commenters<br />
suggested changes to the situational rule<br />
for the health care diagnosis codes<br />
segment on the X12 837D for dental<br />
claims. The situational rule requires<br />
inclusion of diagnosis codes only under<br />
circumstances involving oral surgery or<br />
anesthesia. Commenters suggested that<br />
today’s dental health plans are offering<br />
benefit plans that provide additional<br />
coverage for dental services when<br />
certain medical conditions exist. The<br />
commenter suggested that the<br />
situational rule be expanded to allow for<br />
dental providers to include diagnosis<br />
codes in cases where specific dental<br />
procedures may minimize the risks<br />
associated with the connection between<br />
the patient’s oral and systemic health<br />
conditions.<br />
Response: We do not feel that these<br />
comments are within the scope of the<br />
proposed rule, but instead pertain to<br />
certain technical aspects of the X12<br />
Technical Reports. As such, we shared<br />
the comments with the X12 expert<br />
committee, which agreed with this<br />
recommendation and committed to<br />
incorporating this change into future<br />
versions of X12 Technical Reports Type<br />
3. As stated earlier, X12 will provide<br />
guidance on how to accommodate the<br />
functionality in Version 5010.<br />
Comment: A few comments focused<br />
on the ability of dental providers to<br />
report tooth numbers on the X12 837P<br />
claim. According to commenters, there<br />
is a need for all dental providers to be<br />
able to report tooth numbers on medical<br />
claims. There were two specific issues<br />
raised in this regard. First, even though<br />
a field for the tooth number has been<br />
designated temporarily, to accommodate<br />
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3299<br />
claims from oral surgeons and other<br />
practitioners, a permanent data element<br />
is needed. The second issue pertains to<br />
the use of either a national or<br />
international tooth numbering system.<br />
These commenters stated that both<br />
numbering systems should be<br />
accommodated in the X12 837 Dental<br />
and Professional Guides. Currently, only<br />
the Universal National Tooth<br />
Designation System is accommodated in<br />
Version 5010.<br />
Response: Once again, we believe<br />
these comments pertain more directly to<br />
the technical provisions of the relevant<br />
implementation guides. We therefore<br />
consulted with the X12 expert<br />
committee, which agreed with the first<br />
issue regarding the ability of dental<br />
providers to report tooth number<br />
beyond oral surgery, and committed to<br />
allowing this level of reporting in future<br />
versions of the X12 standards.<br />
Regarding the issue of which tooth<br />
numbering system should be<br />
accommodated in Version 5010, the X12<br />
committee encourages the commenters<br />
to initiate the discussion through the<br />
DSMO process with additional business<br />
justification for future consideration.<br />
The X12 portal has several HIPAA<br />
Implementation Guide Requests (HIRs)<br />
available which explain how to use the<br />
claims transaction for dental services in<br />
the interim (http://www.X12.org).<br />
Overall, the technical comments<br />
received on Version 5010 did not<br />
represent issues that would prevent this<br />
version of the standard from being<br />
adopted as currently proposed.<br />
However, enhancements will either be<br />
implemented in future versions or<br />
further vetted for inclusion in future<br />
versions.<br />
B. Adoption of NCPDP<br />
Telecommunication Standard<br />
Implementation Guide Version D<br />
Release 0 (D.0) and Equivalent Batch<br />
Standard Implementation Guide,<br />
Version 1, Release 2 (1.2) for Retail<br />
Pharmacy Transactions<br />
We proposed to revise § 162.1102,<br />
§ 162.1202, § 162.1302, and § 162.1802<br />
by adding new paragraphs (c)(1) to each<br />
of those sections to adopt the NCPDP<br />
Telecommunication Standard<br />
Implementation Guide, Version D,<br />
Release 0 (Version D.0) and equivalent<br />
NCPDP Batch Standard Implementation<br />
Guide, Version 1, Release 2 (Version<br />
1.2) in place of the NCPDP<br />
Telecommunication Standard<br />
Implementation Guide, Version 5,<br />
Release 1 (Version 5.1) and equivalent<br />
NCPDP Batch Standard Implementation<br />
Guide, Version 1, Release 1 (Version<br />
1.1), for the following retail pharmacy<br />
drug transactions: health care claims or
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equivalent encounter information;<br />
eligibility for a health plan; referral<br />
certification and authorization; and<br />
coordination of benefits.<br />
Since the time that Version 5.1 was<br />
adopted as a transaction standard in the<br />
Transactions and Code Sets rule, the<br />
industry has submitted requests for<br />
modifications to Version 5.1 to NCPDP.<br />
Some of these modification requests<br />
were necessary for reasons similar to<br />
those for the X12 standards—changing<br />
business needs—many of which were<br />
necessitated by the requirements of the<br />
Medicare Prescription Drug,<br />
Improvement and Modernization Act of<br />
2003 (MMA). The complete discussion<br />
of our proposal and reasons for the<br />
proposal can be found in the August 22,<br />
2008 proposed rule (73 FR 49751).<br />
Comment: Commenters unanimously<br />
supported the adoption of Version D.0,<br />
agreeing that Version D.0 is needed so<br />
that transactions for the Medicare Part D<br />
pharmacy benefit can be conducted. We<br />
did not receive any technical comments<br />
on Version D.0.<br />
Response: We agree that Version D.0<br />
is needed to enhance retail pharmacy<br />
transactions, as well as to better support<br />
Medicare Part D requirements. We are<br />
adopting Version D.0 as proposed.<br />
C. Adoption of a Standard for Medicaid<br />
Pharmacy Subrogation: NCPDP<br />
Medicaid Subrogation Implementation<br />
Guide, Version 3.0 for Pharmacy Claims<br />
We proposed adding a new subpart S<br />
to 45 CFR part 162 to adopt a standard<br />
for the subrogation of pharmacy claims<br />
paid by Medicaid. We proposed that the<br />
transaction would be the Medicaid<br />
pharmacy subrogation transaction,<br />
defined at proposed § 162.1901, and that<br />
the standard for that transaction would<br />
be the NCPDP Batch Standard Medicaid<br />
Subrogation Implementation Guide,<br />
Version 3, Release 0 (Version 3.0), July<br />
2007 (hereinafter referred to as Version<br />
3.0) at proposed § 162.1902. The<br />
complete discussion of our proposal and<br />
reasons for the proposal can be found in<br />
the August 22, 2008 proposed rule (73<br />
FR 49751–49752).<br />
Comment: Commenters unanimously<br />
supported the adoption of Version 3.0<br />
for Medicaid pharmacy subrogation, and<br />
we did not receive any comments in<br />
opposition. We also did not receive any<br />
technical comments on Version 3.0.<br />
Response: We are adopting Version<br />
3.0 as the HIPAA standard at<br />
§ 162.1902, for the Medicaid pharmacy<br />
subrogation transaction, as described at<br />
§ 162.1901.<br />
Comment: Several commenters<br />
requested that standards for Medicaid<br />
subrogation also be adopted for other<br />
claims types in addition to pharmacy<br />
claims. The commenters pointed out<br />
that the ASC X12 837 claim standards<br />
used for processing institutional,<br />
professional and dental claims already<br />
include the ability to perform Medicaid<br />
subrogation and that these standards<br />
have also gone through the DSMO<br />
approval process.<br />
Response: We appreciate the<br />
suggestion that we adopt standards for<br />
conducting Medicaid subrogation for<br />
both pharmacy and medical claims.<br />
However, since we did not propose the<br />
adoption of Version 5010 for Medicaid<br />
subrogation of non-pharmacy claims, we<br />
cannot adopt it in this final rule. HHS<br />
will consider whether to adopt the X12<br />
standard for non-pharmacy Medicaid<br />
subrogation transactions. If we pursue<br />
that option, we would propose it in an<br />
NPRM and take industry comments into<br />
consideration before we would adopt a<br />
standard.<br />
We note that, although we are not<br />
adopting a standard for Medicaid<br />
subrogation for non-pharmacy related<br />
claims in this rule, those standards are<br />
available for use. Covered entities are<br />
not prohibited from using Version 5010<br />
for non-pharmacy Medicaid subrogation<br />
transactions between willing trading<br />
partners. Some Medicaid agencies have<br />
already been successfully using this<br />
approach with commercial health plans.<br />
Comment: We received comments<br />
recommending that HHS clarify that<br />
State Medicaid agencies would not be<br />
prohibited from continuing to bill using<br />
paper claims when necessary.<br />
Response: We recognize that there<br />
may be situations where it is not cost-<br />
effective for State Medicaid agencies<br />
and certain plans to use an electronic<br />
format for pharmacy claims. For<br />
example, while a particular plan may<br />
process a large volume of claims, the<br />
same plan may have only a small<br />
number of Medicaid pharmacy<br />
subrogation claims. In addition, States<br />
continue to make advancements in<br />
identifying other liable payers. This<br />
enables States to avoid payment by<br />
returning claims to providers and<br />
instructing them to bill the other payers.<br />
This will result in a decrease in the<br />
volume of subrogation claims for<br />
Medicaid. Health plans do not always<br />
have to conduct electronic transactions<br />
for which a standard has been adopted,<br />
but if they do, the standard must be<br />
used. Section 162.923, however, places<br />
additional requirements on health plans<br />
so that if a covered entity wanted to<br />
conduct the transaction electronically<br />
with the Medicaid agency, the agency<br />
could not refuse to do so. Medicaid<br />
agencies could continue to bill on paper<br />
as long as both parties to the transaction<br />
agree to conduct the paper transaction.<br />
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However, Medicaid agencies will still be<br />
required to have the capacity to transmit<br />
and receive the Medicaid pharmacy<br />
subrogation transaction electronically,<br />
in standard format, which the Medicaid<br />
agency could choose to do through its<br />
own system or through a health care<br />
clearinghouse.<br />
Comment: We received a comment<br />
from a pharmacy that supports the<br />
adoption of Version 3.0. The pharmacy<br />
requested that HHS enforce the use of<br />
the standard and eliminate the practice<br />
used by some States of recouping money<br />
from the pharmacy instead of the third<br />
party, which puts additional burden on<br />
the pharmacy to bill the third party and<br />
in some instances re-bill Medicaid.<br />
Response: It is not in the purview of<br />
this regulation to eliminate the practice<br />
of recoupment from providers. The<br />
adoption of the Medicaid pharmacy<br />
subrogation standard will not restrict<br />
States that choose to recoup from<br />
providers in lieu of seeking<br />
reimbursement from the third party<br />
directly. Once a claim is paid to a<br />
pharmacy, the State has the option to<br />
seek recovery directly from liable third<br />
party payers, or to seek recovery as an<br />
overpayment from the provider. We<br />
believe that the adoption of the<br />
Medicaid pharmacy subrogation<br />
standard will greatly improve the<br />
efficiency and effectiveness of the<br />
health care system which should result<br />
in more direct billing of third parties in<br />
States that routinely recoup from<br />
providers.<br />
D. Adoption of the NCPDP<br />
Telecommunication Standard<br />
Implementation Guide Version D<br />
Release 0 (D.0) and the Health Care<br />
Claim: Professional ASC X12 Technical<br />
Report Type 3 for Billing Retail<br />
Pharmacy Supplies and Services<br />
We proposed to revise § 162.1102 to<br />
adopt both Version D.0 and the 837<br />
Health Care Claim: Professional ASC<br />
X12 Technical Report Type 3 for billing<br />
retail pharmacy supplies and<br />
professional services. The use of either<br />
standard would be determined by<br />
trading partner agreements. The<br />
complete discussion of our proposal and<br />
the reasons for the proposal can be<br />
found in the August 22, 2008 proposed<br />
rule (73 FR 49752–49754).<br />
Comment: We received several<br />
comments in support of the proposal to<br />
allow the use of either standard for this<br />
purpose. Commenters agreed that the<br />
NCPDP Telecommunication and Batch<br />
Standard supports the billing of the<br />
various code sets needed to bill retail<br />
pharmacy supplies and professional<br />
services (for example, Medication<br />
Therapy Management (MTM), vaccine
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administration), and that they can use<br />
this NCPDP standard for most of their<br />
transactions. The commenters said that<br />
workflow will be less disrupted when<br />
pharmacies can bill for services and<br />
supplies using the same NCPDP<br />
standard as that used for pharmacy drug<br />
claims. Commenters said that the ability<br />
to use the NCPDP standard will improve<br />
customer service and lower<br />
administrative costs. These commenters<br />
said that in some cases the X12 standard<br />
was appropriate, and that they preferred<br />
to have the option of using it on a case-<br />
by-case basis.<br />
Response: We are adopting our<br />
proposal to allow the use of either<br />
Version D.0 or Version 5010 for billing<br />
retail pharmacy supplies and<br />
professional services.<br />
Comment: A few commenters noted<br />
their support of the proposal,<br />
particularly as it relates to improving<br />
interoperability of claims processing<br />
and adjudication, and suggested that we<br />
clarify how our proposal would be<br />
implemented with respect to trading<br />
partner agreements. Another commenter<br />
was cautiously supportive, and said that<br />
it agreed with the use of either standard,<br />
but that we should emphasize the<br />
requirement that trading partner<br />
agreements be voluntary, and that a<br />
health plan could not create a mandate<br />
to use one standard over the other.<br />
Response: We reiterate that, by<br />
adopting both standards for the one<br />
transaction, we are supporting current<br />
industry practices with respect to the<br />
use of these standards for billing<br />
supplies and services that are<br />
commonly dispensed or conducted via<br />
the retail pharmacy channel. With the<br />
exception of the requirements set forth<br />
in § 162.915, regarding certain<br />
particulars that may not be included in<br />
trading partner agreements, we do not<br />
dictate the terms of trading partner<br />
agreements but expect that health plans<br />
and providers will continue to<br />
collaborate on the processes for these<br />
claim types.<br />
In addition to revising the regulation<br />
text at § 162.1102 to allow for the use of<br />
either the X12 or the NCPDP standard<br />
for billing retail pharmacy supplies and<br />
professional services, we are also<br />
making a conforming change to the<br />
definition of ‘‘standard transaction’’ at<br />
§ 162.103. We indicate that a standard<br />
transaction means a transaction that<br />
complies with ‘‘an’’ applicable standard<br />
adopted under this part, rather than<br />
‘‘the’’ applicable standard adopted<br />
under this part.<br />
Comment: One commenter said that if<br />
we are adopting standards for retail<br />
pharmacy supplies and services, that we<br />
should clearly state that both adopted<br />
standards apply to Medication Therapy<br />
Management (MTM) services. The<br />
commenter stated that MTM is a service<br />
designed to ensure that Part D drugs<br />
prescribed to targeted beneficiaries are<br />
appropriately used to optimize<br />
therapeutic outcomes through improved<br />
medication.<br />
Response: In the August 22, 2008<br />
proposed rule, we address MTM<br />
services, noting that the MMA provides<br />
coverage for MTM, which is a distinct<br />
set of services that encompasses a broad<br />
range of professional activities and<br />
responsibilities. We noted that some<br />
pharmacies believe it is appropriate to<br />
use the NCPDP standard for MTM<br />
services because the services are part of<br />
the prescription. Other industry<br />
segments, however, believe it is<br />
appropriate to use the X12 standard for<br />
billing MTM services because they<br />
interpret ‘‘professional services’’ to<br />
require the use of a professional claim<br />
(837P) (73 FR 49753). We agree with the<br />
commenter and affirm that MTM is<br />
included as a service to which both<br />
standards apply.<br />
E. Modifications to the Descriptions of<br />
Transactions<br />
We proposed to revise the<br />
descriptions of the transactions at<br />
§ 162.1301, § 162.1401, and § 162.1501<br />
to clearly specify the senders and<br />
receivers of those transactions. We<br />
proposed to revise the descriptions for<br />
the following transactions: (1)<br />
Enrollment and Disenrollment in a<br />
Health Plan; (2) Referral Certification<br />
and Authorization; and (3) Health Care<br />
Claim Status.<br />
Comment: The majority of<br />
commenters expressed their support for<br />
the revised transaction descriptions.<br />
Response: We are adopting the<br />
revisions to the regulation text as<br />
proposed.<br />
Comment: Several pharmacies and a<br />
national pharmacy chain noted that<br />
real-time pharmacy claim transaction<br />
statuses are given using the NCPDP<br />
standard in real time, whereas Version<br />
4010/4010A is a batch standard. A<br />
commenter requested that our definition<br />
of the health care claim status<br />
transaction specify that Version 5010<br />
(ASC X12 276/277) is used to provide<br />
status on X12 transactions for medical<br />
claims only, because the commenter<br />
wanted clear differentiation between<br />
pharmacy and non-pharmacy claims.<br />
Response: We are not making a<br />
change in our regulation text because<br />
we do not think it is appropriate. In<br />
§ 162.1401, the description of the health<br />
care claim status transaction only<br />
describes the actions and specifies the<br />
senders and receivers of the transaction,<br />
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3301<br />
whereas § 162.1402 clearly identifies the<br />
standard that is adopted for the function<br />
described in § 162.1401.<br />
Comment: We received a comment<br />
requesting a technical clarification to<br />
the enrollment and disenrollment in a<br />
health plan transaction (§ 162.1501).<br />
The commenter stated that there has<br />
always been a concern as to when the<br />
enrollment/disenrollment (834)<br />
transaction was required. This<br />
commenter believed that the definition<br />
of a group health plan could be applied<br />
to the plan sponsor role of a self-funded<br />
employer group, which would require<br />
the plan sponsor to use the enrollment<br />
transaction. The commenter<br />
recommended that the final rule include<br />
wording to further clarify this<br />
requirement, by adding to § 162.1501<br />
the following: For the purpose of<br />
enrollment and disenrollment in their<br />
health plan, the term sponsor shall<br />
include self-funded employer groups<br />
that transmit electronic information to<br />
their Third Party Administrator (TPA) to<br />
establish or terminate insurance<br />
coverage for their member.<br />
Response: We proposed to describe<br />
this transaction as being ‘‘the<br />
transmission of subscriber enrollment<br />
information from the sponsor of the<br />
insurance coverage, benefits, or policy,<br />
to a health plan to establish or terminate<br />
insurance coverage.’’ We provided in<br />
the August 22, 2008 proposed rule that<br />
a sponsor is an employer that provides<br />
benefits to its employees, members, or<br />
beneficiaries through contracted<br />
services. We further noted that<br />
numerous entity types act as sponsors in<br />
providing benefits, including, for<br />
example, unions, government agencies,<br />
and associations (73 FR 49754). We do<br />
not think it is appropriate to further<br />
revise the definition of the enrollment<br />
and disenrollment in a health plan<br />
transaction to specify that a sponsor<br />
includes any one particular type of<br />
entity, as the commenter suggests. We<br />
reiterate here that it is not mandatory for<br />
a sponsor that is not otherwise a<br />
covered entity to use the transaction<br />
standard because, as a non-covered<br />
entity, HIPAA does not apply to it.<br />
F. Compliance and Effective Dates<br />
Versions 5010 and D.0: We proposed<br />
to adopt a date of April 1, 2010 for all<br />
covered entities to be in compliance<br />
with Versions 5010 and D.0. In the<br />
August 22, 2008 proposed rule, we<br />
discussed our reasons for proposing the<br />
compliance timeframe we did. We<br />
justified the proposed date based on<br />
assumptions that the industry had<br />
sufficient expertise in using the X12 and<br />
NCPDP standards, and that the system<br />
and business changes could therefore be
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efficiently coordinated, requiring less<br />
time than the original standards for<br />
implementation. We also discussed at<br />
length an alternative we considered, but<br />
did not propose—a staggered<br />
compliance timeframe for Versions 5010<br />
and D.0 (72 FR 49754–49757). We<br />
received more than 100 comments on<br />
compliance dates, with virtually all<br />
indicating that the proposed compliance<br />
date was not feasible given the extensive<br />
changes in Versions 5010 and D.0 from<br />
the current standards, and the need for<br />
a coordinated implementation and<br />
testing schedule. As stated at the<br />
beginning of the preamble, this rule is<br />
effective March 17, <strong>2009</strong>. We note that<br />
the effective date is the date that the<br />
policies set forth in this final rule take<br />
effect, and new policies are considered<br />
to be officially adopted. The compliance<br />
dates, which are different than the<br />
effective dates, are the dates on which<br />
entities are required to have<br />
implemented the policies adopted in<br />
this rule. The compliance dates we now<br />
adopt for this regulation are as follows:<br />
• Versions 5010 and D.0—January 1,<br />
2012.<br />
• Version 3.0 for all covered entities<br />
except small health plans—January 1,<br />
2012.<br />
• Version 3.0 for small health plans—<br />
January 1, 2013.<br />
Comment: The majority of<br />
commenters opposed the proposed<br />
compliance date for Versions 5010 and<br />
D.0 and requested additional time for<br />
implementation. Most commenters<br />
stated that the proposed date did not<br />
provide sufficient time to adequately<br />
execute a gap analysis for all of the<br />
transactions, build programs, train staff,<br />
and conduct outreach and testing with<br />
trading partners. These commenters<br />
stressed the need to avoid compliance<br />
extensions or contingency periods<br />
because they complicate<br />
implementations and increase costs.<br />
Health plans and providers expressed<br />
concern that the proposed compliance<br />
date was unrealistic because large<br />
segments of the industry have not been<br />
able to meet any of the deadlines for the<br />
HIPAA standards to date, including<br />
Medicare and many State Medicaid<br />
agencies.<br />
The majority of commenters who<br />
opposed the April 2010 compliance date<br />
suggested a thirty-six month compliance<br />
period instead. These commenters said<br />
that this amount of time is needed for<br />
full implementation because the same<br />
programmers, developers and<br />
operations staff who must re-design<br />
technical and business infrastructure<br />
activities to accommodate Versions<br />
5010 and D.0 will also be needed to do<br />
similar work to implement ICD–10. In<br />
fact, some commenters suggested that<br />
the impact of ICD–10 is so significant,<br />
that there might not be sufficient<br />
industry resources to address Versions<br />
5010 and D.0 because of competing<br />
resource needs. A number of health<br />
plans stated that, based on their own<br />
impact assessments, not only would<br />
record layouts and mapping changes be<br />
required, but also changes to edits,<br />
business procedures and system<br />
capabilities. They stated that there are<br />
nearly 850 changes between Version<br />
4010/4010A and Version 5010 to be<br />
analyzed and potentially implemented.<br />
One example is the X12 270/271<br />
eligibility transaction, which will<br />
require a more detailed response with<br />
less information supplied. Plans will<br />
have to determine where the data can be<br />
accessed and whether it exists within<br />
the current software; in many cases, it<br />
will not be a case of moving a few extra<br />
fields, and databases may have to be<br />
modified or created. These commenters<br />
said the complexity of the Technical<br />
Reports Type 3 requires in-depth<br />
analysis, which will have to be<br />
conducted through formal procedures<br />
(impact analysis, requirements<br />
definition) before design, build, and<br />
testing can take place. Similar<br />
comments were received regarding the<br />
compliance date for Version D.0.<br />
All entities that submitted comments<br />
agreed with the proposed adoption of<br />
that standard, but did not think enough<br />
time was given for implementation.<br />
Commenters stated that the transition<br />
from Version 5.1 to Version D.0 has<br />
functional complexity that will require<br />
standardization of practices, new fields,<br />
new situational rules for each data<br />
element, as well as education, testing<br />
and training. These commenters pointed<br />
out that, although there have been 22<br />
version releases of the NCPDP standard<br />
since Version 5.1, the majority of the<br />
industry was reluctant to develop<br />
software for any version that was not<br />
adopted under HIPAA. These<br />
commenters suggested a 36-month<br />
implementation schedule for Version<br />
D.0.<br />
Response: Based on the comments<br />
and our analysis of those comments, we<br />
are adopting a compliance date later<br />
than the date we proposed for all<br />
covered entities for Version 5010 and<br />
Version D.0. We are requiring that all<br />
covered entities be in compliance with<br />
Versions 5010 and D.0 on January 1,<br />
2012.<br />
We believe that it is crucial for<br />
covered entities to meet certain<br />
milestones during the compliance<br />
period in order to ensure full,<br />
successful, and timely compliance. The<br />
NCVHS recommended a framework for<br />
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compliance that we believe will be very<br />
effective for these purposes. Therefore,<br />
we describe below the NCVHS<br />
recommendation and the schedule to<br />
which we expect covered entities to<br />
adhere during the compliance period.<br />
A letter from the NCVHS to Secretary<br />
of HHS Michael Leavitt dated<br />
September 26, 2007 (http://<br />
www.ncvhs.hhs.gov) summarized the<br />
<strong>Committee</strong>’s Standards and Security<br />
Subcommittee’s HIPAA transaction<br />
hearings of July 2007, noting that ‘‘the<br />
timing of standards implementation is<br />
critical to success.’’ The NCVHS<br />
weighed the industry testimony<br />
presented at that hearing and noted that<br />
HHS should consider establishing two<br />
different levels of compliance for the<br />
implementation of Version 5010. Level<br />
1 compliance, as interpreted by the<br />
NCVHS, means that the HIPAA covered<br />
entity could demonstrate that it could<br />
create and receive Version 5010<br />
compliant transactions. Level 2<br />
compliance was interpreted by the<br />
NCVHS to mean that HIPAA covered<br />
entities had completed end-to-end<br />
testing with all of their partners and<br />
were ready to move into full production<br />
with the new version. The NCVHS letter<br />
stated that: ‘‘it is critical that the<br />
industry is afforded the opportunity to<br />
test and verify Version 5010 up to two<br />
years prior to the adoption of Version<br />
5010.’’ The letter’s Recommendation 2.2<br />
states that ‘‘HHS should take under<br />
consideration testifier feedback<br />
indicating that for Version 5010, two<br />
years will be needed to achieve Level 1<br />
compliance.’’<br />
Accordingly, our expectations are as<br />
follows. The Level 1 testing period is<br />
the period during which covered<br />
entities perform all of their internal<br />
readiness activities in preparation for<br />
testing the new versions of the<br />
standards with their trading partners.<br />
When we refer to compliance with Level<br />
1, we mean that a covered entity can<br />
demonstrably create and receive<br />
compliant transactions, resulting from<br />
the completion of all design/build<br />
activities and internal testing. When a<br />
covered entity has attained Level 1<br />
compliance, it has completed all<br />
internal readiness activities and is fully<br />
prepared to initiate testing of the new<br />
versions in a test or production<br />
environment, pursuant to its standard<br />
protocols for testing and implementing<br />
new software or data exchanges. The<br />
Level 2 testing period is the period<br />
during which covered entities are<br />
preparing to reach full production<br />
readiness with all trading partners.<br />
When a covered entity is in compliance<br />
with Level 2, it has completed end-to-<br />
end testing with each of its trading
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partners, and is able to operate in<br />
production mode with the new versions<br />
of the standards by the end of that<br />
period. By ‘‘production mode,’’ we<br />
mean that covered entities can<br />
successfully exchange (accept and/or<br />
send) standard transactions and as<br />
appropriate, be able to process them<br />
successfully.<br />
During the Level 1 and Level 2 testing<br />
periods, either version of the standards<br />
may be used in production mode—<br />
Version 4010/4010A and/or Version<br />
5010, as well as Version 5.1 and/or<br />
Version D.0—as agreed to by trading<br />
partners. Covered entities should be<br />
prepared to meet Level 1 compliance by<br />
December 31, 2010, and Level 2<br />
compliance by December 31, 2011. After<br />
December 31, 2011, covered entities<br />
may not use Versions 4010/4010A and<br />
5.1. On January 1, 2012, all covered<br />
entities will have reached Level 2<br />
compliance, and must be fully<br />
compliant in using Versions 5010 and<br />
D.0 exclusively.<br />
The final compliance date provides an<br />
implementation period of 36 months, or<br />
three years, as requested by the majority<br />
of the commenters. Given this revised<br />
implementation period that<br />
accommodates NCVHS and industry<br />
concerns, we expect that covered<br />
entities will be able to meet the<br />
compliance date. We anticipate that,<br />
since there was support for a phased-in<br />
schedule, health plans and<br />
clearinghouses will make every effort to<br />
be fully compliant on January 1, 2012.<br />
Covered entities are urged to begin<br />
preparations now, to incorporate<br />
effective planning, collaboration and<br />
testing in their implementation<br />
strategies, and to identify and mitigate<br />
any barriers long before the deadline.<br />
While we have authorized contingency<br />
plans in the past, we do not intend to<br />
do so in this case, as such an action<br />
would likely adversely impact ICD–10<br />
implementation activities. HIPAA gives<br />
us authority to invoke civil money<br />
penalties against covered entities who<br />
do not comply with the standards, and<br />
we have been encouraged by industry to<br />
use our authority on a wider scale. We<br />
refer readers to the HIPAA Enforcement<br />
Final Rule (71 FR 8390), published in<br />
the Federal Register on February 16,<br />
2006, for our regulations implementing<br />
that HIPAA authority.<br />
Compliance Date for Version 3.0<br />
For implementation of Version 3.0 for<br />
the Medicaid pharmacy subrogation<br />
transaction, we proposed to revise<br />
§ 162.900 to adopt a compliance date of<br />
24 months after the effective date of the<br />
final rule for all covered entities, except<br />
for small health plans, which would<br />
have 36 months. We also proposed to<br />
revise § 162.923, entitled ‘‘Requirements<br />
for covered entities’’ to make paragraph<br />
(a) applicable only to covered entities<br />
that conduct transactions with other<br />
entities that are required to comply with<br />
a transaction standard. We proposed<br />
this change in order to address the<br />
situation where transactions require the<br />
participation of two covered entities,<br />
where one entity is under a different set<br />
of compliance requirements. We expect<br />
that the change we proposed to<br />
§ 162.923 would resolve the problem of<br />
a State Medicaid agency attempting to<br />
transmit a transaction using Version 3.0<br />
to a small health plan before the small<br />
health plan is required to be compliant<br />
and could, therefore, reject the<br />
transaction on the basis that it is in the<br />
standard format (73 FR 49754–49755).<br />
Comment: We received one comment<br />
explaining that Version 3.0 had to be<br />
implemented either at the same time as<br />
Version D.0, or after, because certain<br />
data elements present in D.0, but not in<br />
Version 5.1, were needed in order to use<br />
Version 3.0. The commenter also<br />
believed that willing trading partners<br />
would be able to agree to use the<br />
Medicaid pharmacy subrogation<br />
standard voluntarily at any time after<br />
the effective date and before the<br />
compliance date.<br />
Response: We agree that Versions D.0<br />
and 3.0 are tied together by certain data<br />
elements necessitating their<br />
concomitant or sequential<br />
implementation respectively. To<br />
accommodate these technical needs, we<br />
are making the effective date of Version<br />
TIMELINE FOR IMPLEMENTING VERSIONS 5010/D.0, VERSION 3.0 AND ICD–10<br />
Version 5010/D.0 and Version 3.0 ICD–10<br />
01/09: Publish final rule ............................................................................ 01/09: Publish Final Rule.<br />
01/09: Begin Level 1 testing period activities (gap analysis, design, development,<br />
internal testing) for Versions 5010 and D.0.<br />
01/10: Begin internal testing for Versions 5010 and D.0.<br />
12/10: Achieve Level 1 compliance (Covered entities have completed<br />
internal testing and can send and receive compliant transactions) for<br />
Versions 5010 and D.0.<br />
01/11: Begin Level 2 testing period activities (external testing with trading<br />
partners and move into production; dual processing mode) for<br />
Versions 5010 and D.0.<br />
3303<br />
3.0 later than the effective date for the<br />
other parts of this rule. We are making<br />
the effective date for the portion of the<br />
rule concerning the adoption of Version<br />
3.0 January 1, 2010, which means that<br />
covered entities, except small health<br />
plans, must be in compliance with<br />
Version 3.0 no later than January 1,<br />
2012. Small health plans must be in<br />
compliance no later than January 1,<br />
2013. This gives States and health plans<br />
a two-year planning, implementation<br />
and testing window, in contrast to the<br />
three years being provided for Versions<br />
5010 and D.0. States and plans are<br />
encouraged to do as much planning in<br />
the year before the effective date<br />
(calendar year <strong>2009</strong>) as possible, to take<br />
advantage of that window and the work<br />
already under way for Version D.0,<br />
since Versions D.0 and 3.0 are tied<br />
together. In other words, States may use<br />
calendar year <strong>2009</strong> to conduct a<br />
preliminary analysis of Version 3.0<br />
changes, in concert with their analysis<br />
of Version D.0 changes. States should<br />
also prepare and submit their budget<br />
requests to secure funding for design,<br />
development and implementation in<br />
2010 and 2011, which would leave time<br />
to conduct testing with trading partners<br />
between January 2011 and January 2012.<br />
Comment: We received a number of<br />
comments from providers and health<br />
plans supporting the proposed revision<br />
to § 162.923(a).<br />
Response: We are adopting the<br />
revision to § 162.923(a), as proposed in<br />
the August 22, 2008 proposed rule.<br />
Timeline<br />
In the proposed rule, we provided a<br />
timeline for implementation and<br />
compliance of ICD–10 and Versions<br />
5010 and D.0. We included the timeline<br />
to enable the industry to conduct<br />
preliminary planning (73 FR 49757),<br />
and indicated that the proposed<br />
timeline represented our best estimate<br />
for industry implementation at the time.<br />
We also indicated that the timeline was<br />
subject to revision as updated<br />
information became available. We<br />
provide the revised timeline here.<br />
01/11: Begin initial compliance activities (gap analysis, design, development,<br />
internal testing).<br />
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3304 Federal Register / Vol. 74, No. 11 / Friday, January 16, <strong>2009</strong> / Rules and Regulations<br />
TIMELINE FOR IMPLEMENTING VERSIONS 5010/D.0, VERSION 3.0 AND ICD–10—Continued<br />
Version 5010/D.0 and Version 3.0 ICD–10<br />
01/12: Achieve Level 2 compliance; Compliance date for all covered<br />
entities. This is also the compliance date for Version 3.0 for all covered<br />
entities except small health plans *.<br />
01/13: Compliance date for Version 3.0 for small health plans.<br />
* Note: Level 1 and Level 2 compliance requirements only apply to Versions 5010 and D.0<br />
Other Comments Pertaining to the<br />
Compliance Date Specific to Versions<br />
5010 and D.0<br />
Comment: We received a few<br />
comments from Medicaid agencies<br />
explaining why the compliance dates<br />
were problematic from a funding<br />
perspective. Commenters explained that<br />
the State budget environment requires<br />
more lead time to obtain project<br />
authority and resources on the scale<br />
necessary to implement Versions 5010,<br />
D.0, and 3.0. One State said that it could<br />
not begin any substantial required<br />
documentation activities until there is a<br />
final rule. Finally, a number of States<br />
said that they are facing fairly<br />
significant budget shortages.<br />
Commenters said that, even with 90<br />
percent federal matching rates, resource<br />
requests based on a proposed rule<br />
would be unlikely to receive approval<br />
from legislatures.<br />
Response: The comments from the<br />
States were compelling with respect to<br />
funding and planning issues, and were<br />
helpful in our reconsideration of the<br />
proposed compliance dates. We<br />
acknowledge the need to work with<br />
States to coordinate their budget<br />
requests and implementation activities<br />
with legacy system replacement.<br />
Comment: Another State agency<br />
recommended that the final rule contain<br />
a waiver provision to permit covered<br />
entities to seek a waiver for<br />
implementation of Version 5010 in any<br />
existing legacy system that is scheduled<br />
for replacement.<br />
Response: Waivers cannot be<br />
accommodated. Neither the statute nor<br />
the regulations provide for waivers for<br />
meeting the standards set forth under<br />
HIPAA.<br />
Comment: A few commenters favored<br />
the proposed compliance dates for<br />
Versions 5010 and D.0, citing their<br />
eagerness to begin benefiting from the<br />
updated standards as soon as possible,<br />
particularly because it has been so long<br />
between adoption of Versions 4010/<br />
4010A1 and 5.1, and the updated<br />
versions of those standards.<br />
Response: We believed the proposed<br />
compliance dates were reasonable for<br />
the reasons provided in the proposed<br />
rule (73 FR 49754–49757). Based on the<br />
comments however, we acknowledge<br />
that many significant actions would<br />
have to take place very quickly (for<br />
example, budget requests, hiring and<br />
recruitment of subject matter experts,<br />
design work, schedule of programming<br />
installations, etc.) in order to meet an<br />
April 2010 compliance date, and as<br />
stated above, have adopted a later date<br />
for both standards.<br />
Comment: The majority of<br />
commenters agreed that small health<br />
plans should not have additional time<br />
(for example, an additional year as in<br />
past regulations) to become compliant<br />
with Versions 5010 and D.0 because<br />
these entities are, or should be, already<br />
using Version 4010/4010A and Version<br />
5.1 through clearinghouses or their own<br />
systems. Small health plans should be at<br />
the same stage of implementation as any<br />
other covered entity, meaning that their<br />
organizations, business associates and<br />
trading partners are now well-versed in<br />
the technology and requirements for<br />
using Version 4010/4010A and Version<br />
5.1, and should not require additional<br />
time to accommodate the new versions.<br />
All covered entities are essentially at the<br />
same point with respect to having<br />
implemented the standards, identified<br />
and resolved business process issues,<br />
trained staff, and incorporated the use of<br />
standards process into their existing<br />
infrastructure.<br />
Response: We agree with commenters<br />
regarding the compliance dates for small<br />
health plans, and are requiring all<br />
covered entities, including small health<br />
plans, to be in compliance on the same<br />
date.<br />
Comment: We received several<br />
comments supporting a different<br />
schedule which involved staggering<br />
compliance based on either covered<br />
entity type or transaction type over the<br />
course of 3 years. In the first scenario,<br />
all health plans and clearinghouses<br />
would be required to be compliant one<br />
year before covered health care<br />
providers in order to ensure that<br />
providers could begin testing with all<br />
trading partners the following year. For<br />
example, under a 36-month compliance<br />
scenario, health plans and<br />
10/13: Compliance date for all covered entities (subject to the final<br />
compliance date in any rule published for the adoption of ICD–10).<br />
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clearinghouses would have to be in<br />
compliance 24 months after the effective<br />
date, and prepared to conduct testing<br />
with trading partners over the next 12<br />
months. We also received a few<br />
comments that suggested a staggered<br />
implementation schedule by transaction<br />
type. For example, the updated<br />
standards for health care claims and<br />
related transactions could be<br />
implemented first, followed by updated<br />
standards for eligibility transactions,<br />
claims status transactions, etc. However,<br />
the majority of commenters who had<br />
opinions about a staggered<br />
implementation schedule based on<br />
transaction type believe that assigning<br />
different compliance dates to different<br />
transactions would not have the<br />
intended effect of ensuring compliance<br />
by the deadline, nor would it facilitate<br />
the testing process. These commenters<br />
explained that the use of certain<br />
transactions, particularly auxiliary<br />
transactions (for example,<br />
authorizations and referrals), is so<br />
inconsistent across the industry, there<br />
would be no effective means by which<br />
to stagger their implementation. The use<br />
of the auxiliary transactions is uneven—<br />
many entities do not use the claims<br />
status transactions because they have<br />
on-line access to their billing files; many<br />
do not use the eligibility transaction<br />
because, historically, it has not provided<br />
useful information. Thus, entities<br />
actually have very little experience with<br />
these transactions, and may continue to<br />
use them minimally. They do not wish<br />
to expend limited resources on a<br />
transaction that will not have a return<br />
on investment in the early years.<br />
Response: We believe that different<br />
compliance dates for different types of<br />
covered entities could significantly<br />
complicate trading partner testing,<br />
particularly for those entities that<br />
function as both health plans and health<br />
care providers, as well as for other<br />
entity types that perform in multiple<br />
roles. It is likely that different<br />
compliance dates for different entity<br />
types could be confusing to the<br />
industry, and could actually delay some<br />
implementations while entities waited<br />
for trading partner compliance. For
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example, this approach presumes that<br />
providers and their software vendors<br />
will be making system and operational<br />
changes at the same time as the health<br />
plans and clearinghouses in order to be<br />
ready for testing.<br />
Comment: We received a number of<br />
comments about our assumption in the<br />
August 22, 2008 proposed rule that<br />
staggered implementation dates for<br />
health plans and clearinghouses would<br />
not be feasible because of robust trading<br />
partner tracking systems that might be<br />
needed so that entities could know<br />
which providers were testing Versions<br />
5010 and/or D.0, which were using<br />
Versions 4010/4010A and/or 5.1, and<br />
which had fully converted to Versions<br />
5010 and/or D.0. This would be very<br />
complicated to build and manage<br />
between the thousands of providers,<br />
health plans, vendors and<br />
clearinghouses. Commenters also<br />
expressed concern about the impact on<br />
coordination of benefits with secondary<br />
health plans, since each health plan<br />
would be implementing Version 5010 at<br />
different times. One commenter said<br />
that the reality is that all covered<br />
entities would need robust trading<br />
partner tracking systems for any<br />
implementation plan, and that<br />
coordination of benefits would be<br />
disrupted with any implementation<br />
plan because not all covered entities<br />
would be ready on the same date to<br />
send and receive the updated HIPAA<br />
standards. Commenters said that<br />
covered entities would have to support<br />
the dual use of Version 4010/4010A and<br />
Version 5010 until the compliance date<br />
in any scenario. They explained that all<br />
covered entities would need to test at<br />
different times during the<br />
implementation process, and that a<br />
complex scheduling process would<br />
need to exist between health plans,<br />
clearinghouses and providers testing<br />
and migrating to the updated<br />
transactions at different times.<br />
Response: We agree with the<br />
commenters’ points regarding the<br />
complexity of programming, testing and<br />
coordinating all implementation efforts,<br />
regardless of the timeline, if we were to<br />
adopt a staggered implementation<br />
schedule by entity type or transaction<br />
type.<br />
Comment: Some commenters said that<br />
all health plans, including State<br />
Medicaid agencies, must be held to the<br />
same compliance dates, and that<br />
compliance with prior HIPAA<br />
implementations varies between non-<br />
government health plans and State<br />
Medicaid agencies. Since Medicaid<br />
agencies have lagged behind and not<br />
met implementation deadlines,<br />
hospitals and providers have had to<br />
maintain a dual submission strategy<br />
which incurs significant additional<br />
costs to the providers. We received a<br />
number of comments expressing<br />
particular concern about Medicare<br />
mandating full compliance prior to the<br />
compliance date adopted by the final<br />
rule. The commenters specifically<br />
referenced written communication they<br />
had received from Medicare stating that<br />
it (Medicare) would have an early<br />
compliance date for Version 5010 for<br />
the coordination of benefits transaction.<br />
The commenters stated that, if Medicare<br />
requires covered entities to be ready to<br />
shift to dual processing several months<br />
before the adopted compliance date,<br />
there will be significant implementation<br />
problems for many providers and other<br />
health plans. The commenters also<br />
stated that, if Medicare mandates use of<br />
Version 5010 for coordination of<br />
benefits, before any of the other<br />
transactions were mandated for use,<br />
other health plans would have to run<br />
separate processing systems for just the<br />
one transaction. Other commenters<br />
stated that health plans do not maintain<br />
separate processing systems for each<br />
additional health plan with which they<br />
conduct COB transactions. Commenters<br />
stated that, if Medicare is allowed to<br />
mandate early compliance, it would<br />
exacerbate an already difficult situation,<br />
and reiterated that no entity should be<br />
allowed to require their trading partners<br />
to implement the standards in a<br />
production environment, prior to the<br />
HHS compliance date, if the trading<br />
partner did not agree. These<br />
commenters feel that such a prohibition<br />
would help ease the implementation as<br />
solutions are deployed across all<br />
entities, over a defined period of time.<br />
Response: We agree that no covered<br />
entity, including State Medicaid<br />
agencies or Medicare, should be allowed<br />
to require compliance earlier than the<br />
compliance date we are adopting in this<br />
final rule. If entities were allowed to<br />
require earlier compliance, this would<br />
cause undue financial and operational<br />
burdens on other segments of the<br />
industry. For example, one State chose<br />
to implement the NPI before the<br />
compliance deadline, which caused<br />
significant difficulties and expenses for<br />
providers because, in some cases, they<br />
were not ready to comply, and therefore<br />
had to revert to paper. In many cases,<br />
the State’s other trading partners,<br />
namely other commercial health plans<br />
and the Federal Medicare program, were<br />
not prepared to accept the NPI, which<br />
meant that providers (and their vendors<br />
and clearinghouses) in that State had to<br />
support a complex infrastructure in<br />
which the NPI was included on some<br />
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3305<br />
claims, but not on others. HHS will<br />
ensure that appropriate agencies and<br />
departments work together to monitor<br />
Medicaid implementation work plans,<br />
testing and readiness on a regular basis<br />
throughout the implementation period.<br />
We are adopting a revision to<br />
§ 162.925, by adding a new paragraph<br />
(a)(6), to specify that a health plan is not<br />
permitted to delay, reject, or attempt to<br />
adversely affect the other entity or the<br />
transaction on the basis that the<br />
transaction does not comply with<br />
another adopted standard during the<br />
period from the effective date of the<br />
final rule until the compliance date.<br />
With respect to coordination of benefits,<br />
this means, for example, that Medicare<br />
will not be able to require of trading<br />
partners that they be in full compliance<br />
with Version 5010 prior to January 1,<br />
2012, unless willing trading partners<br />
agree to do so. Health plans that<br />
participate in Medicare’s Coordination<br />
of Benefits program will be able to work<br />
with Medicare to arrange a mutually<br />
agreeable testing schedule in order to<br />
expedite this transaction, but they are<br />
not required to do so, and may revert to<br />
receiving claims directly from providers<br />
if they choose to do so.<br />
Comment: Commenters said that a key<br />
component of any implementation<br />
schedule is testing, and a large number<br />
of commenters stressed the importance<br />
of both internal testing as well as<br />
external testing with trading partners.<br />
Many commenters stated that testing<br />
often occurs at or near the end of the<br />
compliance period, and that such last-<br />
minute testing causes scheduling<br />
problems and creates uncertainty about<br />
whether changes were applied correctly.<br />
Commenters said that, in many cases,<br />
hospitals and other providers must wait<br />
for vendors and health plans to<br />
schedule testing. Many commenters said<br />
that health plans do not provide<br />
sufficient advance communication<br />
about their testing efforts or their<br />
readiness to implement the standards,<br />
and providers have indicated that it is<br />
difficult to obtain the name of the<br />
individual or department within the<br />
health plan with whom they should<br />
coordinate. One commenter explained<br />
that testing is done in three parts:<br />
Testing of the standards themselves for<br />
workability; conformance testing of<br />
products and applications that send<br />
and/or receive the transactions; and<br />
end-to-end testing to ensure<br />
interoperability among trading partners.<br />
All three levels of testing are critical to<br />
the successful implementation of<br />
Versions 5010, D.0 and 3.0, and efforts<br />
to execute all three levels of testing will<br />
minimize delays and avoid many of the
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complications afflicting previous<br />
implementations.<br />
Response: We agree that testing is<br />
absolutely crucial to resolving problems<br />
before the implementation date to<br />
ensure that there are no payment delays<br />
or service disruptions. In the August 22,<br />
2008 proposed rule, we discussed and<br />
emphasized the importance of testing to<br />
a successful and timely implementation<br />
(73 FR 49755–49756). Based on the<br />
industry’s experience in previous<br />
implementations, it is clear to us that<br />
testing is core to resolving issues early<br />
and effectively. We have revised the<br />
regulation text that identifies the<br />
adopted standard for each transaction,<br />
in every instance, to enable testing to<br />
occur during the period from the<br />
effective date of the final rule until the<br />
compliance date for Versions 5010 and<br />
D.0. Our revised regulations permit the<br />
dual use of standards during that<br />
timeframe, so that either Version 4010/<br />
41010A1 or Version 5010, and either<br />
Version 5.1 or Version D.0, may be used<br />
for the period prior to the compliance<br />
date. We note that the adoption of two<br />
standards for one transaction during the<br />
period prior to compliance does not<br />
mean that covered entities must use<br />
both standards, but, rather, that the use<br />
of either standard is permitted.<br />
Comment: Another commenter said<br />
that the importance of vendor<br />
compliance cannot be underestimated,<br />
as practice management system vendors<br />
are critical to provider compliance. Any<br />
delays in vendor implementation of<br />
compliant products will delay end-to-<br />
end testing, so providing sufficient time<br />
for the vendors to design, build and test,<br />
will only facilitate the process. A large<br />
software vendor explained that, to<br />
enable compliance with Versions 5010<br />
and D.0, users must continue to use<br />
their current software while testing new<br />
software updates to accommodate the<br />
changes. The commenter explained that<br />
there are often several stages of software<br />
revisions, and this necessity may add<br />
additional time to the development and<br />
implementation process. Finally, testing<br />
and certification activities on each<br />
version must take place to ensure<br />
compatibility and stability of software.<br />
This process almost always takes longer<br />
than expected.<br />
Response: While we do not have the<br />
authority to regulate vendors, as they<br />
are not covered entities, we agree about<br />
the critical importance of vendor<br />
testing, and that, in particular, accurate,<br />
quality software development and<br />
testing are critical to the successful<br />
implementation of the updated versions.<br />
We also agree that appropriate time is<br />
necessary for installation, user training<br />
and coordination of testing with trading<br />
partners. By adopting a later compliance<br />
date, we hope to ensure that software<br />
development vendors have sufficient<br />
time to conduct the appropriate internal<br />
and external testing such that the<br />
software they provide to their covered<br />
entity clients is compliant with the<br />
standards, capable of facilitating the<br />
transmission and receipt of the new<br />
versions of the standards.<br />
G. Miscellaneous/General Other<br />
Comments<br />
This section includes comments and<br />
responses to other issues raised during<br />
the public comment period.<br />
Claims Attachments<br />
Comment: We received several<br />
comments requesting that HHS not<br />
adopt standards for electronic health<br />
care claims attachments at this time<br />
because implementation of Versions<br />
5010, D.0, and 3.0, and ICD–10 would<br />
make it impossible to also implement<br />
standards for claims attachments. One<br />
commenter stressed that, since claims<br />
attachments included another new<br />
standard—the HL7 Attachment<br />
Specifications—the industry would not<br />
be able to accommodate the additional<br />
work needed to implement the claims<br />
attachment standard if Versions 5010,<br />
D.0, and 3.0, and ICD–10 also had to be<br />
implemented in that same time period.<br />
Response: We appreciate and will<br />
consider the commenters’ concerns for<br />
not wanting to have to implement the<br />
electronic health care claims attachment<br />
standards at the same time as Versions<br />
5010, D.0 and 3.0, and ICD–10.<br />
Standards Adoption and Modifications<br />
In the August 22, 2008 proposed rule,<br />
we provided an explanation of the<br />
procedures for maintaining existing<br />
standards and for adopting new<br />
standards and modifications to existing<br />
standards (73 FR 49744–49755). That<br />
section of the proposed rule describes<br />
how § 162.910 sets out the standards<br />
maintenance process and defines the<br />
role of SDOs and the DSMOs. For<br />
additional information about the DSMO<br />
process and procedures, refer to the<br />
Web site at http://www.hipaa-dsmo.org/<br />
Main.asp. We also described the process<br />
for adopting modifications to standards<br />
under § 162.910, which is discussed in<br />
detail in the Transactions and Code Sets<br />
rule (65 FR 50312), and implemented at<br />
§ 162.910.<br />
The proposed modifications and the<br />
new transaction standards were<br />
developed through the process that<br />
conforms with § 162.910. We received<br />
many technical comments specific to<br />
the Version 5010 standards, indicating<br />
that there are still opportunities for<br />
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improvement in that version. We did<br />
not receive any technical comments<br />
specific to Version D.0.<br />
Comment: A few commenters stated<br />
that greater industry involvement in the<br />
X12 standards development and<br />
balloting process would be helpful to<br />
their industry segment, e.g., health care<br />
providers, hospitals, health plans,<br />
health care clearinghouses and vendors.<br />
Response: We have suggested to the<br />
X12 SDO that it consider the following:<br />
(1) Expanding the current outreach<br />
efforts to industry to obtain more<br />
diverse representation from all covered<br />
entity types. This would take place<br />
during the development of new versions<br />
as well as during the balloting process;<br />
and (2) securing industry volunteers to<br />
test the balloted standards before they<br />
are proposed to NCVHS. That way,<br />
when the suggested modifications are<br />
submitted to NCVHS for consideration,<br />
even greater industry support can be<br />
expected.<br />
Comment: We received a few<br />
comments suggesting that HHS<br />
streamline the standards adoption<br />
process. Commenters said that the<br />
marketplace is evolving at a rapid pace,<br />
creating new products, new<br />
technologies and new methods of<br />
conducting business. They stressed that,<br />
even though X12 continues to improve<br />
the standards each year, the industry<br />
has not had the opportunity to benefit<br />
from necessary and helpful changes<br />
because too much time elapses between<br />
the adoption of versions. Others<br />
reiterated that there is a need for the<br />
updated standards to be available for<br />
use by the industry as they are tested<br />
and balloted. For example, one entity<br />
found that the industry needs<br />
information about tax advantaged<br />
payment mechanisms (for example,<br />
Medical Savings Accounts, Health<br />
Savings Accounts, Health<br />
Reimbursement Accounts, etc.) that are<br />
now commonly in place to support the<br />
movement to consumer-directed health<br />
care. Version 5010 does not contain the<br />
information needed by patients or<br />
providers to determine the financial<br />
impacts and flows. Commenters said<br />
that the industry cannot wait another<br />
eight years to be able to exchange this<br />
type of crucial information for critical<br />
market needs. They suggest that a more<br />
streamlined way to develop, implement<br />
and adopt updated standards must be<br />
found. Commenters suggested that HHS<br />
work with industry stakeholders to<br />
identify and implement a way to<br />
increase the predictability and<br />
timeliness of adopting updated<br />
standards, including a means by which<br />
the rulemaking process might not be
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necessary to allow the industry to use<br />
updated versions of the standards.<br />
Response: HHS has considered<br />
similar concerns in the past, and<br />
continues to assess potential<br />
alternatives within the context of<br />
HIPAA and the Administrative<br />
Procedures Act (APA). HHS will<br />
continue to work with industry to<br />
identify a means by which updated<br />
standards can be used on a timelier<br />
basis, consistent with the law.<br />
Comment: One commenter<br />
recommended that HHS adopt the X12<br />
standard transaction formats in the final<br />
rule, but not the specific versions of the<br />
X12 standards or Technical Reports<br />
Type 3 (TR3s). The commenter stated<br />
that it has been eight years since<br />
publication of the Transactions and<br />
Code Sets rule adopting the Version<br />
4010/4010A implementation guides.<br />
The long passage of time since the<br />
initial adoption has resulted in<br />
widespread workarounds in the<br />
industry to address Version 4010/<br />
4010A’s deficiencies. The commenter<br />
suggests that HHS could designate the<br />
DSMO coordinating committee to<br />
biannually determine whether a change<br />
makes sense for the industry, and which<br />
updated TR3s would be implemented.<br />
The DSMO committee would still<br />
provide open public access to the<br />
standards development process, but this<br />
approach would eliminate the time-<br />
consuming NPRM steps and enable<br />
smaller iterative version updates to take<br />
place. The commenter noted that the<br />
ongoing maintenance of the adopted<br />
code sets is already handled outside of<br />
the NPRM process. Under this<br />
recommendation, new standards, as<br />
opposed to updates or modifications to<br />
the standards, would continue to be<br />
adopted by HHS utilizing the regulatory<br />
process.<br />
Response: HHS has evaluated options<br />
for streamlining the process of adopting<br />
new versions of the standards, and<br />
agrees with commenters that alternate,<br />
more expedient methods are necessary,<br />
consistent with HIPAA and the APA.<br />
We are committed to working with<br />
industry and the standards<br />
organizations to develop a process that<br />
can be proposed in the near future,<br />
consistent with the law. With respect to<br />
the commenter’s reference to the<br />
ongoing maintenance of the adopted<br />
code sets, HHS notes that there is<br />
specific statutory authority in HIPAA<br />
which permits the routine maintenance,<br />
testing, enhancement and expansion of<br />
code sets outside of the rulemaking<br />
process; modifications to adopted code<br />
sets, however, are adopted by means of<br />
the rulemaking process.<br />
Outreach, Education and Training<br />
In the proposed rule, at 73 FR 49756,<br />
we stated that HHS would begin<br />
preparations for, and execution of,<br />
outreach and education activities, and<br />
the engagement of industry leaders and<br />
stakeholder organizations to provide a<br />
variety of educational and<br />
communication programs for various<br />
constituencies.<br />
Comment: Many commenters advised<br />
HHS to establish a network of training<br />
and outreach partners to work<br />
collaboratively to educate the industry,<br />
and outlined the education and<br />
outreach strategies that will be needed.<br />
Commenters stated there were needs for:<br />
National associations to collaborate on<br />
education efforts; a consistent set of<br />
messages and/or materials from<br />
authoritative sources; recognition that<br />
different audiences may need different<br />
levels of training; and in-person training<br />
to supplement Internet training and<br />
printed documents. Several commenters<br />
recommended that HHS develop a<br />
consistent standard set of training<br />
materials for distribution to industry<br />
groups as soon as possible. The<br />
commenter suggested that key<br />
professional associations should be the<br />
source for common educational<br />
materials. One commenter suggested<br />
that HHS collaborate with other<br />
organizations to publish a ‘‘lessons<br />
learned’’ guidance document. A number<br />
of commenters recommended that HHS<br />
begin outreach activities as quickly as<br />
possible, and to clearly differentiate<br />
between HHS Policy guidance (for the<br />
industry at large) and Medicare<br />
guidance (specifically for Medicare<br />
providers). Other commenters agreed,<br />
indicating that this was important<br />
because Medicare policies do not often<br />
apply to other covered entities’ policies,<br />
and information is confusing to<br />
providers when it is not clearly<br />
differentiated. Another commenter<br />
provided a summarized list of requested<br />
technical assistance which included<br />
migration tools that automatically<br />
translate Version 4010/4010A to Version<br />
5010, and Version 5010 to Version<br />
4010/4010A.<br />
Response: We agree that it is<br />
important that consistent and accurate<br />
messages and/or materials be developed<br />
by authoritative sources, and will work<br />
closely with industry to put together a<br />
comprehensive, diverse plan that<br />
addresses Medicare-specific policies, as<br />
well as industry-wide policies and<br />
implementation issues.<br />
We agree that different audiences may<br />
need different levels of training. Our<br />
current plan is to develop and<br />
disseminate high-level materials, and<br />
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3307<br />
we anticipate that the industry will<br />
continue to offer the more in-depth<br />
materials that specific stakeholder<br />
groups may need. HHS already<br />
dedicates a section of its Web site to the<br />
HIPAA regulations, including guidance<br />
papers, FAQs, and links to external Web<br />
sites and to other useful resources. The<br />
Web site is http://www.cms.hhs.gov.<br />
Comment: We received a number of<br />
comments suggesting that HHS ensure<br />
better coordination of the<br />
communication of, by, and between,<br />
Medicare and Medicaid.<br />
Response: We agree that all segments<br />
of the industry should collaborate and<br />
communicate on implementation to<br />
avoid misunderstanding and to<br />
coordinate testing schedules. We will<br />
work with State Medicaid agencies to<br />
support their development of<br />
communication and outreach initiatives<br />
as we develop the overarching<br />
implementation strategy for education.<br />
We will also help to ensure that there<br />
are regular opportunities for Medicare<br />
and Medicaid to collaborate on<br />
implementation strategies.<br />
Companion Guides<br />
In the August 22, 2008 proposed rule,<br />
we discussed the deficiencies in Version<br />
4010/4010A and Version 5.1, and the<br />
fact that the industry has come to rely<br />
upon health plan-specific companion<br />
guides to address the ambiguities in the<br />
implementation guides for each of the<br />
standards (73 FR 49746). It is possible<br />
that the reliance on companion guides<br />
has minimized some of the potential<br />
benefits offered by the standards. Based<br />
on testimony from the standards<br />
organizations and other industry<br />
representatives to NCVHS, the<br />
improvements to Version 5010 should<br />
minimize dependence on companion<br />
guides. Some of those improvements<br />
include clarifications of the standard<br />
requirements, and consistency in<br />
requirements across all of the<br />
transactions. In the August 22, 2008<br />
proposed rule, we said that companion<br />
guides could potentially be eliminated if<br />
the updated versions of the standards<br />
were adopted.<br />
Comment: We received a number of<br />
comments from the industry on this<br />
subject, offering support for the<br />
elimination of companion guides<br />
because of the complexities they create<br />
in implementing the standards. Health<br />
plans were less supportive of a complete<br />
elimination of companion guides, but<br />
did, in general, comment that the use of<br />
companion guides could be reduced,<br />
and that their content could be less<br />
complex. A few commenters requested<br />
that HHS prohibit the use of companion<br />
guides. They justified this
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recommendation based on the use of<br />
these guides continuing to undermine<br />
the potential of standards. A few of the<br />
clearinghouse commenters suggested<br />
that companion guides be limited to<br />
providing supplemental information<br />
and instruction, but that they could not<br />
be used to mandate the use of certain<br />
situational fields. Other commenters felt<br />
that the next version of the standard<br />
should do away with nearly all<br />
situational data elements, and only<br />
leave a bare minimum of fields eligible<br />
to be situational, thus further reducing<br />
the need for companion guides. A few<br />
of the commenters who supported the<br />
use of companion guides said that these<br />
would always be necessary because<br />
health plans would always have unique<br />
business rules, and that sometimes these<br />
rules or practices were to the advantage<br />
of the provider.<br />
Response: We acknowledge the issues<br />
presented by companion guides, but<br />
note that we do not have the authority<br />
to expressly prohibit the use of these<br />
guides. However, based on our review of<br />
many such documents, and the ongoing<br />
efforts of the industry to collaborate, we<br />
strongly discourage health plans from<br />
having companion guides unless they<br />
are focused significantly on the basics<br />
for connectivity, trading partner<br />
arrangements, and use of situational<br />
data elements. We encourage X12 to<br />
evaluate, and address as appropriate,<br />
industry comments specific to<br />
situational data elements, so that the<br />
minimum number of fields remain<br />
situational. This will enhance<br />
standardization and further reduce the<br />
need for companion guides. We also<br />
note that we have already published<br />
FAQs clarifying that, if companion<br />
guides contradict the implementation<br />
guides, the transaction will not be<br />
compliant. Covered entities may use the<br />
existing enforcement process to submit<br />
official complaints to HHS. Once an<br />
investigation is opened, HHS will<br />
review the companion guide at issue<br />
and a determination will be made as to<br />
its compliance with the standard(s).<br />
Standardization of Data Content<br />
Comment: We received a few<br />
comments requesting that HHS support<br />
the work of some industry groups, such<br />
as the Coalition for Affordable and<br />
Quality Healthcare (CAQH), that are<br />
attempting to standardize the use of data<br />
content to maximize the benefits of<br />
transaction standards—in other words,<br />
some industry representatives are trying<br />
to build consensus on the data elements<br />
that everyone will request and provide,<br />
to make implementation more<br />
consistent throughout the industry. A<br />
few commenters said that one group has<br />
been working on standard content for<br />
the eligibility standard, so that the<br />
transaction provides more robust and<br />
useful information above and beyond<br />
what is currently a ‘‘yes/no’’<br />
requirement in response to a request for<br />
information about an individual’s<br />
eligibility for health plan benefits. One<br />
commenter requested that HHS support<br />
the CAQH certification process for the<br />
use of the eligibility transaction, in<br />
which organizations voluntarily agree to<br />
have their programming reviewed and<br />
approved by CAQH, and those<br />
organizations agree to use all of the<br />
same data elements as others who are<br />
participating in the certification<br />
program.<br />
Response: We do support the work of<br />
individuals and organizations in efforts<br />
to make the standard transactions more<br />
useful to the industry as a whole. While<br />
HHS cannot mandate participation in<br />
any certification programs, we do<br />
support any efforts towards improved<br />
compliance with the standards, as well<br />
as efforts towards maximizing the<br />
usefulness and usability of the<br />
standards. We also reiterate that we<br />
have published FAQs clarifying how a<br />
covered entity may file a complaint<br />
against another entity who it believes<br />
may not be in compliance with the<br />
implementation guides.<br />
Definition of Compliance<br />
Comment: We received a few<br />
comments suggesting that we adopt a<br />
definition of the term ‘‘compliance,’’<br />
using the text from the TR3 guides,<br />
which provides that compliance<br />
indicates the receiver of a standard<br />
transaction does not have to reject a<br />
transaction that is not in compliance<br />
with all of the rules within the standard.<br />
According to commenters, the TR3<br />
guides have a definition of compliance<br />
that states a covered entity is out of<br />
compliance if it receives and accepts a<br />
transaction that is a non-standard<br />
transaction. These commenters believe<br />
this statement conflicts with an HHS<br />
FAQ which states that a receiver may<br />
not accept a non-compliant transaction.<br />
The commenter suggests that the sender<br />
of the transactions is responsible for the<br />
compliance of the transaction, and HHS<br />
should not consider the receiver to be<br />
out of compliance if it accepts a noncompliant<br />
transaction. Another<br />
commenter said that HHS should<br />
encourage an ‘‘ignore, don’t reject’’<br />
approach to implementation, which<br />
would mean that, if a transaction is<br />
submitted conforming to the standard,<br />
but it contains more information than is<br />
necessary for an entity to process that<br />
transaction, the additional information<br />
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should be ignored by the receiver, and<br />
the transaction not rejected.<br />
Response: The definitions in the TR3<br />
reports are not specific to the<br />
compliance of the transaction with the<br />
HIPAA rules, so the way ‘‘compliance’’<br />
is defined by the TR3 reports does not<br />
apply to compliance under HIPAA. We<br />
believe our regulations sufficiently<br />
address the requirements for<br />
compliance. Our regulations at<br />
§ 162.923 address the requirements for a<br />
covered entity to conduct a standard<br />
transaction when it conducts a HIPAA<br />
transaction using electronic media, and<br />
we define ‘‘standard transaction,’’ as<br />
revised in this rule, as ‘‘a transaction<br />
that complies with an applicable<br />
standard adopted under this part.’’<br />
Regarding the commenter’s suggestion<br />
of an ‘‘ignore, don’t reject’’ policy, we<br />
point out that § 162.925(a)(3) provides<br />
that a health plan may not reject a<br />
standard transaction on the basis that it<br />
contains data elements not needed or<br />
used by the health plan. Finally, we do<br />
have an enforcement program through<br />
which covered entities may file<br />
complaints, and we continue to<br />
encourage the industry to utilize this<br />
program when faced with conflicts<br />
about the compliance of a transaction.<br />
Pilots<br />
Comment: We received a number of<br />
comments suggesting that standards<br />
should be pilot tested before adoption.<br />
These commenters said that pilot testing<br />
the standards is needed long before a<br />
standard is proposed for adoption<br />
because such testing identifies potential<br />
pit-falls and could identify and correct<br />
unanticipated issues with a particular<br />
standard before it is officially adopted.<br />
A few commenters noted the lack of a<br />
pilot testing process and suggested that<br />
HHS, with industry input, define a pilot<br />
testing process for future standards.<br />
Another commenter recommended that<br />
pilot testing proceed in a certain<br />
sequence, beginning with internal unit<br />
testing, and followed by system testing<br />
and integration testing, and ultimately<br />
ending with trading partner testing. One<br />
commenter stated that, without<br />
workability testing, the government,<br />
X12 and the industry would be<br />
repeating implementation mistakes that<br />
were made with Version 4010/4010A.<br />
That same commenter recommended<br />
that the provisions for permitting<br />
exceptions from the requirements to<br />
comply with the standards in order to<br />
test proposed modifications (§ 162.940)<br />
be suspended until the current version<br />
of a standard was no longer in use, in<br />
other words, that some date certain<br />
would be set to ‘‘retire’’ or sunset a<br />
particular version of a standard. The
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commenter said that such a suspension<br />
would represent cost and administrative<br />
savings to all parties because it would<br />
simplify the process of accommodating<br />
new versions of the standards. We also<br />
received a comment suggesting that<br />
HHS fund pilot testing and allow an<br />
additional twelve months for the testing<br />
before the compliance date of a final<br />
rule, implying future final rules. No<br />
commenters suggested that Version<br />
5010 be tested prior to adoption; rather,<br />
recommendations were for the future<br />
review and adoption of new versions of<br />
the standards.<br />
Response: We recognize the value of<br />
pilot testing and its importance in the<br />
standards implementation process, and<br />
intend to work with the industry to<br />
define parameters for pilot testing in the<br />
future. We also encourage industry<br />
stakeholders and the standards<br />
organizations to take the lead for<br />
initiating pilot tests and monitoring the<br />
success of such tests.<br />
Acknowledgements<br />
Version 5010 accommodates the<br />
acknowledgement transaction, for the<br />
data receiver to communicate any errors<br />
or transmission problems back to the<br />
sender. Many health plans and<br />
clearinghouses use acknowledgement<br />
transactions, and they are free to do so<br />
using the standards they choose for that<br />
transaction. We did not propose to<br />
adopt a standard for the<br />
acknowledgement transaction in the<br />
proposed rule, so we will not adopt one<br />
here.<br />
Comment: We received several<br />
comments on this subject, with most<br />
commenters indicating that<br />
acknowledgements improve the process<br />
of receiving and correcting an error and<br />
resubmitting the correction back to the<br />
receiver. These commenters suggested<br />
that HHS adopt Version 5010 for the<br />
acknowledgement transaction.<br />
Commenters said that migration to<br />
standard acknowledgement transactions<br />
would offer significant business benefits<br />
by ensuring that transactions are<br />
received and front-end errors reported<br />
on a timely and consistent basis. In spite<br />
of the support for adopting an<br />
acknowledgement transaction standard,<br />
commenters also mentioned that they<br />
did not wish in any way to delay overall<br />
implementation of Version 5010 by<br />
waiting until an acknowledgement<br />
transaction standard is proposed and<br />
adopted. In other words, if the choice<br />
was to wait to adopt Version 5010 until<br />
the NCVHS advises the Secretary to also<br />
adopt Version 5010 as the standard for<br />
the acknowledgement transaction, the<br />
commenters did not want to see their<br />
suggestion go forward.<br />
Response: Before we would adopt an<br />
acknowledgement transaction standard,<br />
such standard would have to have been<br />
vetted through the standards adoption<br />
process that includes approval of a<br />
DSMO change request, recommendation<br />
by the DSMOs to the NCVHS, and<br />
recommendation by the NCVHS to the<br />
Secretary. Even though the chair of the<br />
X12 standards workgroup testified to<br />
the NCVHS in July 2007, and<br />
recommended adoption of an<br />
acknowledgement transaction standard<br />
for inclusion with NCVHS’<br />
recommendation for the adoption of<br />
Version 5010, NCVHS did not include<br />
an acknowledgement transaction<br />
standard in its recommendations.<br />
Nonetheless, the fact that we have not<br />
adopted an acknowledgement standard<br />
does not preclude the industry from<br />
using Version 5010 to conduct the<br />
transaction between willing trading<br />
partners. We will consider the adoption<br />
of a standard for the acknowledgement<br />
transaction at the time we receive a<br />
recommendation from NCVHS.<br />
Real-Time Eligibility<br />
Comment: A few commenters stated<br />
that there was a business need for a realtime<br />
eligibility transaction standard for<br />
all participants in healthcare delivery.<br />
They stated that, without a national<br />
standard, varying approaches to realtime<br />
eligibility will be detrimental to<br />
providers and plans that do business on<br />
a national basis. The commenters<br />
identified a number of organizations<br />
such as WEDI, CAQH and Blue Cross<br />
Blue Shield of North Carolina that<br />
support real-time eligibility<br />
transactions.<br />
Response: Similar to a standard for<br />
the acknowledgement transaction,<br />
adopting a standard for real-time<br />
eligibility transactions would have to be<br />
vetted through the standards adoption<br />
process described above. NCVHS did<br />
not include a real-time eligibility<br />
transaction standard in its<br />
recommendations, and we are unable to<br />
adopt one at this time.<br />
HHS Funding the Purchase of TR3<br />
Reports<br />
When the Transactions and Code Sets<br />
rule was published, HHS negotiated a<br />
contract with the publisher of the<br />
Version 4010/4010A implementation<br />
guide to enable the industry to<br />
download the guides at no cost. This<br />
practice ended in 2006. At that time,<br />
very few downloads or copies were<br />
being ordered, and we had no<br />
complaints about individual providers,<br />
plans or clearinghouses paying the fee.<br />
HHS did not have a similar arrangement<br />
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with NCPDP, so the industry has always<br />
paid for guides for those standards.<br />
Comment: A few commenters<br />
suggested that HHS should pay for the<br />
industry to access copies of Version<br />
5010. These commenters stated that<br />
small providers could not afford to buy<br />
the set of guides, which currently cost<br />
approximately $800 for the set, or $175<br />
for each guide. Several other<br />
commenters expressed concern about<br />
the cost of the X12 TR3s and a new<br />
requirement that covered entities<br />
purchase these guides. Commenters<br />
noted that HHS underwrote the Version<br />
4010/4010A guides on behalf of covered<br />
entities through that implementation<br />
effort and believe that it is the most<br />
beneficial way for covered entities to<br />
access and implement new versions.<br />
Response: It is not uncommon for<br />
standards organizations to charge a fee<br />
for copies of their standards. NCPDP<br />
charges such a fee for their standards,<br />
which HHS has never covered for the<br />
industry. We do not agree that the price<br />
for the guides will negatively impact<br />
small providers because we think it is<br />
unlikely that small providers will find<br />
them useful in implementing Version<br />
5010. We understand that small<br />
providers usually rely on software<br />
vendors to make their systems<br />
compliant, and that it is the vendors<br />
who will require the guides for<br />
programming. We expect that, as in the<br />
past, vendors and professional<br />
associations will provide necessary<br />
education and training for the provider<br />
staff on the system changes that will<br />
require operational changes. Software<br />
vendors typically have multiple clients,<br />
and we expect that they will only need<br />
to purchase one, or at most, just a few<br />
sets of the standards to program for all<br />
of their clients. Such multiple usages<br />
should defray the modest expense.<br />
HIPAA Enforcement<br />
At present, most formal compliance<br />
and enforcement activities for HIPAA<br />
are complaint-driven and complaintbased.<br />
Enforcement efforts are focused<br />
on investigating complaints to<br />
determine if a covered entity is in<br />
compliance.<br />
Comment: We received a few<br />
comments recommending that HHS<br />
increase its enforcement efforts related<br />
to HIPAA transactions to ensure that<br />
health plans are adhering to the<br />
requirements of the X12 transactions.<br />
We received another comment<br />
suggesting stronger enforcement of the<br />
adoption of all of the standard<br />
transactions by all covered entities. One<br />
commenter said that, to date, only a<br />
subset of HIPAA-mandated transaction<br />
standards that facilitate EDI have been
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implemented as required, which<br />
significantly decreases the benefits of<br />
standardization to the industry.<br />
Response: Our complaint-driven<br />
enforcement process has been<br />
successful in obtaining compliance on a<br />
case-by-case basis, and we encourage<br />
covered entities to utilize the process.<br />
We understand that some of the<br />
standards have not been implemented<br />
because of their limited usefulness, or<br />
because of issues with implementation.<br />
We believe that, because the standards<br />
have been significantly improved, the<br />
standards we adopt here are more<br />
useful, and therefore will result in<br />
greater industry implementation. We<br />
have the authority to conduct<br />
compliance reviews at our discretion to<br />
evaluate compliance with any of the<br />
HIPAA requirements, and have done so<br />
already with respect to the security<br />
standards. We plan to expand our<br />
compliance review program in the<br />
future to include random reviews of<br />
compliance with the transaction<br />
standards as well.<br />
Certification<br />
Comment: We received several<br />
comments suggesting that HHS consider<br />
petitioning the Certification<br />
Commission for Healthcare Information<br />
Technology (CCHIT) to include Versions<br />
5010 or D.0 in all products that would<br />
be expected to carry the upgraded<br />
standards in order to facilitate<br />
compliance with the final rule.<br />
Commenters believe this will be<br />
especially important for small covered<br />
entities in the process of purchasing<br />
software until the compliance date.<br />
They believe that, if purchasers are<br />
aware of the need to buy products that<br />
are certified to meet the incoming<br />
HIPAA requirements, conversion might<br />
be smoother and less expensive.<br />
Response: Generally, CCHIT does not<br />
certify products for administrative<br />
transactions, and therefore we will not<br />
pursue this suggestion. Furthermore,<br />
HHS does not recognize certification of<br />
any systems or software for purposes of<br />
HIPAA compliance.<br />
H. Comments Considered Out of Scope<br />
We received a number of comments<br />
on subjects that were outside the scope<br />
of the proposed rule. We do not directly<br />
respond to those types of comments<br />
because we consider them to be outside<br />
the scope of this rule, but we wish to<br />
acknowledge them. We have<br />
summarized them in the following list:<br />
• One commenter stated the final rule<br />
should clarify the relationship between<br />
HIPAA and the Family Educational<br />
Rights and Privacy Act (FERPA). The<br />
commenter stated that there are entities<br />
that are bound by both HIPAA and<br />
FERPA, and suggested that clarification<br />
is needed for situations where there are<br />
inconsistencies between the two laws.<br />
• One commenter stated that HHS<br />
should agree to accept and utilize all<br />
diagnosis codes associated with an<br />
admission or an encounter, not just<br />
those accommodated within the limits<br />
first set by paper forms. The current<br />
practice of truncating numbers for<br />
diagnoses and procedures so that they<br />
are equal to what a paper claim supports<br />
causes problems for providers when<br />
they are trying to meet the ‘‘Present on<br />
Admission’’ (POA) requirement of<br />
providing adequate information about a<br />
patient’s condition.<br />
• One commenter recommended that<br />
HHS add a definition for real-time<br />
adjudication with regard to the 837<br />
claim, 835 remittance advice and the<br />
277 health care claim status transactions<br />
in this final rule. The commenter<br />
referenced the collaborative efforts<br />
between WEDI and X12 to provide a<br />
standard way to conduct real-time<br />
adjudication.<br />
• One commenter requested that we<br />
address expectations related to<br />
§ 162.925 regarding health plan<br />
incentives to health care providers for<br />
using direct data entry (DDE)<br />
transactions. The commenter said there<br />
are instances where health plans offer<br />
more information about eligibility and<br />
benefit information on Web sites than<br />
they do through the standard X12 270/<br />
271 transactions, which the commenter<br />
believes is an incentive for a provider to<br />
conduct a transaction using some means<br />
other than the standard transaction. The<br />
commenter requested clarification<br />
regarding the offer of more information<br />
through a non-standard transaction than<br />
in the standard transaction, even though<br />
the standard transaction contains the<br />
required amount of information. Since<br />
we did not address this issue in the<br />
proposed rule, we do not respond here,<br />
but may provide additional direction in<br />
a future Frequently Asked Question on<br />
the CMS Web site.<br />
III. Provisions of the Final Rule<br />
This final rule incorporates the<br />
provisions of the proposed rule, with<br />
the following exceptions and changes:<br />
We proposed to adopt a compliance<br />
date for Versions 5010 and D.0 of April<br />
1, 2010 for all covered entities. In this<br />
final rule, we adopt a compliance date<br />
of January 1, 2012 for Versions 5010 and<br />
D.0 for all covered entities. We revise<br />
§ 162.1102, § 162.1202, § 162.1302,<br />
§ 162.1402, § 162.1502, § 162.1602,<br />
§ 162.1702, and § 162.1802 accordingly.<br />
We proposed a compliance date of 24<br />
months after the effective date of the<br />
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final rule for the Medicaid pharmacy<br />
subrogation standard (Version 3.0) with<br />
an additional 12 months for small<br />
health plans. In this final rule, we<br />
indicate an effective date of January 1,<br />
2010 for the provisions of 45 CFR<br />
Subpart S. This means that covered<br />
entities other than small health plans<br />
must be in compliance on January 1,<br />
2012, while small health plans, which<br />
have an additional 12 months, must be<br />
in compliance on January 1, 2013.<br />
In § 162.925, we add paragraph (a)(6)<br />
that precludes health plans from<br />
requiring an earlier compliance date<br />
than those adopted. Use of Versions<br />
5010 and D.0 in advance of the<br />
mandatory compliance date is<br />
permissible, based upon mutual<br />
agreement by trading partners.<br />
We adopt revisions to § 162.1102,<br />
§ 162.1202, § 162.1302, § 162.1402,<br />
§ 162.1502, § 162.1602, § 162.1702, and<br />
§ 162.1802 to enable covered entities to<br />
engage in Level 2 testing by allowing for<br />
the use of both the old standard and the<br />
updated standard.<br />
We allow covered entities to use<br />
either Version 4010/4010A, 5010, 5.1 or<br />
D.0 for billing retail pharmacy supplies<br />
and services, and reflect that policy in<br />
revisions to § 162.1102. We also revise<br />
the definition of ‘‘standard transaction’’<br />
in accordance with our policy to allow<br />
for the dual use of standards, by<br />
replacing ‘‘the applicable standard’’<br />
with ‘‘an applicable standard’’ at<br />
§ 162.103<br />
We proposed to clarify the<br />
descriptions for three standards:<br />
Enrollment and disenrollment, referral<br />
certification and authorization, and<br />
health care claims status and request. In<br />
the final rule we do so, by specifying the<br />
senders and receivers of those<br />
transactions in § 162.1301, § 162.1401<br />
and § 162.1501.<br />
In the proposed rule, at § 162.900, we<br />
stated that ASC X12N implementation<br />
specifications and the ASCX12 Standard<br />
for Electronic Data interchange<br />
Technical Report Type 3 were available<br />
from the Washington Publishing<br />
Company. In the final rule, we provide<br />
the correct address and Web site for<br />
obtaining the Version 5010 guides, from<br />
X12. Version 4010/4010A specifications<br />
may still be obtained from the<br />
Washington Publishing Company.<br />
IV. Collection of Information<br />
Requirements<br />
Under the Paperwork Reduction Act<br />
of 1995, we are required to provide 30day<br />
notice in the Federal Register and<br />
solicit public comment before a<br />
collection of information requirement is<br />
submitted to the Office of Management<br />
and Budget (OMB) for review and
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approval. In order to fairly evaluate<br />
whether an information collection<br />
should be approved by OMB, section<br />
350(c)(2)(A) of the Paperwork Reduction<br />
Act of 1995 requires that we solicit<br />
comment on the following issues:<br />
• The need for the information<br />
collection and its usefulness in carrying<br />
out the proper functions of our agency.<br />
• The accuracy of our estimate of the<br />
information collection burden.<br />
• The quality, utility, and clarity of<br />
the information to be collected.<br />
• Recommendations to minimize the<br />
information collection burden on the<br />
affected public, including automated<br />
collection techniques.<br />
In this rule, we are finalizing the<br />
revisions to the information collection<br />
requirements that were announced in<br />
the proposed rule that was published on<br />
August 22, 2008 (73 FR 49742).<br />
Specifically, we are revising the<br />
currently approved information<br />
collection requirements contained in<br />
§ 162.1102, § 162.1202, § 162.1301,<br />
§ 162.1302, § 162.1401, § 162.1402,<br />
§ 162.1501, § 162.1502, § 162.1602,<br />
§ 162.1702, and § 162.1802 of this<br />
document. We believe that the revisions<br />
will have an impact on the burden (both<br />
hour burden and cost burden)<br />
associated with the aforementioned<br />
affected sections that are currently<br />
approved under OCN 0938–0866 with<br />
an expiration date of 7/31/2011. In<br />
addition to announcing the revisions in<br />
the proposed rule, we published a 60day<br />
Federal Register notice on October<br />
10, 2008 (73 FR 60296) that solicited<br />
public comments on the proposed<br />
revisions. No comments were received.<br />
Accordingly, we have submitted a<br />
revised information collection request to<br />
OMB for its review and approval of the<br />
revised information collection<br />
requirements. These requirements are<br />
not effective until approved by OMB.<br />
If you wish to comment on these<br />
information collection and<br />
recordkeeping requirements, please fax<br />
your comments to 202–395–6974 or<br />
email your comments to<br />
oira_submission@omb.eop.gov. Please<br />
mark comments to the attention of the<br />
desk officer for CMS and indicate that<br />
they are in relation to OMB control<br />
number 0938–0866.<br />
V. Regulatory Impact Analysis<br />
A. Overall Impact<br />
We have examined the impacts of this<br />
rule as required by Executive Order<br />
12866 (September 1993, Regulatory<br />
Planning and Review), as amended by<br />
Executive Order 13258 (February 26,<br />
2002) and further amended by Executive<br />
Order 13422 (January 18, 2007), the<br />
Regulatory Flexibility Act (RFA)<br />
(September 19, 1980, Pub. L. 96–354),<br />
section 1102(b) of the Social Security<br />
Act, the Unfunded Mandates Reform<br />
Act of 1995 (Pub. L. 104–4), Executive<br />
Order 13132 on Federalism, and the<br />
Congressional Review Act (5 U.S.C.<br />
804(2)).<br />
Executive Order 12866 (as further<br />
amended) directs agencies to assess all<br />
costs and benefits of available regulatory<br />
alternatives and, if regulation is<br />
necessary, to select regulatory<br />
approaches that maximize net benefits<br />
(including potential economic,<br />
environmental, public health and safety<br />
effects, distributive impacts, and<br />
equity). A regulatory impact analysis<br />
(RIA) must be prepared for major rules<br />
with economically significant effects<br />
($100 million or more in any 1 year).<br />
Because we estimate that this rule will<br />
have economically significant effects,<br />
we prepared an RIA. We anticipate that<br />
the adoption of the new versions of the<br />
standards and the adoption of Version<br />
3.0 would result in benefits that will<br />
outweigh the costs. Accordingly, we<br />
prepared a Regulatory Impact Analysis<br />
in the August 22, 2008 proposed rule<br />
that, to the best of our ability, presented<br />
the costs and benefits of the proposals.<br />
We did not receive any comments on<br />
the Regulatory Flexibility Analysis, and<br />
therefore provide a summary here. For<br />
details, we refer readers to the August<br />
22, 2008 proposed rule at 73 FR 49757.<br />
B. Regulatory Flexibility Analysis<br />
The Regulatory Flexibility Act (RFA)<br />
of 1980, Public Law 96–354, requires<br />
agencies to describe and analyze the<br />
impact of the rule on small entities<br />
unless the Secretary can certify that the<br />
regulation will not have a significant<br />
impact on a substantial number of small<br />
entities. In the health care sector, a<br />
small entity is one with between $6.5<br />
million and $31.5 million in annual<br />
revenues or is a nonprofit organization.<br />
For the purposes of this analysis<br />
(pursuant to the RFA), nonprofit<br />
organizations are considered small<br />
entities; however, individuals and<br />
States are not included in the definition<br />
of a small entity. We attempted to<br />
estimate the number of small entities<br />
and provided a general discussion of the<br />
effects of the proposed regulation, and<br />
where we had difficulty, or were unable<br />
to find information, we solicited<br />
industry comment. We stated our belief<br />
that the conversion to Versions 5010<br />
and D.0 would have an impact on<br />
virtually every health care entity. We<br />
did not receive any comments in<br />
response to our solicitation for<br />
comments.<br />
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In our analysis, we combined<br />
Versions 5010 and D.0 because these<br />
two standards will be implemented at<br />
the same time, and in some cases are<br />
dependent on each other. We provided<br />
examples in the August 22, 2008<br />
proposed rule (73 FR 49758).<br />
The summary table in this final rule<br />
includes the final cost estimates for<br />
Versions 5010, D.0 and 3.0 on all<br />
entities we anticipated would be<br />
affected by the rule. The data in that<br />
table were used in this analysis to<br />
provide cost information.<br />
Because most health care providers<br />
are either nonprofit or meet the Small<br />
Business Administration’s (SBA) size<br />
standard for small business, we treated<br />
all health care providers as small<br />
entities. For providers, we predicted<br />
that the changes would be minimal<br />
involving software upgrades for practice<br />
management and billing systems. We<br />
included pharmacies in the analysis,<br />
and considered some of them to be<br />
small businesses. We considered some<br />
health plans small businesses, but were<br />
unable to identify data for these entities,<br />
nor was any information submitted in<br />
response to our solicitation. We<br />
addressed clearinghouses and Pharmacy<br />
Benefit Managers (PBMs) in our<br />
discussion, though we did not believe<br />
that there were a significant number of<br />
clearinghouses that would be<br />
considered small entities. This was<br />
confirmed by a number of associations,<br />
including the Maryland Commission for<br />
Health Care. PBMs were excluded from<br />
the analysis because we had no data to<br />
indicate that they would qualify as a<br />
small entity. State Medicaid agencies<br />
were excluded from the analysis<br />
because States are not considered small<br />
entities in any Regulatory Flexibility<br />
Analysis.<br />
Final Regulatory Flexibility Analysis<br />
(FRFA)<br />
1. Number of Small Entities<br />
In total, we estimated that there are<br />
more than 300,000 health care<br />
organizations that may be considered<br />
small entities either because of their<br />
nonprofit status or because of their<br />
revenues. The Business Census data<br />
shows that there are 4,786 firms<br />
considered as health plans and/or<br />
payers (NAICS code 5415) responsible<br />
for conducting transactions with health<br />
care providers. In the proposed rule’s<br />
impact analysis, we used a smaller<br />
figure based on a report from AHIP. But<br />
for purposes of the RFA, we did not<br />
identify a subset of small plans, and<br />
instead solicited industry comment as to<br />
the percentage of plans that would be<br />
considered small entities. We identified
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the top 78 clearinghouses/vendors in<br />
the Faulkner and Gray health data<br />
directory from 2000—the last year this<br />
document was produced. Health care<br />
clearinghouses provide transaction<br />
processing and translation services to<br />
both providers and health plans.<br />
We identified nearly 60,000<br />
pharmacies, using the National<br />
Association of Chain Drug Stores<br />
Industry Profile (2007) (http://<br />
www.nacds.org), and for the purposes of<br />
the initial regulatory flexibility analysis<br />
we are treating all independent<br />
pharmacies reported in the Industry<br />
Profile as ‘‘small entities.’’ The number<br />
of independent pharmacies reported for<br />
2006 is approximately 17,000 entities.<br />
We specifically invited comments on<br />
the number of small pharmacies, but<br />
received none.<br />
Based on Figure 2 of the Industry<br />
Profile, independent pharmacy<br />
prescription drug sales accounted for<br />
17.4 percent of total pharmacy drug<br />
sales of $249 billion sales for 2006.<br />
Allocating the Versions 5010 and D.0<br />
costs based on the share of prescription<br />
drug revenues to independent<br />
pharmacies (the small businesses),<br />
implementation costs are expected to<br />
range between $6.4 million and $13<br />
million or 0.02 and 0.03 percent of<br />
revenues. These figures indicate that<br />
there is minimal impact, and the effect<br />
falls well below the HHS threshold of 3<br />
to 5 percent specified in the HHS<br />
guidance on treatment of small entities<br />
(see: ‘‘Guidance on Proper<br />
Consideration of Small Entities in<br />
Rulemakings of the U.S. Department of<br />
Health and Human Services’’ http://<br />
www.hhs.gov/execsec/<br />
smallbus.pdf.pdf).<br />
2. Costs for Small Entities<br />
To determine the impact on health<br />
care providers we used Business Census<br />
data on the number of establishments<br />
for hospitals and firms for the classes of<br />
providers and revenue data reported in<br />
the Survey of Annual Services for each<br />
NAICS code. For other providers, we<br />
assumed that the costs to implement<br />
Version 5010 would be accounted for at<br />
the level of firms rather than at the<br />
individual establishments. Since we<br />
treated all health care providers as small<br />
entities for the purpose of the initial<br />
regulatory flexibility analysis, we<br />
allocated 100 percent of the<br />
implementation costs reported in the<br />
impact analysis for provider type. Table<br />
2 shows the impact of the Version 5010<br />
implementation costs as a percent of the<br />
provider revenues. For example,<br />
dentists, with reported 2005 revenues of<br />
$87.4 billion and costs ranging from<br />
$299 million to $598 million have the<br />
largest impact on their revenues of<br />
between 0.11 percent and 0.21 percent.<br />
We solicited comments specifically on<br />
the number of providers affected by the<br />
proposed rule, but received none.<br />
We did not include an analysis of the<br />
impact on small health plans, because<br />
we were not able to determine the<br />
number of plans that meet the SBA size<br />
standard of $6.5 million in annual<br />
receipts.<br />
In evaluating whether there were any<br />
clearinghouses that could be considered<br />
small entities, we consulted with three<br />
national associations (EHNAC, HIMSS<br />
and the Cooperative Exchange), as well<br />
as the Maryland Commission for Health<br />
Care, and determined that the number of<br />
clearinghouses that would be<br />
considered small entities was negligible.<br />
We identified the top 78 clearinghouses,<br />
and determined that they are typically<br />
part of large electronic health networks,<br />
such as Siemens, RxHub, Availity, GE<br />
Healthcare etc., none of which fit into<br />
the category of small entity. As<br />
referenced earlier, in a report by<br />
Faulkner and Gray in 2000, the top 51<br />
entities were listed, and the range of<br />
monthly transactions was 2,500 to 4<br />
million, with transaction fees of $0.25<br />
per transaction to $2.50 per transaction.<br />
We determined that even based on these<br />
data, few of the entities would fall into<br />
the small entity category, and we did<br />
not count them in the analysis.<br />
With respect to Version 3.0, we point<br />
out that, while we do not know how<br />
many health plans/payers will exchange<br />
the pharmacy subrogation standard with<br />
Medicaid agencies, those entities would<br />
be counted in the health plan category<br />
and addressed under the analysis for<br />
Versions 5010 and D.0. We did not<br />
provide a separate analysis in this<br />
section.<br />
In sum, we assumed that the financial<br />
burden would be equal to or less than<br />
three percent of revenues. Based on the<br />
results of this analysis, we remain<br />
reasonably confident that the rule will<br />
not have a significant impact on a<br />
substantial number of small entities. As<br />
stated throughout this section, in spite<br />
of our request for comments on this<br />
analysis, we received none.<br />
Table 2 below summarizes the impact<br />
of the rule on the health care industry.<br />
TABLE 2—ANALYSIS OF IMPLEMENTATION OF THE BURDEN OF VERSIONS 5010, D.0 AND 3.0 ON SMALL COVERED<br />
ENTITIES<br />
NAICS Entities<br />
Total no.<br />
of entities<br />
Small entities<br />
Revenue<br />
or receipts<br />
($<br />
millions)<br />
% Small<br />
entity receipts<br />
of<br />
total receipts<br />
Version<br />
5010/D.0<br />
annual<br />
costs (in<br />
millions)<br />
Small entity<br />
share<br />
of version<br />
5010/D.0<br />
costs (in<br />
millions<br />
$)<br />
% Implementation<br />
cost revenue-receipts(costs/receipts)<br />
6221 ................................ General Acute Care Hospitals (establishments) ..... 5,386 5,386 612,245 100 292–583 ................ .05–.10<br />
6211 ................................ Physicians (firms) .................................................... 189,562 189,562 330,889 100 136–272 ................ .04–.08<br />
6212 ................................ Dentists (firms) ........................................................ 118,163 118,163 87,405 100 94–187 ................ .11–.21<br />
44611 .............................. Pharmacies (includes 5010 and D.0) ...................... 56,946 17,482 249,000<br />
(42,330<br />
@ 17%)<br />
17.4 37–75 6.4–13 .02–.03<br />
In column 1 we display the NAICS<br />
code for class of entity. Column 3 shows<br />
the number of entities that are reported<br />
in the Business Census for 2006 or<br />
‘‘Chain Pharmacy Industry Profile.’’<br />
Column 4 shows the number of small<br />
entities that were computed based on<br />
the Business Census and Survey of<br />
Annual Service when the data was<br />
available. All health care providers were<br />
assumed to be small. We assumed that<br />
all independent pharmacies reported in<br />
Table 2 of the Industry profile are small<br />
entities.<br />
Column 5 shows revenues that were<br />
reported for 2005 in the Survey of<br />
Annual Services, or in the case of<br />
pharmacies, in Figure 2 of the Industry<br />
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profile. In the case of health plans and<br />
third party administrators, we used the<br />
consumer payments reported for private<br />
health insurance in 2006 in the National<br />
Health Expenditure accounts.<br />
Column 6 shows the percent of small<br />
entity revenues.<br />
Column 7 shows the implementation<br />
costs for Versions 5010, D.0 and 3.0
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taken from Table 14a of the impact<br />
analysis and annualized.<br />
Column 8 shows the costs allocated to<br />
the small entities based on the percent<br />
of small entity revenues to total<br />
revenues.<br />
Column 9 presents the percent of the<br />
small entity share of implementation<br />
costs as a percent of the small entity<br />
revenues. As stated in the guidance<br />
cited earlier in this section, HHS has<br />
established a baseline threshold of 3<br />
percent of revenues that would be<br />
considered a significant economic<br />
impact on affected entities. None of the<br />
entities exceeded or came close to this<br />
threshold.<br />
We note that the impact in our<br />
scenarios is consistently under the<br />
estimated impact of 3 percent for all of<br />
the entities listed above, which is below<br />
the threshold the Department considers<br />
as a significant economic impact. As<br />
expressed in the Department guidance<br />
on conducting regulatory flexibility<br />
analyses, the threshold for an economic<br />
impact to be considered significant is 3<br />
percent to 5 percent of either receipts or<br />
costs. As is clear from the analysis, the<br />
impact does not come close to the<br />
threshold. Thus, based on the foregoing<br />
analysis, we conclude that some health<br />
care providers may encounter<br />
significant burdens in the course of<br />
converting to the modified Versions<br />
5010 and D.0. However, we are of the<br />
opinion that, for most providers, health<br />
plans, and clearinghouses the costs will<br />
not be significant.<br />
3. Alternatives Considered<br />
As stated in the August 22, 2008<br />
proposed rule, we considered various<br />
policy alternatives to adopting Versions<br />
5010, D.0 and 3.0, including not<br />
adopting the modifications, using<br />
staggered implementation schedules,<br />
allowing implementation delays for<br />
small entities, and waiting to adopt a<br />
later version of the X12 and/or NCPDP<br />
standards. We rejected all of these<br />
alternatives, resulting in the adoption of<br />
the standards, as proposed, with an<br />
alternate compliance date.<br />
4. Conclusion<br />
As stated in the HHS guidance cited<br />
earlier in this section, HHS uses a<br />
baseline threshold of 3 percent of<br />
revenues to determine if a rule would<br />
have a significant economic impact on<br />
affected entities. None of the entities<br />
exceeded or came close to this<br />
threshold. Based on the foregoing<br />
analysis, the Secretary certifies that this<br />
final rule will not have a significant<br />
economic impact on a substantial<br />
number of small entities.<br />
Section 1102(b) of the Act requires us<br />
to prepare a regulatory impact analysis<br />
if a rule would have a significant impact<br />
on the operations of a substantial<br />
number of small rural hospitals. This<br />
analysis must conform to the provisions<br />
of section 603 of the RFA. For purposes<br />
of section 1102(b) of the Act, we define<br />
a small rural hospital as a hospital that<br />
is located outside of a metropolitan<br />
statistical area and has fewer than 100<br />
beds. This final rule will affect the<br />
operations of a substantial number of<br />
small rural hospitals because they are<br />
considered covered entities under<br />
HIPAA, however, we do not believe the<br />
rule will have a significant impact on<br />
those entities, for the reasons stated<br />
above in reference to small entities.<br />
Therefore, the Secretary has determined<br />
that this final rule will not have a<br />
significant impact on the operations of<br />
a substantial number of small rural<br />
hospitals.<br />
Section 202 of the Unfunded<br />
Mandates Reform Act of 1995 (UMRA)<br />
also requires that agencies assess<br />
anticipated costs and benefits before<br />
issuing any rule whose mandates would<br />
require spending, in any 1 year, $100<br />
million in 1995 dollars, updated<br />
annually for inflation. In 2008, that<br />
threshold is approximately $130<br />
million. This final rule contains<br />
mandates that will impose spending<br />
costs on State, local, or tribal<br />
governments in the aggregate, or by the<br />
private sector, in excess of the current<br />
threshold. The impact analysis in the<br />
proposed rule addressed those impacts<br />
both qualitatively and quantitatively. In<br />
general, each State Medicaid Agency<br />
and other government entity that is<br />
considered a covered entity will be<br />
required to invest in software, testing<br />
and training to accommodate the<br />
adoption of the updated versions of the<br />
standards, and Version 3.0. UMRA does<br />
not address the total cost of a rule.<br />
Rather, it focuses on certain categories<br />
of cost, mainly those ‘‘Federal mandate’’<br />
costs resulting from (A) imposing<br />
enforceable duties on State, local, or<br />
tribal governments, or on the private<br />
sector, or (B) increasing the stringency<br />
of conditions in, or decreasing the<br />
funding of, State, local, or tribal<br />
governments under entitlement<br />
programs.<br />
Executive Order 13132 establishes<br />
certain requirements that an agency<br />
must meet when it promulgates a<br />
proposed rule (and subsequent final<br />
rule) that imposes substantial direct<br />
requirement costs on State and local<br />
governments, preempts State law, or<br />
otherwise has Federalism implications.<br />
This final rule will have a substantial<br />
direct effect on State or local<br />
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3313<br />
governments, could preempt State law,<br />
or otherwise have a Federalism<br />
implication because, even though State<br />
Medicaid agencies will be converting to<br />
a modified version of an existing<br />
standard (Version 4010/4010A to<br />
Version 5010 and NCPCP 5.1 to NCPDP<br />
D.0) with which they are familiar, there<br />
are expenses for implementation and<br />
widescale testing. State Medicaid<br />
agencies are currently required to<br />
conduct pharmacy subrogation, and in<br />
accordance with this final rule, will be<br />
able either to use the new Medicaid<br />
pharmacy subrogation transaction<br />
standard or contract with trading<br />
partners and/or contractors who<br />
specialize in this field to fulfill its<br />
subrogation requirement. With respect<br />
to subrogation for pharmacy claims, we<br />
note that this final rule does not add a<br />
new business requirement for States, but<br />
rather mandates a standard to use for<br />
this purpose which will be used<br />
consistently by all States. There will<br />
also be expenditures for States as they<br />
convert from Version 5.1 to D.0 for other<br />
pharmacy transactions, and this<br />
transition will have implementation and<br />
testing costs as well, meaning there will<br />
be additional fiscal impacts on States<br />
based on this rule.<br />
C. Anticipated Effects<br />
The objective of this regulatory<br />
impact analysis was to summarize the<br />
costs and benefits of the following<br />
proposals:<br />
• Migrating from Version 4010/4010A<br />
to Version 5010 in the context of the<br />
current health care environment;<br />
• Migrating from Version 5.1 to<br />
Version D.0; and<br />
• Adopting a new standard for the<br />
Medicaid subrogation transaction.<br />
The following are the key issues that<br />
we believe necessitate the adoption of<br />
these modified standards and of a<br />
standard for Medicaid pharmacy<br />
subrogation:<br />
• The current X12 and NCPDP<br />
standards were adopted in 2000 and do<br />
not reflect the numerous business<br />
changes that have emerged during that<br />
time.<br />
• The current standards do not<br />
accommodate the use of ICD–10 codes.<br />
• The standard for Medicaid<br />
pharmacy subrogation will significantly<br />
improve the efficiency of this process.<br />
The remainder of this section<br />
provides details supporting the cost<br />
benefit analysis for each of the three<br />
above-referenced proposals.<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49761), we described the<br />
research conducted for us by Gartner,<br />
Incorporated (Gartner) to assess the<br />
costs and benefits associated with the
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adoption of Version 5010. Details about<br />
Gartner’s methodology were provided in<br />
the August 22, 2008 proposed rule, and<br />
a summary of the calculations and<br />
methodology is available on the CMS<br />
Web site at: http://www.cms.hhs.gov/<br />
TransactionCodeSetsStands/Downloads<br />
/5010RegulatoryImpactAnalysis<br />
Supplement.pdf.<br />
In this section of the final rule, we<br />
summarize the key assumptions from<br />
the August 22, 2008 proposed rule, and<br />
discuss those with which commenters<br />
did not agree. In cases where we agreed<br />
with commenters, and changed our<br />
assumptions, we provide both the<br />
original and revised amounts,<br />
unadjusted for present value. The last<br />
section of the impact analysis contains<br />
the summary detailed tables with all of<br />
the costs and benefits recalculated to<br />
reflect the changes to the estimates for<br />
each of the standards and adjusted for<br />
present value. The analysis contained<br />
herein is presented at a high level. For<br />
a complete description of the analysis,<br />
see the Economic Impact Analysis in the<br />
docket of this final rule.<br />
Additionally, although many<br />
commenters mentioned that we<br />
underestimated the costs, or<br />
overestimated the benefits of<br />
transitioning to the new versions, no<br />
substantive data or additional<br />
information was provided to counter<br />
our analysis, and therefore, though some<br />
changes have been made, they are not<br />
substantial, particularly for the benefits<br />
that are detailed in this final rule.<br />
However, based on the information we<br />
did receive, there are three items that<br />
changed, which affected some of the<br />
figures in the impact analysis: (1) The<br />
cost estimate was increased from<br />
between 20 percent and 40 percent of<br />
the Version 4010/4010A costs to<br />
between 25 percent and 50 percent; (2)<br />
the salary for provider billing specialist<br />
was reduced from $60 thousand per<br />
year to $50 thousand per year; (3) the<br />
timing for adoption of the auxiliary<br />
standards was changed to begin in<br />
calendar year 2013 instead of calendar<br />
year 2012; These three items represent<br />
cost and benefit changes that are<br />
reflected in this revised impact analysis,<br />
and we have updated the tables for each<br />
industry sector accordingly. One of the<br />
benefit categories, Cost savings or<br />
savings due to new users of claims<br />
standards, is not impacted by the<br />
aforementioned items. We do not repeat<br />
this entire explanation in each section,<br />
but rather refer the reader back to this<br />
introduction.<br />
As noted in the preamble, the<br />
compliance date for Version 5010 has<br />
been changed to January 1, 2012, and<br />
the cost allocations have been updated<br />
in accordance with the new timeline.<br />
We assumed transition costs would<br />
occur in the fourth year of<br />
implementation (monitoring,<br />
maintaining, and adjusting the upgraded<br />
systems and related processes) and<br />
continue until all parties reach a<br />
‘‘steady state.’’<br />
While significant efforts were taken to<br />
ensure that the cost and benefits<br />
captured for this rule were accurate,<br />
there are a few key uncertainty factors<br />
that should be considered in reviewing<br />
the regulatory impact analysis:<br />
• As detailed in the next section<br />
(Assumptions for Version 5010 Impact<br />
Analysis), the primary driver for all of<br />
the cost estimates was the expected<br />
range of costs for all covered entities<br />
relative to those same costs for<br />
implementation and transition to<br />
Version 4010.<br />
• As detailed in the next section<br />
(Assumptions for Version 5010 Impact<br />
Analysis), one of the key drivers for all<br />
of the benefit estimates was increased<br />
use in electronic transactions. In all<br />
cases, HHS evaluated the industry<br />
feedback and used the conservative<br />
estimates for expected uptake in the<br />
electronic transactions so as to not<br />
inflate the benefits.<br />
• As explained in the section on<br />
Version D.0, there is uncertainty as to<br />
the complexity and the number of<br />
systems that will be affected, and<br />
industry experts made their best<br />
estimates on the possible impacts to<br />
their constituents.<br />
Assumptions for Version 5010 Impact<br />
Analysis<br />
In calculating the costs and benefits,<br />
Gartner made a number of assumptions,<br />
based on interview data and secondary<br />
research. We outlined the key<br />
assumptions used to support Version<br />
5010 impact analysis in the August 22,<br />
2008 proposed rule (73 FR 49762).<br />
Gartner projected the annual increase<br />
in the number of claims at four percent,<br />
and used these figures to calculate the<br />
provider benefits. We outlined annual<br />
claim volume projections in the August<br />
22, 2008 proposed rule (73 FR 49762),<br />
and did not receive any comments on<br />
those figures.<br />
Gartner estimated the current<br />
adoption rate for each of the HIPAA<br />
standards, and the projected rate of<br />
adoption for each of the modified<br />
versions of the standards over the<br />
planning horizon. We outlined those<br />
rates in the August 22, 2008 proposed<br />
rule (73 FR 49763). These figures were<br />
used to calculate the benefits for<br />
healthcare industry.<br />
Comment: We received a few<br />
comments disagreeing with our<br />
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assumptions about the increased use of<br />
auxiliary transactions. They stated that<br />
there will not be an automatic increase<br />
in the usage/volume of the auxiliary<br />
transactions, because the industry is<br />
still establishing a clear business need<br />
for these less widely used transactions<br />
(which are required for plans, but<br />
voluntary for providers). Auxiliary<br />
transactions are those that supplement<br />
or support claims information,<br />
including eligibility, enrollment and<br />
disenrollment, referral requests and<br />
authorizations and premium payments.<br />
Commenters also stated that, because<br />
these transactions were not useful in<br />
Version 4010/4010A, there is still some<br />
hesitancy to use Version 5010 until the<br />
transactions can be evaluated. Because<br />
efforts will be focused on implementing<br />
the claims and eligibility transactions<br />
for Version 5010, commenters stated<br />
that it may take industry longer to<br />
schedule testing for the auxiliary<br />
transactions.<br />
Response: Gartner conducted<br />
additional discussions with industry<br />
experts regarding the original<br />
assumptions in the August 22, 2008<br />
proposed rule. These experts<br />
acknowledged that providers that do not<br />
now use these transactions will be<br />
focusing all their initial efforts on<br />
implementing the key claims<br />
transactions—claims and remittance<br />
advice—and that they would likely<br />
focus on implementing the auxiliary<br />
transactions later. Accordingly, we<br />
changed the benefits realization<br />
assumption for auxiliary transactions to<br />
start in year 2013 instead of 2012. We<br />
do not agree with the few commenters<br />
who stated there would be no increase<br />
in the use of auxiliary transactions. In<br />
fact, the Gartner interviewees did not<br />
veer from their original statements that<br />
the auxiliary transactions would be used<br />
by more providers, albeit after initial<br />
implementation of the core transactions<br />
for claims and remittance advice. An<br />
association for physicians, in its<br />
comments, stated that these transactions<br />
would be increasingly used because of<br />
the improvements in the standards<br />
themselves and increased streamlining<br />
of various administrative processes.<br />
The total benefits (low) across the<br />
industry declined from $18,635 million<br />
to $15,896 million.<br />
Comment: We received a comment<br />
from a government health program<br />
stating that it did not agree with our<br />
savings/benefits assumption of reduced<br />
phone calls. The commenter explained<br />
that the salary savings/benefit has<br />
historically been found to be false<br />
savings unless personnel positions were<br />
actually eliminated.
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Response: We disagree with the<br />
comment. Although personnel positions<br />
may not be eliminated, these personnel<br />
can be assigned to other tasks; in this<br />
case, the benefit is cost avoidance. Our<br />
estimates are based on cost avoidance,<br />
not personnel reductions.<br />
General Assumptions for the Cost-<br />
Benefit Analysis for Providers and<br />
Health Plans<br />
We outlined the key assumptions<br />
used to develop the cost benefit analysis<br />
for each of the provider segments—<br />
hospitals, physicians, pharmacies, and<br />
dentists as well as the health plans in<br />
the August 22, 2008 proposed rule (73<br />
FR 49763).<br />
Explanation of Cost Calculations<br />
To determine the costs for each<br />
subsegment (that is, providers and<br />
health plans), we established an<br />
estimate for what the total approximate<br />
Version 4010/4010A costs were for an<br />
individual entity within that<br />
subsegment (based on the interviews<br />
and other data available through<br />
research—see 73 FR 49761) and then<br />
applied an estimated range of 20 to 40<br />
percent of those costs to come up with<br />
estimated low and high costs for<br />
Version 5010. Additional information<br />
about the cost calculations and Gartner<br />
methodology are available in our<br />
supplemental document on the CMS<br />
Web site at: http://www.cms.hhs.gov/<br />
TransactionCodeSetsStands/Downloads<br />
/5010RegulatoryImpact<br />
AnalysisSupplement.pdf.<br />
Comment: As stated above, a number<br />
of commenters disagreed with our<br />
assumptions concerning the level of<br />
effort necessary to migrate to Version<br />
5010, in comparison with the initial<br />
implementation costs for Version 4010/<br />
4010A, and believed the costs to be<br />
significantly higher than our<br />
projections. Although no commenters<br />
actually provided a cost figure, a small<br />
number of commenters wrote that it<br />
would take 50 to 75 percent of the<br />
initial implementation effort to migrate<br />
to the new versions. The rationale<br />
provided was that:<br />
(1) Organizations will have to operate<br />
dual systems through both testing and<br />
implementation phases as different<br />
trading partners migrate at different<br />
times.<br />
(2) Additional considerations in the<br />
salary cost assumptions such as real<br />
estate, utilities, phone, computer<br />
systems, infrastructure, etc., to represent<br />
total cost of employee should be taken<br />
into consideration.<br />
Other commenters supported our<br />
assumptions regarding costs of<br />
operating dual systems through both<br />
testing and implementation phases.<br />
These commenters explained that there<br />
may be additional hardware costs to<br />
upgrade existing equipment to manage<br />
the dual use period, or enhanced<br />
functionality necessary when upgrading<br />
to new versions of software ready to<br />
handle the new versions. Another<br />
commenter disagreed with our<br />
statement that little or no transmission<br />
costs would be required to comply with<br />
the new regulation. The commenter said<br />
that new transmission costs will be<br />
created with new trading partners and<br />
new or increased number of<br />
transactions. Another commenter stated<br />
that, while there would be a number of<br />
one-time costs to implement Version<br />
5010 (for business flow changes,<br />
software procurement or customized<br />
software development, etc.), they did<br />
not agree that the system testing costs<br />
would account for 60 to 70 percent of<br />
all costs, but did not provide any<br />
additional detail for their dissension. In<br />
sum, while we received a variety of<br />
comments, none provided specific cost<br />
or implementation data to support their<br />
statements.<br />
Response: We agree that the industry<br />
will need to operate dual systems to<br />
process both versions of the standards,<br />
and that transmission costs will<br />
increase. The implementation of<br />
Version 4010/4010A required extensive<br />
remediation of applications;<br />
development of external support<br />
capability to deal with expanded code<br />
lengths; different handling of<br />
coordination of benefits; and a variety of<br />
other business changes. It further<br />
involved the first implementation of<br />
X12 transaction formats for many<br />
providers, health plans and<br />
clearinghouses. In addition, many<br />
providers switched from paper to<br />
electronic transmission concurrent with<br />
this change. The changes going from<br />
Version 4010/4010A to Version 5010 are<br />
far less extensive on the whole, even<br />
though there are a host of content and<br />
format changes. While we acknowledge<br />
the need to support both formats, the<br />
time spent dealing with errors and<br />
reworking business flows should not be<br />
nearly as great as the experience of<br />
implementing Version 4010/4010A.<br />
This difference in the scope of the<br />
changes between implementation of<br />
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3315<br />
Version 4010/4010A and Version 5010<br />
was one of the key bases for the original<br />
estimates that we obtained when<br />
surveying industry segments in<br />
preparing the August 22, 2008 proposed<br />
rule.<br />
With regard to the comments<br />
regarding dual hardware, many<br />
transaction mapping products are<br />
capable of supporting more than one<br />
variant of the transaction format using<br />
the same hardware and communications<br />
channels. Although some additional<br />
transaction volume will be required for<br />
testing and parallel operations, HHS has<br />
concluded that there will be an<br />
incremental need for added hardware<br />
and communications capacity to<br />
support submitting all transactions in<br />
both formats during the conversion<br />
period.<br />
With regard to the comment regarding<br />
additional salary cost assumptions, all<br />
cost estimates provided in the analysis<br />
presented in the proposed rule (73 FR<br />
49762) included the full set of overhead<br />
and added personnel costs including<br />
real estate, utilities, phone, computer<br />
systems, infrastructure, etc. These items<br />
are considered to be part of the fully<br />
loaded costs to implement and maintain<br />
the Version 5010 transactions and<br />
would also be considered to be costs<br />
avoided in the benefit period once all<br />
parties have implemented the new<br />
version.<br />
While most commenters did not<br />
provide specific data regarding<br />
additional costs, we nonetheless<br />
acknowledge that commenters generally<br />
believed our estimates to be too low,<br />
and did note specific areas of concern.<br />
Accounting for all of the new cost<br />
considerations, we have adjusted our<br />
assumption to a range of 25 to 50<br />
percent of the Version 4010/4010A<br />
implementation costs to move to<br />
Version 5010. The total costs (low<br />
estimate) incurred by the whole<br />
industry increased from $5,656 million<br />
to $7,717 million, unadjusted for<br />
present value.<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49764), we show Gartner’s<br />
estimates of the percent of the total costs<br />
allocated to each cost category (for<br />
example, testing and training) for the<br />
provider and plan segments. As<br />
discussed above, we used industry<br />
comments to revise the estimates for<br />
hardware and transmission costs. Table<br />
3 reflects the new allocations of the<br />
percent of the total costs to each cost<br />
category.
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TABLE 3—PERCENTAGE AND TOTAL AMOUNTS FOR COST ITEMS USED FOR VERSION 5010 CALCULATIONS—PROVIDERS<br />
AND HEALTH PLANS<br />
Cost item<br />
Percent of total costs<br />
Providers<br />
(percent)<br />
Health plans<br />
(percent)<br />
Hardware Procurement .................................................................................................................................................... 10 10<br />
Software Costs ................................................................................................................................................................ 10 7.5<br />
Transmission Costs ......................................................................................................................................................... 2.5 2.5<br />
New Data Collection ........................................................................................................................................................ 0 0<br />
Customized software development ................................................................................................................................. 5 2.5<br />
Testing Cost ..................................................................................................................................................................... 60 65<br />
Training Costs .................................................................................................................................................................. 2.5 2.5<br />
Transition Costs ............................................................................................................................................................... 10 10<br />
Totals ........................................................................................................................................................................ 100 100<br />
Original source: Gartner interviews and secondary research.<br />
Explanation of Benefits and Savings<br />
Calculations<br />
In our analysis, we assumed that<br />
benefits would accrue in three<br />
categories which were described and<br />
explained in detail in the August 22,<br />
2008 proposed rule (73 FR 49764). For<br />
ease of reference, they were labeled: (1)<br />
Better standards or savings due to<br />
improved claims standards; (2) Cost<br />
savings or savings due to new users of<br />
claims standards; and (3) Operational<br />
savings or savings due to increased<br />
auxiliary standards usage.<br />
For ease of reference, we repeat the<br />
explanation of the three savings<br />
categories:<br />
(1) Better standards or savings due to<br />
improved claims standards: The<br />
improvements in Version 5010 that<br />
would reduce manual intervention to<br />
resolve issues related to the claim or<br />
remittance advice, due to ambiguity in<br />
the standards;<br />
(2) Cost savings or savings due to new<br />
users of claims standards: Increased use<br />
of electronic transactions for claims and<br />
remittance advice that would accrue to<br />
parties who had previously avoided the<br />
electronic transactions because of their<br />
deficits and shortcomings; and<br />
(3) Operational savings or savings due<br />
to increased auxiliary standards usage:<br />
Increase use of auxiliary transactions<br />
through EDI that would result from a<br />
decrease in manual intervention to<br />
resolve issues with the data (handled<br />
through phone calls or correspondence).<br />
The August 22, 2008 proposed rule<br />
(73 FR 49765) details the business<br />
activities, such as manual interventions<br />
and phone calls, that make up the<br />
calculations for two of the categories of<br />
projected savings: Better standards or<br />
savings due to improved claims<br />
standards and Operational savings or<br />
savings due to increased auxiliary<br />
standards usage. As stated, only two of<br />
the three benefit categories are impacted<br />
by the revised assumptions.<br />
Comment: We received one comment<br />
disagreeing with our assumption that<br />
provider billing specialist yearly costs<br />
are $60,000. The commenter stated that<br />
the billing specialist yearly cost, on<br />
average across the country, is not higher<br />
than $50,000.<br />
Response: We agree with the<br />
comment after performing additional<br />
research regarding this assumption, and<br />
as a result, have changed our estimate<br />
regarding yearly costs for a provider<br />
billing specialist from $60,000 to<br />
$50,000. Based on this change, the total<br />
benefits (low estimate) across the<br />
industry declined from $18,635 million<br />
to $15,896 million, unadjusted for<br />
present value.<br />
The benefits category, ‘‘Cost savings,<br />
or savings due to new users of claims<br />
standards,’’ does not change as a result<br />
of our revised calculations. The revised<br />
provider billing specialist salary<br />
assumption only affects the benefit<br />
calculations for benefit category, ‘‘Better<br />
standards or savings due to improved<br />
claims standards’’ and the revised<br />
benefits realization assumption for<br />
auxiliary transactions only changes the<br />
benefit calculation for benefits category,<br />
‘‘Operational savings or savings due to<br />
increased auxiliary standards usage’’.<br />
However, the entire benefit projection<br />
changes because of the revised<br />
compliance date.<br />
1. Health Care Providers<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49765), we reiterated that<br />
providers are not required by HIPAA to<br />
conduct HIPAA transactions<br />
electronically, but if they do, they must<br />
use the standards adopted by the<br />
Secretary. Providers that conduct these<br />
transactions electronically would be<br />
required to implement Version 5010 of<br />
those transactions.<br />
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Hospitals<br />
In the August 22, 2008 proposed rule,<br />
we calculated that the total cost for all<br />
hospitals to implement Version 5010<br />
would be within a range of $932 million<br />
to $1,864 million (73 FR 49767). Based<br />
on the revised cost assumptions<br />
outlined earlier (increased rate of 25 to<br />
50 percent), the new estimate of total<br />
costs for all hospitals to implement<br />
Version 5010 will be within a range of<br />
$1,165 million to $2,331 million,<br />
unadjusted for present value.<br />
Hospitals would realize savings and<br />
benefits in the same three categories we<br />
identified in the August 22, 2008<br />
proposed rule (73 FR 49766). In the<br />
proposed rule, we calculated that the<br />
savings due to better standards were<br />
estimated to be a low of $403 million.<br />
Cost savings due to an increase in use<br />
of the electronic claims transactions<br />
(837 and 835) were estimated at a low<br />
of $66 million. Operational savings due<br />
to an increase in the use of auxiliary<br />
transactions were estimated at $1,314<br />
million.<br />
Based on the revised benefit<br />
assumptions outlined earlier, the new<br />
estimate for minimum savings due to<br />
better standards is $348 million and<br />
operational savings due to increase in<br />
the use of auxiliary claim transactions<br />
are $1,132 million, unadjusted for<br />
present value. The cost savings benefit<br />
category is not impacted by the revised<br />
benefit assumptions.<br />
Physicians and Other Providers<br />
We outlined the key assumptions<br />
used to develop the cost benefit analysis<br />
for physicians and other providers<br />
segment in the August 22, 2008<br />
proposed rule (73 FR 49767), and<br />
calculated that the total cost for all<br />
physicians and other providers segment<br />
to implement Version 5010 would be<br />
within a range of $435 million to $870<br />
million. Based on the revised cost
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assumption outlined earlier, the new<br />
estimate of total cost for physicians and<br />
other providers segment to implement<br />
Version 5010 is between $544 million to<br />
$1,088 million, unadjusted for present<br />
value.<br />
In the proposed rule, we calculated<br />
that the savings due to better standards<br />
was estimated to be a low of $1,612<br />
million. Cost savings due to an increase<br />
in use of the electronic claims<br />
transactions (837 and 835) were<br />
estimated at a low of $270 million.<br />
Operational savings due to an increase<br />
in the use of auxiliary transactions were<br />
estimated at $5,251 million.<br />
Based on the revised benefit<br />
assumptions outlined earlier (change in<br />
salary and later adoption of auxiliary<br />
transactions), the new estimate for<br />
physician savings due to better<br />
standards is $1,392 million and<br />
operational savings due to increase in<br />
the use of auxiliary claim transactions<br />
are $4,443 million, unadjusted for<br />
present value. As mentioned earlier, the<br />
benefit category cost savings is not<br />
impacted by the revised benefit<br />
assumptions.<br />
Dentists<br />
In the August 22, 2008 proposed rule,<br />
we acknowledged that the dental<br />
community has not yet widely adopted<br />
the HIPAA standards, in large part<br />
because the standards did not meet their<br />
practical business needs, particularly for<br />
claims and remittance advice. We<br />
assumed that the costs for implementing<br />
Version 5010 would largely fall on<br />
vendors as a cost of doing business, as<br />
they support the majority of dentists.<br />
We outlined the key assumptions used<br />
to develop the cost benefit analysis for<br />
dentists segment in the August 22, 2008<br />
proposed rule (73 FR 49768). We<br />
received a few general comments from<br />
the dental community regarding our<br />
estimates of the dental profession. We<br />
did not receive any actual cost data from<br />
any organization or practitioner.<br />
Comment: We received one comment<br />
clarifying a figure in Table 18 in the<br />
supplement document posted on the<br />
CMS Web site in October 2008. The<br />
clarification is that the number of<br />
dentist practices (outlined in Table 18)<br />
does not include a one-to-one<br />
relationship between dentists and their<br />
office, so the calculation assumes too<br />
large a number. The commenter did not<br />
provide a figure however.<br />
Response: We agree with the<br />
clarification and distinction, and have<br />
updated the table in the supplement to<br />
indicate the numbers were for<br />
individual dentists. However, in HHS’s<br />
opinion, the current cost estimates are<br />
not overstated. We derived the cost per<br />
dentist based on input provided by the<br />
industry, which reflected office costs, in<br />
keeping with the other portions of the<br />
analysis.<br />
Comment: We received one comment<br />
clarifying another data point—in Table<br />
19 in the supplement document posted<br />
on the CMS Web site in October 2008.<br />
The clarification is that the size of most<br />
dental practices is less than 5. In Table<br />
19, the practice size categories were too<br />
large (‘‘50–100 physicians’’ and ‘‘100 +<br />
physicians,’’) for dentistry, and should<br />
have reflected a smaller number at the<br />
lower end.<br />
Response: We agree with the<br />
clarification, and have updated the table<br />
to represent the data collected from the<br />
industry. However, the calculation of<br />
the costs and benefits are not affected by<br />
this comment.<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49768), we calculated that the<br />
total cost for dentists to implement<br />
Version 5010 would be within a range<br />
of $299 million to $598 million. Based<br />
on revised cost assumption outlined<br />
earlier, the new revised estimate of total<br />
costs for the dentist segment to<br />
implement Version 5010 is within a<br />
range of $373 million to $747 million,<br />
unadjusted for present value.<br />
Based on the revised benefit<br />
assumptions outlined earlier, the new<br />
estimate for savings due to better<br />
standards is $236 million and<br />
operational savings due to increase in<br />
the use of auxiliary claim transactions<br />
are $753 million, unadjusted for present<br />
value. As mentioned earlier, the benefit<br />
category cost savings is not impacted by<br />
the revised benefit assumptions.<br />
Pharmacies<br />
Pharmacies will transition to greater<br />
use of Version 5010 when the final rule<br />
becomes effective, specifically for the<br />
835 transaction (remittance advice). For<br />
retail pharmacy claims, pharmacies<br />
primarily use the NCPDP standard,<br />
Version 5.1. Since we are replacing<br />
Version 5.1 with Version D.0 in this<br />
regulation, and many of the system<br />
changes, costs and benefits for<br />
implementing both Version 5010 and<br />
Version D.0 will result from related<br />
efforts, we combined the impact<br />
analysis for Version 5010 and Version<br />
D.0. That analysis is detailed later in<br />
this analysis.<br />
Comment: We received a comment<br />
from a pharmacy chain that identified a<br />
pharmacy segment that was not<br />
considered in the regulatory impact<br />
analysis. The commenter stated that<br />
there are retail pharmacies that are not<br />
considered a chain store, and would not<br />
fall under the category of independent<br />
pharmacies. In addition, the commenter<br />
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3317<br />
provided representative costs incurred<br />
by a typical retail pharmacy in this<br />
segment. This commenter said that the<br />
cost of implementation of both the<br />
standards (Versions D.0 and 5010)<br />
would be approximately $250,000, with<br />
90 percent of the cost associated with<br />
the upgrade from Version 4010/4010A<br />
to Version 5010.<br />
Response: Although the commenter<br />
had identified representative costs, it<br />
did not provide additional information<br />
regarding the number of retail chains<br />
that fall in this segment. We were,<br />
therefore, not able to re-model the<br />
impact analysis based on the additional<br />
information provided by the<br />
commenter. Furthermore, the impact<br />
analysis for pharmacies is handled in<br />
the section for Version D.0 and we<br />
believe those figures are representative<br />
of the segment overall.<br />
Health Plans<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49769), we outlined the key<br />
assumptions used to develop the cost<br />
benefit analysis for the health plans<br />
segment. We calculated that the total<br />
cost for health plans to implement<br />
Version 5010 would be within a range<br />
of $3,604 million to $7,209 million.<br />
Based on the revised cost assumption<br />
outlined earlier, the new estimate of<br />
total cost for health plans to implement<br />
Version 5010 is to be within a range of<br />
$4,505 million to $9,011 million,<br />
unadjusted for present value.<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49769), we calculated that the<br />
savings due to better standards were<br />
estimated at a low of $1,283 million.<br />
Cost savings due to an increase in use<br />
of the electronic claims transactions<br />
(837 and 835) were estimated at a low<br />
of $111 million. Operational savings<br />
due to an increase in the use of auxiliary<br />
transactions were estimated at $4,386<br />
million. We outlined the Version 5010<br />
cost benefit summary for health plans<br />
segment (73 FR 49769).<br />
Based on the revised benefit<br />
assumptions outlined earlier, the new<br />
estimate for savings due to better<br />
standards is $1,093 million, and<br />
operational savings due to increase in<br />
the use of auxiliary claim transactions<br />
are $3,711 million, unadjusted for<br />
present value. As mentioned earlier, the<br />
benefit category cost savings is not<br />
impacted by the revised benefit<br />
assumptions.<br />
Government Plans<br />
We outlined the key assumptions<br />
used to develop the cost benefit analysis<br />
for government plans segment in the<br />
August 22, 2008 proposed rule (73 FR<br />
49770), and calculated that the total
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costs for government plans segment to<br />
implement Version 5010 would be<br />
within a range of $252 million to $481<br />
million. Based on the revised cost<br />
assumption outlined earlier, the new<br />
estimate of total costs for the<br />
government plans segment to<br />
implement Version 5010 is within a<br />
range of $314 million to $601 million,<br />
unadjusted for present value.<br />
In the August 22, 2008 proposed rule,<br />
we estimated that savings due to better<br />
standards would be a low of $279<br />
million. Cost savings due to an increase<br />
in use of the electronic claims<br />
transactions (837 and 835) were<br />
estimated to be a low of $24 million.<br />
Operational savings due to an increase<br />
in the use of auxiliary transactions were<br />
estimated at $953 million. We outlined<br />
the Version 5010 cost benefit summary<br />
for government plans segment (73 FR<br />
49770).<br />
Based on the revised benefit<br />
assumptions outlined earlier, the new<br />
estimate for savings due to better<br />
standards is $238 million and<br />
operational savings due to increase in<br />
the use of auxiliary claim transactions<br />
are $807 million, unadjusted for present<br />
value. As mentioned earlier, the benefit<br />
category cost savings is not impacted by<br />
the revised benefit assumptions.<br />
Clearinghouses and Vendors<br />
We outlined the key assumptions<br />
used to develop the cost benefit analysis<br />
for clearinghouses and vendors segment<br />
in the August 22, 2008 proposed rule<br />
(73 FR 49770), and calculated that the<br />
total costs for clearinghouses to<br />
implement Version 5010 would be<br />
within a range of $37 million to $45<br />
million.<br />
Comment: We received a comment<br />
from a large clearinghouse stating that<br />
our cost assumptions were significantly<br />
understated, and that their costs to<br />
implement Version 5010 would be at<br />
least $3.5 million, and would be<br />
affected specifically by the amount of<br />
testing that would be required with<br />
trading partners—both providers and<br />
health plans.<br />
Response: We agree with the<br />
comment based on several additional<br />
interviews with large and medium<br />
clearinghouse representatives. In<br />
preparing the final rule, we did some<br />
additional analysis on a larger sample of<br />
the 162 clearinghouses that we included<br />
in our estimate. In this analysis we<br />
found that the cost per clearinghouse<br />
would be driven primarily by the<br />
number of trading partners with whom<br />
the clearinghouses would need to test<br />
Version 5010 transactions. The number<br />
varied greatly between the smaller<br />
clearinghouses and the larger ones and,<br />
therefore, created a range of costs for<br />
implementation and transition to<br />
Version 5010 based on this variable.<br />
Using this analysis, we increased our<br />
estimates and came up with an average<br />
implementation cost for each<br />
clearinghouse of $1 million (low) and<br />
$1.21 million (high) (up from a range of<br />
$0.23 million to $0.28 million). The<br />
total costs (low) for the clearinghouse<br />
segment increased from $37 million to<br />
$160 million.<br />
Based on the comments, we revised<br />
our estimate of the total costs for the<br />
clearinghouse segment to implement<br />
Version 5010 to be within a range of<br />
$160 million to $196 million,<br />
unadjusted for present value.<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49771), we stated our<br />
assumption that there would be no<br />
benefits for clearinghouses. We did not<br />
receive any comments on this<br />
assumption, but feedback from industry<br />
interviews supports our belief that other<br />
than business stability, there are no<br />
other benefits for clearinghouses.<br />
Other Comments Pertaining to Cost<br />
Estimates<br />
Comment: We received a few<br />
comments requesting that HHS review<br />
the WEDI Cost Benefit Analysis (CBA)<br />
documents prepared in CY2007 and<br />
consider the industry projections of<br />
Version 5010 implementation costs from<br />
that analysis.<br />
Response: We reviewed all of the CBA<br />
documents forwarded by WEDI. We<br />
were able to make some qualitative<br />
inferences based on the CBA survey<br />
responses and used those to solicit<br />
additional feedback from industry<br />
leaders regarding the CBA findings and<br />
to better augment the regulatory impact<br />
analysis. The input from this analysis<br />
helped inform the changes we have<br />
outlined in the final rule. However, we<br />
did not take the CBA estimates in their<br />
current form because:<br />
• The CBA does not capture a<br />
breakdown of costs by healthcare sub<br />
segment but rather at the aggregate.<br />
Although the CBA summarizes the<br />
survey responses, it does not include<br />
analysis based on the survey responses.<br />
For example, the CBA captures the<br />
survey responses regarding participant<br />
details and the cost details. It does not<br />
tie the cost by survey participant as to<br />
establish a clear basis for comparison<br />
across organizations of similar size and<br />
type.<br />
• It is difficult to develop Version<br />
5010 costs based on the WEDI CBA<br />
because each analysis was conducted by<br />
transaction. For example, there are three<br />
analyses, one for each transaction: 835,<br />
837 and 276/277. The costs outlined in<br />
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the CBA have a high potential for<br />
overlap. In addition, participants are<br />
different for each survey. For example:<br />
837 survey participants include four<br />
long term care health plans while 835<br />
survey participants did not include any<br />
health plans.<br />
• The survey results were not from a<br />
controlled sample. The depth of the<br />
survey respondent’s understanding of<br />
the impact of Version 5010 was unclear.<br />
The lack of attribution and ability to<br />
contextualize survey responses makes it<br />
difficult to use the WEDI CBA directly;<br />
the utility of the data is extremely<br />
limited because of the small number of<br />
respondents, the uncertainty of the<br />
responses (over 1 ⁄3 of the payer, provider<br />
and vendor responders answered ‘‘not<br />
sure’’ when asked to estimate the costs<br />
for new software, upgrading of existing<br />
software, and custom solutions), and the<br />
lack of consistency of respondents<br />
across surveys.<br />
As a result of these factors, this final<br />
rule is informed by the qualitative input<br />
from the WEDI CBA, but relies on the<br />
specific cost benefit study performed by<br />
Gartner to prepare the regulatory impact<br />
analysis for the August 22, 2008<br />
proposed rule to adopt Version 5010.<br />
Comment: One commenter stated that<br />
costs estimated to implement Version<br />
5010 were 150 percent of the costs<br />
incurred during NPI implementation.<br />
Response: We understand the context<br />
of the comment, although the<br />
commenter did not provide any data on<br />
which we could conduct any analysis or<br />
comparison. Since the commenter did<br />
not provide baseline data, a specific<br />
analysis could not be done to help us<br />
consider revising our cost estimates<br />
further.<br />
Comment: We received a few<br />
comments requesting that HHS use the<br />
actual Version 4010/4010A<br />
implementation costs incurred by<br />
Medicare and Medicaid to estimate the<br />
truer costs to implement Version 5010.<br />
Response: We acknowledge the<br />
comment, but do not provide a specific<br />
number for the Version 4010/4010A<br />
implementation costs incurred by<br />
Medicare and Medicaid. The budgetary<br />
process used by Medicare and Medicaid<br />
allocates funds for all approved Health<br />
Information Technology initiatives, and<br />
those estimates were used in our<br />
analysis, as was other data obtained<br />
from the industry at large. With respect<br />
to Medicare expenditures specifically,<br />
funds are allocated to the contractors for<br />
purposes of all updates and releases<br />
each year. Medicaid agencies do not<br />
report on a specific implementation, but<br />
rather track all system changes for<br />
purposes of federal cost sharing.
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Comment: We received one comment<br />
requesting that HHS examine the costs<br />
for providers who must submit<br />
electronic information to HIPAAexempt<br />
payers such as auto insurance,<br />
workers’ compensation, property and<br />
casualty insurers who are not required<br />
to accept the HIPAA standard<br />
transactions. These providers must<br />
operate separate systems to support the<br />
requirements of covered and noncovered<br />
entities.<br />
Response: This is consistent with<br />
current practice. These referenced<br />
entities have never been covered under<br />
HIPAA; there are already processes and<br />
systems being used to submit claims to<br />
different payer types. The commenter<br />
did not submit any data with respect to<br />
claims volumes or costs to help support<br />
the statement that these costs are unique<br />
and need to be examined.<br />
Version D.0 (and Version 5010 for<br />
pharmacies)<br />
In this section of the impact analysis,<br />
we summarize the key assumptions<br />
from the August 22, 2008 proposed rule,<br />
and discuss those with which the<br />
commenters disagreed. In cases where<br />
we agreed with the commenters and<br />
changed our estimates, revised tables<br />
are provided. In cases where we did not<br />
change our assumptions or estimates,<br />
the table from the August 22, 2008<br />
proposed rule is not repeated. The last<br />
section of the impact analysis contains<br />
the summary detailed tables with all of<br />
the costs and benefits recalculated to<br />
reflect the changes. In general,<br />
pharmacy chains, health plans and<br />
PBMs believed that our cost estimates<br />
were too low, and provided modest<br />
justification for their position, but no<br />
entity provided actual data that could be<br />
used to adjust our estimates with<br />
precision. Based on the comments, we<br />
made some changes to our original<br />
assumptions and estimates for the cost<br />
of implementing Versions D.0 for<br />
pharmacy benefit managers.<br />
As stated in the preamble, there was<br />
consensus that we should adopt Version<br />
D.0 to replace Version 5.1. No<br />
commenters disagreed with our<br />
estimates of the number of organizations<br />
and professionals affected by this rule,<br />
and there was also no disagreement<br />
about the estimate of more than 2.3<br />
billion prescriptions annually.<br />
Costs<br />
a. Chain Pharmacies<br />
The retail pharmacy industry would<br />
be the most impacted by the transition<br />
from Version 5.1. to Version D.0. In the<br />
August 22, 2008 proposed rule, we<br />
reported that one large national<br />
pharmacy chain estimated that it spent<br />
approximately $10 million when it<br />
converted to Version 5.1. In comparison,<br />
this chain estimated that corporate-wide<br />
costs for the conversion to Version D.0,<br />
including programming, system testing<br />
and personnel training, would be<br />
around $2 million per chain. Another<br />
large national pharmacy chain estimated<br />
its migration costs from Version 5.1 to<br />
Version D.0 would be $1.5 million. We<br />
solicited industry input in preparation<br />
for the proposed impact analysis, and<br />
the overall initial industry input for<br />
conversion to D.0 ranged from $100,000<br />
for a small pharmacy chain to $1<br />
million for large national pharmacy<br />
chains. Based on this information, we<br />
estimated implementation costs to be<br />
$20 million for large national pharmacy<br />
chains, and $18 million for small<br />
chains, for a total of $38 million.<br />
Comment: We received a few<br />
comments disagreeing with our original<br />
cost estimates. One large chain<br />
estimated their cost at $4.9 million over<br />
two years but did not provide specifics.<br />
Another commenter estimated<br />
implementation costs of $2 million for<br />
small chains with costs increasing based<br />
on the size of the chain, but indicated<br />
that this estimate included both Version<br />
D.0 and Version 5010 costs.<br />
Response: The few comments we<br />
received on this topic did not provide<br />
enough detail to permit us to assess<br />
them, and in one case the estimate did<br />
not distinguish between Version D.0<br />
and Version 5010 costs. We retain our<br />
original estimates of $100,000 per small<br />
pharmacy chain and $1 million per<br />
large pharmacy chain company,<br />
unadjusted for present value. We<br />
estimate that these costs would be<br />
spread over the first two years of<br />
implementation of Version D.0.<br />
b. Independent Pharmacies<br />
In the August 22, 2008 proposed rule,<br />
we stated that independent pharmacies<br />
would incur costs resulting from<br />
software upgrades to accommodate<br />
Version D.0. We stated that we believed<br />
that maintenance fees would increase<br />
slightly, as vendors pass along their cost<br />
of the upgrade to the pharmacy. Based<br />
on industry input, we estimated that the<br />
average monthly maintenance contract<br />
between a pharmacy and a vendor<br />
amounts to a range of $400 to $800 per<br />
month per pharmacy with an additional<br />
percent for maintenance fee increases<br />
attributable to the conversion to Version<br />
D.0. Our original estimate per pharmacy<br />
was a range of $540,000 to $1,080,000<br />
based on 18,000 independent<br />
pharmacies.<br />
We did not receive any comments<br />
from any independent pharmacist or<br />
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from any of their associations; therefore<br />
we stand by our original assumptions.<br />
We have modified the dates for those<br />
costs, in accordance with the revised<br />
compliance schedule.<br />
c. Health Plans and PBMs<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49773), we stated that health<br />
plans should see minimal changes in<br />
their operations and workflows between<br />
Version 5.1 and Version D.0. We<br />
estimated the cost for large PBMs to<br />
migrate to Version D.0 to be<br />
approximately $1 million to $1.5<br />
million per large national PBM, and<br />
approximately $100,000 for specialty<br />
PBMs. Our total estimated costs for<br />
health plans and PBMs ranged between<br />
$3.6 and $10.6 million per plan based<br />
on the size of the PBM.<br />
Comment: We received a few<br />
comments suggesting that we<br />
understated the cost for health plans<br />
and PBMs to transition to Version D.0.<br />
While commenters agreed with our<br />
assessment of the consolidation of the<br />
PBM industry nationwide, they claimed<br />
that we did not account for the effect on<br />
a large PBM. Commenters explained<br />
that maintenance of multiple platforms<br />
results in increased complexities of<br />
operations and upgrades. One<br />
commenter estimated that costs for their<br />
upgrades would be $11 million, and,<br />
unlike the upgrades to the retail<br />
systems, they stated that few if any<br />
benefits will result from the costs.<br />
Another commenter expanded on the<br />
cost issues, stating that the business<br />
requirements for commercial and<br />
Medicare Part D clients have required<br />
significant changes to the claim<br />
standard. They stated that the<br />
requirements affect all of the logic<br />
associated with the new fields which<br />
must be accommodated. They explained<br />
that even the customer service screens<br />
will require revision and that the<br />
representatives will require training on<br />
the new fields and the benefit changes<br />
so that they can answer beneficiaries’<br />
questions correctly. They estimate their<br />
total cost to be in excess of $10 million<br />
dollars.<br />
Another commenter challenged our<br />
assumption that health plans and PBMs<br />
should see minimal changes in their<br />
operations and workflows between<br />
Version 5.1 and Version D.0., stating<br />
that Version D.0 requires additional data<br />
reporting related to the eligibility or<br />
subrogation/secondary plan aspects of<br />
the transaction, and that this represents<br />
a significant workload.<br />
Response: When we prepared our<br />
original cost estimates, we treated the<br />
large PBMs the same as a large chain<br />
pharmacy. We did not completely
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account for the complexity that the<br />
systems changes would present to large<br />
PBMs. At the time, we allowed for<br />
changes to be made on only one<br />
operating platform, while commenters<br />
pointed out that as many as seven<br />
platforms might need to be updated. We<br />
agree with commenters that large PBMs<br />
have complex systems that often<br />
include more than one platform, and<br />
that such comprehensive system<br />
upgrades can be more costly. Based on<br />
the comments, we have revised our cost<br />
projections. We amend our estimates<br />
from $2 million to $10.5 million for<br />
each large PBM company. Since we did<br />
not receive any comments from the<br />
smaller specialty PBMs, we leave our<br />
original assumption as stated in the<br />
August 22, 2008 proposed rule. Thus,<br />
our cost estimates have increased to $42<br />
million for the large PBMs, and $3.6<br />
million for the remaining small chains,<br />
for a total of $45.6 million, unadjusted<br />
for present value. We estimate that these<br />
costs would be incurred during the first<br />
two years of implementation.<br />
d. Vendors<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49772), we solicited industry and<br />
stakeholder comment on the<br />
assumptions that vendor costs will be<br />
passed on to the customer over time,<br />
and solicited feedback on actual costs<br />
for vendor software upgrades and<br />
impact on covered entities, including<br />
the conversion of historical data. We<br />
received no comments from vendors<br />
related to their costs to upgrade to<br />
Version D.0 and therefore make no<br />
changes to this section. The figures from<br />
the proposed rule will be included in<br />
the summary table at the end of the<br />
impact analysis.<br />
Benefits<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49742), we assumed that the<br />
benefits of converting to Version D.0<br />
would accrue over several years,<br />
beginning in 2012. For a full overview<br />
of the benefit assumptions, refer to the<br />
discussion in the August 22, 2008<br />
proposed rule at 73 FR 49773–49778.<br />
a. Pharmacies<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49742), we said pharmacies need<br />
Version D.0 to process Medicare Part D<br />
claims more efficiently, and with fewer<br />
workarounds, particularly with respect<br />
to processing coordination of benefits<br />
claims.<br />
Comment: We received a few<br />
comments on our benefit assumptions.<br />
One large pharmacy chain commented<br />
that, while they do not disagree that<br />
there will be benefits and savings<br />
following complete implementation of<br />
Version D.0, they are concerned that<br />
HHS has overstated those savings. The<br />
commenter recognized that the use of<br />
Version D.0 will decrease audit risks,<br />
however the savings assumption by<br />
HHS failed to recognize other gaps that<br />
will continue to exist in the outpatient<br />
health care system, specifically relative<br />
to the coordination of benefits.<br />
Another commenter said that some of<br />
the savings numbers are so small (for<br />
example, the 1.1 percent of time of a<br />
pharmacist being spent on benefit<br />
issues), that they become hard to<br />
validate. Commenters did not provide<br />
any alternative data to show what the<br />
benefits to the pharmacies would be in<br />
their view.<br />
Response: As we stated in the August<br />
22, 2008 proposed rule (73 FR 79744),<br />
we based our assumptions on a study<br />
funded by the National Association of<br />
Chain Drug Stores (NACDS), ‘‘Pharmacy<br />
Activity Cost and Productivity Study’’<br />
(http://www.nacds.org/user-assets/<br />
PDF_files/ arthur_andersen.PDF ). In<br />
projecting the growth in the number of<br />
pharmacies over the next 9 years, we<br />
used data from the NACDS,<br />
‘‘Community Retail Pharmacy Outlets<br />
by Type of Store, 1996–2006’’ (http://<br />
www.nacds.org/userseets/pdfs/<br />
facts_resources/2006/<br />
Retail_Outlets2006.pdf ). Since we did<br />
not get any new data on the benefits, we<br />
stand by our assumptions and make no<br />
changes to the benefit data.<br />
Health Plans and PBMs<br />
We assumed that if pharmacists and<br />
technicians realize productivity savings<br />
as a result of the use of Version D.0,<br />
then conversely, health plans and PBMs<br />
would realize commensurate savings<br />
though a reduction in pharmacist and<br />
technician calls to customer service<br />
representatives at health care plans and<br />
PBMs. For a more detailed discussion of<br />
these savings through reductions in<br />
pharmacist and technician calls to<br />
customer service representatives at<br />
health plans and PBMs, please refer to<br />
the August 22, 2008 proposed rule (73<br />
FR 49778).<br />
Comment: One commenter stated that<br />
they felt that there are few if any<br />
benefits that will result from the cost of<br />
upgrading their system to Version D.0,<br />
however they did not expand on this<br />
statement or offer any alternative<br />
information.<br />
Response: When estimating the<br />
benefits accrued to dispensers, we<br />
solicited industry and stakeholder<br />
comments on our assumptions.<br />
Although we received one comment<br />
stating that there were few, if any<br />
benefits to upgrading to Version D.0, the<br />
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commenter did not provide us with any<br />
other data to refute what we originally<br />
proposed. Since most commenters did<br />
not dispute our assumptions, we do not<br />
make changes in the final rule.<br />
Version 3.0 (Medicaid Pharmacy<br />
Subrogation)<br />
As stated in the impact analysis for<br />
Version 5010 and Version D.0 above, in<br />
this section, we summarize the cost and<br />
benefit assumptions from the August 22,<br />
2008 proposed rule, and discuss those<br />
with which the commenters disagreed.<br />
In cases where we agreed with the<br />
commenters and changed our estimates,<br />
revised tables are provided. The last<br />
section of the impact analysis contains<br />
the summary detailed tables with all of<br />
the costs and benefits recalculated to<br />
reflect the changes.<br />
There was consensus that we should<br />
adopt Version 3.0, and we received no<br />
comments opposing our cost or benefit<br />
assumptions or estimates. However, to<br />
accommodate the change in effective<br />
and compliance dates for Version 3.0,<br />
we have made modifications to each of<br />
the tables presented in the proposed<br />
rule, and re-published them below.<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49779), we said that<br />
approximately 37 States were already<br />
billing a major portion of their Medicaid<br />
pharmacy subrogation claims<br />
electronically. Of those 37 States, 33 of<br />
them were using a contingency fee<br />
contractor to bill their (electronic)<br />
claims. The other four (out of 37) States<br />
were billing electronically without the<br />
use of a contractor. The remaining 14<br />
States were still billing most of their<br />
Medicaid pharmacy subrogation claims<br />
on paper.<br />
A detailed analysis of the impact on<br />
Medicaid agencies and health plans can<br />
be found in the proposed rule (73 FR<br />
49779–49781).<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49779), we said that the costs for<br />
States that currently bill electronically<br />
to upgrade their systems to Version 3.0,<br />
and to transition from paper Medicaid<br />
subrogation claims to using Version 3.0,<br />
would be outweighed by the benefits.<br />
We did not receive any comments on<br />
this conclusion.<br />
1. Impact on States That Use a<br />
Contingency Fee Contractor<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49779), we said that, for the 33<br />
States that contract out their Medicaid<br />
pharmacy subrogation billing processes,<br />
there would be no direct costs, and that<br />
reimbursement to States would increase<br />
proportionally to a projected increase in<br />
the volume of electronic claims. The<br />
contractors supporting these States
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would recover their cost on the backend,<br />
as they would be recouping<br />
additional contingency fees based on<br />
the volumes. We received no comments<br />
on this assumption.<br />
2. Impact on States Converting From<br />
Paper<br />
a. Cost of Development<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49780), we described the costs<br />
that would be incurred by the 14 States<br />
converting from a paper process to an<br />
electronic process, using Version 3.0,<br />
including the cost of development for<br />
gap analysis, requirements<br />
documentation, training, translator<br />
mapping, legacy system changes,<br />
acceptance testing and external, end-toend<br />
testing. We said that infrastructure<br />
costs would be relatively small, in the<br />
range of $50,000 to $150,000 per State,<br />
unadjusted for present value. The State<br />
would be responsible for 10 percent of<br />
those sums, and the Federal government<br />
would reimburse the State 90 percent of<br />
the design, development, and<br />
installation costs related to changes in<br />
their Medicaid Management Information<br />
Systems (MMIS). We projected that<br />
seven States would incur development<br />
costs in order to conduct their own<br />
billing and the other seven would hire<br />
a contingency fee contractor to conduct<br />
their billing. We received no comments<br />
on these estimates or assumptions.<br />
b. Costs of Adopting and Implementing<br />
Trading Partner Agreements (TPAs)<br />
With Third Party Payers<br />
In the proposed rule, (73 FR 49780),<br />
we said that States would enter into<br />
Trading Partner Agreements with other<br />
payers in order to conduct subrogation<br />
electronically. We projected that<br />
approximately forty (40) third party<br />
payers, primarily PBMs and claims<br />
processors, as well as a few large health<br />
plans that process claims in-house,<br />
would participate. We stated that<br />
trading partner agreements would cost<br />
approximately $14,000 to $20,000—<br />
with a range of $5,000 to $15,000 for<br />
each agreement. We assumed that each<br />
State would enter into a trading partner<br />
agreement with an average of 15 payers,<br />
and that the anticipated costs per State<br />
would range from $75,000 to $225,000.<br />
As stated in the previous section, we<br />
projected that half of the 14 States<br />
would hire a contractor, and half would<br />
adopt trading partner agreements.<br />
Therefore, the agreements with 15 plans<br />
would range from $525,000 to $1.6<br />
million, unadjusted for present value.<br />
The State would be responsible for 50<br />
percent of the cost since the Federal<br />
government reimburses States 50<br />
percent of their administrative costs. We<br />
did not receive any comments on this<br />
section of the analysis.<br />
3. Impact on States That Bill<br />
Electronically (Without a Contractor)<br />
a. Cost of Development<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49780), we said that changes for<br />
States that bill electronically would be<br />
minimal and the cost impact would be<br />
much less than for the States that<br />
currently bill paper to convert to<br />
Version 3.0. We did not receive any<br />
comments on this section of the<br />
analysis.<br />
b. Costs of Adopting and Implementing<br />
Trading Partner Agreements With Third<br />
Party Payers<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49780), we suggested that the<br />
cost to execute and implement trading<br />
partner agreements would be<br />
approximately $5,000 to $15,000 per<br />
agreement, and that four States would<br />
establish trading partner agreements<br />
with an additional 12 health plans/<br />
payers, for a total cost ranging from<br />
$20,000 to $60,000, unadjusted for<br />
present value. We did not receive any<br />
comments on this section of the<br />
analysis.<br />
Medicaid Savings<br />
In the August 22, 2008 proposed rule,<br />
73 FR 49780, we stated that the accrued<br />
savings to States would outweigh the<br />
costs because Medicaid agencies would<br />
no longer have to keep track of and use<br />
various electronic formats for different<br />
payers. We estimated the total number<br />
of paper Medicaid pharmacy<br />
subrogation claims to be between 2.5<br />
and 3.4 million annually. We cited a<br />
study by Milliman in 2006, which was<br />
also referenced by the American<br />
Medical Association (AMA), which<br />
stated that electronic claims can save an<br />
average of $3.73 per clean claim. Based<br />
on this study, we estimated that the<br />
Medicaid program could save an<br />
estimated $12.7 million annually<br />
unadjusted for present value, once<br />
Version 3.0 is fully implemented. We<br />
said that the savings represents both<br />
State agencies and the Federal<br />
government, as the Federal government<br />
would share 50 percent of any<br />
administrative savings. We did not<br />
receive any comments on this section of<br />
the analysis.<br />
Impact on Medicaid Pharmacy<br />
Providers<br />
In situations where Medicaid has<br />
been unable to successfully bill third<br />
parties, due to the current challenges of<br />
having to use various formats to meet<br />
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3321<br />
the needs of different payers, States<br />
sometimes recoup the subrogation<br />
monies from pharmacy providers. We<br />
do not believe this practice is<br />
widespread and, therefore, did not<br />
account for it in the impact analysis. We<br />
did not receive any comments on this<br />
section of the analysis.<br />
Impact on Third Party Payers (Includes<br />
Plan Sponsors, Pharmacy Benefit<br />
Managers (PBMs), Prescription Drug<br />
Plans (PDPs) and Claims Processors)<br />
1. Impact on Plan Sponsors That Use a<br />
PBM or Claim Processor<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49781), we stated that the four<br />
large PBMs handle about 75 percent of<br />
all prescription orders dispensed<br />
annually in the United States, and that<br />
many of these organizations already<br />
accept Version 2.0 subrogation<br />
transactions. We said that, for the<br />
majority of plan sponsors that contract<br />
out their claims adjudication, the costs<br />
of implementing Version 3.0 and<br />
establishing trading partner agreements<br />
would be minimal. We received no<br />
comments on this portion of the<br />
analysis.<br />
2. Impact on Plan Sponsors That Do Not<br />
Use a PBM or Claim Processor<br />
We did not estimate any costs for this<br />
sector, as we believe there are few large<br />
payers that administer their own claims<br />
adjudication. We continue to assume<br />
that these payers have already made the<br />
necessary investments in developing<br />
electronic capabilities to meet HIPAA<br />
mandates, and that they will be<br />
upgrading their systems in order to<br />
accommodate Version D.0, to meet the<br />
requirements of this final rule. Since<br />
Version 3.0 utilizes a number of the data<br />
elements found in Version D.0, we<br />
expect additional infrastructure costs to<br />
be small. We did not receive any<br />
comments on this assumption.<br />
a. Cost of Development<br />
In the August 22, 2008 proposed rule<br />
(73 FR 49781), we estimated the<br />
development costs to individual health<br />
plans that would need to implement<br />
Version 3.0 to be similar to the cost for<br />
State Medicaid programs, or<br />
approximately $50,000 to $150,000. We<br />
estimate that there are about 20 payers<br />
that do not contract with a PBM and<br />
that they would need to upgrade their<br />
systems for a total cost of<br />
$1 to $3 million, unadjusted for present<br />
value. We solicited comments on this<br />
subject but received none.
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b. Costs of Adopting and Implementing<br />
Trading Partner Agreements With States<br />
In the proposed rule (73 FR 49781),<br />
we estimated the plan sponsor’s costs of<br />
adopting and implementing trading<br />
partner agreements with States would<br />
be similar to the cost estimated for State<br />
Medicaid programs, which would range<br />
from $5,000 to $15,000 per agreement.<br />
We also anticipated that approximately<br />
40 States would utilize a contingency<br />
fee contractor, setting up trading partner<br />
agreements. We estimated the cost per<br />
plan sponsor to range from $60,000 to<br />
$180,000, unadjusted for present value,<br />
and received no comments on this<br />
assumption.<br />
3. Savings Impact<br />
We assumed that 50 percent of all<br />
subrogation claims currently require<br />
manual review, and that the savings of<br />
converting 3.4 million paper claims to<br />
electronic transmission would be $3.3<br />
million, unadjusted for present value.<br />
We did not receive any comments in the<br />
section on savings.<br />
In summary, we did not receive any<br />
public comments on the impact analysis<br />
for Version 3.0. However, we did<br />
receive comments, as described earlier,<br />
requesting additional time to implement<br />
the standards and expressing the need<br />
to implement Version 3.0 either at the<br />
same time as, or after, implementation<br />
of Version D.0 because of the<br />
interdependency of the two standards.<br />
The compliance date has been changed<br />
to allow for additional implementation<br />
time, and to ensure that the Version 3.0<br />
transactions can be used in concert with<br />
Version D.0. Based on the adopted<br />
effective and compliance dates, we have<br />
revised the tables to coincide with the<br />
new dates.<br />
Summary of Costs and Benefits for This<br />
Final Rule<br />
The final tables, 4a and 4b, which<br />
replace tables 14a and 14b from the<br />
proposed rule, are the compilation of<br />
the total low and high costs and benefits<br />
for all of the standards being adopted in<br />
this final rule. In the proposed rule, we<br />
did not adjust for present value. In order<br />
to assure readers a valid comparison, we<br />
also did not adjust for present value in<br />
the final rule in the main text of the<br />
document. However, for the reader’s<br />
edification, in Tables 4a and 4b, we<br />
show the costs and benefits discounted<br />
by 7% and 3% to reflect present value.<br />
TABLE 4A—ESTIMATED LOW AND HIGH COSTS—IN MILLIONS*—FOR YEARS <strong>2009</strong> THROUGH 2019 FOR IMPLEMENTATION<br />
OF VERSIONS 5010, D.0 AND 3.0<br />
Cost type Industry<br />
Unadjusted<br />
for present<br />
value<br />
@ 3%<br />
Discount<br />
@ 7%<br />
Discount<br />
5010—Imp costs ................................................... Hospitals—low ...................................................... $792 $762 $727<br />
Hospitals—high .................................................... 1,584 1,525 1,453<br />
Physicians—low ................................................... 370 356 339<br />
Physicians—high .................................................. 740 712 679<br />
Dentists—low ....................................................... 254 245 233<br />
Dentists—high ...................................................... 508 489 466<br />
pharmacy—low ..................................................... 57 55 52<br />
pharmacy—high ................................................... 114 110 105<br />
private hp—low .................................................... 3,063 2,949 2,810<br />
private hp—high ................................................... 6,127 5,898 5,621<br />
govt hp—low ........................................................ 213 205 195<br />
govt hp—high ....................................................... 410 395 376<br />
CH—low ............................................................... 137 132 126<br />
CH—high .............................................................. 167 161 153<br />
5010 Transition costs ............................................ Hospitals—low ...................................................... 373 338 298<br />
Hospitals—high .................................................... 746 677 597<br />
Physicians—low ................................................... 174 158 139<br />
Physicians—high .................................................. 348 316 279<br />
Dentists—low ....................................................... 120 109 96<br />
Dentists—high ...................................................... 239 217 191<br />
pharmacy—low ..................................................... 27 24 22<br />
pharmacy—high ................................................... 54 49 43<br />
private hp—low .................................................... 1,442 1,308 1,154<br />
private hp—high ................................................... 2,883 2,615 2,307<br />
govt hp—low ........................................................ 100 91 80<br />
govt hp—high ....................................................... 193 175 154<br />
CH—low ............................................................... 24 22 19<br />
CH—high .............................................................. 30 27 24<br />
Medicaid subrogation development ...................... federal—low ......................................................... .32 .29 .27<br />
federal—high ........................................................ .94 .87 .79<br />
state—low ............................................................. .040 .037 .034<br />
state—high ........................................................... .1 .093 .084<br />
payers—low .......................................................... 1 .93 .844<br />
payers—high ........................................................ 3 2.78 2.53<br />
Medicaid subrogation—Trading Partner agreements.<br />
federal—low ......................................................... .38 .35 .32<br />
federal—high ........................................................ 1.16 1.07 .98<br />
state—low ............................................................. .38 .35 .32<br />
state—high ........................................................... 1.16 1.07 .98<br />
payers—low .......................................................... 2.4 2.2 2<br />
payers—high ........................................................ 7 7 6<br />
D.0—pharmacy chain systems implementation ... pharmacy—low ..................................................... 18 17 16<br />
pharmacy—high ................................................... 38 36 34<br />
Independent pharmacy maintenance fees ........... pharmacy—low ..................................................... .54 .51 .48<br />
pharmacy—high ................................................... 1.08 1.03 .97<br />
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TABLE 4A—ESTIMATED LOW AND HIGH COSTS—IN MILLIONS*—FOR YEARS <strong>2009</strong> THROUGH 2019 FOR IMPLEMENTATION<br />
OF VERSIONS 5010, D.0 AND 3.0—Continued<br />
Cost type Industry<br />
Unadjusted<br />
for present<br />
value<br />
@ 3%<br />
Discount<br />
3323<br />
@ 7%<br />
Discount<br />
PBM programming ................................................ PBM—low ............................................................. 8 8 7<br />
PBM—high ........................................................... 10 9.5 9<br />
Total Costs ..................................................... LOW ..................................................................... 7,177 6,783 6,319<br />
Total Costs ..................................................... HIGH .................................................................... 14,206 13,425 12,505<br />
TABLE 4B—ESTIMATED LOW AND HIGH BENEFITS—IN MILLIONS*—FOR YEARS <strong>2009</strong> THROUGH 2019 FOR<br />
IMPLEMENTATION OF VERSIONS 5010, D.0 AND 3.0<br />
Savings type Industry<br />
Unadjusted<br />
for present<br />
value<br />
@ 3%<br />
Discount<br />
@ 7%<br />
Discount<br />
5010 operational savings ...................................... Hospitals—low ...................................................... $348 $286 $224<br />
Hospitals—high .................................................... 952 783 612<br />
Physicians—low ................................................... 1,392 1,144 895<br />
Physicians—high .................................................. 3,802 3,126 2,445<br />
Dentists—low ....................................................... 237 195 153<br />
Dentists—high ...................................................... 605 497 389<br />
pharmacy—low ..................................................... 16 13 10<br />
pharmacy—high ................................................... 23 19 15<br />
private and govt hp—low ..................................... 1,330 1,093 855<br />
private and govt hp—high .................................... 3,577 2,941 2,300<br />
CH—low ............................................................... 0 0 0<br />
CH—high .............................................................. 0 0 0<br />
5010 cost savings increase in transactions .......... Hospitals—low ...................................................... 66 53 40<br />
Hospitals—high .................................................... 219 176 133<br />
Physicians—low ................................................... 270 217 164<br />
Physicians—high .................................................. 874 702 532<br />
Dentists—low ....................................................... 45 36 27<br />
Dentists—high ...................................................... 56 45 34<br />
pharmacy—low ..................................................... 0 0 0<br />
pharmacy—high ................................................... 0 0 0<br />
private and govt hp—low ..................................... 135 110 86<br />
private and govt hp—high .................................... 338 276 214<br />
CH—low ............................................................... 0 0 0<br />
CH—high .............................................................. 0 0 0<br />
5010 operational savings—increase in auxiliary Hospitals—low ......................................................<br />
claim transaction.<br />
1,131 897 669<br />
Hospitals—high .................................................... 2,890 2,288 1,700<br />
Physicians—low ................................................... 4,442 3,517 2,612<br />
Physicians—high .................................................. 11,553 9,147 6,795<br />
Dentists—low ....................................................... 752 595 442<br />
Dentists—high ...................................................... 1,839 1,456 1,082<br />
pharmacy—low ..................................................... 0 0 0<br />
pharmacy—high ................................................... 0 0 0<br />
private and govt hp—low ..................................... 4,519 3,578 2,658<br />
private and govt hp—high .................................... 11,749 9,302 6,910<br />
CH—low ............................................................... 0 0 0<br />
CH—high .............................................................. 0 0 0<br />
Medicaid subrogation ............................................ fed—low ............................................................... 13 11 10<br />
fed—high .............................................................. 18 16 13<br />
state—low ............................................................. 13 11 10<br />
state—high ........................................................... 18 16 13<br />
payer—low ........................................................... 7 6 5<br />
payer—high .......................................................... 9 8 7<br />
Version D.0 ........................................................... Pharmacist productivity—low ............................... 951 779 607<br />
Pharmacist productivity—high .............................. 1,921 1,574 1,225<br />
Version D.0 ........................................................... Pharmacy technician productivity—low ............... 77 63 49<br />
Pharmacy technician productivity—high .............. 160 132 103<br />
Version D.0 ........................................................... Avoided audits—low ............................................. 152 126 99<br />
Avoided audits—high ........................................... 304 251 198<br />
Total Benefits ................................................. LOW ..................................................................... 15,896 12,732 9,615<br />
Total Benefits ................................................. HIGH .................................................................... 40,906 32,753 24,719<br />
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3324 Federal Register / Vol. 74, No. 11 / Friday, January 16, <strong>2009</strong> / Rules and Regulations<br />
Accounting Statement and Table<br />
Whenever a rule is considered a<br />
significant rule under Executive Order<br />
12866, we are required to develop an<br />
Accounting Statement. This statement<br />
must state that we have prepared an<br />
accounting statement showing the<br />
classification of the expenditures<br />
associated with the provisions of this<br />
final rule. Monetary annualized Benefits<br />
and non-budgetary costs are presented<br />
as discounted flows using three percent<br />
and seven percent factors.<br />
TABLE 5—ACCOUNTING STATEMENT<br />
[Accounting statement: classification of estimated expenditures, from FY<strong>2009</strong> to FY2019 (in millions)]<br />
Category<br />
Primary estimate<br />
(millions)<br />
Minimum<br />
estimate<br />
(millions)<br />
Maximum<br />
estimate<br />
(millions)<br />
Source<br />
citation<br />
(RIA, preamble,<br />
etc.)<br />
BENEFITS:<br />
Annualized Monetized benefits:<br />
7% Discount ................................................... 2,142.4 ................................................................. 1,203.7 3,081.1 RIA<br />
3% Discount ................................................... 2,389.5 ................................................................. 1,314.8 3,437.2 RIA<br />
Qualitative (un-quantified) benefits ....................... Wider adoption of standards due to decrease in<br />
use of companion guides; increased productivity<br />
due to decrease in manual intervention<br />
requirements.<br />
Benefits generated from plans to providers and pharmacies, providers to plans and pharmacies, and pharmacies to beneficiaries.<br />
COSTS:<br />
Annualized Monetized costs:<br />
7% Discount ................................................... 1,144.0 ................................................................. 787.5 1,500.5 RIA<br />
3% Discount ................................................... 1,034.8 ................................................................. 711.7 1,357.8 RIA<br />
Qualitative (un-quantified) costs ........................... None ..................................................................... None None<br />
Cost will be paid by health plans to contractors, programming consultants, IT staff and other outsourced entities; providers will pay costs to software<br />
vendors, trainers and other consultants. Clearinghouses will pay costs to IT staff/contractors and software developers; pharmacies will<br />
pay costs to contractors, software vendors and trainers, and government plans will pay costs to consultants, vendors and staff.<br />
TRANSFERS:<br />
Annualized monetized transfers: ‘‘on budget’’ ...... N/A ....................................................................... N/A N/A<br />
From whom to whom? .......................................... N/A ....................................................................... N/A N/A<br />
Annualized monetized transfers: ‘‘off-budget’’ ...... N/A ....................................................................... N/A N/A<br />
From whom to whom? .......................................... N/A ....................................................................... N/A N/A<br />
In accordance with the provisions of<br />
Executive Order 12866, as amended,<br />
this regulation was reviewed by the<br />
Office of Management and Budget.<br />
List of Subjects in 45 CFR Part 162<br />
Administrative practice and<br />
procedure, Electronic transactions,<br />
Health facilities, Health insurance,<br />
Hospitals, Incorporation by reference,<br />
Medicare, Medicaid, Reporting and<br />
recordkeeping requirements.<br />
■ For the reasons set forth in the<br />
preamble, the Department of Health and<br />
Human Services amends 45 CFR Part<br />
162 as set forth below:<br />
PART 162—ADMINISTRATIVE<br />
REQUIREMENTS<br />
■ 1. The authority citation for part 162<br />
is revised to read as follows:<br />
Authority: Secs. 1171 through 1180 of the<br />
Social Security Act (42 U.S.C.1320d–1320d–<br />
9), as added by sec. 262 of Pub. L. 104–191,<br />
110 Stat. 2021–2031, and sec. 105 of Public<br />
Law 110–233, 122 Stat. 881–922, and sec.<br />
264 of Pub. L. 104–191, 110 Stat. 2033–2034<br />
(42 U.S.C. 1320d–2 (note)).<br />
Subpart A—General Provisions<br />
■ 2. Amend § 162.103 by revising the<br />
definition of ‘‘standard transaction’’ to<br />
read as follows:<br />
§ 162.103 Definitions.<br />
* * * * *<br />
Standard transaction means a<br />
transaction that complies with an<br />
applicable standard adopted under this<br />
part.<br />
Subpart I—General Provisions for<br />
Transactions<br />
§ 162.900 [Removed and Reserved]<br />
■ 3. Remove and reserve § 162.900.<br />
■ 4. Amend § 162.920 as follows:<br />
■ A. Revise introductory text and<br />
paragraph (a) introductory text.<br />
■ B. Add paragraphs (a)(10) through<br />
(a)(18).<br />
■ C. Revise paragraph (b) introductory<br />
text.<br />
■ D. Add paragraphs (b)(4) through<br />
(b)(6).<br />
The revisions and additions read as<br />
follows:<br />
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§ 162.920 Availability of implementation<br />
specifications.<br />
A person or an organization may<br />
directly request copies of the<br />
implementation specifications and the<br />
Technical Reports Type 3 described in<br />
subparts I through S of this part from<br />
the publishers listed in this section. The<br />
Director of the Federal Register<br />
approves the implementation<br />
specifications, which include the<br />
Technical Reports Type 3 described in<br />
this section, for incorporation by<br />
reference in subparts I through S of this<br />
part in accordance with 5 U.S.C. 552(a)<br />
and 1 CFR part 51. The implementation<br />
specifications and Technical Reports<br />
Type 3 described in this section are also<br />
available for inspection by the public at<br />
the Centers for Medicare & Medicaid<br />
Services (CMS), 7500 Security<br />
Boulevard, Baltimore, Maryland 21244.<br />
For more information on the availability<br />
on the materials at CMS, call (410) 786–<br />
6597. The implementation<br />
specifications and Technical Reports<br />
Type 3 are also available at the National<br />
Archives and Records Administration<br />
(NARA). For information on the
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Federal Register / Vol. 74, No. 11 / Friday, January 16, <strong>2009</strong> / Rules and Regulations<br />
availability of this material at NARA,<br />
call (202) 714–6030, or go to: http://<br />
www.archives.gov/federal_register/<br />
code_of_federal_regulations/<br />
ibr_locations.html. Implementation<br />
specifications are available for the<br />
following transactions.<br />
(a) ASC X12N specifications and the<br />
ASC X12 Standards for Electronic Data<br />
Interchange Technical Report Type 3.<br />
The implementation specifications for<br />
the ASC X12N and the ASC X12<br />
Standards for Electronic Data<br />
Interchange Technical Report Type 3<br />
(and accompanying Errata or Type 1<br />
Errata) may be obtained from the ASC<br />
X12, 7600 Leesburg Pike, Suite 430,<br />
Falls Church, VA 22043; Telephone<br />
(703) 970–4480; and FAX (703) 970–<br />
4488. They are also available through<br />
the internet at http://www.X12.org. A<br />
fee is charged for all implementation<br />
specifications, including Technical<br />
Reports Type 3. Charging for such<br />
publications is consistent with the<br />
policies of other publishers of<br />
standards. The transaction<br />
implementation specifications are as<br />
follows:<br />
* * * * *<br />
(10) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Claim:<br />
Dental (837), May 2006, ASC X12N/<br />
005010X224, and Type 1 Errata to<br />
Health Care Claim Dental (837), ASC<br />
X12 Standards for Electronic Data<br />
Interchange Technical Report Type 3,<br />
October 2007, ASC X12N/<br />
005010X224A1, as referenced in<br />
§ 162.1102 and § 162.1802.<br />
(11) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Claim:<br />
Professional (837), May 2006, ASC X12,<br />
005010X222, as referenced in<br />
§ 162.1102 and § 162.1802.<br />
(12) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Claim:<br />
Institutional (837), May 2006, ASC X12/<br />
N005010X223, and Type 1 Errata to<br />
Health Care Claim: Institutional (837),<br />
ASC X12 Standards for Electronic Data<br />
Interchange Technical Report Type 3,<br />
October 2007, ASC X12N/<br />
005010X223A1, as referenced in<br />
§ 162.1102 and § 162.1802.<br />
(13) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Claim<br />
Payment/Advice (835), April 2006, ASC<br />
X12N/005010X221, as referenced in<br />
§ 162.1602.<br />
(14) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Benefit Enrollment and<br />
Maintenance (834), August 2006, ASC<br />
X12N/005010X220, as referenced in<br />
§ 162.1502.<br />
(15) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Payroll Deducted and<br />
Other Group Premium Payment for<br />
Insurance Products (820), February<br />
2007, ASC X12N/005010X218, as<br />
referenced in § 162.1702.<br />
(16) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Services<br />
Review—Request for Review and<br />
Response (278), May 2006, ASC X12N/<br />
005010X217, and Errata to Health Care<br />
Services Review—Request for Review<br />
and Response (278), ASC X12 Standards<br />
for Electronic Data Interchange<br />
Technical Report Type 3, April 2008,<br />
ASC X12N/005010X217E1, as<br />
referenced in § 162.1302.<br />
(17) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Claim<br />
Status Request and Response (276/277),<br />
August 2006, ASC X12N/005010X212,<br />
and Errata to Health Care Claim Status<br />
Request and Response (276/277), ASC<br />
X12 Standards for Electronic Data<br />
Interchange Technical Report Type 3,<br />
April 2008, ASC X12N/005010X212E1,<br />
as referenced in § 162.1402.<br />
(18) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Eligibility<br />
Benefit Inquiry and Response (270/271),<br />
April 2008, ASC X12N/005010X279, as<br />
referenced in § 162.1202.<br />
(b) Retail pharmacy specifications<br />
and Medicaid subrogation<br />
implementation guides. The<br />
implementation specifications for the<br />
retail pharmacy standards and the<br />
implementation specifications for the<br />
batch standard for the Medicaid<br />
pharmacy subrogation transaction may<br />
be obtained from the National Council<br />
for Prescription Drug Programs, 9240<br />
East Raintree Drive, Scottsdale, AZ<br />
85260. Telephone (480) 477–1000; FAX<br />
(480) 767–1042. They are also available<br />
through the Internet at http://<br />
www.ncpdp.org. A fee is charged for all<br />
NCPDP Implementation Guides.<br />
Charging for such publications is<br />
consistent with the policies of other<br />
publishers of standards. The transaction<br />
implementation specifications are as<br />
follows:<br />
* * * * *<br />
(4) The Telecommunication Standard<br />
Implementation Guide, Version D,<br />
Release 0 (Version D.0), August 2007,<br />
National Council for Prescription Drug<br />
Programs, as referenced in § 162.1102,<br />
§ 162.1202, § 162.1302, and § 162.1802.<br />
(5) The Batch Standard<br />
Implementation Guide, Version 1,<br />
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3325<br />
Release 2 (Version 1.2), January 2006,<br />
National Council for Prescription Drug<br />
Programs, as referenced in § 162.1102,<br />
§ 162.1202, § 162.1302, and § 162.1802.<br />
(6) The Batch Standard Medicaid<br />
Subrogation Implementation Guide,<br />
Version 3, Release 0 (Version 3.0), July<br />
2007, National Council for Prescription<br />
Drug Programs, as referenced in<br />
§ 162.1902.<br />
■ 5. Revise § 162.923 paragraph (a) to<br />
read as follows:<br />
§ 162.923 Requirements for covered<br />
entities.<br />
(a) General rule. Except as otherwise<br />
provided in this part, if a covered entity<br />
conducts, with another covered entity<br />
that is required to comply with a<br />
transaction standard adopted under this<br />
part (or within the same covered entity),<br />
using electronic media, a transaction for<br />
which the Secretary has adopted a<br />
standard under this part, the covered<br />
entity must conduct the transaction as a<br />
standard transaction.<br />
* * * * *<br />
■ 6. Section 162.925 is amended by<br />
adding a new paragraph (a)(6) to read as<br />
follows:<br />
§ 162.925 Additional requirements for<br />
health plans.<br />
(a) * * *<br />
(6) During the period from March 17,<br />
<strong>2009</strong> through December 31, 2011, a<br />
health plan may not delay or reject a<br />
standard transaction, or attempt to<br />
adversely affect the other entity or the<br />
transaction, on the basis that it does not<br />
comply with another adopted standard<br />
for the same period.<br />
* * * * *<br />
Subpart K—Health Care Claims or<br />
Equivalent Encounter Information<br />
■ 7. Amend § 162.1102 by—<br />
■ A. Removing paragraph (a).<br />
■ B. Redesignating existing paragraph<br />
(b) as paragraph (a).<br />
■ C. Revising the introductory text of<br />
newly redesignated paragraph (a).<br />
■ D. Adding new paragraphs (b) and (c).<br />
The revisions and additions read as<br />
follows:<br />
§ 162.1102 Standards for health care<br />
claims or equivalent encounter information<br />
transaction.<br />
* * * * *<br />
(a) For the period from October 16,<br />
2003 through March 16, <strong>2009</strong>:<br />
* * * * *<br />
(b) For the period from March 17,<br />
<strong>2009</strong> through December 31, 2011, both:<br />
(1)(i) The standards identified in<br />
paragraph (a) of this section; and<br />
(ii) For retail pharmacy supplies and<br />
professional services claims, the
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3326 Federal Register / Vol. 74, No. 11 / Friday, January 16, <strong>2009</strong> / Rules and Regulations<br />
following: The ASC X12N 837—Health<br />
Care Claim: Professional, Volumes 1 and<br />
2, Version 4010, May 2000, Washington<br />
Publishing Company, 004010X096,<br />
October 2002 (Incorporated by reference<br />
in § 162.920); and<br />
(2)(i) Retail pharmacy drug claims.<br />
The Telecommunication Standard<br />
Implementation Guide, Version D,<br />
Release 0 (Version D.0), August 2007<br />
and equivalent Batch Standard<br />
Implementation Guide, Version 1,<br />
Release 2 (Version 1.2), National<br />
Council for Prescription Drug Programs.<br />
(Incorporated by reference in § 162.920.)<br />
(ii) Dental health care claims. The<br />
ASC X12 Standards for Electronic Data<br />
Interchange Technical Report Type 3—<br />
Health Care Claim: Dental (837), May<br />
2006, ASC X12N/005010X224, and<br />
Type 1 Errata to Health Care Claim:<br />
Dental (837) ASC X12 Standards for<br />
Electronic Date Interchange Technical<br />
Report Type 3, October 2007, ASC<br />
X12N/005010X224A1. (Incorporated by<br />
reference in § 162.920.)<br />
(iii) Professional health care claims.<br />
The ASC X12 Standards for Electronic<br />
Data Interchange Technical Report Type<br />
3—Health Care Claim: Professional<br />
(837), May 2006, ASC X12N/<br />
005010X222. (Incorporated by reference<br />
in § 162.920.)<br />
(iv) Institutional health care claims.<br />
The ASC X12 Standards for Electronic<br />
Data Interchange Technical Report Type<br />
3—Health Care Claim: Institutional<br />
(837), May 2006, ASC X12N/<br />
005010X223, and Type 1 Errata to<br />
Health Care Claim: Institutional (837)<br />
ASC X12 Standards for Electronic Data<br />
Interchange Technical Report Type 3,<br />
October 2007, ASC X12N/<br />
005010X223A1. (Incorporated by<br />
reference in § 162.920.)<br />
(v) Retail pharmacy supplies and<br />
professional services claims. (A) The<br />
Telecommunication Standard,<br />
Implementation Guide Version 5,<br />
Release 1, September 1999.<br />
(Incorporated by reference in § 162.920.)<br />
(B) The Telecommunication Standard<br />
Implementation Guide, Version D,<br />
Release 0 (Version D.0), August 2007,<br />
and equivalent Batch Standard<br />
Implementation Guide, Version 1,<br />
Release 2 (Version 1.2), National<br />
Council for Prescription Drug Programs<br />
(Incorporated by reference in § 162.920);<br />
and<br />
(C) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Claim:<br />
Professional (837), May 2006, ASC<br />
X12N/005010X222. (Incorporated by<br />
reference in § 162.920.)<br />
(c) For the period on and after the<br />
January 1, 2012, the standards identified<br />
in paragraph (b)(2) of this section,<br />
except the standard identified in<br />
paragraph (b)(2)(v)(A) of this section.<br />
Subpart L—Eligibility for a Health Plan<br />
■ 8. Section 162.1202 is amended by—<br />
■ A. Removing paragraph (a).<br />
■ B. Redesignating existing paragraph<br />
(b) as paragraph (a).<br />
■ C. Revising the introductory text of<br />
newly redesignated paragraph (a).<br />
■ D. Adding new paragraphs (b) and (c).<br />
The revisions and additions read as<br />
follows:<br />
§ 162.1202 Standards for eligibility for a<br />
health plan transaction.<br />
* * * * *<br />
(a) For the period from October 16,<br />
2003 through March 16, <strong>2009</strong>:<br />
* * * * *<br />
(b) For the period from March 17,<br />
<strong>2009</strong> through December 31, 2011 both:<br />
(1) The standards identified in<br />
paragraph (a) of this section; and<br />
(2) (i) Retail pharmacy drugs. The<br />
Telecommunication Standard<br />
Implementation Guide Version D,<br />
Release 0 (Version D.0), August 2007,<br />
and equivalent Batch Standard<br />
Implementation Guide, Version 1,<br />
Release 2 (Version 1.2), National<br />
Council for Prescription Drug Programs.<br />
(Incorporated by reference in § 162.920.)<br />
(ii) Dental, professional, and<br />
institutional health care eligibility<br />
benefit inquiry and response. The ASC<br />
X12 Standards for Electronic Data<br />
Interchange Technical Report Type 3—<br />
Health Care Eligibility Benefit Inquiry<br />
and Response (270/271), April 2008,<br />
ASC X12N/005010X279. (Incorporated<br />
by reference in § 162.920.)<br />
(c) For the period on and after January<br />
1, 2012, the standards identified in<br />
paragraph (b)(2) of this section.<br />
Subpart M—Referral Certification and<br />
Authorization<br />
■ 9. Revise § 162.1301 to read as<br />
follows:<br />
§ 162.1301 Referral certification and<br />
authorization transaction.<br />
The referral certification and<br />
authorization transaction is any of the<br />
following transmissions:<br />
(a) A request from a health care<br />
provider to a health plan for the review<br />
of health care to obtain an authorization<br />
for the health care.<br />
(b) A request from a health care<br />
provider to a health plan to obtain<br />
authorization for referring an individual<br />
to another health care provider.<br />
(c) A response from a health plan to<br />
a health care provider to a request<br />
described in paragraph (a) or paragraph<br />
(b) of this section.<br />
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■ 10. Section 162.1302 is amended by—<br />
■ A. Removing paragraph (a).<br />
■ B. Redesignating existing paragraph<br />
(b) as paragraph (a).<br />
■ C. Revising the introductory text of<br />
newly redesignated paragraph (a).<br />
■ D. Adding new paragraphs (b) and (c).<br />
The revisions and additions read as<br />
follows:<br />
§ 162.1302 Standards for referral<br />
certification and authorization transaction.<br />
* * * * *<br />
(a) For the period from October 16,<br />
2003 through March 16, <strong>2009</strong>:<br />
* * * * *<br />
(b) For the period from March 17,<br />
<strong>2009</strong> through December 31, 2011 both—<br />
(1) The standards identified in<br />
paragraph (a) of this section; and<br />
(2)(i) Retail pharmacy drugs. The<br />
Telecommunication Standard<br />
Implementation Guide Version D,<br />
Release 0 (Version D.0), August 2007,<br />
and equivalent Batch Standard<br />
Implementation Guide, Version 1,<br />
Release 2 (Version 1.2), National<br />
Council for Prescription Drug Programs.<br />
(Incorporated by reference in § 162.920.)<br />
(ii) Dental, professional, and<br />
institutional request for review and<br />
response. The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Services<br />
Review—Request for Review and<br />
Response (278), May 2006, ASC X12N/<br />
005010X217, and Errata to Health Care<br />
Services Review-—Request for Review<br />
and Response (278), ASC X12 Standards<br />
for Electronic Data Interchange<br />
Technical Report Type 3, April 2008,<br />
ASC X12N/005010X217E1.<br />
(Incorporated by reference in § 162.920.)<br />
(c) For the period on and after January<br />
1, 2012, the standards identified in<br />
paragraph (b)(2) of this section.<br />
Subpart N—Health Care Claim Status<br />
■ 11. Revise § 162.1401 to read as<br />
follows:<br />
§ 162.1401 Health care claim status<br />
transaction.<br />
The health care claim status<br />
transaction is the transmission of either<br />
of the following:<br />
(a) An inquiry from a health care<br />
provider to a health plan to determine<br />
the status of a health care claim.<br />
(b) A response from a health plan to<br />
a health care provider about the status<br />
of a health care claim.<br />
■ 12. Section 162.1402 is revised to read<br />
as follows:<br />
§ 162.1402 Standards for health care claim<br />
status transaction.<br />
The Secretary adopts the following<br />
standards for the health care claim<br />
status transaction:
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(a) For the period from October 16,<br />
2003 through March 16, <strong>2009</strong>: The ASC<br />
X12N–276/277 Health Care Claim Status<br />
Request and Response, Version 4010,<br />
May 2000, Washington Publishing<br />
Company, 004010X093 and Addenda to<br />
Health Care Claim Status Request and<br />
Response, Version 4010, October 2002,<br />
Washington Publishing Company,<br />
004010X093A1. (Incorporated by<br />
reference in § 162.920.)<br />
(b) For the period from March 17,<br />
<strong>2009</strong> through December 31, 2011, both:<br />
(1) The standard identified in<br />
paragraph (a) of this section; and<br />
(2) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Claim<br />
Status Request and Response (276/277),<br />
August 2006, ASC X12N/005010X212,<br />
and Errata to Health Care Claim Status<br />
Request and Response (276/277), ASC<br />
X12 Standards for Electronic Data<br />
Interchange Technical Report Type 3,<br />
April 2008, ASC X12N/005010X212E1.<br />
(Incorporated by reference in § 162.920.)<br />
(c) For the period on and after January<br />
1, 2012, the standard identified in<br />
paragraph (b)(2) of this section.<br />
Subpart O—Enrollment and<br />
Disenrollment in a Health Plan<br />
13. Revise § 162.1501 to read as<br />
follows:<br />
§ 162.1501 Enrollment and disenrollment<br />
in a health plan transaction.<br />
The enrollment and disenrollment in<br />
a health plan transaction is the<br />
transmission of subscriber enrollment<br />
information from the sponsor of the<br />
insurance coverage, benefits, or policy,<br />
to a health plan to establish or terminate<br />
insurance coverage.<br />
■ 14. Section 162.1502 is revised to read<br />
as follows:<br />
§ 162.1502 Standards for enrollment and<br />
disenrollment in a health plan transaction.<br />
The Secretary adopts the following<br />
standards for enrollment and<br />
disenrollment in a health plan<br />
transaction.<br />
(a) For the period from October 16,<br />
2003 through March 16, <strong>2009</strong>: ASC<br />
X12N 834—Benefit Enrollment and<br />
Maintenance, Version 4010, May 2000,<br />
Washington Publishing Company,<br />
004010X095 and Addenda to Benefit<br />
Enrollment and Maintenance, Version<br />
4010, October 2002, Washington<br />
Publishing Company, 004010X095A1.<br />
(Incorporated by reference in § 162.920.)<br />
(b) For the period from March 17,<br />
<strong>2009</strong> through December 31, 2011, both:<br />
(1) The standard identified in<br />
paragraph (a) of this section; and<br />
(2) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Benefit Enrollment and<br />
Maintenance (834), August 2006, ASC<br />
X12N/005010X220 (Incorporated by<br />
reference in § 162.920)<br />
(c) For the period on and after January<br />
1, 2012, the standard identified in<br />
paragraph (b)(2) of this section.<br />
Subpart P—Health Care Payment and<br />
Remittance Advice<br />
■ 15. Section 162.1602 is revised to read<br />
as follows:<br />
§ 162.1602 Standards for health care<br />
payment and remittance advice transaction:<br />
The Secretary adopts the following<br />
standards for the health care payment<br />
and remittance advice transaction:<br />
(a) For the period from October 16,<br />
2003 through March 16, <strong>2009</strong>: Health<br />
care claims and remittance advice. The<br />
ASC X12N 835—Health Care Claim<br />
Payment/Advice, Version 4010, May<br />
2000, Washington Publishing Company,<br />
004010X091, and Addenda to Health<br />
Care Claim Payment/Advice, Version<br />
4010, October 2002, Washington<br />
Publishing Company, 004010X091A1.<br />
(Incorporated by reference in § 162.920.)<br />
(b) For the period from March 17,<br />
<strong>2009</strong> through December 31, 2011, both:<br />
(1) The standard identified in<br />
paragraph (a) of this section; and<br />
(2) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Claim<br />
Payment/Advice (835), April 2006, ASC<br />
X12N/005010X221. (Incorporated by<br />
reference in § 162.920.)<br />
(c) For the period on and after January<br />
1, 2012, the standard identified in<br />
paragraph (b)(2) of this section.<br />
Subpart Q—Health Plan Premium<br />
Payments<br />
■ 16. Section 162.1702 is revised to read<br />
as follows:<br />
§ 162.1702 Standards for health plan<br />
premium payments transaction.<br />
The Secretary adopts the following<br />
standards for the health plan premium<br />
payments transaction:<br />
(a) For the period from October 16,<br />
2003 through March 16, <strong>2009</strong>: The ASC<br />
X12N 820—Payroll Deducted and Other<br />
Group Premium Payment for Insurance<br />
Products, Version 4010, May 2000,<br />
Washington Publishing Company,<br />
004010X061, and Addenda to Payroll<br />
Deducted and Other Group Premium<br />
Payment for Insurance Products,<br />
Version 4010, October 2002,<br />
Washington Publishing Company,<br />
004010X061A1. (Incorporated by<br />
reference in § 162.920.)<br />
(b) For the period from March 17,<br />
<strong>2009</strong> through December 31, 2011, both:<br />
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3327<br />
(1) The standard identified in<br />
paragraph (a) of this section, and<br />
(2) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Payroll Deducted and<br />
Other Group Premium Payment for<br />
Insurance Products (820), February<br />
2007, ASC X12N/005010X218.<br />
(Incorporated by reference in § 162.920.)<br />
(c) For the period on and after January<br />
1, 2012, the standard identified in<br />
paragraph (b)(2) of this section.<br />
Subpart R—Coordination of Benefits<br />
■ 17. Section 162.1802 is amended by—<br />
■ A. Removing paragraph (a).<br />
■ B. Redesignating existing paragraph<br />
(b) as paragraph (a).<br />
■ C. Revising the introductory text of<br />
newly redesignated paragraph (a).<br />
■ D. Adding new paragraphs (b) and (c).<br />
The additions and revisions read as<br />
follows:<br />
§ 162.1802 Standards for coordination of<br />
benefits information transaction.<br />
* * * * *<br />
(a) For the period from October 16,<br />
2003 through March 16, <strong>2009</strong>:<br />
* * * * *<br />
(b) For the period from March 17,<br />
<strong>2009</strong> through December 31, 2011, both:<br />
(1) The standards identified in<br />
paragraph (a) of this section; and<br />
(2)(i) Retail pharmacy drug claims.<br />
The Telecommunication Standard<br />
Implementation Guide, Version D,<br />
Release 0 (Version D.0), August 2007,<br />
and equivalent Batch Standard<br />
Implementation Guide, Version 1,<br />
Release 2 (Version 1.2), National<br />
Council for Prescription Drug Programs.<br />
(Incorporated by reference in § 162.920.)<br />
(ii) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Claim:<br />
Dental (837), May 2006, ASC X12N/<br />
005010X224, and Type 1 Errata to<br />
Health Care Claim: Dental (837), ASC<br />
X12 Standards for Electronic Date<br />
Interchange Technical Report Type 3,<br />
October 2007, ASC X12N/<br />
005010X224A1. (Incorporated by<br />
reference in § 162.920.)<br />
(iii) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Claim:<br />
Professional (837), May 2006, ASC<br />
X12N/005010X222. (Incorporated by<br />
reference in § 162.920.)<br />
(iv) The ASC X12 Standards for<br />
Electronic Data Interchange Technical<br />
Report Type 3—Health Care Claim:<br />
Institutional (837), May 2006, ASC<br />
X12N/005010X223, and Type 1 Errata to<br />
Health Care Claim: Institutional (837),<br />
ASC X12 Standards for Electronic Data<br />
Interchange Technical Report Type 3,
sroberts on PROD1PC70 with RULES<br />
3328 Federal Register / Vol. 74, No. 11 / Friday, January 16, <strong>2009</strong> / Rules and Regulations<br />
October 2007, ASC X12N/<br />
005010X223A1. (Incorporated by<br />
reference in § 162.920.)<br />
(c) For the period on and after January<br />
1, 2012, the standards identified in<br />
paragraph (b)(2) of this section.<br />
■ 18. Add a new Subpart S to read as<br />
follows:<br />
Subpart S—Medicaid Pharmacy<br />
Subrogation<br />
Sec.<br />
162.1901 Medicaid pharmacy subrogation<br />
transaction.<br />
162.1902 Standard for Medicaid pharmacy<br />
subrogation transaction.<br />
§ 162.1901 Medicaid pharmacy<br />
subrogation transaction.<br />
The Medicaid pharmacy subrogation<br />
transaction is the transmission of a<br />
claim from a Medicaid agency to a payer<br />
for the purpose of seeking<br />
reimbursement from the responsible<br />
health plan for a pharmacy claim the<br />
State has paid on behalf of a Medicaid<br />
recipient.<br />
§ 162.1902 Standard for Medicaid<br />
pharmacy subrogation transaction.<br />
The Secretary adopts the Batch<br />
Standard Medicaid Subrogation<br />
Implementation Guide, Version 3,<br />
Release 0 (Version 3.0), July 2007,<br />
National Council for Prescription Drug<br />
Programs, as referenced in § 162.1902<br />
(Incorporated by reference at § 162.920):<br />
(a) For the period on and after January<br />
1, 2012, for covered entities that are not<br />
small health plans;<br />
(b) For the period on and after January<br />
1, 2013 for small health plans.<br />
(Catalog of Federal Domestic Assistance<br />
Program No. 93.778, Medical Assistance<br />
Program) (Catalog of Federal Domestic<br />
Assistance Program No. 93.773, Medicare—<br />
Hospital Insurance; and Program No. 93.774,<br />
Medicare—Supplementary Medical<br />
Insurance Program)<br />
Approved: December 11, 2008.<br />
Michael O. Leavitt,<br />
Secretary.<br />
[FR Doc. E9–740 Filed 1–15–09; 8:45 am]<br />
BILLING CODE 4150–28–P<br />
DEPARTMENT OF HEALTH AND<br />
HUMAN SERVICES<br />
Office of the Secretary<br />
45 CFR Part 162<br />
[CMS–0013–F]<br />
RIN 0958–AN25<br />
HIPAA Administrative Simplification:<br />
Modifications to Medical Data Code Set<br />
Standards To Adopt ICD–10–CM and<br />
ICD–10–PCS<br />
AGENCY: Office of the Secretary, HHS.<br />
ACTION: Final rule.<br />
SUMMARY: This final rule adopts<br />
modifications to two of the code set<br />
standards adopted in the Transactions<br />
and Code Sets final rule published in<br />
the Federal Register pursuant to certain<br />
provisions of the Administrative<br />
Simplification subtitle of the Health<br />
Insurance Portability and<br />
Accountability Act of 1996 (HIPAA).<br />
Specifically, this final rule modifies the<br />
standard medical data code sets<br />
(hereinafter ‘‘code sets’’) for coding<br />
diagnoses and inpatient hospital<br />
procedures by concurrently adopting<br />
the International Classification of<br />
Diseases, 10th Revision, Clinical<br />
Modification (ICD–10–CM) for diagnosis<br />
coding, including the Official ICD–10–<br />
CM Guidelines for Coding and<br />
Reporting, as maintained and<br />
distributed by the U.S. Department of<br />
Health and Human Services (HHS),<br />
hereinafter referred to as ICD–10–CM,<br />
and the International Classification of<br />
Diseases, 10th Revision, Procedure<br />
Coding System (ICD–10–PCS) for<br />
inpatient hospital procedure coding,<br />
including the Official ICD–10–PCS<br />
Guidelines for Coding and Reporting, as<br />
maintained and distributed by the HHS,<br />
hereinafter referred to as ICD–10–PCS.<br />
These new codes replace the<br />
International Classification of Diseases,<br />
9th Revision, Clinical Modification,<br />
Volumes 1 and 2, including the Official<br />
ICD–9–CM Guidelines for Coding and<br />
Reporting, hereinafter referred to as<br />
ICD–9–CM Volumes 1 and 2, and the<br />
International Classification of Diseases,<br />
9th Revision, Clinical Modification,<br />
Volume 3, including the Official ICD–9–<br />
CM Guidelines for Coding and<br />
Reporting, hereinafter referred to as<br />
ICD–9–CM Volume 3, for diagnosis and<br />
procedure codes, respectively.<br />
DATES: The effective date of this<br />
regulation is March 17, <strong>2009</strong>. The<br />
effective date is the date that the<br />
policies herein take effect, and new<br />
policies are considered to be officially<br />
adopted. The compliance date, which is<br />
VerDate Nov2008 22:11 Jan 15, <strong>2009</strong> Jkt 217001 PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 E:\FR\FM\16JAR5.SGM 16JAR5<br />
different than the effective date, is the<br />
date on which entities are required to<br />
have implemented the policies adopted<br />
in this rule. The compliance date for<br />
this regulation is October 1, 2013.<br />
FOR FURTHER INFORMATION CONTACT:<br />
Denise M. Buenning, (410) 786–6711 or<br />
Shannon L. Metzler, (410) 786–3267.<br />
I. Background<br />
A. Statutory Background<br />
The Congress addressed the need for<br />
a consistent framework for electronic<br />
transactions and other administrative<br />
simplification issues in the Health<br />
Insurance Portability and<br />
Accountability Act of 1996 (HIPAA),<br />
Public Law 104–191, enacted on August<br />
21, 1996. HIPAA has helped to improve<br />
the Medicare and Medicaid programs,<br />
and the efficiency and effectiveness of<br />
the health care system in general, by<br />
encouraging the development of<br />
standards and requirements to facilitate<br />
the electronic transmission of certain<br />
health information.<br />
Through subtitle F of title II of that<br />
statute, the Congress added to title XI of<br />
the Social Security Act (the Act) a new<br />
Part C, titled ‘‘Administrative<br />
Simplification.’’ Part C of title XI of the<br />
Act now consists of sections 1171<br />
through 1180. Section 1172 of the Act<br />
and the implementing regulations make<br />
any standard adopted under Part C<br />
applicable to: (1) Health plans; (2)<br />
health care clearinghouses; and (3)<br />
health care providers who transmit any<br />
health information in electronic form in<br />
connection with a transaction for which<br />
the Secretary has adopted a standard.<br />
Section 1172(c)(1) of the Act requires<br />
any standard adopted by the Secretary<br />
of the Department of Health and Human<br />
Services (HHS) to be developed,<br />
adopted, or modified by a standard<br />
setting organization (SSO), except in the<br />
cases identified under section 1172(c)(2)<br />
of the Act. Under section 1172(c)(2)(A)<br />
of the Act, the Secretary may adopt a<br />
standard that is different from any<br />
standard developed by an SSO if it will<br />
substantially reduce administrative<br />
costs to health care providers and health<br />
plans compared to the alternatives, and<br />
the standard is promulgated in<br />
accordance with the rulemaking<br />
procedures of subchapter III of chapter<br />
5 of Title 5 of the United States Code.<br />
Under section 1172(c)(2)(B) of the Act,<br />
if no SSO has developed, adopted, or<br />
modified any standard relating to a<br />
standard that the Secretary is authorized<br />
or required to adopt, section 1172(c)(1)<br />
does not apply.<br />
Section 1172 of the Act also sets forth<br />
consultation requirements that must be<br />
met before the Secretary may adopt
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Kathleen Sebelius Confirmed as Secretary of the Department of Health and Human Services<br />
Kathleen Sebelius was sworn in as the 21st Secretary of the Department of Health and Human Services (HHS) on<br />
Tuesday, April 29, <strong>2009</strong>. The Secretary governs one of the largest civilian departments in the federal government with<br />
more than 67,000 employees. HHS is the principal agency for protecting the health of all Americans by providing effective<br />
health and human services, especially for those who are least able to help themselves.<br />
Secretary Sebelius has over 20 years of experience in state government, and has been a leader on health care issues for<br />
over a decade. She was first elected governor of Kansas in 2003 and was reelected in 2006. Throughout her tenure,<br />
Sebelius was lauded for her record of bipartisan accomplishment. She worked tirelessly to grow the state’s economy and<br />
to create jobs, to ensure that every Kansas child received a quality education, and to improve access to quality and<br />
affordable health care. As Governor, Sebelius expanded Kansas’ newborn screenings, put a renewed emphasis on<br />
childhood immunization and increased eligibility for children’s health coverage. More than 59,000 additional children were<br />
enrolled in health coverage during her time in office. Sebelius also worked closely with Kansas first responders and law enforcement to prepare for natural<br />
disasters and other emergencies. In 2005, Time magazine named her one of the nation’s top five governors.<br />
Prior to her tenure as Governor, Secretary Sebelius spent 8 years serving as the Kansas State Insurance Commissioner. In that capacity, Sebelius turned her<br />
department into a steadfast advocate for Kansas consumers, and helped senior citizens save more than $7 million on prescription drugs. She also won praise<br />
for blocking the sale of Kansas Blue Cross/Blue Shield by an out-of-state, for-profit health care conglomerate, and for her role in drafting a proposed national<br />
bill of rights for patients. Previously, she was a member of the Kansas House of Representatives from 1986-1994.<br />
Married to husband, Gary, a federal magistrate judge, for 34 years, they have two sons: Ned and John.<br />
Secretary Portrait (1.0 MB)<br />
HHS Office Structure<br />
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ASCO <strong>CAC</strong> Network E-News<br />
January <strong>2009</strong> Issue<br />
Medicare Administrator Contractor Updates<br />
http://view.exacttarget.com/?j=fe5315797c6d00797110&m=ff311d7074...<br />
Five New A/B MAC Contracts Awarded for Jurisdictions 6, 8, 10, 11, and 15<br />
The following table outlines each jurisdiction, the states under each jurisdiction,<br />
the company awarded the MAC contract, and the award date. NOTE: The most<br />
recent awards are highlighted in BOLD. The awards currently in dispute are in<br />
RED.<br />
Jurisdiction Award Date Company States<br />
1 10/25/2007 Palmetto GBA<br />
American Samoa,<br />
Guam, Northern<br />
Mariana Islands, CA,<br />
HI, & NV<br />
2 5/5/2008<br />
Nat'l Heritage Insurance<br />
Corp. (NHIC)<br />
AK, ID, OR, WA<br />
3 7/31/2006<br />
Noridian Administrative<br />
Services<br />
AZ, MT, ND, SD,<br />
UT, WY<br />
4 8/3/2007<br />
Trailblazer Health<br />
Enterprises<br />
CO, NM, OK, TX<br />
5 9/4/2007<br />
Wisconsin Physician<br />
Services (WPS)<br />
IA, KS, MO, NE<br />
6 1/7/<strong>2009</strong><br />
Noridian<br />
Administrative Services<br />
IL, MN, WI<br />
7 6/11/2008<br />
Pinnacle Business<br />
Solutions<br />
AR, LA, MS<br />
8 1/7/<strong>2009</strong><br />
National Government<br />
Services<br />
IN, MI<br />
9 9/12/2008<br />
First Coast Service<br />
Options<br />
FL, Puerto Rico,<br />
& Virgin Islands<br />
10 1/7/<strong>2009</strong> Cahaba GBA AL, GA, TN<br />
11 1/7/<strong>2009</strong> Palmetto GBA NC, SC, VA, WV<br />
12 10/24/2007<br />
Highmark Government<br />
Services (HGS)<br />
DE, DC, MD, NJ,<br />
PA<br />
13 3/18/2008<br />
National Government<br />
Services (NGS)<br />
CT, NY<br />
14 11/19/2008<br />
Nat'l Heritage Insurance<br />
Corp.<br />
(NHIC)<br />
ME, MA, NH, RI,<br />
VT<br />
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15 1/7/<strong>2009</strong><br />
Highmark Medicare<br />
Services (HMS)<br />
KY, OH<br />
The official announcement of the A/B MAC awards can be found in the January 7, <strong>2009</strong><br />
CMS Press Release.<br />
First Coast Issues Final List of MAC J9 Local Coverage Determinations (LCDs)<br />
All incoming MAC contractors are required to adopt the most clinically appropriate LCD<br />
from the existing LCDs on a single topic. On December 9, 2008, FCSO published the<br />
final list of Local Coverage Determinations (LCDs) for the Part A and Part B transition<br />
to Medicare Administrative contractor (MAC) Jurisdiction 9 (J9).<br />
Leucovorin Shortage Updates<br />
ASCO Issues Cancer Policy Alert In Response to Leucovorin Shortage<br />
On January 8, <strong>2009</strong>, ASCO issued a Cancer Policy Alert in response to the current<br />
Leucovorin shortage. The alert mentions the following:<br />
The reason for the shortage,<br />
Using levleucovorin (Fusilev),<br />
Other alternative drugs,<br />
What the FDA is doing about the shortage,<br />
Temporary Medicare coverage for appropriate alternatives, and<br />
What ASCO is doing to assist members during the shortage<br />
Noridian Announces Temporary Coverage Change in Response to Leucovorin<br />
Shortage<br />
On December 23, 2008, in response to the shortage of Leucovorin, Noridian<br />
Administrative Services (NAS) announced, "If Leucovorin is used within labeled<br />
indications, unavailable and medical necessity is documented, NAS will allow<br />
substitution using Levoleucovorin until such time as the current shortage of Leucovorin<br />
is resolved." More information about Noridian's temporary coverage update can be<br />
found on the Noridian website.<br />
Palmetto Allows For Temporary Coverage Change in Response to Leucovorin<br />
Shortage<br />
In December 2008, Arthur Lurvey, MD, the Contractor Medical Director for Palmetto<br />
GBA (MAC Jurisdiction 1), announced, "Until the supply shortage for Leucovorin has<br />
been corrected, we will allow the use of Fusilev (Levoleucovorin) in all places where<br />
Leucovorin was and is covered."<br />
Local Coverage News<br />
http://view.exacttarget.com/?j=fe5315797c6d00797110&m=ff311d7074...<br />
First Coast Issues Local Coverage Article on the Administration of Neupogen and<br />
Neulasta Following Chemotherapy Administration<br />
On December 3, 2008, First Coast Service Options (FCSO) posted an article to their<br />
website referencing the coverage of administration of Neupogen and Neulasta following<br />
chemotherapy administration. The updated article provides additional clarification to the<br />
existing Local Coverage Determinations (LCDs), L6567 and L14000, which further<br />
2 of 5 5/20/<strong>2009</strong> 1:14 PM
outline the coverage and administration criteria. FCSO will not cover Neupogen that is<br />
administered 24 hours before (or 24 hours after) the administration of a chemotherapy<br />
drug. They also will not cover Neulasta administration that occurs within 14 days before<br />
(or 24 hours following) the administration of a chemotherapy drug.<br />
Noridian Recognizes Compendia as Authoritative Source for Determining Medical<br />
Necessity and Provides Additional Guidance to Providers<br />
NAS has retired their "Drugs Used Incident to a Physician's Service and Their Covered<br />
Diagnoses" Local Coverage Determination (LCD), effective January 1, <strong>2009</strong>, and has<br />
provided additional guidance to providers for determining medical necessity.<br />
Local Coverage Updates For Antiemetics (Intravenous and Oral)<br />
National Government Services Updates Drugs & Biologicals Local Coverage Policy<br />
Effective January 1, <strong>2009</strong>, National Government Services (NGS) revised their Local<br />
Coverage Determination (LCD), L25820, for "Drugs and Biologicals,Coverage of, for<br />
Label and Off-Label Uses". A guideline has been added when billing for an IV drug<br />
which has an available oral form.<br />
First Coast Issues Local Coverage Article for Intravenous Emend® (Fosaprepitant)<br />
On December 23, 2008, FCSO issued an updated coverage article for the use of<br />
Intravenous Emend® (Fosaprepitant). The article specifies, "For Medicare Part B to<br />
cover the IV product, the IV route of administration must meet the criteria for what is<br />
considered "reasonable and necessary".<br />
Palmetto Updates Local Coverage Article for IV Emend®<br />
On December 1, 2008, Palmetto GBA, the South Carolina Part B <strong>Carrier</strong>, updated their<br />
local coverage article for Emend® for Injection stating that they will not cover off-label<br />
IV Emend requests. They have also provided guidelines for reporting the use of oral and<br />
IV Emend®.<br />
Clinical Trials Coverage Updates<br />
Medicare Coverage of Phase I Clinical Trials<br />
ASCO was contacted by the University of Maryland regarding a letter it received from<br />
its Medicare Contractor (Highmark Medicare Services) concerning Medicare coverage<br />
of Phase I clinical trials. Highmark (whose jurisdiction includes Maryland, New Jersey,<br />
Pennsylvania, Delaware, and DC) indicates that it does not reimburse for routine costs<br />
associated with Phase I clinical trials. ASCO, in conjunction with the Association of<br />
American Cancer Institutes (AACI) and the American Association for Cancer Research<br />
(AACR), sent a letter to the University of Maryland clarifying that the Medicare NCD<br />
for clinical trials coverage should apply to Phase I oncology trials because of the<br />
therapeutic intent criteria. The University of Maryland is using this letter in its response<br />
to the Highmark letter.<br />
ASCO News<br />
http://view.exacttarget.com/?j=fe5315797c6d00797110&m=ff311d7074...<br />
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Important Changes to ASCO Coding & Reimbursement Hotline Policies &<br />
Procedures<br />
Starting January 5, <strong>2009</strong>, ASCO has implemented two important changes for the Coding<br />
& Reimbursement Hotline. We hope these changes will help expedite responses and<br />
improve service to ASCO members.<br />
1) All hotline inquiries should be submitted via e-mail to practice@asco.org.<br />
We believe this will help streamline our response process.<br />
2) We are now requesting that inquiries from members and their staff be<br />
accompanied by an ASCO member ID number.<br />
State Society Executive Directors who are asking questions on behalf of State/Regional<br />
Affiliate members will continue to have access to the hotline. We appreciate your<br />
patience as we transition to this new process.<br />
ASCO Hosting "Adapting to Changes in Medicare for <strong>2009</strong>" Audio-Conference Call<br />
ASCO will be hosting their Annual "Adapting to Changes in Medicare" audio-conference<br />
call on Thursday, January 22, <strong>2009</strong>, from 4:00 PM - 5:30 PM (EST). Discussion topics<br />
will include:<br />
Overview of Medicare's <strong>2009</strong> Physician Fee Schedule<br />
Overview of Medicare's <strong>2009</strong> Hospital Outpatient Prospective Payment System<br />
Review of <strong>2009</strong> PQRI Program and oncology-specific measures<br />
E-prescribing<br />
<strong>Oncology</strong> Coding Update<br />
For more information, and to register for this call, please visit the ASCO website.<br />
FDA News<br />
http://view.exacttarget.com/?j=fe5315797c6d00797110&m=ff311d7074...<br />
FDA Approves Degarelix, A New Gonadotropin Releasing Hormone (GnRH)<br />
Receptor Antagonist, For The Treatment Of Patients With Advanced Prostate Cancer<br />
On December 24, 2008, the U. S. Food and Drug Administration (FDA) approved<br />
Degarelix for injection (Ferring Pharmaceuticals Inc., Parsippany, NJ), a new<br />
Gonadotropin Releasing Hormone (GnRH) Receptor Antagonist, for the treatment of<br />
patients with advanced prostate cancer. This indication is based on Degarelix's<br />
effectiveness in attaining and maintaining serum testosterone suppression to medical<br />
castration levels during 12 months of treatment in an open-label, randomized, multicenter,<br />
parallel-group study.<br />
Full prescribing information, including clinical trial information, safety, dosing, drug-drug<br />
interactions and contraindications is available on the FDA website.<br />
FDA Approves Gleevec For Adjuvant Treatment of Adult Patients Following<br />
Complete Gross Resection of Kit (CD117) Positive Gastrointestinal Stromal Tumor<br />
(GIST)<br />
On December 19, 2008, the U.S. Food and Drug Administration (FDA) approved<br />
Imatinib Mesylate tablets for oral use (Gleevec®, Novartis Pharmaceuticals) for the<br />
adjuvant treatment of adult patients following complete gross resection of Kit (CD117)<br />
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positive Gastrointestinal Stromal Tumor (GIST).<br />
Full prescribing information, including clinical trial information, safety, dosing, drug-drug<br />
interactions, and contraindications is available on the FDA website.<br />
FDA Approves Plerixafor (In Combination With G-CSF) to Mobilize Hematopoietic<br />
Stem Cells in Patients with Non-Hodgkin's Lymphoma (NHL) and Multiple Myeloma<br />
(MM)<br />
On December 15, 2008, the U. S. Food and Drug Administration approved Plerixafor,<br />
solution for subcutaneous injection, (MozobilTM, Genzyme Corp.) for use in<br />
combination with Granulocyte-Colony Stimulating Factor (G-CSF) to mobilize<br />
hematopoietic stem cells to the peripheral blood for collection and subsequent<br />
autologous transplantation in patients with Non-Hodgkin's Lymphoma (NHL) and<br />
Multiple Myeloma (MM).<br />
Full prescribing information, including clinical trial information, safety, dosing, drug-drug<br />
interactions, and contraindications is available on the FDA website.<br />
-----------------------------------------------------<br />
ASCO sends periodic e-mails to its <strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong> (<strong>CAC</strong>) Network as a means of<br />
disseminating information and increasing awareness about <strong>Carrier</strong>/LCD issues around the<br />
country. You have received this e-mail as an identified interested party in the LCD process<br />
(e.g. State Society President, <strong>Oncology</strong>/<strong>Hematology</strong>/Gynecology <strong>CAC</strong> Representative/Alternate,<br />
CPC Member, CPC State Affiliate). More information is available at ASCO's website. To<br />
submit corrections to ASCO's <strong>CAC</strong> website, or to obtain further information about any items<br />
included in this e-mail or <strong>CAC</strong> issues in general, please contact:<br />
Laura J. Cathro<br />
Medicare Program Coordinator<br />
The American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, Suite 800<br />
Alexandria, VA 22314<br />
Phone (703) 519-2907<br />
Fax (703) 684-8364<br />
laura.cathro@asco.org<br />
This email was sent to: laura.cathro@asco.org<br />
This email was sent by: American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, suite 800 Alexandria, VA 22314 USA<br />
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ASCO <strong>CAC</strong> Network E-News<br />
February <strong>2009</strong> Issue<br />
Local Coverage Updates<br />
ASCO Sends Letter to CMS in Response to National Government Services Local<br />
Coverage Policy for Oral Versus IV Antiemetics<br />
Effective January 1, <strong>2009</strong>, National Government Services (NGS) revised their Local<br />
Coverage Determination (LCD), L25820, for "Drugs and Biologicals, Coverage of, for<br />
Label and Off-Label Uses". A guideline was added limiting coverage for an IV drug<br />
which has an available oral form. This policy affects all states within MAC Jurisdiction<br />
8 (IN and MI) and Jurisdiction 13 (CT and NY).<br />
On February 9, <strong>2009</strong>, ASCO sent a letter to the Centers for Medicare & Medicaid<br />
Services (CMS) requesting that they advise NGS that its recently announced policy<br />
disfavoring coverage of intravenous antiemetics is inconsistent with national Medicare<br />
policy, and must be rescinded. Furthermore, NGS's new policy is contrary to the<br />
interests of cancer patients.<br />
Palmetto (J1 MAC) Issues Alert to Providers Regarding the Incorrect Denials of the<br />
New Hydration and Therapeutic, Diagnostic, and Prophylactic Drug Administration<br />
Codes (963xx)<br />
Palmetto announced that the new <strong>2009</strong> CPT Codes 96360, 96361, 96365-96368,<br />
96372-96375, may have been denied in error for dates of service 1/1/09 - 1/27/09, due<br />
to the system denying claims submitted with Evaluation & Management Services billed<br />
with the 25 modifier and one of the Chemo Administrations/Non-Chemotherapy Drug<br />
Infusion & Drug Injection Services. The claims should have been allowed.<br />
The Palmetto alert applies to Procedure Code(s) 96360, 96361, 96365, 96366, 96367,<br />
96368, 96372, 96373, 96374, and/or 96375 billed with E & M services. The E & M<br />
codes must be submitted with the 25 modifier if billed with one of the Chemo<br />
Administrations/Non-Chemotherapy Drug Infusion & Drug Injection Services. No<br />
action is required by providers - Palmetto will adjust incorrectly denied claims.<br />
MAC Award Updates<br />
http://view.exacttarget.com/?j=fe5015797c6d00797311&m=ff311d7074...<br />
Contract Awarded to Noridian for MAC Jurisdiction 6 (for IL, MN, WI) Now Under<br />
Dispute and Pending GAO Investigation<br />
On January 7, <strong>2009</strong>, Noridian was awarded the A/B Medicare Administrative Contractor<br />
1 of 4 5/20/<strong>2009</strong> 1:15 PM
(MAC) contract for Jurisdiction 6 (includes IL, MN, WI). On January 27, <strong>2009</strong>, the<br />
Centers for Medicare & Medicaid Services (CMS) notified Noridian that the U.S.<br />
Government Accountability Office (GAO) had received a protest of the award, which<br />
has resulted in a Stop-Work Order in accordance with the Federal Acquisition<br />
Regulation. Noridian anticipates a decision from the GAO on or about May 6, <strong>2009</strong>.<br />
Contract Awarded to Palmetto GBA for MAC Jurisdiction 11 (for NC, SC, VA, WV)<br />
Now Under Dispute and Pending GAO Investigation<br />
On January 7, <strong>2009</strong>, Palmetto GBA was awarded the A/B Medicare Administrative<br />
Contractor (MAC) contract for Jurisdiction 11 (includes NC, SC, VA, WV) and Home<br />
Health and Hospice MAC Jurisdiction C. On February 2, <strong>2009</strong>, the Centers for<br />
Medicare & Medicaid Services (CMS) notified Palmetto that the U.S. Government<br />
Accountability Office (GAO) had received a protest of the award, which has resulted in<br />
a Stop-Work Order in accordance with the Federal Acquisition Regulation. Palmetto<br />
anticipates a decision from the GAO on or about May 13, <strong>2009</strong>.<br />
ASCO News<br />
http://view.exacttarget.com/?j=fe5015797c6d00797311&m=ff311d7074...<br />
ASCO Releases 2008 Clinical Cancer Advances Report<br />
In December 2008, ASCO released Clinical Cancer Advances 2008: Major Research<br />
Advances in Cancer Treatment, Prevention and Screening, an independent assessment<br />
of the most significant clinical cancer research of the past year. The report was<br />
developed under the guidance of an editorial board made up of 21 leading oncologists for<br />
a wide array of disciplines who reviewed studies in peer-reviewed scientific journals and<br />
the results of research presented at major scientific meetings from October 2007 through<br />
September 2008.<br />
ASCO has forwarded the report to all Medicare Contractor Medical Directors (CMDs) to<br />
encourage them to look to ASCO as an authoritative resource on clinical cancer care.<br />
ASCO Releases its First Provisional Clinical Opinion (PCO)<br />
In January <strong>2009</strong>, ASCO released their first Provisional Clinical Opinion (PCO), which<br />
recommends that all patients with metastatic colorectal cancer who are candidates for<br />
anti-EFGR therapy have their tumors tested for KRAS gene mutations. If a patient has a<br />
mutated form of the KRAS gene, it recommends against the use of anti-EFGR antibody<br />
therapy, based on recent studies.<br />
The full Provisional Clinical Opinion article can be accessed on the ASCO website.<br />
Update on Leucovorin Shortage<br />
Currently, both Teva and Bedford are manufacturing and releasing leucovorin at this<br />
time. It will take several weeks to fill all backorders, however. Late February/early<br />
March appears to be the timeframe when supplies are anticipated to meet historical<br />
demand. Teva has experienced a shortage due to "increased demand", but is<br />
manufacturing at full capacity. Bedford is still experiencing manufacturing delays,<br />
however.<br />
Bedford has informed ASCO that they have set aside an emergency supply, which can<br />
be accessed through the company's customer service #1-800-562-4797. They have the<br />
2 of 4 5/20/<strong>2009</strong> 1:15 PM
50 mL vial (NDC 55390-0009-01) and the 50 mL Novaplus vial (NDC 55390-0826-01)<br />
available through the emergency order program. Spectrum's Fusilev (levoleucovorin) 50<br />
mg single use vials (NDC 68152-0101-00) continue to be available.<br />
ASCO will continue to provide updates with any new information regarding the drug<br />
shortage.<br />
CMS News<br />
HHS Issues Final ICD-10 Code Sets<br />
On January 16, the Department of Health and Human Services (HHS) issued the final<br />
regulations establishing codes based on the International Classification of Diseases,<br />
Tenth Revision (ICD-10) as the standard code sets for reporting diagnoses and inpatient<br />
hospital procedures. The ICD-10 rule, "HIPAA Administrative Simplification:<br />
Modifications to Medical Data Code Set Standards to Adopt ICD-10-CM and<br />
ICD-10-PCS," is available online. CMS also has developed a fact sheet describing the<br />
new rule. The codes must be used beginning October 1, 2013.<br />
Other News<br />
OIG Review of Hospital Oxaliplatin Billing<br />
The Office of Inspector General (OIG) is currently auditing claims billed by hospitals for<br />
oxaliplatin during Calendar Years 2004 and 2005. Under the Medicare hospital<br />
outpatient prospective payment system, as a new drug oxaliplatin was eligible for a<br />
higher transitional pass-through payment amount from July 1, 2003, to December 31,<br />
2005. Hospitals were to bill using the code C9205 (Injection oxaliplatin, 5 mg) to obtain<br />
the pass-through payment. Some hospitals submitting claims under C9205, however,<br />
incorrectly used the unit for the practitioner's code (J9263, Injection oxaliplatin, 0.5<br />
mg). Consequently, the hospitals submitted claims for ten times the amount of<br />
oxaliplatin actually administered.<br />
More information regarding the oxaliplatin audits can be found on the OIG website.<br />
-----------------------------------------------------<br />
ASCO sends periodic e-mails to its <strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong> (<strong>CAC</strong>) Network as a means of<br />
disseminating information and increasing awareness about <strong>Carrier</strong>/LCD issues around the<br />
country. You have received this e-mail as an identified interested party in the LCD process<br />
(e.g. State Society President, <strong>Oncology</strong>/<strong>Hematology</strong>/Gynecology <strong>CAC</strong> Representative/Alternate,<br />
CPC Member, CPC State Affiliate).More information is available at ASCO's website. To<br />
submit corrections to ASCO's <strong>CAC</strong> website, or to obtain further information about any items<br />
included in this e-mail or <strong>CAC</strong> issues in general, please contact:<br />
Laura J. Cathro<br />
Medicare Program Coordinator<br />
The American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, Suite 800<br />
Alexandria, VA 22314<br />
http://view.exacttarget.com/?j=fe5015797c6d00797311&m=ff311d7074...<br />
3 of 4 5/20/<strong>2009</strong> 1:15 PM
Phone (703) 519-2907<br />
Fax (703) 684-8364<br />
laura.cathro@asco.org<br />
This email was sent to: laura.cathro@asco.org<br />
This email was sent by: American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, suite 800 Alexandria, VA 22314 USA<br />
We respect your right to privacy - view our policy<br />
Manage Subscriptions | Update Profile | One-Click Unsubscribe<br />
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ASCO <strong>CAC</strong> Network E-News<br />
March <strong>2009</strong> Issue<br />
Medicare Administrator Contractor Updates<br />
Six A/B MAC Contracts Currently in Dispute - Jurisdictions 2, 6, 7, 8, 11, and 15<br />
The following table outlines the states under each jurisdiction, the company<br />
awarded the MAC contract, and the award date. The awards currently in dispute<br />
are in RED.<br />
Local Coverage News<br />
http://view.exacttarget.com/?j=fe4b15797c6d00797d1c&m=ff311d7074...<br />
Jurisdiction Award Date Company States<br />
1 10/25/2007 Palmetto GBA<br />
American Samoa,<br />
Guam, Northern<br />
Mariana Islands, CA,<br />
HI, & NV<br />
2 5/5/2008<br />
Nat'l Heritage Insurance<br />
Corp. (NHIC)<br />
AK, ID, OR, WA<br />
3 7/31/2006<br />
Noridian Administrative<br />
Services<br />
AZ, MT, ND, SD, UT,<br />
WY<br />
4 8/3/2007<br />
Trailblazer Health<br />
Enterprises<br />
CO, NM, OK, TX<br />
5 9/4/2007<br />
Wisconsin Physician<br />
Services (WPS)<br />
IA, KS, MO, NE<br />
6 1/7/<strong>2009</strong><br />
Noridian Administrative<br />
Services<br />
IL, MN, WI<br />
7 6/11/2008<br />
Pinnacle Business<br />
Solutions<br />
AR, LA, MS<br />
8 1/7/<strong>2009</strong><br />
National Government<br />
Services (NGS)<br />
IN, MI<br />
9 9/12/2008<br />
First Coast Service<br />
Options (FCSO)<br />
FL, Puerto Rico,<br />
& Virgin Islands<br />
10 1/7/<strong>2009</strong> Cahaba GBA AL, GA, TN<br />
11 1/7/<strong>2009</strong> Palmetto GBA NC, SC, VA, WV<br />
12 10/24/2007<br />
Highmark Government<br />
Services (HGS)<br />
DE, DC, MD, NJ, PA<br />
13 3/18/2008<br />
National Government<br />
Services (NGS)<br />
CT, NY<br />
14 11/19/2008<br />
Nat'l Heritage Insurance<br />
Corp. (NHIC)<br />
ME, MA, NH, RI, VT<br />
15 1/7/<strong>2009</strong><br />
Highmark Medicare<br />
Services (HMS)<br />
KY, OH<br />
1 of 4 5/20/<strong>2009</strong> 1:16 PM
First Coast Service Options Draft LCDs Open for Comment<br />
First Coast Service Options (FCSO), the A/B MAC for Florida, currently has two<br />
oncology-specific draft Local Coverage Policies (LCDs), Erythropoiesis Stimulating<br />
Agents - DL29168 and Intravitreal Bevacizumab (Avastin®) - DL29959, open for<br />
comment. The comment period close date is April 6, <strong>2009</strong>.<br />
Palmetto (Ohio <strong>Carrier</strong>) Revised LCD for Chemotherapy and Biologicals<br />
Effective 2/3/<strong>2009</strong>, Palmetto made a revision to their LCD for Chemotherapy and<br />
Biologicals. Several ICD-9-CM codes were added to support medical necessity for<br />
HCPCS codes J9280, J9290, and J9291 (Mytomycin).<br />
National Heritage Insurance Corp. (NHIC) Issues MAC Transition Schedule for<br />
Jurisdiction 14<br />
The segment cutover dates for J14 MAC are as follows:<br />
http://view.exacttarget.com/?j=fe4b15797c6d00797d1c&m=ff311d7074...<br />
Segment Cutover Date<br />
Effective Dates<br />
of Consolidated LCDs<br />
RI - Part B May 1, <strong>2009</strong> May 1, <strong>2009</strong><br />
ME , MA - Part A May 15, <strong>2009</strong> May 15, <strong>2009</strong><br />
ME, MA, NH, VT, CT May 15, <strong>2009</strong> May 15, <strong>2009</strong><br />
RI - Part A June 1, <strong>2009</strong> June 1, <strong>2009</strong><br />
NHIC, Part B June 1, <strong>2009</strong> June 1, <strong>2009</strong><br />
NH , VT - Part A June 5, <strong>2009</strong> June 5, <strong>2009</strong><br />
ASCO Asks CMS to Rescind the National Government Services (NGS) Local<br />
Coverage Policy due to Impact on Antiemetics<br />
On February 9, ASCO sent a letter to the Centers for Medicare & Medicaid Services<br />
(CMS) opposing a local coverage policy revision made by National Government Services<br />
(NGS), the Medicare contractor for New York, Connecticut, Indiana, and Kentucky.<br />
The revision states the oral form of a medication should be used first and must fail before<br />
the injectable/intravenous counterpart can be administered. This coverage policy applies<br />
to all drugs that are available in both oral and intravenous forms. NGS published a<br />
supplemental article that further clarifies this coverage policy.<br />
ASCO's letter argues that the NGS policy is improperly based on national Part B<br />
coverage of oral antiemetics when used as full replacement for intravenous antiemetics,<br />
rather than recognizing that intravenous administration of antiemetics is part of standard<br />
medical practice.<br />
ASCO Comments on NGS Local Coverage Policy for Vitamin D Assay Testing<br />
National Government Services (NGS) posted a draft policy on vitamin D assay testing<br />
that would exclude coverage for patients with a cancer diagnosis. ASCO submitted<br />
comments on the draft policy on February 20, <strong>2009</strong>. The letter outlines concerns on<br />
NGS' statement that "treatment of vitamin D deficiency is relatively straightforward,<br />
negating the need for measuring vitamin D levels in many cases," and focuses on the<br />
care and treatment of breast cancer patients.<br />
2 of 4 5/20/<strong>2009</strong> 1:16 PM
CMS News<br />
CMS Resumes Recovery Audit Contractor Program<br />
The Tax Relief and Health Care Act of 2006, Section 302, requires a permanent and<br />
nationwide RAC program no later than 2010. There are a total of four RACs<br />
nationwide, which were announced back in October 2008. On November 2, 2008,<br />
however, two of the RAC contracts were disputed, and the Government Accountability<br />
Office (GAO) issued a "Stay of Work", or hold, on the implementation of the four<br />
RACs.<br />
On February 2, <strong>2009</strong>, the companies involved in the RAC contract dispute reached a<br />
settlement, and on February 4, <strong>2009</strong>, the "Stay of Work" was lifted. CMS states it will<br />
begin contacting associations and providers to discuss provider outreach sessions<br />
involving the RACs over the next few months. For additional information on the RAC<br />
program, visit the CMS website.<br />
ASCO News<br />
Update on Leucovorin Shortage<br />
ASCO was recently contacted by the FDA and informed that both Bedford and Teva are<br />
now shipping to fill new and back-orders. Bedford has the 350 mg vials available for<br />
drop shipment. <strong>Oncology</strong> centers or other facilities needing product may call<br />
1-800-562-4797 to receive a shipment. Bedford also plans on releasing their 200 mg<br />
vials later this month and all other presentations in mid-April.<br />
Teva has their 350 mg vials available as well, and will be releasing their 100mg vials by<br />
early April. If a facility or pharmacy cannot receive supplies through their wholesaler,<br />
they may call Teva at 1-888-838-2872.<br />
-----------------------------------------------------<br />
ASCO sends periodic e-mails to its Contractor <strong>Advisory</strong> <strong>Committee</strong> (<strong>CAC</strong>) Network as a means<br />
of disseminating information and increasing awareness about <strong>Carrier</strong>/LCD issues around the<br />
country. You have received this e-mail as an identified interested party in the LCD process<br />
(e.g. State Society President, <strong>Oncology</strong>/<strong>Hematology</strong>/Gynecology <strong>CAC</strong> Representative/Alternate,<br />
CPC Member, CPC State Affiliate).More information is available at ASCO's website. To<br />
submit corrections to ASCO's <strong>CAC</strong> website, or to obtain further information about any items<br />
included in this e-mail or <strong>CAC</strong> issues in general, please contact:<br />
Laura J. Cathro<br />
Medicare Program Coordinator<br />
The American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, Suite 800<br />
Alexandria, VA 22314<br />
Phone (703) 519-2907<br />
Fax (703) 684-8364<br />
laura.cathro@asco.org<br />
http://view.exacttarget.com/?j=fe4b15797c6d00797d1c&m=ff311d7074...<br />
3 of 4 5/20/<strong>2009</strong> 1:16 PM
This email was sent to: laura.cathro@asco.org<br />
This email was sent by: American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, suite 800 Alexandria, VA 22314 USA<br />
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ASCO <strong>CAC</strong> Network E-News<br />
April <strong>2009</strong> Issue<br />
MAC Transition Updates<br />
CMS Revises MedLearn Matter Article, "Preparing for a Transition from an<br />
FI/<strong>Carrier</strong> to a Medicare Administrative Contractor (MAC)".<br />
On March 11, <strong>2009</strong>, the Centers for Medicare and Medicaid Services (CMS) issued a<br />
revision to their MedLearn Matter article intended to assist all providers that will be<br />
affected by Medicare Administrative Contractor (MAC) implementations. This article<br />
was revised to add definitions of an outgoing and incoming contractor, and was re-issued<br />
to remind affected providers of upcoming Medicare contractor transitions.<br />
Cahaba GBA (J10 MAC) Announces Cutover Schedule<br />
Contractor State Workload Type Cutover Date<br />
BCBS of Georgia Georgia Part A 05/04/<strong>2009</strong><br />
Cahaba GBA Alabama Part B 05/04/<strong>2009</strong><br />
Cahaba GBA Alabama Part A 05/18/<strong>2009</strong><br />
Riverbend GBA Tennessee Part A 08/03/<strong>2009</strong><br />
Cahaba GBA Georgia Part B 08/03/<strong>2009</strong><br />
CIGNA Tennessee Part B 09/01/<strong>2009</strong><br />
Cahaba GBA Local Coverage Determinations (LCDs) for MAC Jurisdiction 10<br />
The new J10 LCDs are now available on the Cahaba GBA website. For each cutover<br />
date, the contractor will post a link to the approved list allowing a 45 day notice period.<br />
National Heritage Insurance Corporation (J14 MAC) Announces Effective Dates of<br />
Future Local Coverage Determinations (LCDs) for Medicare Part B<br />
Notice Period Begins<br />
MAC Part B<br />
Effective date of Future<br />
MAC Part B LCDs<br />
http://view.exacttarget.com/?j=fe5815797c6d00787415&m=ff311d7074...<br />
Future LCD<br />
MAC Part B<br />
4/17/<strong>2009</strong> 6/1/<strong>2009</strong> Maine<br />
4/17/<strong>2009</strong> 6/1/<strong>2009</strong> Massachusetts<br />
4/17/<strong>2009</strong> 6/1/<strong>2009</strong> New Hampshire<br />
4/17/<strong>2009</strong> 6/1/<strong>2009</strong> Vermont<br />
1 of 4 5/20/<strong>2009</strong> 1:17 PM
3/17/<strong>2009</strong> 5/01/<strong>2009</strong> Rhode Island<br />
The complete listing of the new NHIC LCDs for J14 can be found on the CMS website.<br />
Local Coverage News<br />
First Coast Revises LCD for Carboplatin (Paraplatin®, Paraplatin - AQ®), J9045,<br />
LCD L29089 (Florida) and LCD L29104 (Puerto Rico/U.S. Virgin Islands)<br />
Effective March 24, <strong>2009</strong>, First Coast Service Options (FCSO) revised their local<br />
coverage determination (LCD) for A/B MAC Jurisdiction 9 for carboplatin (Paraplatin®,<br />
Paraplatin-AQ®) to add the following indication and ICD-9-CM code range to the LCD:<br />
Non-melanoma skin cancers (Merkel cell carcinoma)<br />
173.0 - 173.9 -- Other malignant neoplasm of skin<br />
In addition, references under the "Sources of Information and Basis for Decision"<br />
section of the LCD were updated. The new carboplatin (Paraplatin®, Paraplatin-<br />
AQ®)LCD, L29089 for Florida and L29104 for Puerto Rico and the U.S. Virgin Islands,<br />
can be accessed on the CMS website.<br />
First Coast Revises LCD for Pegfilgrastim (Neulasta), J2505, LCD L29254<br />
(Florida) and LCD L29463 (Puerto Rico/U.S. Virgin Islands)<br />
Effective March 10, <strong>2009</strong>, First Coast Service Options (FCSO) revised their LCD for<br />
A/B MAC Jurisdiction 9 for pegfilgrastim (Neulasta) to include language allowing for<br />
off-label administration if the physician can document that the patient is on a dose dense<br />
chemotherapy cycle.<br />
Refer to the First Coast coverage press release and the new pegfilgrastim (Neulasta)<br />
LCD, L29254 for Florida and L29463 for Puerto Rico and the U.S. Virgin Islands, for<br />
more information.<br />
First Coast Revises LCD for Oxaliplatin (Eloxatin®), J9263, LCD L29248 (Florida)<br />
and LCD L29459 (Puerto Rico/U. S. Virgin Islands)<br />
Effective March 16, <strong>2009</strong>, First Coast Service Options (FCSO) revised their LCD for<br />
A/B MAC Jurisdiction 9 for oxaliplatin (Eloxatin®) to add the following off-label<br />
indication and ICD-9-CM code range to the LCD for the treatment of esophageal<br />
cancer:<br />
150.0 - 150.9 -Malignant neoplasm of esophagus<br />
http://view.exacttarget.com/?j=fe5815797c6d00787415&m=ff311d7074...<br />
In addition, verbiage was updated under the "Indications and Limitations of Coverage<br />
and/or Medical Necessity" section of the LCD, and references were updated under the<br />
"Sources of Information and Basis for Decision" section of the LCD. The new<br />
oxaliplatin (Eloxatin®)LCD, L9248 for Florida and L29459 for Puerto Rico and the U.S.<br />
Virgin Islands, can be accessed on the CMS website.<br />
National Government Services (J13 MAC and IN/KY <strong>Carrier</strong>) Revised Article for Use<br />
of Injectable Medications When an Oral Equivalent is Available<br />
In March <strong>2009</strong>, National Government Services (NGS) revised their supplemental<br />
2 of 4 5/20/<strong>2009</strong> 1:17 PM
instruction article regarding the use of injectable medications when an oral equivalent is<br />
available. This is a revision of the original article posted in January <strong>2009</strong>, which<br />
corresponds with the NGS Local Coverage Determination (LCD), L25820, titled, "Drugs<br />
and Biologicals, Coverage Of, for Label and Off-Label Uses".<br />
On February 9, <strong>2009</strong>, ASCO sent a letter to the Centers for Medicare & Medicaid<br />
Services (CMS) requesting that they advise NGS that its recently announced policy<br />
disfavoring coverage of intravenous antiemetics is inconsistent with national Medicare<br />
policy, and should be rescinded.<br />
ASCO News<br />
ASCO Comments to CMS on Recovery Audit Contractor Program<br />
ASCO and the AMA sent a letter on March 9 to the Centers for Medicare & Medicare<br />
Services (CMS) expressing concerns about the Recovery Audit Contractor (RAC)<br />
program.<br />
The national RAC program is the result of a demonstration program that used RACs to<br />
identify Medicare overpayments and underpayments to health care providers and<br />
suppliers in six different states. However, ASCO and AMA believe that problems with<br />
overpayments and underpayments of Medicare claims would best be resolved through<br />
physician outreach and education.<br />
Additional recommendations in the comments include:<br />
CMS should not to allow RACs to review Evaluation and Management (E&M)<br />
services.<br />
CMS should not to allow RACs to perform E&M audits.<br />
CMS should not allow the RACs to review consultations.<br />
CMS should ensure that physicians are sufficiently educated regarding Medicare<br />
billing policies.<br />
CMS should limit medical record requests to three in a 45 day period for solo<br />
practitioners.<br />
CMS should implement a provision requiring RACs to reimburse physicians for<br />
copies of requested medical records prior to the commencement of the RAC<br />
audits.<br />
CMS will implement a national RAC program by January 1, 2010. For more information<br />
on the RAC program, visit CMS's Web site.<br />
Off-Label Updates<br />
http://view.exacttarget.com/?j=fe5815797c6d00787415&m=ff311d7074...<br />
National Comprehensive Cancer Network (NCCN) Now Requiring a paid subscription<br />
for access to the NCCN Drugs and Biologics Compendium<br />
Effective April 1, <strong>2009</strong>, The National Comprehensive Cancer Network (NCCN) now<br />
requires a paid subscription for access to the NCCN Drugs and Biologics Compendium,<br />
found at www.nccn.org. For more information, including the subscription rates, visit the<br />
NCCN registration website. (United Health Care is offering free access to the<br />
Compendium for participating physicians and their office staff.)<br />
3 of 4 5/20/<strong>2009</strong> 1:17 PM
New FDA Approvals<br />
FDA approves everolimus tablets (AFINITORR, Novartis) for treatment of patients<br />
with advanced renal cell carcinoma after failure of treatment with sunitinib or<br />
sorafenib<br />
On March 30, <strong>2009</strong>, the U. S. Food and Drug Administration granted approval to<br />
everolimus tablets (AFINITOR®, Novartis Pharmaceuticals Corporation) for the<br />
treatment of patients with advanced renal cell carcinoma after failure of treatment with<br />
sunitinib or sorafenib.<br />
The recommended dose of everolimus for treatment of advanced renal cell carcinoma is<br />
10 mg once daily at the same time either with or without food. Full prescribing<br />
information, including clinical trial information, safety, dosing, drug-drug interactions,<br />
and contraindications, is available on the FDA website.<br />
-----------------------------------------------------<br />
ASCO sends periodic e-mails to its Contractor <strong>Advisory</strong> <strong>Committee</strong> (<strong>CAC</strong>) Network as a<br />
means of disseminating information and increasing awareness about <strong>Carrier</strong>/LCD issues<br />
around the country. You have received this e-mail as an identified interested party in the<br />
LCD process (e.g. State Society President, <strong>Oncology</strong>/<strong>Hematology</strong>/Gynecology <strong>CAC</strong><br />
Representative/Alternate, CPC Member, CPC State Affiliate).More information is<br />
available at ASCO's website. To submit corrections to ASCO's <strong>CAC</strong> website, or to obtain<br />
further information about any items included in this e-mail or <strong>CAC</strong> issues in general,<br />
please contact:<br />
Laura J. Cathro<br />
Medicare Program Coordinator<br />
The American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, Suite 800<br />
Alexandria, VA 22314<br />
Phone (703) 519-2907<br />
Fax (703) 684-8364<br />
laura.cathro@asco.org<br />
This email was sent to: laura.cathro@asco.org<br />
This email was sent by: American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, suite 800 Alexandria, VA 22314 USA<br />
We respect your right to privacy - view our policy<br />
Manage Subscriptions | Update Profile | One-Click Unsubscribe<br />
http://view.exacttarget.com/?j=fe5815797c6d00787415&m=ff311d7074...<br />
4 of 4 5/20/<strong>2009</strong> 1:17 PM
To view this email as a web page, go here.<br />
ASCO <strong>CAC</strong> Network E-News<br />
May <strong>2009</strong> Issue<br />
<strong>2009</strong> Annual Meeting of the <strong>Hematology</strong>/<strong>Oncology</strong> <strong>CAC</strong> Network<br />
The <strong>2009</strong> ASCO and ASH Annual Meeting of the <strong>Hematology</strong>/<strong>Oncology</strong> <strong>CAC</strong> Network<br />
will be taking place on Friday, July 24, <strong>2009</strong> at the ASCO Headquarters in Alexandria,<br />
Virginia. If you have not already done so, please fax in your Meeting Response Form to<br />
(571) 366-9568 Attn: Laura Cathro as soon as possible. If you never received the formal<br />
invitation letter, travel service booking instructions, or a copy of the Meeting Response<br />
Form, please contact Laura Cathro. Her contact information is in the e-mail signature<br />
below.<br />
ASCO and ASH National MAC Transition Survey<br />
The American Society of Clinical <strong>Oncology</strong> (ASCO) and the American Society of<br />
<strong>Hematology</strong> (ASH) are currently conducting a nation-wide survey to collect data<br />
concerning the MAC transitions, and your responses are appreciated. The survey was<br />
launched on Monday, May 4, <strong>2009</strong>, and will be closing on May 29, <strong>2009</strong>.<br />
We feel that you will find the information very interesting and useful, especially in being<br />
able to benchmark your survey results against others' across the country. If you did not<br />
receive the e-mail with the link to the survey, please let Laura Cathro know. We will<br />
insert a summary of the final survey results into the <strong>CAC</strong> e-binder for the July 24, <strong>2009</strong><br />
meeting. Thanks in advance for your participation!<br />
Local Coverage News<br />
http://view.exacttarget.com/?j=fe5115797c6d00787713&m=ff311d7074...<br />
Cahaba GBA Issues Local Coverage Policies for MAC Jurisdiction 10<br />
Cahaba GBA has compiled the J10 LCDs, which CMS has approved. There will be a 45<br />
day notice period prior to cutover. More information concerning the J10 MAC transition<br />
can be found on the Cahaba GBA website.<br />
First Coast Issues Article Outlining Billing for Drugs Usually Administered Orally<br />
On April 28, <strong>2009</strong>, First Coast issued an article outlining how they, as the A/B MAC<br />
contractor for Jurisdiction 9, are interpreting the CMS regulations for certain drug<br />
coverage when given by injection. First Coast will be adopting a similar policy to that of<br />
National Government Services (NGS), the A/B MAC Contractor for Jurisdiction 13.<br />
1 of 4 5/20/<strong>2009</strong> 1:17 PM
First Coast Updates Local Coverage Policy for Erythropoiesis Stimulating Agents<br />
(ESAs)<br />
First Coast's new local coverage policy for Erythropoiesis Stimulating Agents (ESAs),<br />
L29168, will be come effective on June 30, <strong>2009</strong>. First Coast has also issued a related<br />
articleto accompany the draft LCD.<br />
First Coast Issues Draft Local Coverage Policy for Intravitreal Bevacizumab<br />
(Avastin®)<br />
Prior to the development of their new local coverage determination (LCD), FCSO gave<br />
consideration for intravitreal bevacizumab (Avastin®) on an individual case-by-case<br />
basis for the treatment of age-related macular degeneration (AMD). After numerous<br />
requests to provide the coverage requirements for intravitreal bevacizumab (Avastin®),<br />
FCSO has developed a new LCD, L29959, effective for services rendered on or after<br />
June 30, <strong>2009</strong>. For more information, visit the FCSO website.<br />
Wisconsin Physician Services (WPS) Issues Local Coverage Policy for Chemotherapy<br />
Drugs and their Adjuncts<br />
Wisconsin Physician Services (WPS) has finalized a new local coverage policy, L28576,<br />
for Chemotherapy Drugs and their Adjuncts that will become effective on May 16, <strong>2009</strong>.<br />
National Coverage News<br />
CMS Issues National Coverage Determination (NCD) to Expand PET Coverage<br />
The Centers for Medicare & Medicaid Services (CMS) issued a final national coverage<br />
determination (NCD) on April 6, <strong>2009</strong> on positron emission tomography (PET) testing<br />
for Medicare beneficiaries who are diagnosed with and treated for most solid tumor<br />
cancers. CMS has removed registry data collection requirements for PET imaging used<br />
in determining the initial treatment strategy for Medicare beneficiaries with suspected<br />
solid tumors. CMS will also cover subsequent scans for cervical and ovarian cancers, as<br />
well as myeloma. However, for many cancers, CMS will continue to cover subsequent<br />
PET scans only under the coverage with evidence development policy. On February 5,<br />
ASCO sent comments to CMS regarding these changes.<br />
Medicare Updates Instructions on Billing Routine Costs of Clinical Trials (Part A and<br />
B)<br />
On April 10, <strong>2009</strong>, CMS issued Transmittal 1710, Change Request (CR) 6431, and a<br />
related MedLearn Matters, MM6431, that alerts providers that they should continue to<br />
report the International Classification of Diseases (ICD) diagnosis code V70.7<br />
(Examination of participant in clinical trial) on clinical trial claims. It is no longer<br />
necessary to make a distinction between a diagnostic and therapeutic clinical trial service<br />
on the claim.<br />
CMS News<br />
http://view.exacttarget.com/?j=fe5115797c6d00787713&m=ff311d7074...<br />
Medicare Announces Sites for Pilot Program to Improve Quality as Patients Move<br />
Across Care Settings<br />
The Centers for Medicare & Medicaid Services (CMS) announced the 14 communities<br />
2 of 4 5/20/<strong>2009</strong> 1:17 PM
around the nation that have been chosen for their Care Transitions Project, which seeks<br />
to eliminate unnecessary hospital readmissions. For more information on Medicare's<br />
quality improvement initiatives, visit the CMS website.<br />
Kathleen Sebelius Confirmed as Secretary of the Department of Health and Human<br />
Services<br />
Kathleen Sebelius was sworn in as the 21st Secretary of the Department of Health and<br />
Human Services (HHS) on Tuesday, April 29, <strong>2009</strong>. More information can be found on<br />
the HHS website.<br />
FDA News<br />
http://view.exacttarget.com/?j=fe5115797c6d00787713&m=ff311d7074...<br />
FDA Reverses Action to Pull Unapproved Liquid Morphine Off Market<br />
At the end of March, the U.S. Food and Drug Administration (FDA) sent warning letters<br />
directing manufacturers to cease production and distribution of several narcotics,<br />
including morphine sulfate, hydromorphone, and oxycodone, that do not have FDA<br />
approval for certain dosage forms.<br />
On April 9, <strong>2009</strong>, in response to concerns from patients and health care professionals in<br />
the palliative care community, the FDA reversed its position on the 20 mg/ml form of<br />
morphine sulfate dosage, deeming it medically necessary for terminally-ill patients. FDA<br />
recognized that its previous action would cause a shortage of 20 mg/ml morphine sulfate<br />
oral solution, as there is currently not an approved version on the market. FDA will<br />
permit continued production and distribution of this drug until an approved version is<br />
available.<br />
The FDA cites concerns that companies marketing unapproved versions of narcotics<br />
have not proven that their products meet safety and effectiveness standards, and states<br />
that its current action is part of a larger effort to ensure that drugs marketed in the United<br />
States have required FDA approval. FDA has instructed providers to substitute other<br />
products with the same active ingredients that already have FDA-approved applications.<br />
The Agency held a stakeholder conference call earlier this month to answer questions<br />
about this action and to address concerns about possible access problems. On this call,<br />
FDA reported that its Office of Drug Shortages is planning to monitor the availability of<br />
these drugs. For more information, visit the FDA's Web site.<br />
-----------------------------------------------------<br />
ASCO sends periodic e-mails to its Contractor <strong>Advisory</strong> <strong>Committee</strong> (<strong>CAC</strong>) Network as a<br />
means of disseminating information and increasing awareness about <strong>Carrier</strong>/LCD issues<br />
around the country. You have received this e-mail as an identified interested party in the<br />
LCD process (e.g. State Society President, <strong>Oncology</strong>/<strong>Hematology</strong>/Gynecology <strong>CAC</strong><br />
Representative/Alternate, CPC Member, CPC State Affiliate).More information is<br />
available at ASCO's website. To submit corrections to ASCO's <strong>CAC</strong> website, or to obtain<br />
further information about any items included in this e-mail or <strong>CAC</strong> issues in general,<br />
please contact:<br />
3 of 4 5/20/<strong>2009</strong> 1:17 PM
Laura J. Cathro<br />
Medicare Program Coordinator<br />
The American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, Suite 800<br />
Alexandria, VA 22314<br />
Phone (703) 519-2907<br />
Fax (703) 684-8364<br />
laura.cathro@asco.org<br />
This email was sent to: laura.cathro@asco.org<br />
This email was sent by: American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, suite 800 Alexandria, VA 22314 USA<br />
We respect your right to privacy - view our policy<br />
Manage Subscriptions | Update Profile | One-Click Unsubscribe<br />
http://view.exacttarget.com/?j=fe5115797c6d00787713&m=ff311d7074...<br />
4 of 4 5/20/<strong>2009</strong> 1:17 PM
To view this email as a web page, go here.<br />
ASCO <strong>CAC</strong> Network E-News<br />
June <strong>2009</strong> Issue<br />
MAC Transition Updates<br />
Stay of Performance Issued on A/B MAC Contracts for Jurisdictions 6, 8, 11, and 15<br />
On June 5, <strong>2009</strong>, ASCO staff inquired as to the current status of the A/B MAC contracts<br />
for Jurisdictions 6, 8, 11, and 15, and was advised by the director of the Medicare<br />
Contractor Management Group that these four contracts have been issued a Stay of<br />
Performance, and are currently under review by the Medicare General Counsel and<br />
agency contracting office. CMS is implementing corrective action for each of these<br />
contracts. Existing contractors will continue to service Medicare claims for these states<br />
until a final determination has been made.<br />
Local Coverage Updates<br />
http://view.exacttarget.com/?j=fe5d1670746d0d747114&m=ff311d7074...<br />
First Coast Revises Local Coverage Policy for J9350: Topotecan Hydrochloride<br />
(Hycamtin®)<br />
First Coast's local coverage determination (LCD) for topotecan hydrochloride<br />
(Hycamtin®), L29290, has been revised, effective June 8, <strong>2009</strong>. A request was received<br />
to add the off-label indication of primary central nervous system lymphoma as medically<br />
reasonable and necessary. Review of literature demonstrated that this was an acceptable<br />
request. The following ICD-9-CM codes have been added as medically reasonable and<br />
necessary: 200.50 - 200.58.<br />
Highmark Local Coverage Policy for Vitamin D Assay Testing Available for<br />
Comment<br />
Highmark's draft local coverage policy, DL30273, for Vitamin D Assay Testing is<br />
currently available for comment. Comments are due by July 8, <strong>2009</strong>. The projected<br />
determination effective date is for services performed on or after September 24, <strong>2009</strong>.<br />
Pinnacle Clarifies Coverage for ESAs<br />
In response to repeated inquiries on billing and coverage for Erythropoiesis Stimulating<br />
Agents (ESAs) from the provider community (The procedure codes involved are J0881<br />
& J0882), Pinnacle has asked providers to use the following table, which clarifies<br />
coverage based on LCDs (AC-05-004; AC-05-005; AC-05-006; & AC-05-007) for<br />
primary and secondary diagnosis indications.<br />
Wisconsin Physician Services (WPS) Issues Draft Local Coverage Policy for<br />
Chemotherapy Drugs and their Adjuncts<br />
1 of 3 6/12/<strong>2009</strong> 10:02 AM
The draft local coverage policy for Wisconsin Physician Services (WPS) for<br />
Chemotherapy Drugs and their Adjuncts, DL28576, is currently pending a new<br />
anticipated effective date of September 20, <strong>2009</strong>.<br />
CMS Updates<br />
CMS Releases New MLN Matters Article-Overview of the HIPAA 5010<br />
The implementation of HIPAA 5010 presents substantial changes in the content of the<br />
data that providers submit with their claims, as well as the data available to them in<br />
response to their electronic inquiries. This Special Edition MLN Matters article,<br />
SE0904, alerts providers of these HIPAA changes and how they need to plan for their<br />
implementation.<br />
FDA Updates<br />
http://view.exacttarget.com/?j=fe5d1670746d0d747114&m=ff311d7074...<br />
FDA Grants Accelerated Approval to Bevacizumab Injection (Avastin®, Genentech,<br />
Inc.) as a Single Agent for Patients with Glioblastoma with Progressive Disease<br />
On May 5, <strong>2009</strong>, the U.S. Food and Drug Administration granted accelerated approval to<br />
bevacizumab injection (Avastin®, Genentech, Inc.) as a single agent for patients with<br />
glioblastoma, with progressive disease following prior therapy. The approval was based<br />
on demonstration of durable objective response rates observed in two single-arm trials,<br />
AVF3708g and NCI 06-C-0064E.<br />
Full prescribing information, including clinical trial information, safety, dosing, drug-drug<br />
interactions and contraindications is available on the FDA website.<br />
MedWatch - Tarceva (erlotinib): Dear HCP Letter Issued to Warn About GI<br />
Perforation, Exfoliative Skin Conditions and Corneal Perforation/Ulceration<br />
On May 8, <strong>2009</strong>, the FDA Safety Information and Adverse Event Reporting Program<br />
issued the following alert to oncological, dermatological and ophthalmological healthcare<br />
professionals:<br />
"OSI, Genentech and FDA notified healthcare professionals of new safety information<br />
added to the WARNINGS AND PRECAUTIONS sections of the prescribing information<br />
for Tarceva. Gastrointestinal perforation (including fatalities), bullous, blistering and<br />
exfoliative skin conditions including cases suggestive of Stevens-Johnson syndrome/toxic<br />
epidermal necrolysis, in some cases fatal, and ocular disorders, including corneal<br />
perforation or ulceration have been reported during use of Tarceva. The new safety<br />
information comes from routine pharmacovigilance activities of clinical study and<br />
postmarketing reports. Tarceva monotherapy is indicated for the treatment of patients<br />
with locally advanced or metastatic non-small cell lung cancer after failure of at least<br />
one prior chemotherapy regimen. In combination with gemcitabine, Tarceva is also<br />
indicated for the first-line treatment of patients with locally advanced, unresectable, or<br />
metastatic pancreatic cancer."<br />
The complete MedWatch <strong>2009</strong> Safety summary and OSI Dear Healthcare Professional<br />
Letter are available through the MedWatch website.<br />
2 of 3 6/12/<strong>2009</strong> 10:02 AM
Drug Shortage Updates<br />
On April 27, the Food and Drug Administration (FDA) declared that the Leucovorin<br />
shortage, which was first announced on January 8, is over. However, FDA is now<br />
reporting shortages of Morphine Sulfate Oral Solution and Methotrexate injection.<br />
Currently, Roxane Laboratories has Morphine Sulfate Oral Solution available, and APP<br />
Pharmaceuticals has the 25 mg/mL (with preservative) 10 mL vial (NDC 63323-123-10)<br />
Methotrexate injection available.<br />
Mytomycin and oxycodone are also currently on the FDA shortage list. More<br />
information about the shortages is available on the FDA website.<br />
-----------------------------------------------------<br />
ASCO sends periodic e-mails to its Contractor <strong>Advisory</strong> <strong>Committee</strong> (<strong>CAC</strong>) Network as a means<br />
of disseminating information and increasing awareness about <strong>Carrier</strong>/LCD issues around the<br />
country. You have received this e-mail as an identified interested party in the LCD process<br />
(e.g. State Society President, <strong>Oncology</strong>/<strong>Hematology</strong>/Gynecology <strong>CAC</strong> Representative/Alternate,<br />
CPC Member, CPC State Affiliate).More information is available at ASCO's website. To<br />
submit corrections to ASCO's <strong>CAC</strong> website, or to obtain further information about any items<br />
included in this e-mail or <strong>CAC</strong> issues in general, please contact:<br />
Laura J. Cathro<br />
Medicare Program Coordinator<br />
The American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, Suite 800<br />
Alexandria, VA 22314<br />
Phone (703) 519-2907<br />
Fax (703) 684-8364<br />
laura.cathro@asco.org<br />
This email was sent to: laura.cathro@asco.org<br />
This email was sent by: American Society of Clinical <strong>Oncology</strong><br />
2318 Mill Road, suite 800 Alexandria, VA 22314 USA<br />
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3 of 3 6/12/<strong>2009</strong> 10:02 AM
Update on ASH Advocacy with Local Medicare Contractors<br />
As Local Coverage Decisions (LCDs) are established, revised, and opened for public comment, a team of ASH staff, Society consultants, and practice leaders<br />
analyze all hematology-related policies and submit comments as needed directly to the MAC Medical Director. ASH staff also briefs hematology/oncology<br />
<strong>Carrier</strong> <strong>Advisory</strong> <strong>Committee</strong> (<strong>CAC</strong>) Representatives and other ASH Members in those regions on the top issues of concern and recommended strategy for<br />
commenting and working on the local level with the carriers and MACs. Below, please find information about recent local coverage decisions and ASH<br />
actions.<br />
Area Covered/Region Medicare<br />
Contractor<br />
J 12 MAC Region<br />
Highmark<br />
(MD, PA, NJ, DE, DC, & Medicare<br />
NOVA counties)<br />
Services<br />
J4 MAC Region (CO, NM,<br />
OK, & TX)<br />
Multiple Regions<br />
• J13 MAC<br />
Region (CT & NY)<br />
• Policy will also cover<br />
the following states until<br />
their new Medicare<br />
Administrative<br />
Contractors take over:<br />
IL, IN, KY, ME, MA,<br />
MI, NH, OH, VT, VA &<br />
WV.<br />
J 13 MAC Region<br />
(CT & NY)<br />
Trailblazer<br />
Health<br />
Enterprises<br />
National<br />
Government<br />
Services<br />
(NGS)<br />
National<br />
Government<br />
Services<br />
(NGS)<br />
LCD(s) of Concern Issues of Concern/ Requirements ASH Recommendations Status of LCD(s)<br />
• Draft LCD for<br />
Consultations • Draft<br />
LCD for ESAs<br />
• Consultations are constrained by<br />
CMS definitions of Evaluation<br />
and Management Services.<br />
• Bone marrow blasts of
Multiple Regions<br />
• J13 MAC Region (CT &<br />
NY)<br />
• Policy will also cover<br />
the following states until<br />
their new Medicare<br />
Administrative<br />
Contractors take over:<br />
IL, IN, KY, ME, MA,<br />
MI, NH, OH, VT, VA &<br />
WV.<br />
J 14 MAC Region (ME, MA,<br />
NH, RI, & VT (for Part A,<br />
Part B, and RHHI)). The<br />
policy will also cover CT<br />
(RHHI only).<br />
National<br />
Government<br />
Services<br />
(NGS)<br />
National<br />
Heritage<br />
Insurance<br />
Corporation<br />
(NHIC)<br />
Draft LCD for<br />
Irradiated Blood<br />
Products<br />
Daft LCD for<br />
Erythropoietin<br />
Analogs Unrelated to<br />
ESRD or Cancer<br />
Edits necessary to the following items<br />
on the indication list for irradiated<br />
blood products:<br />
• Bone marrow transplant<br />
recipients<br />
• Intrauterine transfusions and<br />
exchange transfusions for<br />
hemolytic disease of the newborn<br />
• Patients receiving HLA-matched<br />
platelets<br />
• Bone marrow and peripheral<br />
blood stem-cell transplant<br />
candidates and recipients.<br />
• Intrauterine transfusions and<br />
exchange transfusions for<br />
newborns that have had an<br />
intrauterine transfusion.<br />
• Patients receiving<br />
HLAmatched platelets or<br />
granulocyte transfusions.<br />
• Add Patients receiving purine<br />
analogs to the list of covered<br />
indication.<br />
• No issues • Submitted letter of support for<br />
LCD as it is consistent with<br />
ASH’s model policy<br />
Recommendations<br />
included in final<br />
policy.<br />
N/A
Multiple Regions<br />
• J13 MAC Region (CT &<br />
NY)<br />
• Policy will also cover<br />
the following states until<br />
their new Medicare<br />
Administrative<br />
Contractors take over:<br />
IL, IN, KY, ME, MA,<br />
MI, NH, OH, VT, VA &<br />
WV.<br />
J 14 MAC Region (ME, MA,<br />
NH, RI, & VT (for Part A,<br />
Part B, and RHHI)). The<br />
policy will also cover CT<br />
(RHHI only).<br />
National<br />
Government<br />
Services<br />
(NGS)<br />
National<br />
Heritage<br />
Insurance<br />
Corporation<br />
(NHIC)<br />
Draft LCD for<br />
Irradiated Blood<br />
Products<br />
Daft LCD for<br />
Erythropoietin<br />
Analogs Unrelated to<br />
ESRD or Cancer<br />
Edits necessary to the following items<br />
on the indication list for irradiated<br />
blood products:<br />
• Bone marrow transplant<br />
recipients<br />
• Intrauterine transfusions and<br />
exchange transfusions for<br />
hemolytic disease of the newborn<br />
• Patients receiving HLA-matched<br />
platelets<br />
• Bone marrow and peripheral<br />
blood stem-cell transplant<br />
candidates and recipients.<br />
• Intrauterine transfusions and<br />
exchange transfusions for<br />
newborns that have had an<br />
intrauterine transfusion.<br />
• Patients receiving<br />
HLAmatched platelets or<br />
granulocyte transfusions.<br />
• Add Patients receiving purine<br />
analogs to the list of covered<br />
indication.<br />
• No issues • Submitted letter of support for<br />
LCD as it is consistent with<br />
ASH’s model policy<br />
Recommendations<br />
included in final<br />
policy.<br />
N/A
ASH Model Policy – Indications for ESA treatment<br />
for Patients with Myelodysplastic Syndromes (MDS)<br />
(The following coverage criteria apply to both EPO and DPA)<br />
Anemia is observed in 90 percent of individuals with MDS. Those MDS patients with an<br />
endogenous EPO level of less than 500 mU/mL are more likely to respond to ESA therapy. ESA<br />
therapy is indicated for patients with a confirmed diagnosis of MDS, when the anemia is<br />
symptomatic, there is a reasonable expectancy of longer survival and therapy is provided in order<br />
to end or reduce the need for transfusions.<br />
Medicare will cover either EPO or DPA for the treatment of anemia in MDS when the following<br />
criteria are met:<br />
• Patient with anemia associated with MDS with bone marrow blast count of less than ten<br />
percent blasts (238.72, 238.73, 238.74, and 238.75)<br />
• Patient’s anemia is symptomatic<br />
• Pretreatment Hgb level of < 10 g/dL or Hct of < 30% obtained within one week of the<br />
initial injection.<br />
Dosing Management:<br />
• Dose, dosage frequency, and increases:<br />
• If no increase in Hgb of 1g/dL or greater in first month, increase dose to 60,000<br />
units of EPO or proportionate increase in DPA dosage to 300 micrograms.<br />
• If no increase in Hgb of 1 g/dL or greater in second month, increase dose to 80,000<br />
units or a proportionate increase in DPA dosage to 400 micrograms.<br />
• If no increase in Hgb of 1 g/dL or greater in third month, discontinue therapy.<br />
• Dosage should be titrated so that the Hgb is within a range of 10 – 12g/dL or Hct of 30%<br />
- 36%.<br />
• Once the patient’s Hgb is >10g/dL or Hct >30%, decrease the current dose by 10% –<br />
25% to maintain the target range of 10 – 12 g/dL or 30%-36%.<br />
• After 12 weeks of EPO/DPA therapy with the appropriate dose titrations, Hgb must<br />
increase by at least 1 g/dL or transfusion requirement must decrease by 50% resulting in<br />
a rate of 2 units per month or less for treatment to continue.<br />
ESA therapy would not be covered if Hgb/Hct levels are above 12 g/dL/36%
American Society of <strong>Hematology</strong><br />
October 16, 2008<br />
Page 1 of 2<br />
October 16, 2008<br />
James Cope, MD<br />
Contractor Medical Director<br />
National Government Services, Inc.<br />
Medical Policy Unit<br />
Attn: Gina Oliveri, RN - LCD Reconsideration Requests<br />
P.O. Box 7149<br />
Indianapolis, IN 46207-7149<br />
Re: LCD for Erythropoietin Stimulating Agents (ESA) (L25211)<br />
Dear Dr. Cope,<br />
The American Society of <strong>Hematology</strong> (ASH) respectfully requests that<br />
National Government Services (NGS) open for reconsideration its Local<br />
Coverage Decision for Erythropoietin Stimulating Agents. ASH represents<br />
over 11,000 hematologists in the United States who are committed to the<br />
treatment of blood and blood-related diseases. ASH members include<br />
hematologists and hematologist/oncologists who regularly render services to<br />
Medicare beneficiaries. We are asking that the LCD be open so that NGS will<br />
reconsider the coverage restrictions on ESA coverage for patients with<br />
myelodysplastic syndromes (MDS).<br />
In response to the publication of numerous Medicare LCDs on ESA treatment<br />
in the past year, ASH brought together experts in the treatment of patients with<br />
MDS to develop a model coverage policy that could be used as a reference and<br />
to assist ASH members in working with their local MACs and <strong>Carrier</strong>s. The<br />
ASH policy titled: “Indications for ESA treatment for Patients with<br />
Myelodysplastic Syndromes (MDS)” is attached for your review.<br />
We recognize and concur with NGS’ interest in the appropriate use of ESAs in<br />
treating patients with MDS, but there are two coverage limitations in this policy<br />
that we ask you to revise to allow practicing hematologist/oncologists to better<br />
serve their patients with MDS. The restrictive policies that we seek changes to<br />
are:<br />
• Requiring pretreatment EPO levels of less than 100 MU/ml<br />
• Requiring bone marrow blasts of less than 5%<br />
Require pretreatment EPO levels of less than 500 MU/ml – The policy<br />
currently limits ESA coverage to patients with MDS with a pretreatment EPO<br />
level of
American Society of <strong>Hematology</strong><br />
October 16, 2008<br />
Page 2 of 2<br />
The study showed that 35% of patients with EPO levels between 100 and 500 MU/ml<br />
responded positively to darbepoetin. In addition, the ASH model policy on ESA treatment for<br />
patients with MDS recommends a pretreatment EPO level of 500 MU/ml. We ask that the<br />
policy be revised to provide coverage for ESA treatment for patients with a pretreatment EPO<br />
level of less than 500 MU/ml.<br />
Require bone marrow blasts of
American Society of <strong>Hematology</strong><br />
September 26, 2008<br />
Page 1 of 2<br />
September 26, 2008<br />
Richard Baer, MD<br />
Contractor Medical Director<br />
National Government Services Medical Policy Unit<br />
Draft_LCD_Comments_Part A@anthem.com<br />
P.O. Box 7138<br />
Indianapolis, IN 46207 -7138<br />
Re: Draft LCD for Irradiated Blood Products (DL 28533)<br />
Dear Dr. Baer,<br />
The American Society of <strong>Hematology</strong> (ASH) appreciates the opportunity to<br />
comment on National Government Services’ (NGS) draft LCD on irradiated<br />
blood products. ASH represents over 11,000 hematologists in the United<br />
States who are committed to the treatment of blood and blood-related<br />
diseases. ASH members include hematologists, oncologists and clinical<br />
pathologists who regularly render services to Medicare beneficiaries.<br />
At the behest of our Society, a select group of ASH members with expertise<br />
in transfusion medicine reviewed the draft LCD. In general, the group<br />
found the draft policy to be very reasonable, however they felt that certain<br />
critical edits would significantly strengthen the draft LCD and bring it into<br />
line with evidence-based practice. ASH proposes adoption of their<br />
suggestions to assure appropriate patient access to irradiated blood products.<br />
ASH recommends the following changes to the list of conditions for which<br />
irradiated blood products are considered to be medically necessary<br />
(suggested revisions in bold):<br />
1. ASH recommends that the second bullet be revised to read “Bone<br />
marrow and peripheral blood stem-cell transplant candidates and<br />
recipients.” It is important to include transplant candidates in the<br />
policy because whereas irradiated blood products are typically<br />
recommended in the pre-transplant phase of the care of these<br />
patients, the term “recipients” could imply that irradiated products<br />
would only be covered after the transplant has taken place. In<br />
addition, we ask that the LCD be made explicit to include transplant<br />
patients who receive peripheral blood stem cell grafts because their<br />
treatment considerations are virtually identical to those who receive<br />
bone marrow grafts.<br />
2. ASH recommends that the third bullet be revised to read<br />
“Intrauterine transfusions and exchange transfusions for newborns
American Society of <strong>Hematology</strong><br />
September 26, 2008<br />
Page 2 of 2<br />
that have had an intrauterine transfusion.” The majority of cases of transfusion<br />
associated graft versus host disease in apparently immunocompetent infants have<br />
occurred in the setting of exchange transfusion following intrauterine transfusion<br />
in pre-term and term infants.<br />
3. ASH recommends that the fourth bullet be revised to read “Patients receiving<br />
HLA-matched platelets or granulocyte transfusions. Granulocyte products are<br />
heavily contaminated with immunocompetent lymphocytes and are transfused to<br />
severely ill infants or imunosuppressed adults with hematological malignancies.<br />
Thus irradiation is recommended for all granulocyte transfusions.<br />
4. ASH recommends that patients receiving purine analogs be added to the list of<br />
covered indications. Transfusing these patients with irradiated blood products is<br />
recognized as mandatory because of the increased risk of transfusion associated<br />
graft versus host disease in recipients of this class of drugs.<br />
The Society would be happy to further discuss any of these recommendations with the<br />
appropriate individuals at NGS. Please feel free to contact ASH Government Relations<br />
Manager Stephanie Kart at 202-776-0544.<br />
Sincerely,<br />
Kenneth Kaushansky, MD<br />
President
March 31, <strong>2009</strong><br />
Paul Deutsch, MD<br />
Medical Director<br />
National Government Services, Inc.<br />
P.O. Box 4837<br />
Syracuse, NY 13221<br />
Re: LCD for Drugs and Biologicals, Coverage of, for Label and Off-Label Uses<br />
(L25820)<br />
Dear Dr. Deutsch,<br />
As chairman of the American Society of <strong>Hematology</strong> (ASH) <strong>Committee</strong> on<br />
Practice, I wanted to follow-up on your recent communication with<br />
hematologists in the New York region regarding the coverage of intravenous<br />
palonosetron (Aloxi) for the treatment of chemotherapy induced nausea and<br />
vomiting. Attached are several recently published studies supporting the use of<br />
intravenous Aloxi for patients with severe nausea and vomiting. The following<br />
studies compare the use of this agent (either as a single agent or in combination<br />
with dexamethasone) with other anti-emetic treatments in large randomized<br />
double-blinded studies.<br />
1. Eisenberg P, Figueroa-Vadillo J, Zamora R, et al. Improved<br />
Prevention of Moderately Emetogenic Chemotherapy-Induced<br />
Nausea and Vomiting with Palonosetron, a Pharmacologically<br />
Novel 5-HT3 Receptor Antagonist: Results of a Phase III, Single-<br />
Dose Trial Versus Dolasetron. Cancer. 2003;98:2473-2482.<br />
2. Gralla R, Lichinitser M, Van der Vegt S, et al. Palonosetron<br />
improves prevention of chemotherapy induced nausea and<br />
vomiting following moderately emetogenic chemotherapy: results<br />
of a double-blind randomized phase III trial comparing single<br />
doses of palonosetron with ondansetron. Annals of <strong>Oncology</strong>.<br />
2003;14:1570-1577.<br />
3. Saito M, Aogi K, Sekine I, et al. Palonosetron plus dexamethasone<br />
versus granisetron plus dexamethasone for prevention of nausea<br />
and vomiting during chemotherapy: a double-blind, doubledummy,<br />
randomised, comparative phase III trial. The Lancet<br />
<strong>Oncology</strong>. <strong>2009</strong>;10:115-124.<br />
ASH represents over 11,000 hematologists in the United States who are<br />
committed to the treatment of blood and blood-related diseases. ASH members
Paul Deutsch, MD<br />
March 27, <strong>2009</strong><br />
Page 2<br />
include hematologists and hematologist/oncologists who regularly render services to<br />
Medicare beneficiaries.<br />
I would be happy to further discuss this issue with you and provide additional<br />
information to you regarding this subject as it becomes available. Please feel free to<br />
contact ASH Government Relations Manager Stephanie Kart at 202-776-0544.<br />
Sincerely,<br />
Lawrence A. Solberg Jr, MD, PhD<br />
Chair, <strong>Committee</strong> on Practice
July 9, <strong>2009</strong><br />
Craig Haug, MD<br />
Medical Director<br />
The National Heritage Insurance Corporation (NHIC)<br />
75 Sgt. William Terry Drive<br />
Hingham, MA 02043<br />
RE: LCD on Erythropoietin Analogs Unrelated to ESRD or Cancer<br />
(DL30258)<br />
Dear Dr. Haug,<br />
The American Society of <strong>Hematology</strong> (ASH) appreciates this opportunity to<br />
review and provide input on NHIC’s draft Local Coverage Determination<br />
(LCD) on Erythropoietin Analogs Unrelated to ESRD or Cancer (DL30258),<br />
currently open for comment. ASH represents over 11,000 hematologists in the<br />
United States who are committed to the treatment of blood and blood-related<br />
diseases. ASH members include hematologists and hematologist/oncologists<br />
who regularly render services to Medicare beneficiaries.<br />
ASH is supportive of NHIC’s policy especially as it relates to the treatment of<br />
patients with myelodysplastic syndromes (MDS). In response to the<br />
publication of numerous Medicare LCDs on ESA treatment in the past few<br />
years, ASH brought together experts in the treatment of patients with MDS to<br />
develop a model coverage policy that could be used as a reference and to<br />
assist ASH members in working with their local MACs and <strong>Carrier</strong>s. The<br />
ASH policy titled: “Indications for ESA treatment for Patients with<br />
Myelodysplastic Syndromes (MDS)” is attached for your review. As you will<br />
see the NHIC LCD is consistent with ASH’s model policy. The Society<br />
commends you for initiating a policy that will allow for the appropriate<br />
treatment of these patients.<br />
Again, thank you for the opportunity to submit these comments. The Society<br />
would be happy to discuss these policies with you in greater detail. Please<br />
feel free to contact ASH Government Relations Manager Stephanie Kart at<br />
202-776-0544.<br />
Sincerely,<br />
Lawrence A. Solberg Jr, MD, PhD<br />
Chair, <strong>Committee</strong> on Practice
July 2, <strong>2009</strong><br />
The Honorable Max Baucus<br />
Chairman<br />
Senate Finance <strong>Committee</strong><br />
219 Dirksen Senate Office Building<br />
Washington, DC 20515<br />
The Honorable Charles Grassley<br />
Ranking Member<br />
Senate Finance <strong>Committee</strong><br />
203 Hart Senate Office Building<br />
Washington, DC 20515<br />
Dear Senators Baucus and Grassley:<br />
As Congress considers innovated payment reforms for physicians, the undersigned organizations are writing to<br />
share a proposal for modifying Medicare’s physician payment formula to encourage higher quality, lower cost care<br />
for Medicare beneficiaries with severe or disabling chronic conditions.<br />
As you know, these beneficiaries are typically older and suffer from multiple co‐morbid conditions, which are<br />
sometimes challenging to diagnose; and undoubtedly costly to treat. However, by coordinating care through an<br />
incentive system that increases quality by focusing on and rewarding face‐to‐face time spent with patients, we can<br />
achieve improved care that reduces unnecessary tests and duplication of services, resulting in lower costs.<br />
Specifically, the undersigned organizations support the institution of a bonus payment over the fee schedule<br />
amount for evaluation and management (E/M) services provided to patients suffering from the chronic conditions<br />
identified by the Medicare Special Needs Plan Chronic Condition Panel (SNCCP). The bonus payment would be in<br />
effect for a period of three to five years as a temporary solution until further analyses of comprehensive<br />
alternatives to the payment system are completed and new payment models are implemented.<br />
By using a patient‐centered approach to determine eligibility, all physicians treating patients with the chronic<br />
conditions identified by the SNCCP would be rewarded for the provision of focused, ongoing care. Directing<br />
solutions to be based on patient need is likely to bring added care management to these complex, high cost,<br />
chronically ill patients.<br />
Any provider could qualify for the separate bonus payment by seeing patients with the appropriate ICD‐9 diagnosis<br />
code for any of the conditions identified by the SNCCP (listed below). The secretary could also require the<br />
reporting of quality measures and care coordination. The SNCCP – authorized by the Medicare Improvements for<br />
Patients and Providers Act of 2008 – identified 15 conditions for inclusion in the 2010 Medicare Advantage Special<br />
Needs Plans. The panel — comprised mainly of generalists — considered the following inclusion factors: medically<br />
complex, substantially disabling, life threatening, a high risk of hospitalization, a high risk for adverse outcomes,<br />
and in need of specialized care delivery across several domains.<br />
CMS could easily administer this plan, as it would be based on reported E/M services that are provided on patients<br />
with the identified diagnoses (ICD‐9 codes).<br />
Adoption of this bonus payment will re‐align incentives to deliver truly patient‐centered care, enhance patient<br />
access, improve quality, and immediately lower costs.<br />
Page 1 of 1
2010 Medicare Special Needs Plans Chronic Conditions<br />
a) Chronic alcohol and other drug dependence<br />
b) Autoimmune disorders limited to: (Polyarteritis nodosa, Polymyalgia rheumatic, Polymyositis, Rheumatoid<br />
arthritis, Systemic lupus erythematosus)<br />
c) Cancer excluding pre‐cancer conditions or<br />
in‐situ status<br />
d) Cardiovascular disorders limited to: (Cardiac arrhythmia, Coronary artery disease, Peripheral vascular<br />
disease, Chronic venous thromboembolic disorder)<br />
e) Chronic heart failure<br />
f) Dementia<br />
g) Diabetes mellitus<br />
h) End‐stage liver disease<br />
i) End‐stage renal disease requiring dialysis (any mode of dialysis)<br />
j) Severe hematologic<br />
disorders: (Aplastic anemia, Hemophilia, Immune thrombocytopenic purpura,<br />
Myelodysplastic syndrome,<br />
Sickle‐cell disease (excluding sickle‐cell trait), Chronic venous thromboembolic<br />
disorder)<br />
k) HIV/AIDS<br />
l) Chronic lung disorders: (Asthma, Chronic bronchitis, Emphysema, Pulmonary fibrosis, Pulmonary<br />
hypertension)<br />
m) Chronic and disabling mental health conditions: (Bipolar disorders, Major depressive disorders, Paranoid<br />
disorder, Schizophrenia, Schizoaffective disorder)<br />
n) Neurologic disorders: (Amyotrophic lateral sclerosis (ALS), Epilepsy, Extensive paralysis (i.e., hemiplegia,<br />
quadriplegia, paraplegia, monoplegia), Huntington’s disease, Multiple sclerosis, Parkinson’s disease,<br />
Polyneuropathy,<br />
Spinal stenosis, Stroke‐related neurologic deficit<br />
o) Stroke<br />
This proposal is supported by several physician and patient organizations, who are listed below, who strongly<br />
believe<br />
it will result in high quality, patient‐centered, and cost‐effective care. We ask that you include in the<br />
legislation the institution of a bonus payment over the fee schedule<br />
amount for evaluation and management (E/M)<br />
services provided to patients suffering from the chronic conditions identified by the Medicare Special Needs Plan<br />
Chronic<br />
Condition Panel (SNCCP).<br />
Patient Advocates<br />
ALS Association<br />
Alzheimer’s Foundation<br />
Epilepsy Foundation<br />
National<br />
Alliance on Mental Illness<br />
National Multiple Sclerosis Society<br />
Parkinson’s Action Network<br />
Physician Organizations<br />
American Academy of Allergy<br />
A merican Academy of Neurology Professional Association<br />
American Association<br />
for the Study of Liver Diseases<br />
American College of Allergy, Asthma and Immunology<br />
American College of Rheumatology<br />
American Gastroenterological<br />
Association<br />
American Society of <strong>Hematology</strong><br />
Joint Council of Allergy, Asthma, and<br />
Immunology<br />
Page 2 of 2
May 15, <strong>2009</strong><br />
The Honorable Max Baucus<br />
Chairman<br />
Senate Finance <strong>Committee</strong><br />
Dirksen Senate Office Building, Room 219<br />
U.S. Senate<br />
Washington, D.C. 20150<br />
Dear Chairman Baucus:<br />
On behalf of the American Society of <strong>Hematology</strong> (ASH), thank you for the<br />
opportunity to comment on the Senate Finance <strong>Committee</strong>'s document,<br />
Transforming the Health Care Delivery System: Proposal to Improve Patient Care<br />
and Reduce Health Care Costs. ASH represents over 11,000 hematologists in the<br />
United States who are committed to the treatment of blood and blood-related<br />
diseases. ASH members include hematologists and hematologist/oncologists who<br />
regularly render services to Medicare beneficiaries.<br />
Hematologists treat patients with malignant and non-malignant bleeding disorders.<br />
ASH members care for patients – especially elderly patients – with anemia,<br />
bleeding and clotting problems and blood cancers – leukemia, lymphoma, multiple<br />
myeloma – that affect more and more Americans every day. Other diseases treated<br />
by hematologists are relatively rare and all require highly specialized diagnostic and<br />
therapeutic services. It is critically important that in making changes to the<br />
Medicare system access to hematology services is maintained.<br />
ASH applauds the <strong>Committee</strong>'s commitment to national health reform through the<br />
release of this first paper, which has kicked off a substantive dialogue on how to<br />
improve the Medicare program not only in Washington but throughout the country.<br />
The recently released <strong>2009</strong> Medicare Trustees Report which highlighted the<br />
declining financial health of this major safety net health program underscores both<br />
the enormity and gravity of this task.<br />
ASH's physician leadership has articulated the following principles that are<br />
essential for effective and sustainable reform for the Medicare program:<br />
• Maintain policies that ensure patients have direct access to hematologists,<br />
allowing for the provision of high quality and effective care for bloodrelated<br />
disorders.<br />
• Recognize the value of cognitive services and improve Medicare payment<br />
for these services.<br />
• Do not establish policies that increase payment to primary care services by<br />
reducing payment for other cognitive services.<br />
• Eliminate the Medicare Sustainable Growth Rate (SGR) formula and<br />
provide physicians with an adequate annual update in fees.
American Society of <strong>Hematology</strong><br />
May 15, <strong>2009</strong><br />
Page 2 of 4<br />
Overall, ASH supports the policies and proposals laid out in the <strong>Committee</strong>'s document. ASH<br />
believes that all citizens should have access to affordable health care from prevention, to<br />
treatment, to end of life care. ASH is eager to work with the Congress and the Administration in<br />
developing proposals leading to an improved high quality Medicare system. In that spirit, the<br />
Society would like to raise some concerns with specific proposals and address in this letter issues<br />
related to bonus payments for primary care services, finding a permanent solution for the<br />
Sustainable Growth Rate (SGR) formula, and implementing a physician value based purchasing<br />
program that allows all physicians to participate.<br />
Bonus Payments for Primary Care<br />
The <strong>Committee</strong> proposes that from January 1, 2010 – December 31, 2014 certain providers<br />
would be eligible for a bonus of at least 5 percent for providing select evaluation and<br />
management services in specified ambulatory settings. This initiative would be budget neutral so<br />
it would be funded through either an across-the-board reduction in payments for all other<br />
services or through another funding source.<br />
A wide variety of internal medicine subspecialists, including hematologists and many others,<br />
such as, nephrologists, rheumatologists, and infectious disease specialists, meet the routine<br />
health care needs of medically complex patients with acute and chronic conditions on a regular<br />
basis. As they are treating and managing the chronic diseases of their patients, these<br />
subspecialists are also typically providing for their primary care needs. Being knowledgeable<br />
about the chronic disease allows the subspecialist to provide the highest quality of primary care<br />
and it also reduces the duplication of services, thereby reducing overall health care costs.<br />
In a June 2008 Medicare payment <strong>Advisory</strong> Commission (MedPAC) recommendation to<br />
Congress on a primary care bonus, the Commissioners recommended the following definition of<br />
primary care: Primary care-focused practitioners are those whose specialty designation is<br />
defined as primary care and/or those whose pattern of claims meets a minimum threshold of<br />
furnishing primary care services. The Secretary would use rulemaking to establish criteria for<br />
determining a primary-care-focused practitioner.<br />
ASH believes this would be a much more accurate method of determining primary care<br />
practitioners rather than relying on Medicare specialty designations or other similar affiliations<br />
or categorizations. ASH urges the Senate Finance <strong>Committee</strong> to use a definition that is broad<br />
enough to include the wide array of internal medicine subspecialists who provide primary care<br />
services to chronically ill Medicare beneficiaries.<br />
While ASH strongly supports the concept of a primary care bonus; reduced payments for<br />
cognitive services have threatened the viability of primary care practices. However, the Society<br />
is very concerned with the proposed budget neutral design requiring any bonus to be financed<br />
through reductions in other services, especially other cognitive services. ASH does not support<br />
establishing policies that increase payment for primary care services by reducing payment for<br />
other cognitive services. Any policy that would finance the bonus through reductions in other<br />
parts of the fee schedule will risk reducing access and quality of these other important and<br />
needed services. The crisis in access to primary care cannot be addressed without adding funds
American Society of <strong>Hematology</strong><br />
May 15, <strong>2009</strong><br />
Page 3 of 4<br />
for cognitive services. A cost neutral shift that penalizes some primary care providers in order to<br />
assist others will not meet the needs of Medicare beneficiaries who have many chronic<br />
conditions and comorbidities.<br />
Finding a Permanent Solution for the SGR Formula<br />
ASH was pleased to see a temporary fix for the Sustainable Growth Rate (SGR) formula in the<br />
<strong>Committee</strong>'s proposal, but the update in physician fees must be addressed in a more permanent<br />
fashion through the elimination of the SGR formula and the implementation of a methodology<br />
that would provide an adequate annual update in Medicare physician reimbursement rates.<br />
The SGR needs to be replaced this year with an updated system that reflects increases in<br />
physicians' and other health professionals' practice costs. A budget baseline for future Medicare<br />
payment updates, which accurately reflects the anticipated costs of providing physicians with<br />
positive updates under a new update system in lieu of SGR-related cuts, should be incorporated<br />
into the federal budget. One alternative to the current system is to link the updates to the<br />
Medicare Economic Index (MEI). ASH recommends that the MEI be adjusted to include all<br />
costs of a current medical practice and use realistic productivity assumptions. This methodology<br />
would provide needed stability and predictability to the system.<br />
Implementing a Physician Value Based Purchasing Program that Allows All Physicians to<br />
Participate<br />
In its document the <strong>Committee</strong> proposes to move the current physician quality program from a<br />
voluntary program that provides bonuses for successful participation to one that has penalties for<br />
non-participation.<br />
ASH supports the implementation of innovative payment system reforms that support physicians<br />
in the provision of high quality care in a cost-effective manner. At the same time, the Society<br />
recommends that any legislation on physician quality measures recognize the inherent<br />
complexity of implementing quality initiatives in the physician community. CMS staff has<br />
acknowledged in public meetings that as challenging as it has been to implement reforms on the<br />
hospital side, physician payment reforms are inherently more complex.<br />
ASH is concerned that the current Medicare quality programs for physicians expanded in the<br />
<strong>Committee</strong>'s proposal do not allow all physicians to participate, yet if made compulsory, these<br />
physicians would be penalized for lack of compliance. A good example where this is playing out<br />
within our own specialty is with the Physician Quality Reporting Initiative (PQRI) program.<br />
While ASH has been very active in developing measures for hematologists, the current list of<br />
approved measures does not apply to all hematologists. For instance, specialists that primarily<br />
care for patients with lymphoma, hemophilia, or sickle cell disease currently do not have<br />
measures applying to these areas. Similarly, in every specialty there is a subset of physicians<br />
providing care for patients with rare diseases who do not have measures that would apply to<br />
them. The system to develop measures for a wide range of physicians will take time and it<br />
would be unfair to penalize physicians for lack of compliance when the program design does not<br />
allow for them to participate.
American Society of <strong>Hematology</strong><br />
May 15, <strong>2009</strong><br />
Page 4 of 4<br />
An additional concern for hematologists and other specialties caring for very complex patients is<br />
the capacity of the various quality initiatives to account for the severity of their patient<br />
population and the intensity of their work. Physicians who care for very sick individuals with<br />
terminal diseases will have higher morbidity and mortality rates even when the provider does<br />
everything according to accepted standards and guidelines. Any program must adjust for the<br />
severity of the patients being treated.<br />
Because of their inherent complexity, quality programs should be pilot tested and evaluated in a<br />
variety of practice settings, geographic locales among different specialties and patient<br />
populations. ASH recommends a rigorous evaluation with input from physicians and<br />
stakeholders on which innovations are ready for wider implementation, which require more<br />
evaluation and which need further refinement and testing.<br />
In order for any of these innovations to be widely instituted a sophisticated health information<br />
technology (HIT) system will be required. While ASH was pleased to see funding for HIT in the<br />
Stimulus Bill, the Society’s members have expressed a great deal of concern about whether<br />
current technology will allow for the effective deployment of these systems within the existing<br />
timetable. Many ASH members have also indicated that even when systems are in place or are<br />
quickly being put into place, these systems exist in isolation and are not able to communicate<br />
with other systems resulting in many providers delaying in the investment of HIT until there are<br />
further advances in technology.<br />
ASH is very concerned that the HIT infrastructure is not sufficiently developed yet. The Society<br />
realizes that reforms to the current Medicare payment system are necessary for the program to<br />
survive, yet it believes greater investments will be needed in health information technology in<br />
order for these innovations to succeed. ASH also recommends that the <strong>Committee</strong> give serious<br />
consideration to expansion of the system used by the VA, which has proven effectiveness and<br />
can serve as a foundation to a national electronic medical records system while billing and other<br />
services can be added to it.<br />
ASH looks forward to working with the Congress and Administration on health care reform and<br />
would be pleased to provide your <strong>Committee</strong> with any additional information on the issues raised<br />
in this letter. Your staff can contact Carol Schwartz, ASH Senior Manager of Policy and<br />
Practice at 202-292-0258 or cschwartz@hematology.org.<br />
Sincerely,<br />
Nancy Berliner, MD<br />
President
February 9, <strong>2009</strong><br />
Ron Christensen, MD, Chair<br />
<strong>Committee</strong> on Oversight and Monitoring of Maintenance of Certification<br />
American Board of Medical Specialties<br />
1007 Church Street, Suite 404<br />
Evanston, IL 60201<br />
Dear Dr. Christensen:<br />
The American Society of <strong>Hematology</strong> (ASH) appreciates this opportunity to<br />
comment on “Setting Standards for ABMS MOC (Parts 1-4) Program Version<br />
1.1.” ASH represents over 11,000 U.S. clinicians and scientists committed to the<br />
study and treatment of blood and blood-related diseases. Our Society is in a<br />
unique situation as our members, depending upon their focus and training, may<br />
fall under the purview of the American Board of Internal Medicine (ABIM), the<br />
American Board of Pediatrics, or the American Board of Pathology.<br />
Providing evidence-based, high quality educational programs for hematologists is<br />
a key function of ASH. We place high value on the importance of our role in<br />
facilitating the education of our members to help them provide the best care<br />
possible to patients. Our robust offering of meetings, workshops, and publications<br />
provides opportunities for hematologists to receive continuing medical education<br />
(CME) credits while focusing on the advances in hematology. In addition to these<br />
educational materials, ASH provides complimentary copies of the ASH-SAP<br />
(Self-Assessment Program) for exam preparation as well as access to the ASH-<br />
SAP MOC self-assessment modules and to ASH Practice Improvement Modules<br />
(PIMs) to all recertifying hematologists including both members and nonmembers.<br />
ASH strongly supports ongoing educational activities, but is concerned about the<br />
mandates that the American Board of Medical Specialties (ABMS) continues to<br />
modify and implement for Maintenance of Certification (MOC). Our concerns<br />
involve the following areas:<br />
1) Separation of educational activities from testing and certification<br />
functions<br />
The changes proposed for Part 2, “Life-long learning and self assessment,”<br />
raise several questions. The language is unclear and no background is offered<br />
to explain the purpose of these changes. If this is an attempt to codify the<br />
requirements of different member boards, we can be supportive of some of the<br />
concepts, but will still raise concerns about the doors this leaves open.
Ron Christensen, MD<br />
February 9, <strong>2009</strong><br />
Page 2<br />
The rule regarding CME should be to accept CME credits from activities<br />
developed to meet the specifications of the appropriate accrediting body that, as<br />
stated in the introduction, are “relevant to the advances within the diplomate’s<br />
scope of practice.” This should be broad and suffice for the “life long learning”<br />
aspect of Part 2, just as CME credits from accredited providers can be used for<br />
other institutional or governmental CME requirements.<br />
We are, however, very concerned about the blurring of the line between the<br />
certification and education bodies that this document portends. The stated mission<br />
of the ABMS is “to maintain and improve the quality of medical care by assisting<br />
the Member Boards in their efforts to develop and utilize professional and<br />
educational standards for the certification of physician specialists.” Any effort by<br />
the ABMS or its member boards to become both assessor and teacher is<br />
fundamentally flawed and represents an inherent conflict of interest. The ABMS<br />
or its member boards should not be involved in approving or vetting CME that<br />
has been developed in compliance with the rigorous standards of the<br />
Accreditation Council for Continuing Medical Education (ACCME), nor should<br />
ABMS be involved in the development of material specifically intended for use in<br />
preparation for Board testing activities.<br />
The membership of ASH reflects a broad base of expertise in clinical hematology,<br />
research and teaching. Encompassed within our organization are mechanisms for<br />
incorporating a wide range of opinions and for validating the science supporting<br />
the educational materials that we generate. We are very concerned that expanding<br />
these activities to other groups and institutions – and especially to other boards –<br />
will complicate this process and present opportunities for promoting biased,<br />
inaccurate or outdated information. We strongly believe, therefore, that the “self<br />
assessment” component should remain the purview of ASH and other specialty<br />
societies. Points for self-assessment should be taken from approved society selfassessment<br />
materials<br />
The second bullet (Lines 117-120) should be deleted. This adds nothing but<br />
confusion for physicians and gives undue latitude and power to the member<br />
boards.<br />
2) Multiple burdens on physicians<br />
The proposed MOC changes will affect physicians in many adverse ways,<br />
including the added financial stress of enrolling in the programs and the cost of<br />
materials needed for maintaining certification (although ASH provides<br />
educational material at no cost to hematologists, certification through these<br />
vehicles requires payment to the ABIM). These requirements combine to drive up<br />
the cost of healthcare and reduce time spent in caring for patients.<br />
The “Overall” section, which begins on line 169, is troubling. There is great<br />
concern that the ABMS is considering abolishing the grandfathered status of
Ron Christensen, MD<br />
February 9, <strong>2009</strong><br />
Page 3<br />
lifetime certificates. ASH is strongly opposed to any effort on the part of the<br />
Board to impose MOC requirements upon lifetime certificate holders. This group<br />
represents a large population of physicians over age 55 with decades of clinical<br />
experience and large patient practices. It is not an overstatement to say that<br />
changing the lifetime nature of these existing certificates could be the proverbial<br />
straw that breaks the camel’s back, sending a generation of physicians into early<br />
retirement and possibly exacerbating critical shortages in subspecialty care. This<br />
is not to say that these physicians should not be subject to CME requirements,<br />
which have been required in many states for years. Most of our members have<br />
been fulfilling such requirements and feel that they serve a valuable function in<br />
their practices. However, aside from the cited data from Lipner, et al, which we<br />
contend suffers from selection bias; there is no evidence that requiring MOC<br />
participation for lifetime certificate holders will improve physician education or<br />
patient care. Further, the “lifetime” status of certification was part of the<br />
“contract” between the certifying board and the physician; violating this<br />
agreement would undermine the reputation and credibility of the member boards.<br />
Our country is in a time of great economic stress, but also a time of change and<br />
new direction. The preamble of the “Setting Standards” document cites “local and<br />
national efforts in healthcare reform” as a reason for these changes in MOC. As<br />
stated above, we believe that any new directions in healthcare should be based on<br />
evidence. We encourage ABMS to evaluate whether MOC programs are effective<br />
in improving patient care and whether they optimize the use of health care<br />
resources.<br />
3) Lack of evidence of the efficacy of Maintenance of Certification<br />
Since the inception of MOC in 2001, ASH has raised concerns to the ABIM about<br />
the unproven foundation upon which a substantial portion of MOC is built. As<br />
scientists, we are trained to use evidence as the basis of decision-making. This<br />
new document outlines even more rules and more steps (Line 86, assess<br />
diplomate’s communication skills using the “Communication Core” physician<br />
CAHPS patient survey”) for a process that has not been adequately evaluated or<br />
validated.<br />
Footnote 30 is a troubling glimpse at the future of MOC and highlights a key<br />
concern we have with how the ABMS (and member boards) position MOC.<br />
Physicians are trained to trust science and evidence, which does not lead one to<br />
“align with<br />
the national movement towards performance measurements” simply for the sake<br />
of doing so.<br />
ASH suggests that rather than move forward with the proposed changes at this<br />
time, the ABMS step back while the current MOC process undergoes an<br />
independent review of its value and efficacy. If presented with the evidence that
Ron Christensen, MD<br />
February 9, <strong>2009</strong><br />
Page 4<br />
these processes do in fact create better physicians and impact patient care and<br />
outcomes, ABMS can debut an evidence-based MOC process.<br />
ASH strongly urges caution and restraint in making changes to a system that has not been<br />
proven effective in the first place. Each new iteration of the MOC requirements serves<br />
only to confuse and stress diplomates, many of whom are already struggling with changes<br />
in reimbursement and other policies. Not only are they required to participate in this<br />
unproven process, but they also are not clear about the requirements, which change<br />
before even one full lifespan of their present certificate passes.<br />
ASH encourages ABMS as well as its individual boards to work with specialty societies<br />
as the requirements are finalized. We would welcome the opportunity to participate in<br />
such a forum.<br />
Thank you for the opportunity to submit these comments. Please contact Karen Kayoumi,<br />
ASH Senior Manager for Training and Evaluation, at 202-552-4939 or<br />
kkayoumi@hematology.org for any additional information.<br />
Sincerely,<br />
Nancy Berliner, MD<br />
President
The <strong>2009</strong> Physician Quality Reporting<br />
Initiative (PQRI) &<br />
E-Prescribing Prescribing Incentive Program<br />
American Society of <strong>Hematology</strong><br />
April 28 28, , <strong>2009</strong><br />
Sylvia W. Publ, MBA, RHIA<br />
CMS Sr. Quality Advisor<br />
Consortium for Quality Improvement<br />
and S&C Operations, CQISCO<br />
Overview<br />
• Value-Based Purchasing and PQRI<br />
• PQRI Introduction<br />
• <strong>2009</strong> PQRI<br />
• PQRI Reporting: Measures & Codes<br />
• Implementing PQRI<br />
• Resources<br />
What is PQRI?<br />
• A voluntary quality reporting system for<br />
covered services furnished to Medicare FFS<br />
beneficiaries by individual eligible<br />
professionals.<br />
• Eligible g pprofessionals can qqualify y to receive<br />
an incentive if they satisfactorily report data<br />
on quality measures to CMS.<br />
• Quality data reporting options: through<br />
claims, or qualified registries.<br />
• Criteria for satisfactorily reporting depends<br />
on the reporting option selected.<br />
3<br />
5<br />
Disclaimers<br />
This presentation was current at the time it was published or uploaded onto the<br />
web. Medicare policy changes frequently so links to the source documents have<br />
been provided within the document for your reference.<br />
This presentation was prepared as a tool to assist providers and is not intended to<br />
grant rights or impose obligations. Although every reasonable effort has been made<br />
to assure the accuracy of the information within these pages, the ultimate<br />
responsibility for the correct submission of claims and response to any remittance<br />
advice lies with the provider of services. The Centers for Medicare & Medicaid<br />
Services (CMS) employees, agents, and staff make no representation, warranty, or<br />
guarantee t that th t this thi compilation il ti of f MMedicare di iinformation f ti iis error-free f and d will ill bbear<br />
no<br />
responsibility or liability for the results or consequences of the use of this guide. This<br />
publication is a general summary that explains certain aspects of the Medicare<br />
Program, but is not a legal document. The official Medicare Program provisions are<br />
contained in the relevant laws, regulations, and rulings.<br />
CPT only copyright 2008 American Medical Association. All rights reserved. CPT is a<br />
registered trademark of the American Medical Association. Applicable FARS\DFARS<br />
Restrictions Apply to Government Use. Fee schedules, relative value units,<br />
conversion factors and/or related components are not assigned by the AMA, are not<br />
part of CPT, and the AMA is not recommending their use. The AMA does not directly<br />
or indirectly practice medicine or dispense medical services. The AMA assumes<br />
no liability for data contained or not contained herein.<br />
Towards Value-Based Purchasing<br />
2007<br />
2008 <strong>2009</strong> 2010<br />
•TRHCA<br />
•MMSEA •MIPPA TBD<br />
•74<br />
measures<br />
•119<br />
measures<br />
•153<br />
measures<br />
through<br />
rulemaking•Claims-<br />
•Claims •Claims<br />
based only<br />
•4 Measures •7<br />
Groups Measures<br />
•Registry<br />
Groups<br />
•Registry<br />
•EHRtesting<br />
•eRx<br />
<strong>2009</strong> PQRI Quality Measures<br />
VBP<br />
• 153 PQRI quality measures for <strong>2009</strong><br />
- Includes 101 measures from the 2008 PQRI and<br />
52 new measures<br />
- E-prescribing measure (Measure #125) removed,<br />
as required by MIPPA as a separate incentive<br />
program<br />
- 18 measures reportable only through registries<br />
- Measure specifications are available in the<br />
Measures/Codes section of the website at<br />
http://www.cms.hhs.gov/pqri.<br />
2<br />
4<br />
6<br />
1
<strong>2009</strong> PQRI Measures:<br />
<strong>Hematology</strong><br />
• #67 MDS & Acute Leukemia: Baseline<br />
Cytogenetic Testing on Bone Marrow<br />
• #68 MDS: Documentation of Iron Stores<br />
in Patients Receiving Erythropoietin<br />
Therapy py<br />
• #69 Multiple Myeloma: Treatment with<br />
Bisphosphonates<br />
• #70 CLL: Baseline Flow Cytometry<br />
Note: EPs can report any PQRI measure they feel is<br />
applicable to their practice<br />
PQRI Claims-Based Process<br />
Visit Documented in<br />
the Medical Record<br />
Encounter Form Coding & Billing<br />
NCH<br />
Analysis Contractor National Claims<br />
History File<br />
Confidential<br />
Report<br />
Incentive<br />
Payment<br />
<strong>2009</strong> PQRI Resources<br />
http://www.cms.hhs.gov/PQRI/20_Reporting.asp#TopOfPage<br />
• Registry-based Reporting<br />
- Individual Measures<br />
- Measures Groups<br />
• List of Qualified Registries<br />
Critical<br />
Step<br />
N-365<br />
<strong>Carrier</strong>/MAC<br />
http://www.cms.hhs.gov/PQRI/30_EducationalResources.asp#TopOf<br />
Page<br />
• MLN Matters Articles<br />
• Fact Sheets<br />
• Tip Sheets<br />
• <strong>2009</strong> PQRI Patient-Level Measures List<br />
7<br />
9<br />
11<br />
<strong>2009</strong> PQRI Satisfactory<br />
Claims-Based Reporting Options<br />
Criteria for claims-based submission<br />
of individual measures (1 option):<br />
• Reporting period: January 1, <strong>2009</strong> –<br />
December 31, <strong>2009</strong><br />
• ≥ 3 PQRI measures or 1-2 measures<br />
if < 3 apply*<br />
• ≥ 80% of applicable Medicare Part B FFS<br />
patient claims for 1-3 measures<br />
* If < 3 measures reported, EP is subject to<br />
measure-applicability validation (MAV)<br />
<strong>2009</strong> PQRI Measures/Codes<br />
Resources<br />
http://www.cms.hhs.gov/PQRI/15_Measures<br />
Codes.asp#TopOfPage<br />
• <strong>2009</strong> PQRI Measures List : measure developer,<br />
reporting p g method<br />
• Reporting Individual Measures via Claims<br />
- <strong>2009</strong> PQRI Measures Specifications Manual<br />
for Claims and Registry and Release Notes<br />
- <strong>2009</strong> PQRI Implementation Guide<br />
Claims-Based Reporting Principles<br />
• The CPT Category II code(s) and/or G-code(s), which supply<br />
the numerator, must be reported:<br />
- on the same claim<br />
- for the same beneficiary<br />
- for the same date of service (DOS)<br />
- for the same EP (NPI within the holder of the tax ID number - NPI/TIN)<br />
• All diagnoses reported on the base claim will be included in PQRI<br />
analysis.<br />
• Claims may NOT be resubmitted simply to add or correct QDCs.<br />
• QDCs must be submitted with a line-item charge of zero dollars<br />
($0.00) at the time the associated covered service is performed. If a<br />
system does not allow a $0.00 line-item charge, a nominal amount<br />
can be substituted.<br />
• The submitted charge field cannot be blank.<br />
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10<br />
12<br />
2
Claims-Based<br />
Reporting Principles (ctd.)<br />
• Entire claims with a zero charge will be rejected. (Total<br />
charge for the claim cannot be $0.00).<br />
• QDC line items will be denied for payment by the carrier, but<br />
are then passed through the claims processing system for<br />
PQRI analysis. EPs will receive a Remittance Advice (RA)<br />
associated with the claim which contains the PQRI QDC line-<br />
item and will include a standard remark code (N365) and a<br />
message that confirms that the QDCs passed into the National<br />
Claims History (NCH) file. N365 reads: “This procedure code is<br />
not payable. It is for reporting/information purposes only.” The<br />
N365 remark code does NOT indicate whether the QDC is<br />
accurate for that claim or for the measure the EP is attempting<br />
to report.<br />
21. Review applicable PQRI measures related<br />
to ANY diagnosis (Dx) listed in Item 21. Up to<br />
8 Dx may be entered electronically.<br />
Identifies<br />
claim<br />
line-item<br />
CMS-1500 Claim Example<br />
Example of an individual NPI reporting on a single CMS-1500 claim. See<br />
http://www.cms.hhs.gov/manuals/downloads/clm104c26.pdf for more information.<br />
Myelodysplastic<br />
Syndrome<br />
24D. Procedures, Services, or<br />
Supplies – CPT/HCPCS,<br />
Modifier as needed<br />
For group<br />
billing, the<br />
rendering<br />
NPI number<br />
of the<br />
individual<br />
EP who<br />
MDS–PQRI #68<br />
performed<br />
Documentation of iron<br />
the service<br />
stores prior to initiating<br />
will be used<br />
erythropoietin therapy<br />
AND<br />
from each<br />
Patient receiving<br />
line-item in<br />
erythropoietin th i ti therapy th<br />
the PQRI<br />
calculations.<br />
13<br />
QDC codes must be submitted with a<br />
line-item charge of $0.00. Charge field<br />
cannot be blank.<br />
• The patient was seen for an office visit (99201). The provider is reporting one measure related to Myelodysplastic Syndrome<br />
(MDS).<br />
• Measure #68 (MDS – Documentation of Iron Stores in Patients Receiving Erythropoietin Therapy) with QDC 3106F and QDC<br />
4090F + MDS line-item diagnosis (24E points to DX 238.7x in Item 21).<br />
• Note: All diagnoses listed in Item 21 will be used for PQRI analysis. Measures that require the reporting of two or more diagnoses<br />
on claim will be analyzed as submitted in Item 21.<br />
• NPI placement: Item 24J must contain the NPI of the individual provider that rendered the service when a group is billing. This<br />
includes putting the individual NPI on the QDC line-items as well.<br />
• The Tax ID associated with the NPI(s) on this claim is shown in Item 25.<br />
Selection of Measures<br />
Solo practitioner -<br />
Enter individual<br />
NPI here<br />
• Consider Practice Characteristics:<br />
- Clinical conditions usually treated<br />
- Types of care typically provided – e.g., preventive, chronic, acute<br />
- Settings where care is usually delivered – e.g., office, ED, surgical<br />
suite<br />
- Quality improvement goals for <strong>2009</strong><br />
• Review the List of Measures: determine which measures apply<br />
most frequently to the practice's Medicare FFS patients. Many PQRI<br />
measures require one-time reporting per patient per reporting period<br />
per eligible professional (See Patient Level Measures List).<br />
• Review <strong>2009</strong> PQRI Measures Specifications Manual for Claims<br />
and Registry & Release Notes for selected measures carefully to<br />
understand reporting instructions, coding, and frequency of reporting.<br />
15 #<br />
17<br />
Step 1:<br />
Dr. Thomas<br />
documents iron<br />
stores prior to<br />
initiating therapy.<br />
patient receives<br />
erythropoietin<br />
therapy<br />
3106F<br />
AND<br />
4090F<br />
Successful Reporting Scenario<br />
Myelodysplastic Syndrome -Documentation Iron Stores (#68)<br />
Mr. Jones presents for office visit<br />
(99201) with Dr. Thomas<br />
Mr. Jones has diagnosis<br />
of MDS - 238. 7X )<br />
Step 2:<br />
Dr. Thomas<br />
documents iron<br />
stores not available<br />
due to system<br />
reasons prior to<br />
initiating<br />
erythropoietin<br />
therapy<br />
3106F-3P<br />
AND<br />
4090F<br />
Step 3a:<br />
Dr. Thomas<br />
documents that<br />
patient did not<br />
receive<br />
erythropoietin<br />
therapy<br />
4095F<br />
CPT only copyright 2008 American Medical Association. All rights reserved.<br />
Where EPs Should Begin<br />
OR Step 3b:<br />
Dr. Thomas does not<br />
document reason<br />
that iron stores not<br />
performed, patient<br />
Receives<br />
erythropoietin<br />
therapy<br />
3160F-8P<br />
AND<br />
4090F<br />
• Gather information from the PQRI web<br />
page: www.cms.hhs.gov/pqri (e.g.,<br />
Measures/Codes, Educational Resources,<br />
Tool Kit web pages)<br />
• GGather th information i f ti ffrom other th sources, such h<br />
as your professional association, specialty<br />
society, or the American Medical Association<br />
• Determine which PQRI reporting option(s)<br />
best fits practice<br />
• Determine PQRI reporting period<br />
Selection of Reporting Method<br />
• Review and study the measures specifications:<br />
Measures Specifications Manual for Claims and<br />
Registry & Release Notes for selected<br />
measures carefully to understand reporting<br />
instructions, coding and frequency of reporting.<br />
• Select a reporting method: via claims or via a<br />
qualified registry<br />
The “<strong>2009</strong> PQRI Participation Decision Tree” is a<br />
tool designed to help practices select a reporting<br />
method (see Appendix <strong>2009</strong> PQRI<br />
Implementation Guide)<br />
14 24<br />
16<br />
18<br />
3
Prepare to Participate in PQRI<br />
• Assemble an Implementation Team<br />
- Ensure that the practice's billing software<br />
and clearinghouse can capture all the<br />
codes and associated modifiers used in<br />
PQRI for the measures you have<br />
selected. Discuss with EDI vendors.<br />
- Read and discuss with staff: reporting<br />
principles and specifications for each of<br />
the measures selected for reporting in<br />
PQRI.<br />
Understanding the Measures:<br />
The Performance Modifiers<br />
• Unique modifiers used with CPT II codes only<br />
• Performance exclusion modifiers indicate that an action<br />
specified in the measure was not provided due to medical,<br />
patient or systems reasons documented in the medical<br />
record:<br />
- 1P- Performance exclusion modifier due to Medical<br />
Reasons<br />
- 2P- Performance exclusion modifier used due to Patient<br />
Reasons<br />
- 3P- Performance exclusion modifier used due to System<br />
Reasons<br />
• One or more or no exclusions may be allowed for a given<br />
measure. Refer to the measure specifications to determine<br />
the appropriate exclusion modifiers.<br />
Understanding the Measures:<br />
Performance Timeframe<br />
• Some measures have a<br />
Performance Timeframe related to<br />
the clinical action that may be distinct<br />
from the reporting frequency.<br />
- Perform within 12 months or annually<br />
- Most Recent result<br />
Clinical test result needs to be obtained,<br />
reviewed, reported one time for each EP.<br />
It need not have been performed during the<br />
reporting period.<br />
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21<br />
23<br />
Prepare to Participate in PQRI<br />
• Develop a process for concurrent<br />
data collection so that all eligible claims<br />
and PQRI quality data codes (QDC)<br />
are correctly identified and submitted<br />
• Regularly review the Remittance<br />
Advice notices from the <strong>Carrier</strong>/AB<br />
MAC to ensure you receive N365<br />
remark code for each QDC submitted<br />
Understanding the Measures:<br />
The 8P-Reporting Modifier<br />
Performance Measure Reporting Modifier<br />
• Facilitates reporting a case when the<br />
patient is eligible but the action described in<br />
a measure is not performed and the reason<br />
is not specified or documented<br />
- 8P modifier: action not performed,<br />
reason not otherwise specified<br />
Understanding the Measures:<br />
Reporting Frequency<br />
• Each measure has a Reporting Frequency<br />
requirement for each eligible patient seen<br />
during the reporting period for each EP:<br />
- Report one-time<br />
- Report once for each procedure performed<br />
Report for each acute episode<br />
- Report for each visit<br />
20<br />
22<br />
24<br />
4
2007 PQRI Experience Report<br />
Invalid QDC Submission Attempts<br />
• 12.15% Missing individual NPI<br />
• 18.89% Incorrect HCPCS (CPT1) code*<br />
• 13.93% Incorrect DX code*<br />
• 77.24% 24% Both B th incorrect i t HCPCS code d and d<br />
incorrect DX code*<br />
• 4.97% All line items were QDCs only<br />
*Denominator mismatch<br />
http://www.cms.hhs.gov/PQRI/Downloads/2008QDCError3rdQuar<br />
ter.pdf<br />
Benefits of PQRI Participation<br />
• Receive confidential feedback reports to<br />
support quality improvement<br />
• Earn a bonus incentive payment<br />
• Make an investment in the future of the<br />
practice<br />
- Prepare for higher bonus incentives over<br />
time<br />
- Prepare for pay-for-performance<br />
- Prepare for public reporting of<br />
performance results<br />
FAQs, Listserv<br />
25<br />
27<br />
29<br />
2008 PQRI Aggregate QDC Error Report<br />
Prior to Analytic Modifications<br />
http://www.cms.hhs.gov/PQRI/Downloads/2008QDCError3rdQuarter.pdf<br />
Measure # Submitted* %Valid*<br />
#67 12,116 69.0%<br />
#68 9,810 71.2%<br />
#69 7,786 84%<br />
#70 10,343 81.0%<br />
*Excludes denied claims<br />
PQRI Website:<br />
www.cms.hhs.gov/pqri<br />
Resources Available<br />
Physician Quality Reporting Initiative:<br />
https://www.cms.hhs.gov/pqri<br />
CMS Quality Initiatives – General<br />
Information:<br />
http://www.cms.hhs.gov/QualityInitiatives<br />
GenInfo/<br />
American Society of <strong>Hematology</strong><br />
http://hematology.org/policy/resources/pqr<br />
i/index.cfm<br />
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28<br />
30<br />
5
Centers for Medicare & Medicaid Services<br />
<strong>2009</strong> EE-Prescribing Prescribing<br />
Incentive Program<br />
<strong>2009</strong> Adoption and Use of<br />
Medication E-Prescribing Measure<br />
• E-prescribing quality measure may only be reported<br />
via a claims-based method.<br />
• Eligible professionals (EPs) who successfully report<br />
(e-prescribers) may receive an incentive payment<br />
equal to 2% of total allowed charges for covered<br />
professional services furnished to patients enrolled<br />
in Medicare Part B* during the reporting period<br />
(January 1 through December 31, <strong>2009</strong>).<br />
*Medicare Advantage or Private FFS patients are<br />
not included in the incentive<br />
E-Prescribing Incentives & Reductions<br />
Year<br />
Incentive for<br />
Successful<br />
E-Prescribers<br />
<strong>2009</strong> 2.0%<br />
2010 2.0%<br />
2011 1.0%<br />
Reduction for<br />
Unsuccessful<br />
E-Prescribers<br />
2012 1.0% -1.0%<br />
2013 0.5% -1.5%<br />
2014 -2.0%<br />
31<br />
33<br />
35<br />
What is E-Prescribing?<br />
• The transmission, using electronic media,<br />
of prescription or prescription-related<br />
information between a prescriber,<br />
dispenser, d spe se , ppharmacy a acy be benefit e manager, a age , oor<br />
health plan either directly or through an<br />
intermediary, including an e-prescribing<br />
network. E-prescribing includes, but is not<br />
limited to, two-way transmissions between<br />
the point of care and the dispenser.<br />
<strong>2009</strong> Adoption and Use of<br />
Medication E-Prescribing Measure<br />
• To qualify as a successful e-prescriber, a<br />
minimum of 10% of their Medicare Part B<br />
allowed charges must be generated from the<br />
specified denominator codes in the measure<br />
and the e-prescriber must report on at least<br />
50% of all Medicare Part B patient<br />
encounters.<br />
Getting Started in E-Prescribing<br />
• Plan and implement a process within your<br />
practice to ensure successful claims-based<br />
reporting of the E-prescribing measure.<br />
• Appoint a member of your team as the<br />
main contact person for trouble-shooting or<br />
fielding questions.<br />
32<br />
34<br />
36<br />
6
Getting Started in E-Prescribing<br />
• Ensure that your system meets<br />
qualified e-prescribing system<br />
requirements, i.e., must employ<br />
standards adopted by the Secretary for<br />
Part D by virtue of the 2003 Medicare<br />
Modernization Act (MMA) and is<br />
capable of ALL of the following<br />
functionalities:<br />
E-Prescribing Functionalities<br />
- Providing information on formulary or tiered<br />
formulary medications, patient eligibility, and<br />
authorization requirements received<br />
electronically from the patient’s drug plan (if<br />
available) )<br />
*An alert on an e-prescribing system is an<br />
automated prompt that indicates a potential<br />
inappropriate medication dose, route<br />
of administration, interactions, allergy concerns<br />
and warnings/cautions<br />
E-Prescribing Measure –<br />
Numerator (QDCs)<br />
• Prescriptions Generated via Qualified E-Prescribing System<br />
- G8443: All prescriptions created during the encounter were<br />
generated using a qualified e-prescribing system OR<br />
• E-Prescribing System Available, but not Used for One or More<br />
Prescriptions Due to Patient/System Reasons<br />
- G8446: Provider does have access to a qualified e-prescribing<br />
system. Some or all prescriptions generated during the<br />
encounter t were printed i t d or phoned h d iin as required i d bby state t t or<br />
federal law or regulations, patient request, or pharmacy system<br />
being unable to receive electronic transmission; OR because<br />
they were for narcotics or other controlled substances OR<br />
• Qualified E-Prescribing System Available, but no<br />
Prescription(s) were Generated During the Encounter<br />
- G8445: No prescriptions were generated during the encounter.<br />
Provider does have access to a qualified e-prescribing system<br />
37<br />
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41<br />
Denominator-eligible<br />
Encounter Documented in<br />
Medical Record & e-Rx<br />
Generated<br />
E-Prescribing Functionalities<br />
- Generating a complete active<br />
medication list<br />
incorporating electronic data received<br />
from pharmacies and pharmacy benefit<br />
managers (PBM (PBMs) ) if available il bl<br />
- Selecting medications, printing<br />
prescriptions, electronically<br />
transmitting prescriptions, and<br />
conducting all alerts*<br />
How the E-Prescribing Incentive<br />
Program Works<br />
PBM<br />
Analysis Contractor<br />
Confidential Report<br />
for e-prescriber<br />
E-Rx<br />
Transmitted<br />
to<br />
Pharmacy<br />
Encounter<br />
Form<br />
NCH<br />
National Claims<br />
History File<br />
Coding & Billing<br />
Successful e-prescriber<br />
=Incentive Payment<br />
E-Prescribing Measure –<br />
Denominator (Eligible Cases)<br />
Critical<br />
Step<br />
N-365<br />
<strong>Carrier</strong>/MAC<br />
Patient encounter for covered<br />
services during the reporting period<br />
(CPT or HCPCS):<br />
• 90801, 90802, 90804, 90805, 90806, 90807,<br />
90808 90808, 90809<br />
• 92002, 92004, 92012, 92014<br />
• 96150, 96151, 96152<br />
• 99201, 99202, 99203, 99204, 99205, 99211,<br />
99212, 99213, 99214, 99215, 99241, 99242,<br />
99243, 99244, 99245<br />
• G0101, G0108, G0109<br />
38<br />
40<br />
42<br />
7
Scenario 1:<br />
The clinician discusses<br />
current medications and<br />
prescribes new<br />
medication, updates<br />
active medication list in<br />
eRx system, transmits<br />
prescription electronically<br />
to pharmacy.<br />
Reports G8443<br />
Reporting Scenarios<br />
E-Prescribing<br />
A 70-year old male patient presents to the<br />
clinician’s office for medical care.<br />
Scenario 2:<br />
Patient uses a pharmacy p y<br />
that cannot accept eRx and<br />
asks for a hard copy.<br />
OR<br />
Prescription is for a<br />
controlled substance.<br />
Physician updates meds in<br />
eRx system, eRx system<br />
provides hard copy of<br />
prescription to patient.<br />
Reports G8446<br />
All of these scenarios represent successful <strong>2009</strong> reporting<br />
Allowable Reasons for<br />
Not E-Prescribing<br />
Scenario 3:<br />
The clinician documents<br />
there were no prescriptions<br />
generated; provider does<br />
have access to a qualified<br />
eRx system.<br />
Reports G8445<br />
G8446 E-Prescribing System Available, but not used for<br />
One or More Prescriptions Due to Patient/System<br />
Reasons<br />
• Provider does have access to a qualified system, but due to<br />
one of the following reasons in the code descriptor, cannot eprescribe.<br />
• Only the allowable reasons delineated in the code descriptor<br />
can be applied to G8446:<br />
- Controlled substance<br />
- State, federal law<br />
- Patient asks for hard copy<br />
- Pharmacy cannot receive eRx transmittal<br />
Thank You<br />
For questions about PQRI contact:<br />
• <strong>Carrier</strong><br />
• Regional Office or<br />
• Submit through the PQRI mailbox:<br />
pqri_inquiry@cms.hhs.gov<br />
For questions regarding measure construct<br />
contact measure developer identified on<br />
<strong>2009</strong> PQRI Measures List<br />
43<br />
45<br />
47<br />
What is Not E-Prescribing<br />
• Calling in a prescription<br />
• Patient seen in ED is sent home with a written prescription<br />
• Physician-generated faxed prescription to receiving<br />
pharmacy fax<br />
• Sending a prescription via PDA (exception: depends on<br />
software used – must meet e-prescribing system qualifications)<br />
• Knowingly sending a computer-generated fax initiated at the<br />
doctor’s office to a pharmacy (exception: if sent via qualified eprescribing<br />
system and pharmacy system generates message<br />
as a fax, it is e-prescribing)<br />
• Office visits during a global surgical period that result in a<br />
prescription<br />
• Medicare Advantage patients (MA claims do not count toward<br />
incentive payment calculation)<br />
E-Prescribing Resources<br />
• E-Prescribing Incentive Program Website:<br />
http://www.cms.hhs.gov/ERXIncentive<br />
Medicare’s Practical Guide to the E-Prescribing Incentive Program:<br />
http://www.cms.hhs.gov/partnerships/downloads/11399.pdf<br />
• E-Prescribing General Information:<br />
http://www.cms.hhs.gov/eprescribing/<br />
• SSureScripts’ S i t ’ EE-Rx R HHub b iincludes l d li list t of f vendors d who h meet t EE-Prescribing P ibi<br />
qualifications:<br />
http://www.surescripts.com/get-connected.aspx?ptype=physician<br />
• Clinician’s Guide to Electronic Prescribing<br />
- http://ehealthinitiative.org/eRx/clinicians.mspx<br />
• National E-prescribing Conference CME<br />
- http://www.massmed.org >e-prescribing CME information<br />
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