02-28147. Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2003, Notice of Delay of Final Rule

AGENCY:

Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION:

Notice of delay of final rule.

SUMMARY:

This document gives notice of a delay in publication of the physician fee schedule for calendar year 2003 due to concerns about data used to establish the physician fees and the need to further assess the accuracy of the data.

FOR FURTHER INFORMATION CONTACT:

Terry Kay [phone].

SUPPLEMENTARY INFORMATION:

The Medicare physician fee schedule specifies payments to physicians for more than 7,000 health care services and procedures ranging from routine office visits to complex surgical procedures. In calendar year (CY) 2003, Medicare is expected to pay approximately $44.7 billion to over 750,000 physicians and other practitioners for services paid under the physician fee schedule.

On June 28, 2002, we published a proposed rule to refine the resource-based ST practice expense relative value units (RVUs) and make other changes to Medicare Part B payment policy, which affect the Medicare physician fee schedule for CY 2003. The policy changes proposed concerned: the Medicare Economic Index, pricing of the technical component for positron emission tomography (PET) scans, Medicare qualifications for clinical nurse specialists, a process to add or delete services to the definition of telehealth, definition for ZZZ global periods, global period for surface radiation, and an endoscopic base for urology codes. We also discuss the refinement of anesthesia work values, clinical social worker services, and how drugs are accounted for in the sustainable growth rate.

Under the formula set for in section 1848(b)(1) of the Social Security Act, the payment amount for each service paid under the physician fee schedule is the product of three factors: (1) A nationally uniform RVU for the service; (2) a geographic adjustment factor for each physician; and (3) a nationally uniform conversion factor (CF) for the service. The CF converts the RVUs into payment amounts. For each physician fee schedule service there are three RVUs: (1) An RVU for physician work; (2) an RVU for practice expense; and (3) an RVU for malpractice expense.

We are concerned about information and data used in establishing RVUs for certain physicians' services that would apply under the Medicare physician fee schedule for CY 2003. In reviewing the information and data used to establish RVUs (including data and information obtained from outside sources) we discovered that the data and information were incomplete, and we could not, therefore, make an accurate evaluation and establishment of RVUs, which form in part the basis of payment under the physician fee schedule. The effects of the incomplete data and information that we have identified are of such a magnitude to affect significantly the rates paid under the physician fee schedule for all physicians, non-physician practitioners, suppliers and providers paid physician fee schedule rates. Because changes in RVUs are done in a budget-neutral manner, RVU changes have redistributive implications for all physicians, non-physician practitioners, suppliers, and providers paid physician fee schedule rates. Using the data and information as currently constituted without refinement would result in inappropriate and uneven payments to physicians, non-physician practitioners, suppliers, and providers. Because it would be impossible to avoid such uneven payments at this point based on the current state of information, it would be inappropriate to proceed to publication of a final rule with a physician fee schedule for CY 2003 until the subject data and information can be re-evaluated and then utilized to assign the proper number of units under our relative value system.

In order to thoroughly assess the accuracy of the data and information and to assure that they do not contain further inaccuracies that might also have significant implications, an intensive review of the data and information will be necessary. Because of the time needed for this review, we cannot complete this review and recalculate the physician fee schedule rates for CY 2003 before November 1, 2002. Once our review has been completed and data and information assessed and rates revised, we will publish a final rule. We will announce the effective date of the physician fee schedule for CY 2003 in that rule.

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical Assistance Program)

(Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program)

Dated: October 31, 2002.

Thomas A. Scully,

Administrator, , Centers for Medicare & Medicaid Services.

Approved: October 31, 2002.

Tommy G. Thompson,

Secretary.