Medicare program; revisions to payment policies, five-year review of work relative value units, changes to the practice expense methodology under the physician fee schedule, and other changes to payment under part B; revisions to the payment policies of ambulance services under the fee schedule for ambulance services; and ambulance inflation factor update for CY 2007. Final rule with comment period.

This final rule with comment period addresses certain provisions of the Deficit Reduction Act of 2005, as well as making other changes to Medicare Part B payment policy. These changes are intended to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services. This final rule with comment period also discusses geographic practice cost indices (GPCI) changes; requests for additions to the list of telehealth services; payment for covered outpatient drugs and biologicals; payment for renal dialysis services; policies related to private contracts and opt-out; policies related to bone mass measurement (BMM) services, independent diagnostic testing facilities (IDTFs), the physician self-referral prohibition; laboratory billing for the technical component (TC) of physician pathology services; the clinical laboratory fee schedule; certification of advanced practice nurses; health information technology, the health care information transparency initiative; updates the list of certain services subject to the physician self-referral prohibitions, finalizes ASP reporting requirements, and codifies Medicare's longstanding policy that payment of bad debts associated with services paid under a fee schedule/charge-based system are not allowable. We are also finalizing the calendar year (CY) 2006 interim RVUs and are issuing interim RVUs for new and revised procedure codes for CY 2007. In addition, this rule includes revisions to payment policies under the fee schedule for ambulance services and the ambulance inflation factor update for CY 2007. As required by the statute, we are announcing that the physician fee schedule update for CY 2007 is -5.0 percent, the initial estimate for the sustainable growth rate for CY 2007 is 2.0 percent and the CF for CY 2007 is $35.9848.