[Federal Register Volume 74, Number 223 (Friday, November 20, 2009)]
[Rules and Regulations]
[Pages 60316-60983]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-26499]
[[Page 60315]]
-----------------------------------------------------------------------
Part II
Book 2 of 2 Books
Pages 60315-61012
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
-----------------------------------------------------------------------
42 CFR Parts 410, 416, and 419
Medicare Program: Changes to the Hospital Outpatient Prospective
Payment System and CY 2010 Payment Rates; Changes to the Ambulatory
Surgical Center Payment System and CY 2010 Payment Rates; Final Rule
Federal Register / Vol. 74, No. 223 / Friday, November 20, 2009 /
Rules and Regulations
[[Page 60316]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 410, 416, and 419
[CMS-1414-FC]
RIN 0938-AP41
Medicare Program: Changes to the Hospital Outpatient Prospective
Payment System and CY 2010 Payment Rates; Changes to the Ambulatory
Surgical Center Payment System and CY 2010 Payment Rates
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule with comment period.
-----------------------------------------------------------------------
SUMMARY: This final rule with comment period revises the Medicare
hospital outpatient prospective payment system (OPPS) to implement
applicable statutory requirements and changes arising from our
continuing experience with this system. In this final rule with comment
period, we describe the changes to the amounts and factors used to
determine the payment rates for Medicare hospital outpatient services
paid under the prospective payment system. These changes are applicable
to services furnished on or after January 1, 2010.
In addition, this final rule with comment period updates the
revised Medicare ambulatory surgical center (ASC) payment system to
implement applicable statutory requirements and changes arising from
our continuing experience with this system. In this final rule with
comment period, we set forth the applicable relative payment weights
and amounts for services furnished in ASCs, specific HCPCS codes to
which these changes will apply, and other pertinent ratesetting
information for the CY 2010 ASC payment system. These changes are
applicable to services furnished on or after January 1, 2010.
DATES: Effective Date: The provisions of this rule are effective
January 1, 2010.
Comment Period: We will consider comments on the subject areas
listed in the SUPPLEMENTARY INFORMATION section of this rule that are
received at one of the addresses provided in the ADDRESSES section of
this rule no later than 5 p.m. EST on December 29, 2009.
Application Deadline for New Class of New Technology Intraocular
Lenses: Request for review of applications for a new class of new
technology intraocular lenses must be received by 5 p.m. EST on March
8, 2010.
ADDRESSES: In commenting, please refer to file code CMS-1414-FC.
Because of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (no duplicates,
please):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the instructions for
``Comment or Submission'' and enter the file code to find the document
accepting comments.
2. By regular mail. You may mail written comments (one original and
two copies) to the following address ONLY: Centers for Medicare &
Medicaid Services, Department of Health and Human Services, Attention:
CMS-1414-FC, P.O. Box 8013, Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments (one
original and two copies) to the following address ONLY: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-1414-FC, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments (one original and two copies) before the
close of the comment period to one of the following addresses:
a. Room 445-G, Hubert H. Humphrey Building, 200 Independence
Avenue, SW., Washington, DC 20201.
(Because access to the interior of the HHH Building is not readily
available to persons without Federal Government identification,
commenters are encouraged to leave their comments in the CMS drop slots
located in the main lobby of the building. A stamp-in clock is
available for persons wishing to retain a proof of filing by stamping
in and retaining an extra copy of the comments being filed.)
b. 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
please call the telephone number (410) 786-9994 in advance to schedule
your arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
Applications for a new class of new technology intraocular lenses:
Requests for review of applications for a new class of new technology
intraocular lenses must be sent by regular mail to ASC/NTOL, Division
of Outpatient Care, Mailstop C4-05-17, Centers for Medicare & Medicaid
Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.
FOR FURTHER INFORMATION CONTACT:
Alberta Dwivedi, (410) 786-0378, Hospital outpatient prospective
payment issues.
Dana Burley, (410) 786-0378, Ambulatory surgical center issues.
Michele Franklin, (410) 786-4533, and Jana Lindquist, (410) 786-4533,
Partial hospitalization and community mental health center issues.
James Poyer, (410) 786-2261, Reporting of quality data issues.
SUPPLEMENTARY INFORMATION:
Comment Subject Areas: We will consider comments on the following
subject areas discussed in this final rule with comment period that are
received by the date and time indicated in the DATES section of this
final rule with comment period:
(1) The payment classifications assigned to HCPCS codes identified
in Addenda B, AA, and BB to this final rule with comment period with
the ``NI'' comment indicator;
(2) Recognition of plasma protein fraction as a blood product or a
biological for OPPS payment, as discussed in section II.A.1.d.(2) of
this final rule with comment period;
(3) Potential alternative coding schemes for reporting hospital
clinic visits for new and established patients, as discussed in section
IX.B.1. of this final rule with comment period;
(4) The possibility of extending the direct supervision
requirements for hospital-based partial hospitalization program
services to those same services in community mental health centers, as
discussed in section XII.D.3. of this final rule with comment period;
and
(5) The possibility of establishing direct physician supervision
requirements for ASC services, as discussed in section XV.A.3. of this
final rule with comment period.
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following Web
site as soon as possible after they have been received: http://www.regulations.gov. Follow the search
[[Page 60317]]
instructions on that Web site to view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, MD 21244, on Monday through Friday of each week from 8:30
a.m. to 4 p.m. EST. To schedule an appointment to view public comments,
phone 1-800-743-3951.
Electronic Access
This Federal Register document is also available from the Federal
Register online database through GPO Access, a service of the U.S.
Government Printing Office. Free public access is available on a Wide
Area Information Server (WAIS) through the Internet and via
asynchronous dial-in. Internet users can access the database by using
the World Wide Web; the Superintendent of Documents' home page address
is http://www.gpoaccess.gov/index.html, by using local WAIS client
software, or by telnet to swais.access.gpo.gov, then login as guest (no
password required). Dial-in users should use communications software
and modem to call (202) 512-1661; type swais, then login as guest (no
password required).
Alphabetical List of Acronyms Appearing in This Final Rule
ACEP American College of Emergency Physicians
AHA American Hospital Association
AHIMA American Health Information Management Association
AMA American Medical Association
AMP Average manufacturer price
AOA American Osteopathic Association
APC Ambulatory payment classification
ASC Ambulatory Surgical Center
ASP Average sales price
AWP Average wholesale price
BBA Balanced Budget Act of 1997, Public Law 105-33
BBRA Medicare, Medicaid, and SCHIP [State Children's Health
Insurance Program] Balanced Budget Refinement Act of 1999, Public
Law 106-113
BCA Blue Cross Association
BCBSA Blue Cross and Blue Shield Association
BIPA Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, Public Law 106-554
CAH Critical access hospital
CAP Competitive Acquisition Program
CBSA Core-Based Statistical Area
CCR Cost-to-charge ratio
CERT Comprehensive Error Rate Testing
CKD Chronic kidney disease
CMHC Community mental health center
CMS Centers for Medicare & Medicaid Services
CORF Comprehensive outpatient rehabilitation facility
CPT [Physicians'] Current Procedural Terminology, Fourth Edition,
2009, copyrighted by the American Medical Association
CR Cardiac rehabilitation
CRNA Certified registered nurse anesthetist
CY Calendar year
DMEPOS Durable medical equipment, prosthetics, orthotics, and
supplies
DMERC Durable medical equipment regional carrier
DRA Deficit Reduction Act of 2005, Public Law 109-171
DSH Disproportionate share hospital
EACH Essential Access Community Hospital
E/M Evaluation and management
EPO Erythropoietin
ESRD End-stage renal disease
FACA Federal Advisory Committee Act, Public Law 92-463
FAR Federal Acquisition Regulations
FDA Food and Drug Administration
FFS Fee-for-service
FSS Federal Supply Schedule
FTE Full-time equivalent
FY Federal fiscal year
GAO Government Accountability Office
GME Graduate medical education
HCPCS Healthcare Common Procedure Coding System
HCRIS Hospital Cost Report Information System
HHA Home health agency
HIPAA Health Insurance Portability and Accountability Act of 1996,
Public Law 104-191
HOPD Hospital outpatient department
HOPQDRP Hospital Outpatient Quality Data Reporting Program
ICD-9-CM International Classification of Diseases, Ninth Edition,
Clinical Modification
ICR Intensive cardiac rehabilitation
IDE Investigational device exemption
IME Indirect medical education
I/OCE Integrated Outpatient Code Editor
IOL Intraocular lens
IPPS [Hospital] Inpatient prospective payment system
IVIG Intravenous immune globulin
KDE Kidney disease education
MAC Medicare Administrative Contractor
MedPAC Medicare Payment Advisory Commission
MDH Medicare-dependent, small rural hospital
MIEA-TRHCA Medicare Improvements and Extension Act Under Division B,
Title I of the Tax Relief Health Care Act of 2006, Public Law 109-
432
MIPPA Medicare Improvements for Patients and Providers Act of 2008,
Public Law 110-275
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003, Public Law 108-173
MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007, Public
Law 110-173
MPFS Medicare Physician Fee Schedule
MSA Metropolitan Statistical Area
NCCI National Correct Coding Initiative
NCD National Coverage Determination
NTIOL New technology intraocular lens
OIG [HHS] Office of the Inspector General
OMB Office of Management and Budget
OPD [Hospital] Outpatient department
OPPS [Hospital] Outpatient prospective payment system
PBD Provider-based department
PHP Partial hospitalization program
PM Program memorandum
PPI Producer Price Index
PPS Prospective payment system
PR Pulmonary rehabilitation
PRA Paperwork Reduction Act
QAPI Quality Assessment and Performance Improvement
QIO Quality Improvement Organization
RAC Recovery Audit Contractor
RFA Regulatory Flexibility Act
RHQDAPU Reporting Hospital Quality Data for Annual Payment Update
[Program]
RHHI Regional home health intermediary
SBA Small Business Administration
SCH Sole community hospital
SDP Single Drug Pricer
SI Status indicator
TEFRA Tax Equity and Fiscal Responsibility Act of 1982, Public Law
97-248
TOPS Transitional outpatient payments
USPDI United States Pharmacopoeia Drug Information
WAC Wholesale acquisition cost
In this document, we address two payment systems under the Medicare
program: the hospital outpatient prospective payment system (OPPS) and
the revised ambulatory surgical center (ASC) payment system. The
provisions relating to the OPPS are included in sections I. through
XIV., and XVI. through XXI. of this final rule with comment period and
in Addenda A, B, C (Addendum C is available on the Internet only; we
refer readers to section XVIII.A. of this final rule with comment
period), D1, D2, E, L, and M to this final rule with comment period.
The provisions related to the revised ASC payment system are included
in sections XV., XVI., and XVIII. through XXI. of this final rule with
comment period and in Addenda AA, BB, DD1, DD2, and EE to this final
rule with comment period. (Addendum EE is available on the Internet
only; we refer readers to section XVIII.B. of this final rule with
comment period.)
Table of Contents
I. Background and Summary of the CY 2010 OPPS/ASC Final Rule With
Comment Period
A. Legislative and Regulatory Authority for the Hospital
Outpatient Prospective Payment System
B. Excluded OPPS Services and Hospitals
C. Prior Rulemaking
D. Advisory Panel on Ambulatory Payment Classification (APC)
Groups
1. Authority of the APC Panel
2. Establishment of the APC Panel
3. APC Panel Meetings and Organizational Structure
E. Background and Summary of the CY 2010 OPPS/ASC Proposed Rule
1. Updates Affecting OPPS Payments
[[Page 60318]]
2. OPPS Ambulatory Payment Classification (APC) Group Policies
3. OPPS Payment for Devices
4. OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
5. Estimate of OPPS Transitional Pass-Through Spending for
Drugs, Biologicals, Radiopharmaceuticals, and Devices
6. OPPS Payment for Brachytherapy Sources
7. OPPS Payment for Drug Administration Services
8. OPPS Payment for Hospital Outpatient Visits
9. Payment for Partial Hospitalization Services
10. Procedures That Will Be Paid Only as Inpatient Services
11. OPPS Nonrecurring Technical and Policy Changes and
Clarifications
12. OPPS Payment Status and Comment Indicators
13. OPPS Policy and Payment Recommendations
14. Updates to the Ambulatory Surgical Center (ASC) Payment
System
15. Reporting Quality Data for Annual Payment Rate Updates
16. Healthcare-Associated Conditions
17. Regulatory Impact Analysis
F. Public Comments Received in Response to the CY 2010 OPPS/ASC
Proposed Rule
G. Public Comments Received in Response to the November 18, 2008
OPPS/ASC Final Rule With Comment Period
II. Updates Affecting OPPS Payments
A. Recalibration of APC Relative Weights
1. Database Construction
a. Database Source and Methodology
b. Use of Single and Multiple Procedure Claims
c. Calculation of CCRs
(1) Development of the CCRs
(2) Charge Compression
2. Data Development Process and Calculation of Median Costs
a. Claims Preparation
b. Splitting Claims and Creation of ``Pseudo'' Single Claims
(1) Splitting Claims
(2) Creation of ``Pseudo'' Single Claims
c. Completion of Claim Records and Median Cost Calculations
d. Calculation of Single Procedure APC Criteria-Based Median
Costs
(1) Device-Dependent APCs
(2) Blood and Blood Products
(3) Single Allergy Tests
(4) Echocardiography Services
(5) Nuclear Medicine Services
(6) Hyperbaric Oxygen Therapy
(7) Payment for Ancillary Outpatient Services When Patient
Expires (CA Modifier)
e. Calculation of Composite APC Criteria-Based Median Costs
(1) Extended Assessment and Management Composite APCs (APCs 8002
and 8003)
(2) Low Dose Rate (LDR) Prostate Brachytherapy Composite APC
(APC 8001)
(3) Cardiac Electrophysiologic Evaluation and Ablation Composite
APC (APC 8000)
(4) Mental Health Services Composite APC (APC 0034)
(5) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006,
8007, and 8008)
3. Calculation of OPPS Scaled Payment Weights
4. Changes to Packaged Services
a. Background
b. Packaging Issues
(1) Packaged Services Addressed by the February 2009 APC Panel
Recommendations
(2) Packaged Services Addressed by the August 2009 APC Panel
Recommendations
(3) Other Service-Specific Packaging Issues
B. Conversion Factor Update
C. Wage Index Changes
D. Statewide Average Default CCRs
E. OPPS Payment to Certain Rural and Other Hospitals
1. Hold Harmless Transitional Payment Changes Made by Public Law
110-275 (MIPPA)
2. Adjustment for Rural SCHs Implemented in CY 2006 Related to
Pub. L. 108-173 (MMA)
F. Hospital Outpatient Outlier Payments
1. Background
2. Outlier Calculation
3. Final Outlier Calculation
4. Outlier Reconciliation
G. Calculation of an Adjusted Medicare Payment From the National
Unadjusted Medicare Payment
H. Beneficiary Copayments
1. Background
2. Copayment Policy
3. Calculation of an Adjusted Copayment Amount for an APC Group
III. OPPS Ambulatory Payment Classification (APC) Group Policies
A. OPPS Treatment of New CPT and Level II HCPCS Codes
1. Treatment of New Level II HCPCS Codes and Category I CPT
Vaccine Codes and Category III CPT Codes
2. Process for New Level II HCPCS Codes and Category I and
Category III CPT Codes for Which We Are Soliciting Public Comments
on the CY 2010 OPPS/ASC Final Rule With Comment Period
B. OPPS Changes--Variations Within APCs
1. Background
2. Application of the 2 Times Rule
3. Exceptions to the 2 Times Rule
C. New Technology APCs
1. Background
2. Movement of Procedures From New Technology APCs to Clinical
APCs
D. OPPS APC-Specific Policies
1. Cardiovascular Services
a. Cardiovascular Telemetry (APC 0209)
b. Implantable Loop Recorder Monitoring (APC 0689)
c. Transluminal Balloon Angioplasty (APC 0279)
2. Gastrointestinal Services
a. Change of Gastrostomy Tube (APC 0676)
b. Laparoscopic Liver Cryoablation (APC 0131)
c. Cholangioscopy (APC 0151)
d. Laparoscopic Hernia Repair (APC 0131)
3. Genitourinary Services
a. Percutaneous Renal Cryoablation (APC 0423)
b. Hemodialysis (APC 0170)
c. Radiofrequency Remodeling of Bladder Neck (APC 0165)
d. Change of Bladder Tube (APC 0121)
4. Nervous System Services
a. Pain-Related Procedures (APCs 0203, 0204, 0206, 0207, 0221,
0224, and 0388)
b. Magnetoencephalography (APCs 0065 and 0067)
5. Ocular Services
a. Insertion of Anterior Segment Aqueous Drainage Device (APC
0234)
b. Backbench Preparation of Corneal Allograft
6. Orthopedic and Musculoskeletal Services
a. Arthroscopic Procedures (APCs 0041 and 0042)
b. Knee Arthroscopy (APCs 0041 and 0042)
c. Shoulder Arthroscopy (APC 0042)
d. Fasciotomy Procedures (APC 0049)
e. Fibula Repair (APC 0062)
f. Forearm Orthopedic Procedures (APCs 0050, 0051, and 0052)
g. Low Energy Extracorporeal Shock Wave Therapy (Low Energy
ESWT)
h. Insertion of Posterior Spinous Process Distraction Device
(APC 0052)
7. Radiation Therapy Services
a. Proton Beam Therapy (APCs 0664 and 0667)
b. Stereotactic Radiosurgery (SRS) Treatment Delivery Services
(APCs 0065, 0066, 0067, and 0127)
c. Clinical Brachytherapy (APCs 0312 and 0651)
8. Other Services
a. Low Frequency, Non-Contact, Non-Thermal Ultrasound (APC 0013)
b. Skin Repair (APCs 0134 and 0135)
c. Group Psychotherapy (APC 0325)
d. Portable X-Ray Services
e. Home Sleep Study Tests (APC 0213)
IV. OPPS Payment for Devices
A. Pass-Through Payments for Devices
1. Expiration of Transitional Pass-Through Payments for Certain
Devices
2. Provisions for Reducing Transitional Pass-Through Payments To
Offset Costs Packaged Into APC Groups
a. Background
b. Final Policy
B. Adjustment to OPPS Payment for No Cost/Full Credit and
Partial Credit Devices
1. Background
2. APCs and Devices Subject to the Adjustment Policy
V. OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
A. OPPS Transitional Pass-Through Payment for Additional Costs
of Drugs, Biologicals, and Radiopharmaceuticals
1. Background
2. Drugs and Biologicals With Expiring Pass-Through Status in CY
2009
3. Drugs, Biologicals, and Radiopharmaceuticals With New or
Continuing Pass-Through Status in CY 2010
4. Pass-Through Payments for Implantable Biologicals
a. Background
b. Policy for CY 2010
5. Definition of Pass-Through Payment Eligibility Period for New
Drugs and Biologicals
6. Provision for Reducing Transitional Pass-Through Payments for
Diagnostic
[[Page 60319]]
Radiopharmaceuticals and Contrast Agents To Offset Costs Packaged
Into APC Groups
a. Background
b. Payment Offset Policy for Diagnostic Radiopharmaceuticals
c. Payment Offset Policy for Contrast Agents
B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
Without Pass-Through Status
1. Background
2. Criteria for Packaging Payment for Drugs, Biologicals, and
Radiopharmaceuticals
a. Background
b. Cost Threshold for Packaging of Payment for HCPCS Codes That
Describe Certain Drugs, Nonimplantable Biologicals, and Therapeutic
Radiopharmaceuticals (``Threshold-Packaged Drugs'')
c. Packaging Determination for HCPCS Codes That Describe the
Same Drug or Biological But Different Dosages
d. Packaging of Payment for Diagnostic Radiopharmaceuticals,
Contrast Agents, and Implantable Biologicals (``Policy-Packaged''
Drugs and Devices)
3. Payment for Drugs and Biologicals Without Pass-Through Status
That Are Not Packaged
a. Payment for Specified Covered Outpatient Drugs (SCODs) and
Other Separately Payable and Packaged Drugs and Biologicals
b. Payment Policy
4. Payment for Blood Clotting Factors
5. Payment for Therapeutic Radiopharmaceuticals
a. Background
b. Payment Policy
6. Payment for Nonpass-Through Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS Codes, But Without OPPS Hospital
Claims Data
VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs,
Biologicals, Radiopharmaceuticals, and Devices
A. Background
B. Estimate of Pass-Through Spending
VII. OPPS Payment for Brachytherapy Sources
A. Background
B. OPPS Payment Policy
VIII. OPPS Payment for Drug Administration Services
A. Background
B. Coding and Payment for Drug Administration Services
IX. OPPS Payment for Hospital Outpatient Visits
A. Background
B. Policies for Hospital Outpatient Visits
1. Clinic Visits: New and Established Patient Visits
2. Emergency Department Visits
3. Visit Reporting Guidelines
X. Payment for Partial Hospitalization Services
A. Background
B. PHP APC Update for CY 2010
C. Separate Threshold for Outlier Payments to CMHCs
XI. Procedures That Will Be Paid Only as Inpatient Procedures
A. Background
B. Changes to the Inpatient List
XII. OPPS Nonrecurring Technical and Policy Changes and
Clarifications
A. Kidney Disease Education Services
1. Background
2. Payment for Services Furnished by Providers of Services
Located in a Rural Area
B. Pulmonary Rehabilitation, Cardiac Rehabilitation, and
Intensive Cardiac Rehabilitation Services
1. Legislative Changes
2. Payment for Services Furnished to Hospital Outpatients in a
Pulmonary Rehabilitation Program
3. Payment for Services Furnished to Hospital Outpatients Under
a Cardiac Rehabilitation or an Intensive Cardiac Rehabilitation
Program
4. Physician Supervision for Pulmonary Rehabilitation, Cardiac
Rehabilitation, and Intensive Cardiac Rehabilitation Services
C. Stem Cell Transplants
D. Physician Supervision
1. Background
2. Issues Regarding the Physician Supervision of Hospital
Outpatient Services Raised by Hospitals and Other Stakeholders
3. Policies for Direct Supervision of Hospital and CAH
Outpatient Therapeutic Services
4. Policies for Direct Supervision of Hospital and CAH
Outpatient Diagnostic Services
5. Summary of CY 2010 Physician Supervision Final Policies
E. Direct Referral for Observation Services
XIII. OPPS Payment Status and Comment Indicators
A. OPPS Payment Status Indicator Definitions
1. Payment Status Indicators To Designate Services That Are Paid
Under the OPPS
2. Payment Status Indicators To Designate Services That Are Paid
Under a Payment System Other Than the OPPS
3. Payment Status Indicators To Designate Services That Are Not
Recognized Under the OPPS But That May Be Recognized by Other
Institutional Providers
4. Payment Status Indicators To Designate Services That Are Not
Payable by Medicare on Outpatient Claims
B. Comment Indicator Definitions
XIV. OPPS Policy and Payment Recommendations
A. MedPAC Recommendations
B. APC Panel Recommendations
C. OIG Recommendations
XV. Updates to the Ambulatory Surgical Center (ASC) Payment System
A. Background
1. Legislative Authority for the ASC Payment System
2. Prior Rulemaking
3. Policies Governing Changes to the Lists of Codes and Payment
Rates for ASC Covered Surgical Procedures and Covered Ancillary
Services
B. Treatment of New Codes
1. Treatment of New Category I and III CPT Codes and Level II
HCPCS Codes
2. Treatment of New Level II HCPCS Codes Implemented in April
and July 2009
C. Update to the List of ASC Covered Surgical Procedures and
Covered Ancillary Services
1. Covered Surgical Procedures
a. Additions to the List of ASC Covered Surgical Procedures
b. Covered Surgical Procedures Designated as Office-Based
(1) Background
(2) Changes to Covered Surgical Procedures Designated as Office-
Based for CY 2010
c. ASC Covered Surgical Procedures Designated as Device-
Intensive
(1) Background
(2) Changes to List of Covered Surgical Procedures Designated as
Device-Intensive for CY 2010
d. ASC Treatment of Surgical Procedures Removed From the OPPS
Inpatient List for CY 2010
2. Covered Ancillary Services
D. ASC Payment for Covered Surgical Procedures and Covered
Ancillary Services
1. Payment for Covered Surgical Procedures
a. Background
b. Update to ASC Covered Surgical Procedure Payment Rates for CY
2010
c. Adjustment to ASC Payments for No Cost/Full Credit and
Partial Credit Devices
2. Payment for Covered Ancillary Services
a. Background
b. Payment for Covered Ancillary Services for CY 2010
E. New Technology Intraocular Lenses (NTIOLs)
1. Background
2. NTIOL Application Process for Payment Adjustment
3. Classes of NTIOLs Approved and New Requests for Payment
Adjustment
a. Background
b. Request To Establish New NTIOL Class for CY 2010 and Deadline
for Public Comment
4. Payment Adjustment
5. ASC Payment for Insertion of IOLs
6. Announcement of CY 2010 Deadline for Submitting Requests for
CMS Review of Appropriateness of ASC Payment for Insertion of an
NTIOL Following Cataract Surgery
F. ASC Payment and Comment Indicators
1. Background
2. ASC Payment and Comment Indicators
G. ASC Policy and Payment Recommendations
H. Revision to Terms of Agreements for Hospital-Operated ASCs
1. Background
2. Changes to the Terms of Agreements for ASCs Operated by
Hospitals
I. Calculation of the ASC Conversion Factor and ASC Payment
Rates
1. Background
2. Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2010 and
Future Years
b. Updating the ASC Conversion Factor
3. Display of ASC Payment Rates
XVI. Reporting Quality Data for Annual Payment Rate Updates
A. Background
1. Overview
[[Page 60320]]
2. Hospital Outpatient Quality Data Reporting Under Section
109(a) of Public Law 109-432
3. Reporting ASC Quality Data for Annual Payment Update
4. HOPQDRP Quality Measures for the CY 2009 Payment
Determination
5. HOP QDRP Quality Measures for the CY 2010 Payment
Determination
a. Background
b. Maintenance of Technical Specifications for Quality Measures
c. Publication of HOP QDRP Data
B. Quality Measures for the CY 2011 Payment Determination
1. Considerations in Expanding and Updating Quality Measures
Under the HOP QDRP Program
2. Retirement of HOP QDRP Quality Measures
3. HOP QDRP Quality Measures for the CY 2011 Payment
Determination
C. Possible Quality Measures Under Consideration for CY 2012 and
Subsequent Years
D. Payment Reduction for Hospitals That Fail To Meet the HOP
QDRP Requirements for the CY 2010 Payment Update
1. Background
2. Reporting Ratio Application and Associated Adjustment Policy
for CY 2010
E. Requirements for HOPD Quality Data Reporting for CY 2011 and
Subsequent Years
1. Administrative Requirements
2. Data Collection and Submission Requirements
a. General Data Collection and Submission Requirements
b. Extraordinary Circumstance Extension or Waiver for Reporting
Quality Data
3. HOP QDRP Validation Requirements
a. Data Validation Requirements for CY 2011
b. Data Validation Approach for CY 2012 and Subsequent Years
c. Additional Data Validation Conditions Under Consideration for
CY 2012 and Subsequent Years
F. 2010 Publication of HOP QDRP Data
G. HOP QDRP Reconsideration and Appeals Procedures
H. Reporting of ASC Quality Data
I. Electronic Health Records
XVII. Healthcare-Associated Conditions
A. Background
1. Preventable Medical Errors and Hospital-Acquired Conditions
(HACs) Under the IPPS
2. Expanding the Principles of the IPPS HACs Payment Provision
to the OPPS
3. Discussion in the CY 2009 OPPS/ASC Final Rule With Comment
Period
B. Public Comments and Recommendations on Issues Regarding
Healthcare-Associated Conditions From the Joint IPPS/OPPS Listening
Session
C. CY 2010 Approach to Healthcare-Associated Conditions Under
the OPPS
XVIII. Files Available to the Public via the Internet
A. Information in Addenda Related to the CY 2010 Hospital OPPS
B. Information in Addenda Related to the CY 2010 ASC Payment
System
XIX. Collection of Information Requirements
A. Legislative Requirements for Solicitation of Comments
B. Associated Information Collections Not Specified in
Regulatory Text
1. Hospital Outpatient Quality Data Reporting Program (HOP QDRP)
2. HOP QDRP Quality Measures for the CY 2010 and CY 2011 Payment
Determinations
3. HOP QDRP Validation Requirements
4. HOP QDRP Reconsideration and Appeals Procedures
5. Additional Topics
XX. Response to Comments
XXI. Regulatory Impact Analysis
A. Overall Impact
1. Executive Order 12866
2. Regulatory Flexibility Act (RFA)
3. Small Rural Hospitals
4. Unfunded Mandates
5. Federalism
B. Effects of OPPS Changes in This Final Rule With Comment
Period
1. Alternatives Considered
2. Limitations of Our Analysis
3. Estimated Effects of This Final Rule With Comment Period on
Hospitals
4. Estimated Effects of This Final Rule With Comment Period on
CMHCs
5. Estimated Effects of This Final Rule With Comment Period on
Beneficiaries
6. Conclusion
7. Accounting Statement
C. Effects of ASC Payment System Changes in This Final Rule With
Comment Period
1. Alternatives Considered
2. Limitations of Our Analysis
3. Estimated Effects of This Final Rule With Comment Period on
Payments to ASCs
4. Estimated Effects of This Final Rule With Comment Period on
Beneficiaries
5. Conclusion
6. Accounting Statement
D. Effects of Requirements for Reporting of Quality Data for
Annual Hospital Payment Update
E. Executive Order 12866
Regulation Text
Addenda
Addendum A--Final OPPS APCs for CY 2010
Addendum AA--Final ASC Covered Surgical Procedures for CY 2010
(Including Surgical Procedures for Which Payment Is Packaged)
Addendum B--Final OPPS Payment by HCPCS Code for CY 2010
Addendum BB--Final ASC Covered Ancillary Services Integral to
Covered Surgical Procedures for CY 2010 (Including Ancillary
Services for Which Payment Is Packaged)
Addendum D1--Final OPPS Payment Status Indicators for CY 2010
Addendum DD1--Final ASC Payment Indicators for CY 2010
Addendum D2--Final OPPS Comment Indicators for CY 2010
Addendum DD2--Final ASC Comment Indicators for CY 2010
Addendum E-- HCPCS Codes That Are Paid as Inpatient Procedures for
CY 2010
Addendum L-CY 2010 OPPS Out-Migration Adjustment
Addendum M--HCPCS Codes for Assignment to Composite APCs for CY 2010
I. Background and Summary of the CY 2010 OPPS/ASC Final Rule With
Comment Period
A. Legislative and Regulatory Authority for the Hospital Outpatient
Prospective Payment System
When Title XVIII of the Social Security Act (the Act) was enacted,
Medicare payment for hospital outpatient services was based on
hospital-specific costs. In an effort to ensure that Medicare and its
beneficiaries pay appropriately for services and to encourage more
efficient delivery of care, the Congress mandated replacement of the
reasonable cost-based payment methodology with a prospective payment
system (PPS). The Balanced Budget Act (BBA) of 1997 (Pub. L. 105-33)
added section 1833(t) to the Act authorizing implementation of a PPS
for hospital outpatient services. The OPPS was first implemented for
services furnished on or after August 1, 2000. Implementing regulations
for the OPPS are located at 42 CFR part 419.
The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act
(BBRA) of 1999 (Pub. L. 106-113) made major changes in the hospital
outpatient prospective payment system (OPPS). The following Acts made
additional changes to the OPPS: the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act (BIPA) of 2000 (Pub. L. 106-
554); the Medicare Prescription Drug, Improvement, and Modernization
Act (MMA) of 2003 (Pub. L. 108-173); the Deficit Reduction Act (DRA) of
2005 (Pub. L. 109-171), enacted on February 8, 2006; the Medicare
Improvements and Extension Act under Division B of Title I of the Tax
Relief and Health Care Act (MIEA-TRHCA) of 2006 (Pub. L. 109-432),
enacted on December 20, 2006; the Medicare, Medicaid, and SCHIP
Extension Act (MMSEA) of 2007 (Pub. L. 110-173), enacted on December
29, 2007; and the Medicare Improvements for Patients and Providers Act
(MIPPA) of 2008 (Pub. L. 110-275), enacted on July 15, 2008.
Under the OPPS, we pay for hospital outpatient services on a rate-
per-service basis that varies according to the ambulatory payment
classification (APC) group to which the service is assigned. We use the
Healthcare Common Procedure Coding System (HCPCS) codes (which include
certain Current Procedural Terminology (CPT) codes) and descriptors to
identify and
[[Page 60321]]
group the services within each APC group. The OPPS includes payment for
most hospital outpatient services, except those identified in section
I.B. of this final rule with comment period. Section 1833(t)(1)(B)(ii)
of the Act provides for payment under the OPPS for hospital outpatient
services designated by the Secretary (which includes partial
hospitalization services furnished by community mental health centers
(CMHCs)) and hospital outpatient services that are furnished to
inpatients who have exhausted their Part A benefits, or who are
otherwise not in a covered Part A stay. Section 611 of Public Law 108-
173 added provisions for Medicare coverage for an initial preventive
physical examination, subject to the applicable deductible and
coinsurance, as an outpatient department service, payable under the
OPPS.
The OPPS rate is an unadjusted national payment amount that
includes the Medicare payment and the beneficiary copayment. This rate
is divided into a labor-related amount and a nonlabor-related amount.
The labor-related amount is adjusted for area wage differences using
the hospital inpatient wage index value for the locality in which the
hospital or CMHC is located.
All services and items within an APC group are comparable
clinically and with respect to resource use (section 1833(t)(2)(B) of
the Act). In accordance with section 1833(t)(2) of the Act, subject to
certain exceptions, services and items within an APC group cannot be
considered comparable with respect to the use of resources if the
highest median (or mean cost, if elected by the Secretary) for an item
or service in the APC group is more than 2 times greater than the
lowest median cost for an item or service within the same APC group
(referred to as the ``2 times rule''). In implementing this provision,
we generally use the median cost of the item or service assigned to an
APC group.
For new technology items and services, special payments under the
OPPS may be made in one of two ways. Section 1833(t)(6) of the Act
provides for temporary additional payments, which we refer to as
``transitional pass-through payments,'' for at least 2 but not more
than 3 years for certain drugs, biological agents, brachytherapy
devices used for the treatment of cancer, and categories of other
medical devices. For new technology services that are not eligible for
transitional pass-through payments, and for which we lack sufficient
data to appropriately assign them to a clinical APC group, we have
established special APC groups based on costs, which we refer to as New
Technology APCs. These New Technology APCs are designated by cost bands
which allow us to provide appropriate and consistent payment for
designated new procedures that are not yet reflected in our claims
data. Similar to pass-through payments, an assignment to a New
Technology APC is temporary; that is, we retain a service within a New
Technology APC until we acquire sufficient data to assign it to a
clinically appropriate APC group.
B. Excluded OPPS Services and Hospitals
Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to
designate the hospital outpatient services that are paid under the
OPPS. While most hospital outpatient services are payable under the
OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for
ambulance, physical and occupational therapy, and speech-language
pathology services, for which payment is made under a fee schedule.
Section 614 of Public Law 108-173 amended section 1833(t)(1)(B)(iv) of
the Act to exclude payment for screening and diagnostic mammography
services from the OPPS. The Secretary exercised the authority granted
under the statute to also exclude from the OPPS those services that are
paid under fee schedules or other payment systems. Such excluded
services include, for example, the professional services of physicians
and nonphysician practitioners paid under the Medicare Physician Fee
Schedule (MPFS); laboratory services paid under the clinical diagnostic
laboratory fee schedule (CLFS); services for beneficiaries with end-
stage renal disease (ESRD) that are paid under the ESRD composite rate;
and services and procedures that require an inpatient stay that are
paid under the hospital inpatient prospective payment system (IPPS). We
set forth the services that are excluded from payment under the OPPS in
Sec. 419.22 of the regulations.
Under Sec. 419.20(b) of the regulations, we specify the types of
hospitals and entities that are excluded from payment under the OPPS.
These excluded entities include: Maryland hospitals, but only for
services that are paid under a cost containment waiver in accordance
with section 1814(b)(3) of the Act; critical access hospitals (CAHs);
hospitals located outside of the 50 States, the District of Columbia,
and Puerto Rico; and Indian Health Service hospitals.
C. Prior Rulemaking
On April 7, 2000, we published in the Federal Register a final rule
with comment period (65 FR 18434) to implement a prospective payment
system for hospital outpatient services. The hospital OPPS was first
implemented for services furnished on or after August 1, 2000. Section
1833(t)(9) of the Act requires the Secretary to review certain
components of the OPPS, not less often than annually, and to revise the
groups, relative payment weights, and other adjustments that take into
account changes in medical practices, changes in technologies, and the
addition of new services, new cost data, and other relevant information
and factors.
Since initially implementing the OPPS, we have published final
rules in the Federal Register annually to implement statutory
requirements and changes arising from our continuing experience with
this system. These rules can be viewed on the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/. We published in the Federal
Register on November 18, 2008 the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68502). In that final rule with comment period,
we revised the OPPS to update the payment weights and conversion factor
for services payable under the CY 2009 OPPS on the basis of claims data
from January 1, 2007, through December 31, 2007, and to implement
certain provisions of Public Law 110-173 and Public Law 110-275. In
addition, we responded to public comments received on the provisions of
the November 27, 2007 final rule with comment period (72 FR 66580)
pertaining to the APC assignment of HCPCS codes identified in Addendum
B to that rule with the new interim (``NI'') comment indicator, and
public comments received on the July 18, 2008 OPPS/ASC proposed rule
for CY 2009 (73 FR 41416).
Subsequent to publication of the CY 2009 OPPS/ASC final rule with
comment period, we published in the Federal Register on January 26,
2009, a correction notice (74 FR 4343 through 4344) to correct certain
technical errors in the CY 2009 OPPS/ASC final rule with comment
period.
On July 20, 2009, we issued in the Federal Register (74 FR 35232) a
proposed rule for the CY 2010 OPPS/ASC payment system to implement
statutory requirements and changes arising from our continuing
experience with both systems.
[[Page 60322]]
D. Advisory Panel on Ambulatory Payment Classification (APC) Groups
1. Authority of the APC Panel
Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of
Public Law 106-113, and redesignated by section 202(a)(2) of Public Law
106-113, requires that we consult with an outside panel of experts to
review the clinical integrity of the payment groups and their weights
under the OPPS. The Act further specifies that the panel will act in an
advisory capacity. The Advisory Panel on Ambulatory Payment
Classification (APC) Groups (the APC Panel), discussed under section
I.D.2. of this final rule with comment period, fulfills these
requirements. The APC Panel is not restricted to using data compiled by
CMS, and it may use data collected or developed by organizations
outside the Department in conducting its review.
2. Establishment of the APC Panel
On November 21, 2000, the Secretary signed the initial charter
establishing the APC Panel. This expert panel, which may be composed of
up to 15 representatives of providers (currently employed full-time,
not as consultants, in their respective areas of expertise) subject to
the OPPS, reviews clinical data and advises CMS about the clinical
integrity of the APC groups and their payment weights. The APC Panel is
technical in nature, and it is governed by the provisions of the
Federal Advisory Committee Act (FACA). Since its initial chartering,
the Secretary has renewed the APC Panel's charter four times: on
November 1, 2002; on November 1, 2004; on November 21, 2006; and on
November 2, 2008. The current charter specifies, among other
requirements, that: the APC Panel continues to be technical in nature;
is governed by the provisions of the FACA; may convene up to three
meetings per year; has a Designated Federal Officer (DFO); and is
chaired by a Federal official designated by the Secretary.
The current APC Panel membership and other information pertaining
to the APC Panel, including its charter, Federal Register notices,
membership, meeting dates, agenda topics, and meeting reports, can be
viewed on the CMS Web site at: http://www.cms.hhs.gov/FACA/05_AdvisoryPanelonAmbulatoryPaymentClassificationGroups.asp#TopOfPage.
3. APC Panel Meetings and Organizational Structure
The APC Panel first met on February 27 through March 1, 2001. Since
the initial meeting, the APC Panel has held 16 meetings, with the last
meeting taking place on August 5 and 6, 2009. Prior to each meeting, we
publish a notice in the Federal Register to announce the meeting and,
when necessary, to solicit nominations for APC Panel membership and to
announce new members.
The APC Panel has established an operational structure that, in
part, includes the use of three subcommittees to facilitate its
required APC review process. The three current subcommittees are the
Data Subcommittee, the Visits and Observation Subcommittee, and the
Packaging Subcommittee. The Data Subcommittee is responsible for
studying the data issues confronting the APC Panel and for recommending
options for resolving them. The Visits and Observation Subcommittee
reviews and makes recommendations to the APC Panel on all technical
issues pertaining to observation services and hospital outpatient
visits paid under the OPPS (for example, APC configurations and APC
payment weights). The Packaging Subcommittee studies and makes
recommendations on issues pertaining to services that are not
separately payable under the OPPS, but whose payments are bundled or
packaged into APC payments. Each of these subcommittees was established
by a majority vote from the full APC Panel during a scheduled APC Panel
meeting, and their continuation as subcommittees was last approved at
the August 2009 APC Panel meeting. At that meeting, the APC Panel
recommended that the work of these three subcommittees continue, and we
accept those recommendations of the APC Panel. All subcommittee
recommendations are discussed and voted upon by the full APC Panel.
Discussions of the other recommendations made by the APC Panel at
the August 2009 meeting are included in the sections of this final rule
with comment period that are specific to each recommendation. For
discussions of earlier APC Panel meetings and recommendations, we refer
readers to previously published hospital OPPS/ASC proposed and final
rules, the CMS Web site mentioned earlier in this section, and the FACA
database at: http://fido.gov/facadatabase/public.asp.
Comment: Several commenters requested that CMS include ASC
representation on the APC Panel. Because the revised ASC payment system
is based upon the same APC groups and relative payment weights as the
OPPS, the commenters believed that ASC representation on the APC Panel
would ensure input from representatives of all care settings that
provide surgical services whose payment groups and payment weights are
affected by the OPPS. Further, the commenters urged CMS to revise the
APC Panel's charter to reflect the current alignment of the OPPS and
the revised ASC payment system by including representation from the ASC
industry on the APC Panel, as the commenters believed is permitted by
the statute.
Response: We acknowledge that the revised ASC payment system
provides Medicare payments to ASCs for surgical procedures that are
based, in most cases, on the relative payment weights of the OPPS.
However, CMS is statutorily required to have an appropriate selection
of representatives of ``providers'' as members of the APC Panel. The
current APC Panel charter requires that ``Each Panel member must be
employed full-time by a hospital, hospital system, or other Medicare
provider subject to payment under the OPPS,'' which does not include
ASCs because ASCs are not providers. We refer readers to section
1833(t)(9)(A) of the Act and Sec. 400.202 of our regulations for
specific requirements and definitions. ASCs are suppliers, not
providers. The charter must comply with the statute, which does not
include representatives of suppliers on the APC Panel. Therefore,
although we understand the concerns of the commenters regarding ASC
input on the APC Panel now that the ASC payment system is based on the
OPPS relative payment weights, we cannot revise the charter to include
ASC representation.
E. Background and Summary of the CY 2010 OPPS/ASC Proposed Rule
A proposed rule appeared in the July 20, 2009 Federal Register (74
FR 35232) that set forth proposed changes to the Medicare hospital OPPS
for CY 2010 to implement statutory requirements and changes arising
from our continuing experience with the system. In addition, we set
forth proposed changes to the revised Medicare ASC payment system for
CY 2010, including updated payment weights, covered surgical
procedures, and covered ancillary items and services based on the
proposed OPPS update. Finally, we set forth proposed quality measures
for the Hospital Outpatient Quality Data Reporting Program (HOP QDRP)
for reporting quality data for annual payment rate updates for CY 2011
and subsequent calendar years, the requirements for data collection and
submission for the annual payment
[[Page 60323]]
update, and a proposed reduction in the OPPS payment for hospitals that
fail to meet the HOP QDRP requirements for the CY 2010 payment update,
in accordance with the statutory requirement. The following is a
summary of the major proposed changes included in the CY 2010 OPPS/ASC
proposed rule:
1. Updates Affecting OPPS Payments
In section II. of the proposed rule, we set forth--
The methodology used to recalibrate the APC relative
payment weights.
The proposed changes to packaged services.
The proposed update to the conversion factor used to
determine payment rates under the OPPS. In this section, we set forth
proposed changes in the amounts and factors for calculating the full
annual update increase to the conversion factor.
The proposed retention of our current policy to use the
IPPS wage indices to adjust, for geographic wage differences, the
portion of the OPPS payment rate and the copayment standardized amount
attributable to labor-related cost.
The proposed update of statewide average default CCRs.
The proposed application of hold harmless transitional
outpatient payments (TOPs) for certain small rural hospitals.
The proposed payment adjustment for rural SCHs.
The proposed calculation of the hospital outpatient
outlier payment.
The calculation of the proposed national unadjusted
Medicare OPPS payment.
The proposed beneficiary copayments for OPPS services.
2. OPPS Ambulatory Payment Classification (APC) Group Policies
In section III. of the proposed rule, we discussed--
The proposed additions of new HCPCS codes to APCs.
The proposed establishment of a number of new APCs.
Our analyses of Medicare claims data and certain
recommendations of the APC Panel.
The application of the 2 times rule and proposed
exceptions to it.
The proposed changes to specific APCs.
The proposed movement of procedures from New Technology
APCs to clinical APCs.
3. OPPS Payment for Devices
In section IV. of the proposed rule, we discussed the proposed
pass-through payment for specific categories of devices and the
proposed adjustment for devices furnished at no cost or with partial or
full credit.
4. OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
In section V. of the proposed rule, we discussed the proposed CY
2010 OPPS payment for drugs, biologicals, and radiopharmaceuticals,
including the proposed payment for drugs, biologicals, and
radiopharmaceuticals with and without pass-through status.
5. Estimate of OPPS Transitional Pass-Through Spending for Drugs,
Biologicals, Radiopharmaceuticals, and Devices
In section VI. of the proposed rule, we discussed the estimate of
CY 2010 OPPS transitional pass-through spending for drugs, biologicals,
and devices.
6. OPPS Payment for Brachytherapy Sources
In section VII. of the proposed rule, we discussed payment for
brachytherapy sources.
7. OPPS Payment for Drug Administration Services
In section VIII. of the proposed rule, we set forth our proposed
policy concerning coding and payment for drug administration services.
8. OPPS Payment for Hospital Outpatient Visits
In section IX. of the proposed rule, we set forth our proposed
policies for the payment of clinic and emergency department visits and
critical care services based on claims data.
9. Payment for Partial Hospitalization Services
In section X. of the proposed rule, we set forth the proposed
payment for partial hospitalization services, including the proposed
separate threshold for outlier payments for CMHCs.
10. Procedures That Will Be Paid Only as Inpatient Procedures
In section XI. of the proposed rule, we discussed the procedures
that we proposed to remove from the inpatient list and assign to APCs
for payment under the OPPS.
11. OPPS Nonrecurring Technical and Policy Changes and Clarifications
In section XII. of the proposed rule, we discussed nonrecurring
technical issues, proposed policy changes, and provided policy
clarifications.
12. OPPS Payment Status and Comment Indicators
In section XIII. of the proposed rule, we discussed our proposed
changes to the definitions of status indicators assigned to APCs and
presented our proposed comment indicators for the final rule with
comment period.
13. OPPS Policy and Payment Recommendations
In section XIV. of the proposed rule, we addressed recommendations
made by the Medicare Payment Advisory Commission (MedPAC) in its March
2009 report to Congress, by the Office of Inspector General (OIG), and
by the APC Panel regarding the OPPS for CY 2010.
14. Updates to the Ambulatory Surgical Center (ASC) Payment System
In section XV. of the proposed rule, we discussed the proposed
updates of the revised ASC payment system and payment rates for CY
2010.
15. Reporting Quality Data for Annual Payment Rate Updates
In section XVI. of the proposed rule, we discussed the proposed
quality measures for reporting hospital outpatient (HOP) quality data
for the annual payment update factor for CY 2011 and subsequent
calendar years; set forth the requirements for data collection and
submission for the annual payment update; and discussed the reduction
in the OPPS payment for hospitals that fail to meet the HOP Quality
Data Reporting Program (QDRP) requirements for CY 2010.
16. Healthcare-Associated Conditions
In section XVII. of the proposed rule, we discussed public
responses to a December 2008 CMS public listening session addressing
the potential extension of the principle of Medicare not paying more
under the IPPS for the care of preventable hospital-acquired conditions
experienced by a Medicare beneficiary during a hospital inpatient stay
to medical care in other settings that are paid under other Medicare
payment systems, including the OPPS, for those healthcare-associated
conditions that occur or result from care in those other settings.
17. Regulatory Impact Analysis
In section XXI. of the proposed rule, we set forth an analysis of
the impact the proposed changes would have on affected entities and
beneficiaries.
[[Page 60324]]
F. Public Comments Received in Response to the CY 2010 OPPS/ASC
Proposed Rule
We received approximately 1,527 timely pieces of correspondence
containing multiple comments on the CY 2010 OPPS/ASC proposed rule. We
note that we received some public comments that were outside of the
scope of the CY 2010 OPPS/ASC proposed rule. These out-of-scope public
comments are not addressed in this final rule with comment period.
New (and substantially revised) CY 2010 HCPCS codes are designated
with comment indicator ``NI'' in Addenda B, AA, and BB of this final
rule with comment period to signify that their CY 2010 interim OPPS
and/or ASC treatment are open to public comment on this final rule with
comment period. Summaries of the public comments that are within the
scope of the CY 2010 proposals and our responses to those comments are
set forth in the various sections of this final rule with comment
period under the appropriate headings.
G. Public Comments Received in Response to the November 18, 2008 OPPS/
ASC Final Rule With Comment Period
We received approximately 41 timely pieces of correspondence on the
CY 2009 OPPS/ASC final rule with comment period, some of which
contained multiple comments on the interim APC assignments and/or
status indicators of HCPCS codes identified with comment indicator
``NI'' in Addendum B of that final rule with comment period. Summaries
of those public comments on topics open to comment in the CY 2009 OPPS/
ASC final rule with comment period and our responses to them are set
forth in the various sections of this final rule with comment period
under the appropriate headings.
II. Updates Affecting OPPS Payments
A. Recalibration of APC Relative Weights
1. Database Construction
a. Database Source and Methodology
Section 1833(t)(9)(A) of the Act requires that the Secretary review
and revise the relative payment weights for APCs at least annually. In
the April 7, 2000 OPPS final rule with comment period (65 FR 18482), we
explained in detail how we calculated the relative payment weights that
were implemented on August 1, 2000 for each APC group.
For CY 2010, we proposed to use the same basic methodology that we
described in the April 7, 2000 OPPS final rule with comment period to
recalibrate the APC relative payment weights for services furnished on
or after January 1, 2010, and before January 1, 2011 (CY 2010). That
is, we proposed to recalibrate the relative payment weights for each
APC based on claims and cost report data for hospital outpatient
department (HOPD) services. We proposed to use the most recent
available data to construct the database for calculating APC group
weights. Therefore, for the purpose of recalibrating the APC relative
payment weights for CY 2010, we used approximately 141 million final
action claims for hospital outpatient department services furnished on
or after January 1, 2008, and before January 1, 2009. (For exact counts
of claims used, we refer readers to the claims accounting narrative
under supporting documentation for this final rule with comment period
on the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/HORD/.)
Of the 141 million final action claims for services provided in
hospital outpatient settings used to calculate the CY 2010 OPPS payment
rates for this final rule with comment period, approximately 107
million claims were the type of bill potentially appropriate for use in
setting rates for OPPS services (but did not necessarily contain
services payable under the OPPS). Of the 107 million claims,
approximately 50 million claims were not for services paid under the
OPPS or were excluded as not appropriate for use (for example,
erroneous cost-to-charge ratios (CCRs) or no HCPCS codes reported on
the claim). From the remaining 58 million claims, we created
approximately 99 million single records, of which approximately 68
million were ``pseudo'' single or ``single session'' claims (created
from 26 million multiple procedure claims using the process we discuss
later in this section). Approximately 657,000 claims were trimmed out
on cost or units in excess of +/-3 standard deviations from the
geometric mean, yielding approximately 99 million single bills for
median setting. As described in section II.A.2. of this final rule with
comment period, our data development process is designed with the goal
of using appropriate cost information in setting the APC relative
weights. The bypass process is described in section II.A.1.b. of this
final rule with comment period. This section discusses how we develop
``pseudo'' single claims, with the intention of using more appropriate
data from the available claims. In some cases, the bypass process
allows us to use some portion of the submitted claim for cost
estimation purposes, while the remaining information on the claim
continues to be unusable. Consistent with the goal of using appropriate
information in our data development process, we only use claims (or
portions of each claim) that are appropriate for ratesetting purposes.
Ultimately, we were able to use for CY 2010 ratesetting some portion of
95 percent of the CY 2008 claims containing services payable under the
OPPS.
As proposed, the APC relative weights and payments for CY 2010 in
Addenda A and B to this final rule with comment period were calculated
using claims from CY 2008 that were processed before January 1, 2009
and continue to be based on the median hospital costs for services in
the APC groups. We selected claims for services paid under the OPPS and
matched these claims to the most recent cost report filed by the
individual hospitals represented in our claims data. We continue to
believe that it is appropriate to use the most current full calendar
year claims data and the most recently submitted cost reports to
calculate the median costs underpinning the APC relative payment
weights and the CY 2010 payment rates.
We did not receive any public comments on our proposal to base the
CY 2010 APC relative weights on the most currently available cost
reports and on claims for services furnished in CY 2008. Therefore, for
the reasons noted above in this section, we are finalizing our data
source for the recalibration of the CY 2010 APC relative payment
weights as proposed, without modification, as described in this section
of this final rule with comment period.
b. Use of Single and Multiple Procedure Claims
For CY 2010, in general, we proposed to continue to use single
procedure claims to set the medians on which the APC relative payment
weights would be based, with some exceptions as discussed below in this
section. We generally use single procedure claims to set the median
costs for APCs because we believe that the OPPS relative weights on
which payment rates are based should be derived from the costs of
furnishing one procedure and because, in many circumstances, we are
unable to ensure that packaged costs can be appropriately allocated
across multiple procedures performed on the same date of service.
We agree that, optimally, it is desirable to use the data from as
many claims as possible to recalibrate the APC relative payment
weights, including
[[Page 60325]]
those claims for multiple procedures. As we have for several years, we
continued to use date of service stratification and a list of codes to
be bypassed to convert multiple procedure claims to ``pseudo'' single
procedure claims. Through bypassing specified codes that we believe do
not have significant packaged costs, we are able to use more data from
multiple procedure claims. In many cases, this enables us to create
multiple ``pseudo'' single claims from claims that were submitted as
multiple procedure claims spanning multiple dates of service, or claims
that contained numerous separately paid procedures reported on the same
date on one claim. We refer to these newly created single procedure
claims as ``pseudo'' single claims. The history of our use of a bypass
list to generate ``pseudo'' single claims is well documented, most
recently in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68512 through 68519). In addition, for CY 2008, we increased packaging
and created the first composite APCs. This also increased the number of
bills that we were able to use for median calculation by enabling us to
use claims that contained multiple major procedures that previously
would not have been usable. Further, for CY 2009, we expanded the
composite APC model to one additional clinical area, multiple imaging
services (73 FR 68559 through 68569), which also increased the number
of bills we were able to use to calculate APC median costs. We refer
readers to section II.A.2.e. of this final rule with comment period for
discussion of the use of claims to establish median costs for composite
APCs.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35239 through 35241),
we proposed to continue to apply these processes to enable us to use as
much claims data as possible for ratesetting for the CY 2010 OPPS. This
process enabled us to create, for this final rule with comment period,
approximately 68 million ``pseudo'' single claims, including multiple
imaging composite ``single session'' bills (we refer readers to section
II.A.2.e.(5) of this final rule with comment period for further
discussion), to add to the approximately 32 million ``natural'' single
bills. For this final rule with comment period, ``pseudo'' single and
``single session'' procedure bills represent 68 percent of all single
bills used to calculate median costs.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35239 through 35241),
we proposed to bypass 438 HCPCS codes for CY 2010. Since the inception
of the bypass list, we have calculated the percent of ``natural''
single bills that contained packaging for each HCPCS code and the
amount of packaging on each ``natural'' single bill for each code. Each
year, we generally retain the codes on the previous year's bypass list
and use the update year's data (for CY 2010, data available for the
February 2009 APC Panel meeting from CY 2008 claims processed through
September 30, 2008 and CY 2007 claims data processed through June 30,
2008 used to model the final payment rates for CY 2009) to determine
whether it would be appropriate to propose to add additional codes to
the previous year's bypass list. For CY 2010, we proposed to continue
to bypass all of the HCPCS codes on the CY 2009 OPPS bypass list. We
also proposed to add to the bypass list for CY 2010 all HCPCS codes not
on the CY 2009 bypass list that, using both CY 2009 final rule and
February 2009 APC Panel data, met the same previously established
empirical criteria for the bypass list that are summarized below.
Because we must make some assumptions about packaging in the multiple
procedure claims in order to assess a HCPCS code for addition to the
bypass list, we assume that the representation of packaging on
``natural'' single claims for any given code is comparable to packaging
for that code in the multiple claims. The proposed criteria for the
bypass list were:
There are 100 or more ``natural'' single claims for the
code. This number of single claims ensures that observed outcomes are
sufficiently representative of packaging that might occur in the
multiple claims.
Five percent or fewer of the ``natural'' single claims for
the code have packaged costs on that single claim for the code. This
criterion results in limiting the amount of packaging being
redistributed to the separately payable procedures remaining on the
claim after the bypass code is removed and ensures that the costs
associated with the bypass code represent the cost of the bypassed
service.
The median cost of packaging observed in the ``natural''
single claims is equal to or less than $50. This criterion also limits
the amount of error in redistributed costs. Throughout the bypass
process, we do not know the dollar value of the packaged cost that
should be appropriately attributed to the other procedures on the
claim. Ensuring that redistributed costs associated with a bypass code
are small in amount and volume protects the validity of cost estimates
for low cost services billed with the bypassed service.
The code is not a code for an unlisted service.
In addition, we proposed to continue to include on the bypass list
HCPCS codes that CMS medical advisors believe have minimal associated
packaging based on their clinical assessment of the complete CY 2010
OPPS proposal. Some of these codes were identified by CMS medical
advisors and some were identified in prior years by commenters with
specialized knowledge of the packaging associated with specific
services, especially on a multiple procedure claim. We also proposed to
continue to include on the bypass list certain HCPCS codes in order to
purposefully direct the assignment of packaged costs to a companion
code where services always appear together and where there would
otherwise be few single claims available for ratesetting. For example,
we have previously discussed our reasoning for adding HCPCS code G0390
(Trauma response team associated with hospital critical care service)
and the CPT codes for additional hours of drug administration to the
bypass list (73 FR 68513 and 71 FR 68117 through 68118).
As a result of the multiple imaging composite APCs that we
established in CY 2009, we note that the program logic for creating
``pseudo'' singles from bypassed codes that are also members of
multiple imaging composite APCs changed. When creating the set of
``pseudo'' single claims, claims that contain ``overlap bypass codes,''
that is, those HCPCS codes that are both on the bypass list and are
members of the multiple imaging composite APCs, were identified first.
These HCPCS codes were then processed to create multiple imaging
composite ``single session'' bills, that is, claims containing HCPCS
codes from only one imaging family, thus suppressing the initial use of
these codes as bypass codes. However, these ``overlap bypass codes''
were retained on the bypass list because, at the end of the ``pseudo''
single processing logic, we reassessed the claims without suppression
of the ``overlap bypass codes'' under our longstanding ``pseudo''
single process to determine whether we could convert additional claims
to ``pseudo'' single claims. (We refer readers to section II.A.2.b. of
this final rule with comment period for further discussion of the
treatment of ``overlap bypass codes.'') This process also created
multiple imaging composite ``single session'' bills that could be used
for calculating composite APC median costs. ``Overlap bypass codes''
that would be members of the proposed multiple imaging composite APCs
were
[[Page 60326]]
identified by asterisks (*) in Table 1 of the CY 2010 OPPS/ASC proposed
rule (74 FR 35242 through 35252).
At the February 2009 APC Panel Meeting, the APC Panel recommended
that CMS place CPT code 76098 (Radiological examination, surgical
specimen) on the bypass list and reassign the code to APC 0260 (Level I
Plain Film Except Teeth) in response to a public presentation
requesting that CMS makes these changes. Although CPT code 76098 would
not be eligible for addition to the bypass list because the frequency
and magnitude of packaged costs in its ``natural'' single claims exceed
the empirical criteria, the presenter suggested that the ``natural''
single claims represented aberrant billing with inappropriate packaged
services and pointed out that the packaged services support the
surgical procedures that commonly are also reported on claims for CPT
code 76098. The presenter suggested that bypassing CPT code 76098 would
properly allocate packaged costs to surgical procedures on these
claims, and would increase the number of single claims available for
ratesetting for both CPT code 76098 and the associated surgical breast
procedures. The APC Panel indicated that the issues raised by the
presenter appeared to be consistent with clinical practice and
subsequently made the recommendation to bypass CPT code 76098 and
reassign the code to APC 0260 based on the code's revised cost.
Based on the APC Panel's specific recommendation for CPT code
76098, we studied the billing patterns for the code in the ``natural''
single and multiple major claims in the CY 2008 claims data available
for the February 2009 APC Panel. The presenter asserted that CPT code
76098 is commonly billed with surgical breast procedures and our claims
data from the multiple procedure claims confirm this observation.
However, as noted above, there are also a significant number of
``natural'' single bills in those data (1,303), and these ``natural''
single claims include costly packaged services, such as CPT code 19290
(Preoperative placement of needle localization wire, breast) and CPT
77032 code (Mammographic guidance for needle placement, breast (eg, for
wire localization or for injection), each lesion, radiological
supervision and interpretation). We have received anecdotal information
indicating that hospitals may place guidance wires prior to surgery in
the hospital's radiology department and then examine the surgical
specimen in the radiology department after its surgical removal. This
information, along with the number of observed ``natural'' single
claims, suggests that the packaged costs might appropriately be
associated with the radiological examination of the breast specimen.
Although bypassing CPT code 76098 would allow for the creation of more
``pseudo'' single claims for ratesetting, it would also require the
assumption that all packaging on the claim would be correctly assigned
to the remaining major procedure where it exists and that on
``natural'' single bills no packaging would be appropriately associated
with CPT code 76098. Given the number of ``natural'' single bills for
CPT code 76098 and the significant packaged costs on these claims, we
are not confident that placement of this code on the bypass list is
appropriate.
While we did not propose to place CPT code 76098 on the bypass
list, we wanted to continue to provide separate payment for this
procedure when appropriate. We believe that CPT code 76098 is generally
ancillary and supportive to surgical breast procedures. In CY 2008 we
established a group of conditionally packaged codes, called ``T-
packaged codes,'' whose payment is packaged when one or more separately
paid surgical procedures with status indicator ``T'' are provided
during a hospital encounter. In order to provide separate payment for
CPT code 76098 when not provided with a separately payable surgical
procedure and also to recognize its ancillary and supportive nature
when it accompanies separately payable procedures, we proposed to
conditionally package CPT code 76098 as a ``T-packaged code'' for CY
2010, identified with status indicator ``Q2'' in Addendum B to the CY
2010 OPPS/ASC proposed rule. As a ``T-packaged code,'' CPT code 76098
would receive separate payment except where it appears with a surgical
procedure, in which case its payment would be packaged. Designating CPT
76098 in this way allows the separate payment to appropriately account
for the packaged costs that appear on the code's ``natural'' single
bills, while also allowing us to use more multiple procedure claims
that include both a surgical procedure and CPT code 76098 to set the
payment rates for the related surgical procedures. The CPT code-
specific median cost of CPT code 76098 in the CY 2008 claims data
available for the February 2009 APC Panel meeting was approximately
$346, consistent with its CY 2009 assignment to APC 0317 (Level II
Miscellaneous Radiology Procedures), which had an observed APC median
cost in those data of approximately $339. In contrast, the median cost
of APC 0260, the APC reassignment recommended by the APC Panel, was
much lower in the APC Panel data, approximately $46. Therefore, we did
not accept the APC Panel's recommendation to reassign CPT code 76098.
Instead, we proposed to continue its assignment to APC 0317 for CY 2010
in those cases where CPT code 76098 is separately paid.
Comment: Several commenters requested that CMS add CPT code 76098
to the bypass list and reassign it to APC 0260. The commenters believed
that CPT 76098 is similar with respect to resource use to the other
codes assigned to APC 0260. The commenters also claimed that including
CPT code 76098 on the bypass list would appropriately make more claims
available for ratesetting purposes for the CPT code itself and the
surgical breast procedures that appear with CPT code 76098 in the
multiple major procedure claims. Another commenter supported the
proposal to not include CPT code 76098 on the CY 2010 bypass list.
Response: The hospital claims data show that there is significant
packaging associated with CPT code 76098. Therefore, we believe CPT
code 76098 is not appropriate for inclusion on the bypass list.
In examining the billing patterns for CPT 76098, we noted its
failure to meet the empirical criteria for inclusion on the bypass
list. The significant number of ``natural'' single claims suggests that
these claims are an accurate representation of hospital billing
practices in certain clinical situations. Further, we believe the
packaging on these claims is properly associated with the code.
Anecdotal information on the placement of wires prior to surgery
suggests that the packaging on the ``natural'' single claims reflects
appropriate billing in some clinical scenarios, such as when hospitals
place guidance wires prior to surgery in the hospital's radiology
department and then examine the surgical specimen in the radiology
department after its surgical removal. This example illustrates
appropriate billing on ``natural'' single claims for CPT code 76098
because the hospital has accurately reported all services that the
hospital provided to the patient on the claim. In this case, the
hospital did not provide the associated surgical breast procedure;
therefore, all packaging would be appropriately associated with CPT
code 76098, which is the separately payable service that the hospital
provided to the patient. This scenario contradicts the commenter's
belief that the significant packaging on the ``natural'' single claims
for CPT code
[[Page 60327]]
76098 would represent aberrant hospital billing. As a result, for the
CY 2010 proposed rule, we did not propose to add CPT code 76098 to the
bypass list. However, based on our examination of the claims data for
the proposed rule, we agreed that CPT 76098 is generally ancillary and
supportive to surgical breast procedures. In order to provide
appropriate separate payment for CPT code 76098 when the service is not
furnished with a separately payable surgical procedure, and also to
recognize its ancillary and supportive nature when it accompanies
separately payable procedures, we proposed to conditionally package CPT
code 76098 as a ``T-packaged code'' for CY 2010, identified with status
indicator ``Q2'' in Addendum B to the proposed rule. Designating CPT
code 76098 as a ``T-packaged code'' allows the separate payment to
appropriately account for the packaged costs that appear on the code's
``natural'' single bills, while also allowing us to use more multiple
procedure claims that include a surgical procedure and CPT code 76098
to set the payment rates for the related surgical procedures. In turn,
we are able to use more data from the multiple procedure claims with
CPT code 76098 to set payment rates for the surgical breast procedures
on those claims. We continue to believe that classifying CPT code 76098
as a conditionally packaged code with status indicator ``Q2'' is the
proper policy to both provide appropriate payment when the service is
billed by itself and appropriate payment for the associated surgical
breast procedures that it supports.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to assign status
indicator ``Q2'' to CPT code 76098. When the service is furnished with
a separately payable surgical procedure with status indicator ``T'' on
the same day, payment for CPT code 76098 is packaged. Otherwise,
payment for CPT code 76098 is made separately through APC 0317, which
has a final APC median cost of approximately $374. We are not adding
CPT code 76098 to the bypass list for CY 2010.
Comment: Many commenters supported the current methodology of
bypassing HCPCS codes and the goal of using more data from the multiple
major claims. A few commenters noted that some of the HCPCS codes on
the proposed CY 2010 bypass list do not meet the empirical criteria
described above and observed that many codes that meet the empirical
criteria were not included on the proposed bypass list. The commenters
highlighted findings from supporting data analysis to illustrate their
points. Several commenters also raised concerns about the transparency
of the bypass process. The commenters suggested that the empirical
criteria were not explained clearly and were applied inconsistently.
Other commenters believed that there is a lack of transparency
regarding the addition of codes to the bypass list and the bypass
process in general.
The commenters requested detailed explanations about which codes
are included on the bypass list, asking that CMS identify any codes on
the bypass list that do not meet the empirical criteria and the reason
for their inclusion. Several commenters believed that modifying the
specific empirical criteria that the median packaged cost be less than
$50 on less than 5 percent of ``natural'' single bills would increase
the number of potential bypass codes and ``pseudo'' single claims. Some
commenters suggested adopting a different threshold of some low
percentage of total packaged costs on the code's single claims as a
percent of total costs on all single claims. They believed that a
percentage approach could provide more stability in the ratesetting
process. One commenter also suggested that more generous empirical
thresholds could be appropriate for a select set of HCPCS codes by
subtracting the average packaged cost of the bypass code from other
costs on the date of service where the code appears and is used as a
bypass code, specifically to increase the number of claims available
for setting payment rates for APCs for low dose rate brachytherapy
services. A few commenters recommended that the median packaged cost
threshold of $50 on less than 5 percent of ``natural'' single bills be
updated as CMS has not updated the threshold since its introduction,
and one commenter claimed the packaged cost threshold was arbitrary.
Several commenters also indicated that the HCPCS codes CMS proposed to
add to the CY 2010 OPPS bypass list were not actually incorporated into
CMS' ratesetting process.
Response: As discussed above in this section, we only apply the
empirical criteria to the ``natural'' single claims. The bypass list is
intended to consist of services that have minimal or no associated
packaging, and in recent years, also includes codes for services that
we wish to explicitly treat as not having packaged costs for purposes
of OPPS payment. We refer readers to our previous discussions regarding
the inclusion of additional hours of drug administration services (73
FR 68513) and HCPCS G0390 (71 FR 68117 through 68118) on the bypass
list for further detail. Extracting ``pseudo'' single bills or unique
estimates of a single service's total resource cost from claims
containing multiple procedures requires making some assumptions about
the amount of packaging associated with every service. As reflected in
the CY 2005 proposed rule (69 FR 50474 through 50475), our empirical
criteria of 100 ``natural'' single claims, 5 percent or fewer
``natural'' single claims with packaging, and median packaged cost less
than $50 are intended to be conservative, that is, to limit the amount
and impact of redistributed packaging from expanding the bypass list.
These criteria ensure that the packaged costs associated with bypass
codes are limited, based on the best information that we have in the
``natural'' single procedure claims. Bypassing codes with significant
associated packaging would inappropriately redistribute these packaged
costs to major procedures billed with the bypass codes in the multiple
procedure claims, when the individual line-items for the bypass codes
are removed to create ``pseudo'' single claims. Because we recognize
that the ``natural'' single claims are not always good representations
of the code when it is reported on multiple major claims, for example,
a service with only 20 ``natural'' single claims, we also judiciously
include procedures on the bypass list that both CMS' medical advisors
and public commenters identify as not including significant packaging
and for which our own data analyses do not suggest that inclusion on
the bypass list would result in an inappropriate redistribution of
packaged costs. Finally, our general policy each year has been to
retain codes from the previous year's bypass list without reevaluation
of these codes in the context of the empirical criteria based upon
updated data. We listed and discussed these empirical criteria most
recently in the CY 2010 OPPS/ASC proposed rule (74 FR 35240 through
35241). The empirical criteria have remained unchanged since first
implemented because it has been our experience that they effectively
limit the inappropriate redistribution of packaged costs when we create
``pseudo'' single procedure claims.
In examining the empirical data provided by commenters supporting
their requests for additions to the bypass list, we believe that the
research supporting these public comments applied the empirical
criteria to all single claims rather than only to the ``natural''
single claims. We note that
[[Page 60328]]
this application of the empirical criteria is inconsistent with our
methodology of generalizing about packaging in the multiple procedure
claims from the ``natural'' single procedure claims. We do not believe
that it would be appropriate to expand the bypass list by assuming that
our packaging redistribution after application of the current bypass
list should be used to identify additional candidates for the bypass
list. Clearly comparing all single bills, not just ``natural'' single
bills, would lead to the conclusion that many more codes are eligible
for inclusion on the bypass list but could also compound any
inappropriate cost redistribution created by the current ``pseudo''
single claim development process. The OPPS pays for individual items
and services and some APCs do not contain many services and some of
these services are low cost. Further, some payment rates are based on a
small sample of single procedure claims. Because redistributing even a
small amount of packaging could have a potentially large impact on
median costs for small volume or low cost APCs, we believe our current
empirical criteria and reliance on ``natural'' single procedure claims
provide the most appropriate bypass policy.
Some commenters indicated that a packaged cost threshold based on a
percentage of low packaged costs out of total costs for all single
bills would be more appropriate. We believe that using a percentage
could allow some significant packaged costs to be redistributed.
Specifically, implementing this change to the empirical criteria could
redistribute a low percentage of packaged cost out of total cost for
all single bills to a very inexpensive service, leading to potential
distortions in the APC relative weights. This would be contrary to one
primary purpose of the empirical criteria, which is to limit the
inappropriate redistribution of packaged costs in the bypass process.
We also do not understand how adopting this policy would introduce
greater stability. If the policy increased the size of the bypass list,
it could introduce greater instability by inappropriately
redistributing more variable packaged costs from year to year. With
regard to the suggestion that we subtract an average packaged cost for
the bypass code from each multiple procedure claim, we believe that
this would inappropriately remove cost information from the claims used
for ratesetting and assume that the removal of that average cost is
appropriate in most cases.
While we are not adopting the commenters' suggested revisions to
the empirical criteria for the CY 2010 OPPS bypass list, we acknowledge
that the $50 median packaged cost threshold has not been updated for
several years and that the real value of this packaged cost threshold
criterion has declined due to inflation. Consequently, we will consider
whether it would be appropriate to update the $50 dollar packaged cost
threshold for inflation when identifying potential bypass codes in
future rulemaking.
The bypass list we used to calculate payment rates for this final
rule with comment period omits 11 of the 14 HCPCS codes that we newly
proposed to add to the bypass list for the CY 2010 OPPS. Although these
14 proposed codes met the empirical criteria for inclusion on the
bypass list for CY 2010 and although we listed them in Table 1 of the
proposed rule (74 FR 35242 through 35352), we inadvertently omitted
them from the bypass list that we used to calculate the median costs
and payment rates that we proposed for CY 2010. To ensure consistency
between the proposed rule and the final rule with comment period, we
began our modeling for this final rule with comment period using the
same list of bypass codes that we used to create the median costs and
payment rates that we proposed for CY 2010. Three proposed radiation
oncology code additions are an exception to this approach. In this
final rule with comment period, we are including these three proposed
bypass codes both because they meet the empirical criteria and because
commenters on the CY 2010 OPPS/ASC proposed rule specifically requested
that we add them to the CY 2010 bypass list. These three codes are: CPT
code 77300 (Basic radiation dosimetry, central axis depth dose
calculation, TDF, NSD, gap calculation, off axis factor, tissue
inhomogeneity factors, calculation of non-ionizing radiation surface
and depth dose, as required during course of treatment, only when
prescribed by the treating physician); CPT code 77331 (Special
dosimetry (e.g., TLD, microdosimetry)(specify), only when prescribed by
the treating physician); and CPT code 77370 (Special medical radiation
physics consultation).
Thus, the bypass list that we used to calculate the payment rates
in this final rule with comment period does not include 11 of the 14
codes proposed for inclusion on the CY 2010 bypass list. These 11 HCPCS
codes are identified in Table 1 of this final rule with comment period.
In response to commenters' requests that we document additions to the
bypass list, we have included a column in the list of bypass codes in
Table 2 to identify additions for the CY 2010 update year, and we will
continue to identify new additions in future rulemaking.
Comment: A few commenters noted that CMS removed radiation oncology
HCPCS codes that did not meet the empirical criteria from the bypass
list for the CY 2009 OPPS/ASC final rule with comment period. Observing
that this action had an adverse effect on the median costs for those
codes and services frequently billed with those codes, the commenters
requested that a number of the radiation oncology CPT codes be added to
the bypass list, including CPT codes 77295 (Therapeutic radiology
simulation-aided field setting, 3-dimensional); 77299 (Unlisted
procedure, therapeutic radiology clinical treatment planning); 77300
(Basic radiation dosimetry calculation, central axis depth dose
calculation, TDF, NSD, gap calculation, off axis factor, tissue
inhomogeneity factors, calculation of non-ionizing radiation surface
and depth dose, as required during course of treatment, only when
prescribed by treating physician); 77301 (Intensity modulated
radiotherapy plan, including dose-volume histograms for target and
critical structure partial tolerance specifications); 77310
(Teletherapy, isodose plan (whether hand or computer calculated);
intermediate (three or more treatment ports directed to a single area
of interest)); 77315 (Teletherapy. Isodose plan (whether hand or
computer calculated); complex (mantle or inverted Y, tangential ports,
the use of wedges, compensators, complex blocking, rotational beam, or
special beam considerations)); 77327 (Brachytherapy isodose plan;
intermediate (multiplane dosage calculations, application involving 5
to10 sources/ribbons, remote afterloading brachytherapy, 9 to 12
sources)); 77328 (Brachytherapy isodose plan; complex (multiplane
isodose plan, volume implant calculations, over 10 sources/ribbons
used, special spatial reconstruction, remote afterloading
brachytherapy, over 12 sources)); 77331 (Special dosimetry (e.g., TLD,
microdosimetry) (specify), only when prescribed by the treating
physician); 77336 (Continuing medical physics consultation, including
assessment of treatment parameters, quality assurance of dose delivery,
and review of patient treatment documentation in support of the
radiation oncologist, reporter per week of therapy); 77370 (Special
medical radiation physics consultation); 77371 (Radiation treatment
delivery, stereotactic radiosurgery (SRS),
[[Page 60329]]
complete course of treatment of cranial lesion(s) consisting of 1
session; multi-source Cobalt 60 based); 77401 (Radiation treatment
delivery, superficial and/or ortho voltage); 77470 (Special treatment
procedure (e.g., total body irradiation, hemibody radiation, per oral,
endocavitary or intraoperative cone irradiation)); 77600 (Hyperthermia,
externally generated; superficial (i.e., heating to a depth of 4 cm or
less)); 77783 (Remote afterloading high intensity brachytherapy; 9-12
source positions or catheters); and 77789 (Surface application of
radiation source).
Response: Some of the HCPCS codes that commenters suggested that we
add to the bypass list are already included on the bypass list for this
final rule with comment period, including CPT codes 77301, 77315,
77336, and 77401. These codes met the empirical criteria in earlier
years and, because of our policy to retain codes once they have been
added to the bypass list, these codes continue on the bypass list.
However, many of the codes that commenters requested for addition the
CY 2010 bypass list do not meet the empirical criteria because the
percentage of ``natural'' single procedure claims with packaging
exceeds 5 percent and, for some, the low volume of ``natural'' single
claims prevents us from making an accurate assessment about packaging
in the multiple procedure claims. Most of these codes have a low
packaged median cost in the ``natural'' single procedure claims.
We examined the billing patterns for these HCPCS codes in the
multiple major claims to better understand the potential impact that
adding the recommended codes that do not meet the empirical criteria to
the bypass list might have on the redistribution of packaged costs. We
specifically analyzed the amount of packaged cost on the same date of
service as the suggested bypass codes and other codes in the same
clinical series as the recommended bypass codes in the multiple
procedure claims, as well as the number of other procedures appearing
on the same date of service, the APCs associated with these procedures,
and whether any of these other procedures were already included on the
bypass list. For three codes, specifically CPT codes 77600
(Hyperthermia, externally generated; superficial (i.e. heating to a
depth of 4cm or less)); 77605 (Hyperthermia, externally generated; deep
(i.e. heating to depths greater than 4 cm)); and 77610 (Hyperthermia
generated by interstitial probe(s); 5 or fewer interstitial
applicators), we did not observe a significant amount of additional
packaging on the multiple procedure claims or many other services, so
we believe that including these codes on the bypass list would result
in a limited amount of redistributed packaged cost. Therefore, we added
these three codes to the CY 2010 bypass list. We also observed packaged
costs associated with CPT code 77327, but the amount was proportionally
limited relative to the procedure costs on the same date of service,
and we believe that we can appropriately add this code to the CY 2010
bypass list.
As discussed above in this section, we also are adding the
radiation oncology codes that we proposed to include on the CY 2010
bypass list, specifically CPT codes 77300, 77331, and 77370, because
these codes meet the empirical criteria, they were proposed for
addition to the bypass list, and several commenters specifically
requested these codes be included on the bypass list. However, several
codes in the commenters' suggested additions to the bypass list not
only failed the empirical criteria in the ``natural'' single procedure
claims, but also were associated with significant packaged costs
proportional to the costs of the other procedures appearing on the same
date of service and the presence of many other separately paid
procedures. Most of this packaged cost on claims for the candidate
bypass codes was reported as revenue code charges without HCPCS codes,
and we could not ascertain whether some of the packaging should be
associated with the suggested bypass code or with one of the many other
procedures appearing on the same date of service in the multiple
claims. Because we would be unable to allocate the packaged cost among
services or to determine that it was not associated with the candidate
bypass list code, we believe it would be inappropriate to add these
HCPCS codes to the bypass list. Although previous commenters have
suggested that packaging of radiation guidance services in CY 2008
reduced the number of claims available for setting payment rates for
radiation oncology services, it is notable that only a small portion of
the packaged costs on the claims for radiation oncology services could
be attributed to the radiation guidance services. In summary, we are
not adding CPT codes 77295, 77299, 77310, 77328, 77371, 77470, 77783,
and 77789 to the final CY 2010 bypass list.
We always appreciate the empirical information that commenters
submitted regarding their suggested additions to the bypass list.
However, we note that, due to the redistributive properties of the
bypass list and our process for creating ``pseudo'' single procedure
claims, we always must examine the redistributive impact of additions
to the bypass list on all HCPCS code and APC median costs. Future
recommendations from the public for additions to the bypass list should
consider the global impact on APCs and HCPCS codes of changes to the
bypass list in order to facilitate our evaluation of codes suggested
for inclusion on the bypass list in the future.
Comment: Some commenters supported the inclusion of the HCPCS codes
for additional hours of drug administration on the bypass list. In
addition, several commenters requested that CPT 90768 (Intravenous
infusion, for therapy, prophylaxis, or diagnosis (specify substance or
drug); concurrent infusion (List separately in addition to code for
primary procedure)) be made separately payable and added to the bypass
list to ensure consistent treatment of codes for additional hours of
drug administration under the bypass list.
Response: We appreciate the commenters' support and have continued
to include the separately payable codes for additional hours of drug
administration on the CY 2010 bypass list. Bypassing these drug
administration codes, and associating all the packaging with the code
for the initial hour of drug administration, enables us to use many
correctly coded claims for initial drug administration services that
would otherwise not be available for ratesetting. We did not include
CPT 90768 on the CY 2010 bypass list because we proposed to
unconditionally package its successor code (CPT code 96368 (Intravenous
infusion, for therapy, prophylaxis, or diagnosis (specify substance or
drug); concurrent infusion (List separately in addition to code for
primary procedure))) in CY 2010 and, therefore, CPT code 90768 is not a
candidate for the bypass list. Our final CY 2010 policy to package
payment for CPT code 96368 is discussed in section VIII.B. of this
final rule with comment period.
As discussed above, the bypass list consists of separately paid
services with no or minimal packaging or separately paid services that
CMS knowingly prices without including packaged costs and associates
any packaging with the other service(s) billed on the same date of
service. The purpose of the bypass list is to help develop better
estimates of total resource costs for a given separately payable
procedure through creating ``pseudo'' single procedure claims from the
multiple procedure claims by removing line-items without
[[Page 60330]]
packaging from each claim's date of service. Including packaged codes
on the bypass list would remove valid packaging from a multiple
procedure claim and would not allow CMS to derive more estimates of a
service's total resource costs from multiple procedure claims. We have
previously discussed our reasons for packaging CPT code 90768 in the CY
2009 OPPS/ASC final rule with final period (73 FR 68674).
Comment: Several commenters supported the inclusion of HCPCS code
G0340 (Image-guided robotic linear accelerator-based stereotactic
radiosurgery, delivery including collimator changes and custom
plugging, fractionated treatment, all lesion, per session, second
through fifth session, maximum) on the bypass list.
Response: We appreciate the commenters' support and have continued
to include HCPCS code G0340 on the CY 2010 bypass list.
Comment: One commenter requested that CMS examine whether changes
to the bypass list or other edits included in CMS' ratesetting
processes negatively affected the proposed CY 2010 payment rates for
APC 0651 (Complex Interstitial Radiation Source Application) and
composite APC 8001(LDR Prostate Brachytherapy Composite).
Response: In analyzing the impact of the final CY 2010 bypass list
changes on APCs 0651 and 8001, we noted modest changes in both single
procedure claim frequency and median costs. In the case of composite
APC 8001, bypass list changes increased the single procedure claims
available for ratesetting purposes and reduced the median cost by
roughly 2 percent. APC 0651 experienced a modest increase of 3 percent
in the single procedure claims available for ratesetting and its median
cost also increased by about 3 percent. Neither APC 0651 nor composite
APC 8001 experienced significant fluctuations in median cost or single
procedure claim frequency due to the line-item trim discussed in
section II.A.2.(a) of this final rule with comment period.
After consideration of the public comments received, we are
adopting, as final, our proposed methodology to use a bypass list to
create ``pseudo'' single claims. To ensure consistency between the CY
2010 proposed and final rules, we began our consideration of comments
using the same list of bypass codes for this final rule with comment
period that we used to calculate the median costs and payment rates
that we proposed for CY 2010, which was the CY 2009 final rule bypass
list. We added HCPCS codes to the CY 2010 bypass list based on whether
they met the empirical criteria and, if they did not, whether we
believe that the amount of redistributed packaged cost that their
inclusion on the bypass list would generate would be appropriate. We
ultimately added seven codes to the CY 2010 bypass list. The list of CY
2010 bypass code additions that we proposed in the CY 2010 OPPS/ASC
proposed rule but did not implement in this final rule with comment
period appears in Table 1. Table 2 below is the final list of bypass
codes for CY 2010. ``Overlap bypass codes'' that are members of the
multiple imaging composite APCs are identified by asterisks (*) in
Table 2. HCPCS codes that have been added for CY 2010 are also
identified by asterisks (*) in Table 2.
Table 1--Proposed CY 2010 Bypass Code Additions Excluded from Final CY
2010 Bypass List
------------------------------------------------------------------------
CY 2010 HCPCS Code CY 2010 Short descriptor
------------------------------------------------------------------------
57452.......................... Exam of cervix w/scope.
76120.......................... Cine/video x-rays.
76813.......................... Ob us nuchal meas, 1 gest.
88314.......................... Histochemical stain.
88367.......................... Insitu hybridization, auto.
92700.......................... Ent procedure/service.
94660.......................... Pos airway pressure, CPAP.
95971.......................... Analyze neurostim, simple.
99406.......................... Behav chng smoking 3-10 min.
99407.......................... Behav chng smoking >10 min.
G0249.......................... Provide INR test mater/equip.
------------------------------------------------------------------------
4120-01-P
[[Page 60331]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.000
[[Page 60332]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.001
[[Page 60333]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.002
[[Page 60334]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.003
[[Page 60335]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.004
[[Page 60336]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.005
[[Page 60337]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.006
[[Page 60338]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.007
[[Page 60339]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.008
[[Page 60340]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.009
[[Page 60341]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.010
[[Page 60342]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.011
BILLING CODE 4120-01-C
c. Calculation of CCRs
(1) Development of the CCRs
We calculated hospital-specific overall ancillary CCRs and
hospital-specific departmental CCRs for each hospital for which we had
CY 2008 claims data from the most recent available hospital cost
reports, in most cases, cost reports beginning in CY 2007. For the CY
2010 OPPS ratesetting, we used the set of claims processed during CY
2008. We applied the hospital-specific CCR to the hospital's charges at
the most detailed level possible, based on a revenue code-to-cost
center crosswalk that contains a hierarchy of CCRs used to estimate
costs from charges for each revenue code. That crosswalk is available
for review and continuous comment on the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/03_crosswalk.asp#TopOfPage. We
calculated CCRs for the standard and nonstandard cost centers accepted
by the electronic cost report database. In general, the most detailed
level at which we calculated CCRs was the hospital-specific
departmental level. For a discussion of the hospital-specific overall
ancillary CCR calculation, we refer readers to the CY 2007 OPPS/ASC
final rule with comment period (71 FR 67983 through 67985).
In the CY 2010 OPPS/ASC proposed rule (74 FR 35253), we proposed to
continue using the hospital-specific overall ancillary and departmental
CCRs to convert charges on the claims reported under specific revenue
codes to estimated costs through application of a revenue code-to-cost
center crosswalk for CY 2010.
We did not receive any public comments on this proposal. Therefore,
we are finalizing our proposal for CY 2010, without modification, to
calculate hospital-specific overall and departmental CCRs as described
above in this section.
(2) Charge Compression
Since the implementation of the OPPS, some commenters have raised
concerns about potential bias in the OPPS cost-based weights due to
``charge compression,'' which is the practice of applying a lower
charge markup to higher-cost services and a higher charge markup to
lower-cost services. (We discuss our CCR calculation in section
[[Page 60343]]
II.A.1.c. of this final rule with comment period and how we use these
CCRs to estimate cost on hospital outpatient claims in detail in
section II.A.2.a. of this final rule with comment period). As a result,
the cost-based weights incorporate aggregation bias, undervaluing high
cost items and overvaluing low cost items when an estimate of average
markup, embodied in a single CCR, is applied to items of widely varying
costs in the same cost center. Commenters on previous rules have
expressed increased concern about the impact of charge compression when
CMS began setting the relative weights for payment under the IPPS based
on the costs of inpatient hospital services, rather than the charges
for the services.
To explore this issue, in August 2006 we awarded a contract to RTI
International (RTI) to study the effects of charge compression in
calculating the IPPS relative weights, particularly with regard to the
impact on inpatient diagnosis-related group (DRG) payments, and to
consider methods to capture better the variation in cost and charges
for individual services when calculating costs for the IPPS relative
weights across services in the same cost center. Of specific note was
RTI's analysis of a regression-based methodology estimating an average
adjustment for CCR by type of revenue code from an observed
relationship between provider cost center CCRs and proportional billing
of high and low cost services in the revenue codes associated with the
cost center in the claims data. RTI issued a report in March 2007 with
its findings on charge compression. The report is available on the CMS
Web site at: http://www.cms.hhs.gov/reports/downloads/Dalton.pdf.
Although this report was focused largely on charge compression in the
context of the IPPS cost-based relative weights, several of the
findings were relevant to the OPPS. Therefore, we discussed the
findings and our responses to that report in the CY 2008 OPPS/ASC
proposed rule (72 FR 42641 through 42643) and reiterated them in the CY
2008 OPPS/ASC final rule with comment period (72 FR 66599 through
66602).
RTI noted in its 2007 report that its research was limited to IPPS
DRG cost-based weights and that it did not examine potential areas of
charge compression specific to hospital outpatient services. We were
concerned that the analysis was too limited in scope because typically
hospital cost report CCRs encompass both inpatient and outpatient
services for each cost center. Further, because both the IPPS and OPPS
rely on cost-based weights, we preferred to introduce any
methodological adjustments to both payment systems at the same time. We
believe that because charge compression affects the cost estimates for
services paid under both IPPS and OPPS in the same way, it is
appropriate that we would use the same or, at least, similar approaches
to address the issue. Finally, we noted that we wished to assess the
educational activities being undertaken by the hospital community to
improve cost reporting accuracy in response to RTI's findings, either
as an adjunct to or in lieu of regression-based adjustments to CCRs.
We expanded RTI's analysis of charge compression to incorporate
outpatient services. In August 2007, we again contracted with RTI.
Under this contract, we asked RTI to evaluate the cost estimation
process for the OPPS relative weights. This research included a
reassessment of the regression-based CCR models using hospital
outpatient and inpatient charge data, as well as a detailed review of
the OPPS revenue code-to-cost center crosswalk and the OPPS' hospital-
specific CCR methodology. In evaluating cost-based estimation, in
general, the results of RTI's analyses impact both the OPPS APC
relative weights and the IPPS MS-DRG (Medicare severity) relative
weights. The RTI final report can be found on RTI's Web site at: http://www.rti.org/reports/cms/HHSM-500-2005-0029I/PDF/Refining_Cost_to_
Charge_Ratios_200807_Final.pdf. For a complete discussion of the RTI
recommendations, public comments, and our responses, we refer readers
to the CY 2009 OPPS/ASC final rule with comment period (73 FR 68519
through 68527).
In the FY 2009 IPPS final rule, we finalized our proposal for both
the OPPS and IPPS to add one cost center to the cost report so that, in
general, the costs and charges for relatively inexpensive medical
supplies would be reported separately from the costs and charges for
more expensive implantable devices (such as pacemakers and other
implantable devices). Specifically, we created one cost center for
``Medical Supplies Charged to Patients'' and one cost center for
``Implantable Devices Charged to Patients.'' This change split the CCR
for ``Medical Supplies and Equipment'' into one CCR for medical
supplies and another CCR for implantable devices. In response to the
majority of commenters on the proposal set forth in the FY 2009 IPPS
proposed rule, we finalized a definition of the ``Implantable Devices
Charged to Patients'' cost center as capturing the costs and charges
billed with the following UB-04 revenue codes: 0275 (Pacemaker), 0276
(Intraocular lens), 0278 (Other implants), and 0624 (FDA
investigational devices). We made this change to the cost report form
for cost reporting periods beginning in the spring of 2009. Because
there is generally a 3-year lag between the availability of cost report
data for IPPS and OPPS ratesetting purposes in a given calendar year,
we believe we will be able to use data from the revised cost report
form to estimate costs from charges associated with UB-04 revenue codes
0275, 0276, 0278, and 0624 for implantable devices in order to more
accurately estimate the costs of device-related procedures for the CY
2013 OPPS relative weights. For a complete discussion of the proposal,
public comments, and our responses, we refer readers to the FY 2009
IPPS final rule (73 FR 48458 through 45467).
For the CY 2009 OPPS/ASC proposed rule, we made a similar proposal
for drugs, proposing to split the ``Drugs Charged to Patients'' cost
center into two cost centers: one for drugs with high pharmacy overhead
costs and one for drugs with low pharmacy overhead costs (73 FR 41492).
We noted that we expected that CCRs from the proposed new cost centers
would be available in 2 to 3 years to refine OPPS drug cost estimates
by accounting for differential hospital markup practices for drugs with
high and low pharmacy overhead costs. However, after consideration of
the public comments received and the APC Panel recommendations, we did
not finalize our proposal to split the single standard ``Drugs Charged
to Patients'' cost center into two cost centers, and instead indicated
in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68659)
that we would continue to explore other potential approaches to improve
our drug cost estimation methodology. Unlike implantable devices, we do
not currently have a policy to address charge compression in our cost
estimation for expensive drugs and biologicals. In section V.B.3. of
the CY 2010 OPPS/ASC proposed rule (74 FR 35326 through 35333), we
proposed an adjustment to our cost estimation methodology for drugs and
biologicals to address charge compression by proposing to shift a
portion of the pharmacy overhead cost associated with packaged drugs
and biologicals from those packaged drugs and biologicals to separately
payable drugs and biologicals; proposing payment for separately payable
drugs and biologicals at ASP+4 percent; and proposing a proportional
reduction in the total amount of pharmacy overhead cost
[[Page 60344]]
associated with packaged drugs and biologicals prior to our estimating
the total resource costs of individual OPPS services.
Finally, in the CY 2009 OPPS/ASC final rule with comment period, we
indicated that we would be making some OPPS-specific changes in
response to the RTI report recommendations. With regard to modifying
the cost reporting preparation software in order to impose fixed
descriptions for nonstandard cost centers, we indicated that the change
would be made for the next release of the cost report software. We
anticipate that these changes will be made to the cost reporting
software in CY 2010 and will act as a quality check for hospitals to
review their choice of nonstandard cost center code to ensure that the
reporting of nonstandard cost centers is accurate, while not
significantly increasing provider burden. In addition to improving the
reporting mechanism for the nonstandard cost centers, we indicated in
the CY 2009 OPPS/ASC final rule with comment period that we also
planned to add the new nonstandard cost centers for Cardiac
Rehabilitation, Hyperbaric Oxygen Therapy, and Lithotripsy. We expect
that changes to add these nonstandard cost centers also will be made
for cost reports beginning in CY 2010. Furthermore, we noted in the FY
2010 IPPS final rule (74 FR 43781 through 43782) that we are updating
the cost report form to eliminate outdated requirements, in conjunction
with the Paperwork Reduction Act (PRA), and that we had proposed actual
changes to the cost reporting form, the attending cost reporting
software, and the cost report instructions in Chapters 36 and 40 of the
PRM-II. The comment period for this proposal (74 FR 31738) ended on
August 31, 2009. We believe that improved cost report software, the
incorporation of new nonstandard cost centers, and elimination of
outdated requirements will improve the accuracy of the cost data
contained in the electronic cost report data files and, therefore, the
accuracy of our cost estimation processes for the OPPS relative
weights. As has been described above, CMS has taken steps to address
charge compression in the IPPS and OPPS, and continues to examine ways
in which it can improve the accuracy of its cost estimation process.
Comment: Several commenters expressed support for the policy
adopted in the FY 2009 IPPS final rule, with application to both the
OPPS and IPPS, to create one cost center for ``Medical Supplies Charged
to Patients'' and one cost center for ``Implantable Devices Charged to
Patients.'' Some commenters recommended that CMS verify the accuracy of
the CCRs derived from the new cost centers by comparing CCRs calculated
from the new cost center against regression-based CCRs or by
undertaking other activities to ensure that data reported in these
revised cost centers are consistent and accurate.
One commenter stated that hospitals are reluctant to bill for
devices that do not remain in the patient upon discharge, specifically
cryoablation probes, under revenue code 0278 (Medical/Surgical
Supplies: Other Implants). The commenter requested that CMS work with
hospitals to revise the common hospital practice of billing for
cryoablation probes under revenue code 0272 (Medical/Surgical Supplies:
Sterile Supplies) rather than revenue code 0278. The commenter asserted
that billing cryoablation probes under revenue code 0272 would result
in estimating costs from charges using a CCR derived from the revised
cost center for ``Medical Supplies Charged to Patients,'' rather than
one derived from the ``Implantable Devices Charged to Patients,'' even
though cryoablation probes are high cost implantable devices. The
commenter believed that, without a change in the revenue code under
which many hospitals report cryoablation probes, the recent cost center
changes for medical supplies would negatively bias the estimated cost
of cryoablation probes and the accuracy of the APC payment rates for
cryoablation procedures.
Some commenters suggested that CMS engage in outreach and
educational activities to hospitals on the changes to the cost report
and the reporting of charges with respect to the medical device and
medical supply cost centers so that hospitals can appropriately report
data. The commenters recommended that the outreach activities go beyond
the ``distribution of bulletins that are used to inform providers about
changes to the Medicare program.''
Response: We appreciate the commenters' support for our CY 2009
policy to split the ``Medical Supplies Charged to Patients'' into one
cost center for ``Medical Supplies Charged to Patients'' and one cost
center for ``Implantable Devices Charged to Patients''. In the FY 2009
IPPS final rule (73 FR 48458 through 48467), we explained in detail the
reasoning behind the development of the cost center split and our
decision to ultimately have hospitals use the American Hospital
Association's National Uniform Billing Committee (NUBC) revenue codes
to determine what would be reported in the ``Medical Supplies Charged
to Patients'' and the ``Implantable Devices Charged to Patients'' cost
centers. In that discussion, we noted that while we require that the
device broadly be considered implantable to have its costs and charges
included in the new ``Implantable Devices Charged to Patients'' cost
center, our final policy did not require the device to remain in the
patient at discharge (73 FR 48462 through 48463). We typically do not
specify a revenue code-to-cost center crosswalk that hospitals must
adopt to prepare their cost report, recognizing hospitals' need to
interpret the NUBC definitions and cost reporting requirements within
the context of their own financial systems. In response to comments on
our proposal to create the new cost center in the FY 2009 IPPS final
rule, we did define the new ``Implantable Devices Charged to Patients''
cost center by the revenue codes that we believe would map to this cost
center to facilitate ease of reporting by hospitals. We note that
revenue code definitions are established by the NUBC, and we fully
expect hospitals to follow existing guidelines regarding revenue code
use. Specifically with regard to reporting cryoablation probes, we do
not believe that the current NUBC definition of revenue code 0278
(Medical/Surgical Supplies and Devices (also see 062x, an extension of
027x); Other implants (a)) precludes reporting hospital charges for
cryoablation probes under this revenue code. Therefore, we believe
hospitals can report charges for cryoablation probes under the revenue
code 0278 using the definitions in the official UB 04 Data
Specifications Manual.
As discussed in the FY 2010 IPPS final rule (74 FR 43780), we
reiterated that we had not proposed any policy changes with respect to
the use of revenue codes or alternative ways of identifying high-cost
devices. We refer readers to the discussion in the FY 2009 IPPS final
rule concerning our current policy on these matters (73 FR 48462).
Hospitals were able to report costs and charges for the new
``Implantable Devices Charged to Patients'' cost center for cost
reporting periods beginning on or after May 1, 2009 as line 55.30 on
Form 2552-96 and, at the time of development of this final rule with
comment period, we anticipate that hospitals will be able to report
costs and charges for the new cost center as line 69 on the revised
draft Medicare hospital cost report form CMS-2552-10 beginning February
1, 2010.
In the FY 2009 IPPS final rule (73 FR 48463), we agreed that once
the data reflecting the cost center changes become available for
ratesetting, we
[[Page 60345]]
would evaluate the CCRs that we derive from the new ``Medical Supplies
Charged to Patients'' and ``Implantable Devices Charged to Patients''
cost centers and that we would continue to analyze cost report data. In
the FY 2010 IPPS final rule (74 FR 43782), we indicated that we might
consider the results of regression analyses as one way to evaluate
costs and charges reported in the new cost center. However, we point
out that we do not believe it is appropriate to ``pick and choose''
between CCRs; rather, the determining factor should be payment
accuracy, regardless of whether one method increases or decreases
payment for devices (73 FR 48463). That is, the validity of the CCRs
resulting from the newly implemented cost center cannot be determined
to be accurate simply because they will result in higher overall cost
estimates for procedures that rely on implantable devices and,
therefore, higher APC payment rates.
As discussed in the FY 2010 IPPS rule, we believe it is early to
plan specific outreach activities on the revised cost report form CMS-
2552-10 and the new ``Implantable Devices Charged to Patients'' cost
center, given that the comment period for the revised cost reporting
forms closed on August 31, 2009. We agree that such educational
activities are important, and we have been considering various options
for educating the provider community that would involve fiscal
intermediaries, Medicare administrative contractors, and cost report
vendors. We look forward to working with the provider community on
these initiatives.
Comment: A few commenters noted that two revenue codes became
effective for reporting radiopharmaceuticals, specifically 0343
(Nuclear Medicine; Diagnostic Radiopharmaceuticals) for diagnostic
preparations and 0344 (Nuclear Medicine; Therapeutic
Radiopharmaceuticals) for therapeutic preparations in October 2004; and
that this more specific revenue code reporting should help capture the
unique costs and charges of radiopharmaceuticals. The commenters also
pointed out that the costs and charges associated with these revenue
codes likely would be reported by hospitals under the broader radiology
cost center on the Medicare hospital cost report. They expressed
concern that, because the CCR used to estimate charges for these
revenue codes encompasses a large volume of many different services,
the specificity of charge information in the claims data gained through
use of the new revenue codes would not translate into better cost
estimation for diagnostic and therapeutic radiopharmaceuticals under
the OPPS. The commenters suggested that CMS require hospitals to report
costs and charges for these two revenue codes as unique cost centers on
the cost report.
Response: We agree with the commenters that the broader the range
and volume of services included in a given cost center, the more the
resulting CCR calculated from the costs and charges for that cost
center represents a weighted average of included services. To the
extent that the revenue codes implemented in October 2004, specifically
0343 (Nuclear Medicine; Diagnostic Radiopharmaceuticals) for diagnostic
preparations and 0344 (Nuclear Medicine; Therapeutic
Radiopharmaceuticals) for therapeutic preparations, have no specific
associated cost center in which to capture their unique costs and
charges and to the extent hospitals report these costs and charges in
cost center 4100 ``Radiology--Diagnostic'' or 4200 ``Radiology--
Therapeutic,'' the CCRs for cost centers 4100 and 4200 that CMS uses to
estimate costs from charges on claims for specific radiopharmaceuticals
will reflect the average cost and markup associated with all diagnostic
and therapeutic radiology procedures. However, our policy for
establishing new cost centers requires a public review process that
allows commenters the opportunity to provide input on any changes, and
many commenters historically have not been interested in adding cost
centers to the cost report because of the associated hospital
administrative burden.
As we have noted above, we have recently undertaken regulatory
comment and response on our effort to update the cost report. The
proposed draft hospital cost report Form CMS-2552-10 went on Federal
Register public display at the Office of the Federal Register on July
2, 2009, for a 60-day review and comment period, which ended on August
31, 2009. As we stated in the CY 2009 OPPS/ASC final rule with comment
period (73 FR 68525 through 68526), that notice and comment procedure
is the process by which we are considering public comments requesting
additional cost centers. We will consider all comments for new cost
centers submitted through that process as we work to improve and modify
the hospital cost report. We also note that we make the revenue code-
to-cost center crosswalk that we use to match Medicare hospital cost
report information with claims data continually available for
inspection and comment on the CMS Web site: http://www.cms.hhs.gov/HospitalOutpatientPPS.
Comment: One commenter believed that the proposed drug cost center
split discussed in the CY 2009 OPPS/ASC proposed rule would represent
an unnecessary burden for hospitals.
Response: While we welcome comments regarding OPPS policy, we note
that the drug cost center proposal was a CY 2009 proposal which was not
finalized (73 FR 68654 through 68657). We have not proposed a policy to
split the drug cost center for CY 2010.
Comment: One commenter requested that CMS issue clarifying
instructions for reporting computed tomography (CT) and magnetic
resonance imaging (MRI) equipment and supported the creation of new
cost centers to capture the unique costs and charges of CT scanning,
MRI, and other radiology procedures.
Response: We did not propose to implement separate standard
radiology cost centers for CT Scanning, MRI, and other radiology
procedures due to the significant number of comments we received in
response to our general request in the CY 2009 OPPS/ASC proposed rule
for comments and reactions to RTI's recommendations. The commenters on
the CY 2009 OPPS/ASC proposed rule were generally in favor of these
cost centers in theory, but suggested that the allocation of capital
cost across these cost centers was not consistent or consistently
accurate across hospitals and that smaller hospitals might not have
sufficiently sophisticated accounting systems to accurately allocate
costs (73 FR 68526). In that discussion, we expressed our preference
for establishing these cost centers as standard cost centers because
standard cost centers constitute the minimum set of cost centers that a
hospital is required to report, assuming that the hospital maintains
separate departments for those services and reports the costs and
charges for these departments in separate accounts within its own
internal accounting systems. We believe this step would improve the
accuracy of radiology payment by encouraging greater and more
consistent reporting of the costs and charges specifically associated
with advanced imaging services. However, we also noted that nonstandard
cost centers already are available for CT Scanning and MRI and that
hospitals that provide these services and maintain a separate account
for each of these services in their internal accounting records to
capture the costs and charges are currently required, in accordance
with Sec. 413.53(a)(1), to report these cost centers on the cost
report, even if CMS
[[Page 60346]]
does not identify a nonstandard cost center code for the department(s).
As we stated in the CY 2009 OPPS/ASC final rule with comment (73 FR
68525 through 68526) and in response to an earlier comment in this
section, we will consider public comments requesting additional cost
centers in response to the PRA Federal Register notice for the proposed
draft cost report form CMS-2552-10. The comment period for this
proposal ended August 31, 2009.
Comment: A few commenters expressed concern about the timing for
implementing the nonstandard cost center for cardiac rehabilitation,
suggesting that a delay could limit beneficiary access to cardiac
rehabilitation services because the proposed CY 2010 payment was too
low. The commenters noted that the new CCRs would not be available for
setting OPPS payment rates until CY 2013.
Response: While we understand the commenters' concern regarding the
timing of implementing the cardiac rehabilitation nonstandard cost
center, in our CY 2009 OPPS/ASC final rule with comment period
discussion (73 FR 68524), we explained our preference for improving the
accuracy of the APC relative weights through long-term changes to the
cost report rather than implementing short-term statistical
adjustments, in order to ensure that actual hospital data are used to
set payment rates. As discussed above, we currently anticipate we will
implement new nonstandard cost centers for Cardiac Rehabilitation,
Hyperbaric Oxygen Therapy, and Lithotripsy with the revised Medicare
hospital cost report form in CY 2010.
We have approximately 2.5 million CY 2008 claims from almost 2,000
hospitals for cardiac rehabilitation sessions available for setting the
CY 2010 payment rates for these services. Given that the OPPS payment
for the services has been highly stable for the past several years, we
have no reason to believe that Medicare beneficiaries' access to
cardiac rehabilitation will be limited in CY 2010 based on the final
OPPS payment rates for the services. Further discussion of CY 2010
payment for traditional and intensive cardiac rehabilitation services
is included in section XII.B. of this final rule with comment period.
Comment: One commenter believed that CMS continues to expand and
complicate the antiquated Medicare cost report rather than to design a
helpful tool. The commenter believes that the current ``piecemeal''
approach to revising the cost report is costly and burdensome. Based on
that impression, the commenter recommended that CMS partner with the
hospital industry to consider more comprehensive changes to the cost
report.
Response: In the FY 2009 IPPS proposed and final rules (73 FR 23546
and 73 FR 48461) and CY 2009 OPPS/ASC proposed rule and final rule with
comment period (73 FR 41431 and 73 FR 68526), we stated that we began a
comprehensive review of the Medicare hospital cost report, and
splitting the current cost center for ``Medical Supplies Charged to
Patients'' into one line for ``Medical Supplies Charged to Patients''
and another line for ``Implantable Devices Charged to Patients'' is
part of that initiative to update and revise the cost report. We also
explained that in the context of the effort to update the cost report
and eliminate outdated requirements, we would make changes to the cost
report form and cost report instructions that would be available to the
public for comment. Thus, the public would have an opportunity to
suggest the more comprehensive reforms that one commenter on the CY
2010 OPPS/ASC proposed rule advocates. Similarly, the public would be
able to offer suggestions for ensuring that these reforms are made in a
manner that is not disruptive to hospitals' billing and accounting
systems, and within the guidelines of General Accepted Accounting
Principles (GAAP), which are consistent with the Medicare principles of
reimbursement and sound accounting practices. The proposed draft
hospital cost report Form CMS-2552-10 went on Federal Register public
display at the Office of the Federal Register on July 2, 2009, for a
60-day review and comment period, which ended on August 31, 2009. We
will consider comments from the public as we work to improve and modify
the hospital cost report. The cost center for ``Implantable Devices
Charged to Patients'' is available for use for cost reporting periods
beginning on or after May 1, 2009. The revised hospital cost report
Form CMS-2552-10 will be effective for cost reporting periods beginning
on or after February 1, 2010 (74 FR 43781 through 43782).
2. Data Development Process and Calculation of Median Costs
In this section of this final rule with comment period, we discuss
the use of claims to calculate final OPPS payment rates for CY 2010.
The hospital OPPS page on the CMS Web site on which this final rule
with comment period is posted provides an accounting of claims used in
the development of the final payment rates at: http://www.cms.hhs.gov/HospitalOutpatientPPS. The accounting of claims used in the development
of this final rule with comment period is included on the CMS Web site
under supplemental materials for the CY 2010 OPPS/ASC final rule with
comment period. That accounting provides additional detail regarding
the number of claims derived at each stage of the process. In addition,
below in this section we discuss the file of claims that comprise the
data set that is available for purchase under a CMS data use agreement.
Our CMS Web site, http://www.cms.hhs.gov/HospitalOutpatientPPS,
includes information about purchasing the ``OPPS Limited Data Set,''
which now includes the additional variables previously available only
in the OPPS Identifiable Data Set, including ICD-9-CM diagnosis codes
and revenue code payment amounts. This file is derived from the CY 2008
claims that were used to calculate the final payment rates for the CY
2010 OPPS.
As proposed, we used the methodology described in sections
II.A.2.b. through e. of this final rule with comment period to
establish the relative weights used in calculating the final OPPS
payment rates for CY 2010 shown in Addenda A and B to this final rule
with comment period.
a. Claims Preparation
For the CY 2010 OPPS/ASC proposed rule, we used the CY 2008
hospital outpatient claims processed before January 1, 2009 to
calculate the median costs of APCs, which in turn are used to set the
proposed relative weights for CY 2010. To begin the calculation of the
relative weights for CY 2010, we pulled all claims for outpatient
services furnished in CY 2008 from the national claims history file.
This is not the population of claims paid under the OPPS, but all
outpatient claims (including, for example, critical access hospital
(CAH) claims and hospital claims for clinical laboratory services for
persons who are neither inpatients nor outpatients of the hospital). In
the discussion that follows, we have updated the information to reflect
the claims available for this final rule with comment period,
specifically CY 2008 claims processed through June 30, 2009.
We then excluded claims with condition codes 04, 20, 21, and 77.
These are claims that providers submitted to Medicare knowing that no
payment would be made. For example, providers submit claims with a
condition code 21 to elicit an official denial notice from Medicare and
[[Page 60347]]
document that a service is not covered. We then excluded claims for
services furnished in Maryland, Guam, the U.S. Virgin Islands, American
Samoa, and the Northern Mariana Islands because hospitals in those
geographic areas are not paid under the OPPS.
We divided the remaining claims into the three groups shown below.
Groups 2 and 3 comprise the 107 million claims that contain hospital
bill types paid under the OPPS.
1. Claims that were not bill types 12X, 13X (hospital bill types),
14X (laboratory specimen bill types), or 76X (CMHC bill types). Other
bill types are not paid under the OPPS and, therefore, these claims
were not used to set OPPS payment.
2. Claims that were bill types 12X, 13X or 14X. Claims with bill
types 12X and 13X are hospital outpatient claims. Claims with bill type
14X are laboratory specimen claims, of which we use a subset for the
limited number of services in these claims that are paid under the
OPPS.
3. Claims that were bill type 76X (CMHC). (These claims are later
combined with any claims in item 2 above with a condition code 41 to
set the per diem partial hospitalization rates determined through a
separate process.)
To convert charges on the claims to estimated cost, we needed to
multiply those charges by the CCR associated with each revenue code as
discussed in section II.A.1.c.(1) of this final rule with comment
period. For the CCR calculation process, we used the same general
approach that we used in developing the final APC rates for CY 2007,
using the revised CCR calculation that excluded the costs of
paramedical education programs and weighted the outpatient charges by
the volume of outpatient services furnished by the hospital. We refer
readers to the CY 2007 OPPS/ASC final rule with comment period for more
information (71 FR 67983 through 67985). We first limited the
population of cost reports to only those for hospitals that filed
outpatient claims in CY 2008 before determining whether the CCRs for
such hospitals were valid.
We then calculated the CCRs for each cost center and the overall
ancillary CCR for each hospital for which we had claims data. We did
this using hospital-specific data from the Hospital Cost Report
Information System. We used the most recent available cost report data,
in most cases, cost reports with cost reporting periods beginning in CY
2007. As proposed, for this final rule with comment period, we used the
most recently submitted cost reports to calculate the CCRs to be used
to calculate median costs for the final CY 2010 OPPS payment rates. If
the most recent available cost report was submitted but not settled, we
looked at the last settled cost report to determine the ratio of
submitted to settled cost using the overall ancillary CCR, and we then
adjusted the most recent available submitted but not settled cost
report using that ratio. We then calculated both an overall ancillary
CCR and cost center-specific CCRs for each hospital. We used the
overall ancillary CCR referenced in section II.A.1.c.(1) of this final
rule with comment period for all purposes that require use of an
overall ancillary CCR.
We then flagged CAH claims, which are not paid under the OPPS, and
claims from hospitals with invalid CCRs. The latter included claims
from hospitals without a CCR; those from hospitals paid an all-
inclusive rate; those from hospitals with obviously erroneous CCRs
(greater than 90 or less than .0001); and those from hospitals with
overall ancillary CCRs that were identified as outliers (3 standard
deviations from the geometric mean after removing error CCRs). In
addition, we trimmed the CCRs at the cost center (that is,
departmental) level by removing the CCRs for each cost center as
outliers if they exceeded 3 standard deviations from the
geometric mean. We used a four-tiered hierarchy of cost center CCRs,
which is the revenue code-to-cost center crosswalk, to match a cost
center to every possible revenue code appearing in the outpatient
claims that is relevant to OPPS services, with the top tier being the
most common cost center and the last tier being the default CCR. If a
hospital's cost center CCR was deleted by trimming, we set the CCR for
that cost center to ``missing'' so that another cost center CCR in the
revenue center hierarchy could apply. If no other cost center CCR could
apply to the revenue code on the claim, we used the hospital's overall
ancillary CCR for the revenue code in question. For example, if a visit
was reported under the clinic revenue code but the hospital did not
have a clinic cost center, we mapped the hospital-specific overall
ancillary CCR to the clinic revenue code. The revenue code-to-cost
center crosswalk is available for inspection and comment on the CMS Web
site: http://www.cms.hhs.gov/HospitalOutpatientPPS. Revenue codes not
used to set medians or to model impacts are identified with an ``N'' in
the revenue code-to-cost center crosswalk.
As we proposed, we updated the revenue code-to-cost center
crosswalk to more accurately reflect the current use of revenue codes.
We indicated in the CY 2009 OPPS/ASC final rule with comment period (73
FR 68531) that we intended to assess the NUBC revenue codes to
determine whether any changes to the list of packaged revenue codes
should be proposed for the CY 2010 OPPS. We expanded this evaluation to
review all revenue codes in the revenue code-to-cost center crosswalk
that we have used for OPPS ratesetting purposes in recent years against
the CY 2008 NUBC definitions of revenue codes in place for CY 2008. As
a result of that review, we proposed to revise the revenue code-to-cost
center crosswalk as described in Table 2 of the CY 2010 OPPS/ASC
proposed rule (74 FR 35256 through 35261).
Comment: Two commenters specifically addressed the proposed OPPS
treatment of a number of revenue codes for CY 2010 and submitted
identical, detailed recommendations. In general, the commenters agreed
with the proposed treatment of revenue codes 0253 (Pharmacy; Take Home
Drugs); 0290 (Durable Medical Equipment (other than renal); General
Classification); 0291 (Durable Medical Equipment; Rental); 0292
(Durable Medical Equipment; Purchase of New DME); 0293 (Durable Medical
Equipment; Purchase of Used DME); 0294 (Durable Medical Equipment;
Supplies/Drugs for DME); 052x (Free-Standing Clinic; All
Classifications); 066X (Respite Care; All Classifications); 0749, 0759,
0779, 0799, and 0910 (All Reserved); and 0948 (Other Therapeutic
Services--Pulmonary Rehabilitation). The commenters disagreed with the
proposed treatment of the revenue codes as displayed in Table 3 below,
which provides the commenters' perspective on each revenue code.
Response: Specifically, our revenue proposal addressed: (1)
Acknowledging that costs estimated from charges are associated with
specific revenue codes when calculating OPPS payment rates; (2)
identifying the appropriate cost center CCR that should be used to
estimate costs for certain revenue codes; and (3) packaging of revenue
center costs into the costs of separately paid procedures when revenue
charges are reported without a HCPCS code. The commenters addressed
some revenue codes that were explicitly identified and discussed in the
CY 2010 OPPS/ASC proposed rule (74 FR 35256 through 35266), as well as
some additional revenue codes. Table 3 below displays our response to
each area where the commenters disagreed with our proposed treatment of
the revenue code.
[[Page 60348]]
We note that we continually make our revenue code-to-cost center
crosswalk available on the CMS Web site for review and comment, and we
welcome further comments on the crosswalk from the public at any time.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR20NO09.012
[[Page 60349]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.013
[[Page 60350]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.014
[[Page 60351]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.015
[[Page 60352]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.016
[[Page 60353]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.017
BILLING CODE 4120-01-C
Comment: One commenter suggested that CMS include dates in the
revenue code-to-cost center crosswalk document to allow hospitals and
CMS to easily track the effective dates for each change.
Response: We appreciate the desire to track changes to the revenue
code-to-cost center crosswalk. However, rather than document changes to
individual revenue codes in the crosswalk, we will provide the public
with the current and past copies of the same revenue code-to-cost
center crosswalk that we directly incorporate into our modeling of the
OPPS payment rates each year.
Table 4 below shows the update to the revenue codes for which
estimated costs on each claim for this final rule with comment period
are based and incorporates the costs for those revenue codes into APC
median cost estimates. Column A of Table 4 provides the 2008 revenue
code and description. Column B indicates whether the charges reported
with the revenue code will be converted to cost and incorporated into
median cost estimates for CY 2010. Column C indicates whether the
charges reported with the revenue code were converted to cost and
incorporated into median cost estimates for the CY 2009 OPPS. In both
columns, a ``Y'' indicates that the charges will be converted to cost
in CY 2010 (or were converted for CY 2009), and an ``N'' indicates that
charges reported under the revenue code will not be converted to cost
and incorporated into median cost estimates. Finally, Column D provides
our rationale for the CY 2010 final change.
BILLING CODE 4120-01-P
[[Page 60354]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.018
[[Page 60355]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.019
[[Page 60356]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.020
[[Page 60357]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.021
BILLING CODE 4120-01-C
Also, as a result of our comprehensive review of the revenue codes
included in the revenue code-to-cost center crosswalk, as we proposed,
we are adding revenue codes to the hierarchy of primary, secondary, and
tertiary hospital cost report cost centers that result in the
departmental CCRs that we use to estimate cost from charges for some
revenue codes or to revise the applicable cost centers associated with
a given revenue code. Table 5 below lists the revenue codes for which
we made changes to the revenue code-to-cost center crosswalk for CY
2010 ratesetting and our rationale for each change. With the exception
of revenue code 0942 (Other Therapeutic Services; Education/Training),
the revenue codes for which we made changes to the designated
departmental CCRs are those identified in our comprehensive review that
are also listed above in Table 4.
[[Page 60358]]
Table 5--Changes to CY 2010 OPPS Hierarchy of Cost Centers in the
Revenue Code-to-Cost Center Crosswalk
------------------------------------------------------------------------
2008 Revenue code and
description Rationale for CY 2010 change
------------------------------------------------------------------------
0392--Administration, We crosswalked charges under revenue code
Processing and Storage for 0392 to cost center 4700 (Blood Storing,
Blood and Blood Components; Processing, & Transfusing) because we
Processing and Storage. believe that cost center 4700 is the
most likely departmental cost center to
which hospitals would assign the costs
of blood processing and storage. We made
no secondary or tertiary cost centers
because we believe that no other
departmental cost centers are
appropriate.
0623--Medical Surgical We crosswalked the charges reported under
Supplies--Extension of 027X; revenue code 0623 to cost center 5500
Surgical Dressings. (Medical Supplies Charged to Patients)
as the primary cost center because we
believe that the costs associated with
the charges for surgical dressings are
most likely to be assigned by hospitals
to cost center 5500. We made no
secondary or tertiary cost centers
because we believe that no other
departmental cost centers are
appropriate.
0942--Other Therapeutic We crosswalked the charges under revenue
Services (also see 095x, an code 0942 to cost center 6000 (Clinic)
extension of 094x); Educ/ as the primary cost center. Previously,
Training. the charges under revenue code 0942 were
crosswalked to the overall ancillary
CCR. As discussed above, we believe that
cost center 6000 is a more appropriate
primary cost center. We made no
secondary or tertiary cost centers
because we believe that no other
departmental cost centers are
appropriate.
0948--Other Therapeutic We crosswalked the charges under revenue
Services (also see 095x, an code 0948 to cost center 4900
extension of 094x); (Respiratory Therapy) as primary and to
Pulmonary Rehabilitation. cost center 6000 (Clinic) as secondary
because we believe that hospitals are
most likely to assign the costs of these
services to these cost centers. We are
not establishing a tertiary cost center.
------------------------------------------------------------------------
Having revised the revenue code-to-cost center crosswalk, we then
converted the charges to costs on each claim by applying the CCR that
we believed was best suited to the revenue code indicated on the line
with the charge. One exception to this general methodology for
converting charges to costs on each claim is the calculation of median
blood costs, as discussed in section II.A.2.d.(2) of the proposed rule
and this final rule with comment period.
Thus, we applied CCRs as described above to claims with bill type
12X, 13X, or 14X, excluding all claims from CAHs and hospitals in
Maryland, Guam, the U.S. Virgin Islands, American Samoa, and the
Northern Mariana Islands and claims from all hospitals for which CCRs
were flagged as invalid.
We identified claims with condition code 41 as partial
hospitalization services of hospitals and moved them to another file.
These claims were combined with the 76X claims identified previously to
calculate the partial hospitalization per diem rates. We note that the
separate file containing partial hospitalization claims is included in
the files that are available for purchase as discussed above.
We then excluded claims without an HCPCS code. We moved to another
file claims that contained nothing but influenza and pneumococcal
pneumonia (PPV) vaccines. Influenza and PPV vaccines are paid at
reasonable cost and, therefore, these claims are not used to set OPPS
rates.
We next copied line-item costs for drugs, blood, and brachytherapy
sources (the lines stay on the claim, but are copied onto another file)
to a separate file. No claims were deleted when we copied these lines
onto another file. These line-items are used to calculate a per unit
mean and median cost and a per day mean and median cost for drugs,
therapeutic radiopharmaceutical agents, and brachytherapy sources, as
well as other information used to set payment rates, such as a unit-to-
day ratio for drugs.
To implement our policy to redistribute some portion of total cost
for packaged drugs and biologicals to the separately payable drugs and
biologicals as acquisition and pharmacy overhead and handling costs
discussed in section V.B.3. of this final rule with comment period, we
used the line-item cost data for drugs and biologicals for which we had
an HCPCS code with ASP pricing information to calculate the ASP+X
values first for all drugs and biologicals, and then for separately
payable drugs and biologicals and for packaged drugs and biologicals,
respectively, by taking the ratio of total claim cost for each group
relative to total ASP dollars (per unit of each drug or biological
HCPCS code's July 2009 ASP amount multiplied by total units for each
drug or biological in the CY 2008 claims data). These values are ASP+11
percent, ASP-3 percent, and ASP+259 percent, respectively. As we
discuss in greater detail in section V.B.3. of this final rule with
comment period, we are finalizing a policy to redistribute $150 million
of the total cost in our claims data for packaged drugs and biologicals
that have an associated ASP from packaged drugs with an ASP to
separately payable drugs and biologicals. The $150 million is, roughly,
one-third of the difference of $445 million between the total cost of
packaged drugs and biologicals with an associated ASP in our CY 2008
claims data ($616 million) and ASP for the same drugs and biologicals
($171 million). In response to comments that CMS excluded valid
overhead and handling costs associated with drugs lacking ASP
information, largely costs estimated from uncoded charges reported
under pharmacy revenue codes, we also are finalizing a policy to
redistribute an additional $50 million of the total cost in our claims
data for drugs and biologicals lacking an ASP, largely for estimated
costs associated with uncoded charges billed under pharmacy revenue
code series 025X (Pharmacy (also see 063X, an extension of 025X)), 026X
(IV Therapy), and 063X (Pharmacy--Extension of 025X). As we state in
section V.B.3. of this final rule with comment period, because we do
not know ASP for this subset of drug costs, we do not know the amount
of associated pharmacy overhead. We observe about $656 million for
drugs lacking an ASP in our CY 2008 claims data. This total excludes
the cost of diagnostic and therapeutic radiopharmaceuticals because
they are not reported under pharmacy revenue codes or under the
pharmacy cost center on the cost report.
Removing a total of $150 million in pharmacy overhead cost from
packaged drugs and biologicals reduces the $616 million to $466
million, a 24 percent reduction. Removing $50 million from the cost of
drugs lacking an ASP reduces the $656 million to $606 million, an 8
percent reduction. To implement our final CY 2010 policy to
redistribute $150 million in claim cost from
[[Page 60359]]
packaged drugs and biologicals with an ASP to separately payable drugs
and biologicals and $50 million in claim cost from packaged drugs and
biologicals lacking an ASP, including uncoded pharmacy revenue code
charges, we multiplied the cost of each packaged drug or biological
with an HCPCS code and ASP pricing information in our CY 2008 claims
data by 0.76, and we multiplied all other packaged drug costs in our CY
2008 claims data, excluding those for diagnostic radiopharmaceuticals,
by 0.92. We also added the redistributed $200 million to the total cost
of separately payable drugs and biologicals in our CY 2008 claims data,
which increased the relationship between the total cost for separately
payable drugs and biologicals and ASP dollars for the same drugs and
biologicals to ASP+4 percent.
For CY 2010, we added an additional trim in our claims preparation
to remove line-items that were not paid during claim processing,
presumably for a line-item rejection or denial. The number of edits for
valid OPPS payment in the Integrated Outpatient Code Editor (I/OCE) and
elsewhere has grown significantly in the past few years, especially
with the implementation of the full spectrum of National Correct Coding
Initiative (NCCI) edits. To ensure that we are using valid claims that
represent the cost of payable services to set payment rates, we removed
line-items with an OPPS status indicator for the claim year (CY 2008)
and a status indicator of ``S,'' ``T,'' ``V,'' or ``X'' when separately
paid under the final CY 2010 payment system. This logic preserves
charges for services that would not have been paid in the claim year
but for which some estimate of cost is needed for the prospective year,
such as services newly proposed to come off the inpatient list for CY
2010 which were assigned status indicator ``C'' in the claim year.
Using February 2009 APC Panel data, we estimate that the impact of
removing line-items with valid status indicators that received no CY
2008 payment was limited to approximately 1.4 percent of all line-items
for separately paid services. This additional trim reduced the number
of single bills available for ratesetting by 1.5 percent. For
approximately 92 percent of procedural APCs, we observed a change in
the APC median cost of less than 1 percent. A handful of APCs
experienced greater changes in median cost. For example, APC 0618
(Trauma Response with Critical Care) experienced declines in both the
number of single bills used to set the median cost and the estimated
median cost itself. This occurred because the I/OCE has an edit to
ensure that HCPCS code G0390 (Trauma response team activation
associated with hospital critical care service), which is assigned to
APC 0618, receives payment only when one unit of G0390 appears with
both a revenue code in the 68x series and CPT code 99291 (Critical
care, evaluation and management of the critically ill or critically
injured patient; first 30-74 minutes) on the claim for the same date of
service, as described in the CY 2007 OPPS/ASC final rule with comment
period (71 FR 68134). If the I/OCE criteria are not met, HCPCS code
G0390 is not separately paid, and we found that a number of CY 2008
claims including HCPCS code G0390 did not meet the criteria for
payment. On the other hand, a few APCs had greater estimated median
costs and greater numbers of single bills as a result of this
additional trim, presumably because removing lines from the claim
allowed us to identify more single bills. We believe that removing
lines with valid status indicators that were edited and not paid during
claims processing increases the accuracy of the single bills used to
determine the APC median costs for ratesetting.
Comment: One commenter claimed that the removal of charges and
costs from denied lines was in contrast to longstanding policy for
hospital inpatient services. A few commenters expressed concern about
APC 0312 (Radioelement Applications), noting that there has been
significant fluctuation in the payment rates for this APC in the past.
They believe that implementing the proposed line-item trim, which
removed a significant number of single claims, may have contributed to
that instability. The commenters suggested that historical data would
not indicate any reason for significant line-items to be trimmed. One
commenter believed that the payment rates for low dose rate prostate
brachytherapy were arbitrary and unfair. Based on the commenters'
impression that the purpose of the line-item trim was to act as a
quality check, the commenters requested that the line-item trim be
suppressed for APC 0312.
Response: While payment systems such as the IPPS do not remove
charge and cost data, this is largely due to the differences in the
fundamental structures of the two payment systems. The IPPS is a system
based on DRGs that relies on significant bundling of services under
common clinical scenarios, while the OPPS is largely based on payment
for a specific individual service. These differences in payment
approach under each system are reflected in the way that data are used
to establish the payment weights, from the CCRs used to reduce charges
to cost to the structure of how charge and cost information is
classified. One byproduct of the differences between the IPPS and the
OPPS is the level of editing in each system to ensure that a correct
payment is made. Similarly, there are many NCCI edits to ensure that
payment is made to hospitals for outpatient services only when there is
correct coding because there are hundreds of APCs that may contribute
to inappropriate unbundling of services when those services are
reported for a hospital outpatient encounter. In the CY 2010 OPPS/ASC
proposed rule (74 FR 35262), we indicated that removing lines with
valid status indicators that were edited and not paid during claims
processing increases the accuracy of the single bills used for
ratesetting. Doing so allows the single bills used for ratesetting
purposes to be representative of those services as they would be paid
in the prospective year.
In studying the billing patterns for HCPCS codes that are assigned
to APC 0312, we noted that the line-item trim removes a number of
unpaid single bills for this APC, as the commenters had suggested.
However, we also observed a general decline in the reporting of
services assigned to this APC that was unrelated to the line-item trim,
suggesting that a portion of the observed decline in the number of
single bills available for ratesetting is due to an actual reduction in
the frequency that the services assigned to APC 0312 are furnished.
While we understand the commenters' concern regarding the reduction of
single bills used in ratesetting for APC 0312, the data suggest that
the reduction is due in part to a decline in the billing of individual
services assigned to the APC. Further, we believe that removing these
line-items which have likely been rejected or denied is appropriate in
light of the goal of using accurate single procedure claims for
ratesetting under the OPPS.
After consideration of the public comments received relating to our
CY 2010 proposal for claims preparation, we are adopting it as final,
with modification to the treatment of certain revenue codes as
described in Table 4 in this section.
b. Splitting Claims and Creation of ``Pseudo'' Single Claims
(1) Splitting Claims
We then split the remaining claims into five groups: single majors,
multiple majors, single minors, multiple minors, and other claims.
(Specific definitions
[[Page 60360]]
of these groups follow below.) In the CY 2010 OPPS/ASC proposed rule
(74 FR 35262), we proposed to continue our current policy of defining
major procedures as any HCPCS code having a status indicator of ``S,''
``T,'' ``V,'' or ``X;'' defining minor procedures as any code having a
status indicator of ``F,'' ``G,'' ``H,'' ``K,'' ``L,'' ``R,'' ``U,'' or
``N,'' and classifying ``other'' procedures as any code having a status
indicator other than one that we have classified as major or minor. For
CY 2010, we proposed to continue assigning status indicator ``R'' to
blood and blood products; status indicator ``U'' to brachytherapy
sources; status indicator ``Q1'' to all ``STVX-packaged codes;'' status
indicator ``Q2'' to all ``T-packaged codes;'' and status indicator
``Q3'' to all codes that may be paid through a composite APC based on
composite-specific criteria or paid separately through single code APCs
when the criteria are not met. As discussed in the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68709), we established status
indicators ``Q1,'' ``Q2,'' and ``Q3'' to facilitate identification of
the different categories of codes. We proposed to treat these codes in
the same manner for data purposes for CY 2010 as we have treated them
since CY 2008. Specifically, we proposed to continue to evaluate
whether the criteria for separate payment of codes with status
indicator ``Q1'' or ``Q2'' are met in determining whether they are
treated as major or minor codes. As discussed earlier in this section,
because we proposed to treat CPT code 76098 as conditionally packaged,
this logic now includes the addition of CPT code 76098 as a ``Q2''
code. Codes with status indicator ``Q1'' or ``Q2'' are carried through
the data either with status indicator ``N'' as packaged or, if they
meet the criteria for separate payment, they are given the status
indicator of the APC to which they are assigned and are considered as
``pseudo'' single major codes. Codes assigned status indicator ``Q3''
are paid under individual APCs unless they occur in the combinations
that qualify for payment as composite APCs and, therefore, they carry
the status indicator of the individual APC to which they are assigned
through the data process and are treated as major codes during both the
split and ``pseudo'' single creation process. The calculation of the
median costs for composite APCs from multiple major claims is discussed
in section II.A.2.e. of this final rule with comment period.
Specifically, we divided the remaining claims into the following
five groups:
1. Single Major Claims: Claims with a single separately payable
procedure (that is, status indicator ``S,'' ``T,'' ``V,'' or ``X,''
which includes codes with status indicator ``Q3''); claims with one
unit of a status indicator ``Q1'' code (``STVX-packaged'') where there
was no code with status indicator ``S,'' ``T,'' ``V,'' or ``X'' on the
same claim on the same date; or claims with one unit of a status
indicator ``Q2'' code (``T-packaged'') where there was no code with a
status indicator ``T'' on the same claim on the same date.
2. Multiple Major Claims: Claims with more than one separately
payable procedure (that is, status indicator ``S,'' ``T,'' ``V,'' or
``X,'' which includes codes with status indicator ``Q3''), or multiple
units of one payable procedure. These claims include those codes with a
status indicator ``Q2'' code (``T-packaged'') where there was no
procedure with a status indicator ``T'' on the same claim on the same
date of service but where there was another separately paid procedure
on the same claim with the same date of service (that is, another code
with status indicator ``S,'' ``V,'' or ``X''). We also include in this
set, claims that contained one unit of one code when the bilateral
modifier was appended to the code and the code was conditionally or
independently bilateral. In these cases, the claims represented more
than one unit of the service described by the code, notwithstanding
that only one unit was billed.
3. Single Minor Claims: Claims with a single HCPCS code that was
assigned status indicator ``F,'' ``G,'' ``H,'' ``K,'' ``L,'' ``R,''
``U,'' or ``N'' and not status indicator ``Q1'' (``STVX-packaged'') or
status indicator ``Q2'' (``T-packaged'') code.
4. Multiple Minor Claims: Claims with multiple HCPCS codes that are
assigned status indicator ``F,'' ``G,'' ``H,'' ``K,'' ``L,'' ``R,''
``U,'' or ``N;'' claims that contain more than one code with status
indicator ``Q1'' (``STVX-packaged'') or more than one unit of a code
with status indicator ``Q1'' but no codes with status indicator ``S,''
``T,'' ``V,'' or ``X'' on the same date of service; or claims that
contain more than one code with status indicator ``Q2'' (T-packaged),
or ``Q2'' and ``Q1,'' or more than one unit of a code with status
indicator ``Q2'' but no code with status indicator ``T'' on the same
date of service.
5. Non-OPPS Claims: Claims that contain no services payable under
the OPPS (that is, all status indicators other than those listed for
major or minor status). These claims were excluded from the files used
for the OPPS. Non-OPPS claims have codes paid under other fee
schedules, for example, durable medical equipment or clinical
laboratory tests, and do not contain a code for a separately payable or
packaged OPPS service. Non-OPPS claims include claims for therapy
services paid sometimes under the OPPS but billed, in these non-OPPS
cases, with revenue codes indicating that the therapy services would be
paid under the Medicare Physician Fee Schedule (MPFS).
The claims listed in numbers 1, 2, 3, and 4 above are included in
the data file that can be purchased as described above. Claims that
contain codes to which we have assigned status indicators ``Q1''
(``STVX-packaged'') and ``Q2'' (``T-packaged'') appear in the data for
the single major file, the multiple major file, and the multiple minor
file used in this final rule with comment period. Claims that contain
codes to which we have assigned status indicator ``Q3'' (composite APC
members) appear in both the data of the single and multiple major files
used in this final rule with comment period, depending on the specific
composite calculation.
Because we did not receive any public comments on our proposed
process of organizing claims by type, we are finalizing our CY 2010
proposal without modification.
(2) Creation of ``Pseudo'' Single Claims
As we proposed, to develop ``pseudo'' single claims for this final
rule with comment period, we examined both the multiple major claims
and the multiple minor claims. We first examined the multiple major
claims for dates of service to determine if we could break them into
``pseudo'' single procedure claims using the dates of service for all
lines on the claim. If we could create claims with single major
procedures by using dates of service, we created a single procedure
claim record for each separately payable procedure on a different date
of service (that is, a ``pseudo'' single).
We also used the bypass codes listed earlier in Table 1 and
discussed in section II.A.1.b. of this final rule with comment period
to remove separately payable procedures that we determined contained
limited or no packaged costs or that were otherwise suitable for
inclusion on the bypass list from a multiple procedure bill. As
discussed above, we ignore the ``overlap bypass codes,'' that is, those
HCPCS codes that are both on the bypass list and are members of the
multiple imaging
[[Page 60361]]
composite APCs, in this initial assessment for ``pseudo'' single
claims. The CY 2010 ``overlap bypass codes'' are listed in Table 1 in
section II.A.1.b. of this final rule with comment period. When one of
the two separately payable procedures on a multiple procedure claim was
on the bypass list, we split the claim into two ``pseudo'' single
procedure claim records. The single procedure claim record that
contained the bypass code did not retain packaged services. The single
procedure claim record that contained the other separately payable
procedure (but no bypass code) retained the packaged revenue code
charges and the packaged HCPCS code charges. We also removed lines that
contained multiple units of codes on the bypass list and treated them
as ``pseudo'' single claims by dividing the cost for the multiple units
by the number of units on the line. Where one unit of a single,
separately payable procedure code remained on the claim after removal
of the multiple units of the bypass code, we created a ``pseudo''
single claim from that residual claim record, which retained the costs
of packaged revenue codes and packaged HCPCS codes. This enabled us to
use claims that would otherwise be multiple procedure claims and could
not be used.
We then assessed the claims to determine if the criteria for the
multiple imaging composite APCs, discussed in section II.A.2.e.(5) of
this final rule with comment period, were met. Where the criteria for
the imaging composite APCs were met, we created a ``single session''
claim for the applicable imaging composite service and determined
whether we could use the claim in ratesetting. For HCPCS codes that are
both conditionally packaged and are members of a multiple imaging
composite APC, we first assessed whether the code would be packaged and
if so, the code ceased to be available for further assessment as part
of the composite APC. Because the packaged code would not be a
separately payable procedure, we considered it to be unavailable for
use in setting the composite APC median cost. Having identified
``single session'' claims for the imaging composite APCs, we reassessed
the claim to determine if, after removal of all lines for bypass codes,
including the ``overlap bypass codes,'' a single unit of a single
separately payable code remained on the claim. If so, we attributed the
packaged costs on the claim to the single unit of the single remaining
separately payable code other than the bypass code to create a
``pseudo'' single claim. We also identified line-items of overlap
bypass codes as a ``pseudo'' single claim. This allowed us to use more
claims data for ratesetting purposes.
We also examined the multiple minor claims to determine whether we
could create ``pseudo'' single procedure claims. Specifically, where
the claim contained multiple codes with status indicator ``Q1''
(``STVX-packaged'') on the same date of service or contained multiple
units of a single code with status indicator ``Q1,'' we selected the
status indicator ``Q1'' HCPCS code that had the highest CY 2008
relative weight, set the units to one on that HCPCS code to reflect our
policy of paying only one unit of a code with a status indicator of
``Q1.'' We then packaged all costs for the following into a single cost
for the ``Q1'' HCPCS code that had the highest CY 2008 relative weight
to create a ``pseudo'' single claim for that code: additional units of
the status indicator ``Q1'' HCPCS code with the highest CY 2008
relative weight; other codes with status indicator ``Q1;'' and all
other packaged HCPCS codes and packaged revenue code costs. We changed
the status indicator for selected codes from the data status indicator
of ``N'' to the status indicator of the APC to which the selected
procedure was assigned for further data processing and considered this
claim as a major procedure claim. We used this claim in the calculation
of the APC median cost for the status indicator ``Q1'' HCPCS code.
Similarly, where a multiple minor claim contained multiple codes
with status indicator ``Q2'' (``T-packaged'') or multiple units of a
single code with status indicator ``Q2,'' we selected the status
indicator ``Q2'' HCPCS code that had the highest CY 2008 relative
weight, set the units to one on that HCPCS code to reflect our policy
of paying only one unit of a code with a status indicator of ``Q2.'' We
then packaged all costs for the following into a single cost for the
``Q2'' HCPCS code that had the highest CY 2008 relative weight to
create a ``pseudo'' single claim for that code: additional units of the
status indicator ``Q2'' HCPCS code with the highest CY 2008 relative
weight; other codes with status indicator ``Q2;'' and other packaged
HCPCS codes and packaged revenue code costs. We changed the status
indicator for the selected code from a data status indicator of ``N''
to the status indicator of the APC to which the selected code was
assigned, and we considered this claim as a major procedure claim.
Lastly, where a multiple minor claim contained multiple codes with
status indicator ``Q2'' (``T-packaged'') and status indicator ``Q1''
(``STVX-packaged''), we selected the status indicator ``Q2'' HCPCS code
(``T-packaged'') that had the highest relative weight for CY 2008 and
set the units to one on that HCPCS code to reflect our policy of paying
only one unit of a code with a status indicator of ``Q2.'' We then
packaged all costs for the following into a single cost for the
selected (``T packaged'') HCPCS code to create a ``pseudo'' single
claim for that code: additional units of the status indicator ``Q2''
HCPCS code with the highest CY 2008 relative weight; other codes with
status indicator ``Q2;'' codes with status indicator ``Q1'' (``STVX-
packaged''); and other packaged HCPCS codes and packaged revenue code
costs. We favor status indicator ``Q2'' over ``Q1'' HCPCS codes because
``Q2'' HCPCS codes have higher CY 2008 relative weights. If a status
indicator ``Q1'' HCPCS code had a higher CY 2008 relative weight, it
would become the primary code for the simulated single bill process. We
changed the status indicator for the selected status indicator ``Q2''
(``T-packaged'') code from a data status indicator of ``N'' to the
status indicator of the APC to which the selected code was assigned and
we considered this claim as a major procedure claim.
We excluded those claims that we were not able to convert to single
claims even after applying all of the techniques for creation of
``pseudo'' singles to multiple major and to multiple minor claims. As
has been our practice in recent years, we also excluded claims that
contained codes that were viewed as independently or conditionally
bilateral and that contained the bilateral modifier (Modifier 50
(Bilateral procedure)) because the line-item cost for the code
represented the cost of two units of the procedure, notwithstanding
that the code appeared with a unit of one.
Comment: One commenter noted that the bilateral procedure logic did
not appear to appropriately exclude claims with bilateral codes from
the single major claims, having observed bilateral procedure codes in
that claims subset. Also, the commenter suggested that the conditional
packaging of the status indicator ``Q2'' (``T-packaged'') codes did not
appear to be treated consistently with the policy we proposed, which
was that a ``Q2'' procedure with the highest scaled weight would be
paid separately when there is no status indicator ``T'' procedure on
the claim and that the costs of any other ``Q2'' codes on the claim
would be packaged.
Response: In seeking to address the commenter's observations, we
discovered that the bilateral logic was
[[Page 60362]]
not processed correctly as we proposed. Similarly, inaccurate program
logic in the weight comparison for status indicator ``Q2'' (``T-
packaged'') codes caused the packaging to be assigned based on order of
precedence rather than by weight.
For this final rule with comment period, we accurately applied the
bilateral and status indicator ``Q2'' (``T-packaged'') weight
comparison packaging logic, consistent with the proposed and final
policy. The national unadjusted payments for CY 2010 accurately reflect
the policy that we proposed to continue for CY 2010 OPPS and that we
are finalizing in this final rule with comment period.
After consideration of the public comment received, we are
finalizing our CY 2010 proposal, without modification, for the process
by which we develop ``pseudo'' single procedure claims.
c. Completion of Claim Records and Median Cost Calculations
We then packaged the costs of packaged HCPCS codes (codes with
status indicator ``N'' listed in Addendum B to this final rule with
comment period and the costs of those lines for codes with status
indicator ``Q1'' or ``Q2'' when they are not separately paid), and the
costs of packaged revenue codes into the cost of the single major
procedure remaining on the claim. For CY 2010, this packaging also
included the redistributed packaged pharmacy overhead cost relative to
the units of separately payable drugs on each single procedure claim.
As noted in the CY 2008 OPPS/ASC final rule with comment period (72
FR 66606), for the CY 2008 OPPS, we adopted an APC Panel recommendation
that requires CMS to review the final list of packaged revenue codes
for consistency with OPPS policy and ensure that future versions of the
I/OCE edit accordingly. We compared the packaged revenue codes in the
I/OCE to the final list of packaged revenue codes for the CY 2009 OPPS
(73 FR 68531 through 68532) that we used for packaging costs in median
calculation. As a result of that analysis, we proposed to use the
packaged revenue codes for CY 2010 that were displayed in Table 4 of
the CY 2010 OPPS/ASC proposed rule (74 FR 35265 through 35266).
As noted in the CY 2009 OPPS/ASC final rule with comment period (73
FR 68531), we replaced the NUBC standard abbreviations for the revenue
codes listed in Table 2 of the CY 2009 OPPS/ASC proposed rule with the
most current NUBC descriptions of the revenue code categories and
subcategories to better articulate the meanings of the revenue codes
without actually changing the proposed list of revenue codes. In the
course of making the changes in labeling for the revenue codes in Table
2 of the CY 2009 OPPS/ASC final rule with comment period, we noticed
some changes to revenue categories and subcategories that we believed
warranted further review for future OPPS updates. Although we finalized
the list of packaged revenue codes in Table 2 for CY 2009, we indicated
in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68531)
that we intended to assess the NUBC revenue codes to determine whether
any changes to the list of packaged revenue codes should be proposed
for the CY 2010 OPPS. We specifically requested public input and
discussion on this issue during the comment period of the CY 2009 OPPS/
ASC final rule with comment period. We did not receive any public
comments on this issue. As we discuss in section II.A.2.a. of this
final rule with comment period, we have completed that analysis for all
revenue codes in the revenue code-to-cost center crosswalk. As
discussed in the CY 2010 OPPS/ASC proposed rule (74 FR 35264 through
35265), as a result, we proposed to add several revenue codes to the
list of packaged revenue codes for the CY 2010 OPPS. Specifically, we
believe that the costs derived from charges reported under revenue
codes 0261 (IV Therapy; Infusion Pump); 0392 (Administration,
Processing and Storage for Blood and Blood Components; Processing and
Storage); 0623 (Medical Supplies--Extension of 027X, Surgical
Dressings); 0943 (Other Therapeutic Services (also see 095X, an
extension of 094X), Cardiac Rehabilitation); and 0948 (Other
Therapeutic Services (also see 095X, an extension of 094X), Pulmonary
Rehabilitation) are appropriately packaged into payment for other OPPS
services when charges appear on lines with these revenue codes but no
HCPCS code appears on the line. Revenue codes that we proposed to add
to the CY 2010 packaged revenue code list were identified by asterisks
(*) in Table 4 of the CY 2010 OPPS/ASC proposed rule.
The public comments that we received that resulted in our changing
the list of packaged revenue codes for CY 2010 are discussed in section
II.A.2.a. of this final rule with comment period. Thus, we are
finalizing the proposed packaged revenue codes for CY 2010, with
modification. The final CY 2010 packaged revenue codes are listed in
Table 6 below. Revenue codes that we are adding to the CY 2010 packaged
revenue code list are identified by asterisks (*) in Table 6.
Table 6--Final CY 2010 Packaged Revenue Codes
------------------------------------------------------------------------
Revenue code Description
------------------------------------------------------------------------
0250................................... Pharmacy; General
Classification.
0251................................... Pharmacy; Generic Drugs.
0252................................... Pharmacy; Non-Generic Drugs.
0254................................... Pharmacy; Drugs Incident to
Other Diagnostic Services.
0255................................... Pharmacy; Drugs Incident to
Radiology.
0257................................... Pharmacy; Non-Prescription.
0258................................... Pharmacy; IV Solutions.
0259................................... Pharmacy; Other Pharmacy.
0260................................... IV Therapy; General
Classification.
*0261.................................. IV Therapy; Infusion Pump.
0262................................... IV Therapy; IV Therapy/Pharmacy
Svcs.
0263................................... IV Therapy; IV Therapy/Drug/
Supply Delivery.
0264................................... IV Therapy; IV Therapy/
Supplies.
0269................................... IV Therapy; Other IV Therapy.
0270................................... Medical/Surgical Supplies and
Devices; General
Classification.
0271................................... Medical/Surgical Supplies and
Devices; Non-sterile Supply.
0272................................... Medical/Surgical Supplies and
Devices; Sterile Supply.
0275................................... Medical/Surgical Supplies and
Devices; Pacemaker.
0276................................... Medical/Surgical Supplies and
Devices; Intraocular Lens.
0278................................... Medical/Surgical Supplies and
Devices; Other Implants.
0279................................... Medical/Surgical Supplies and
Devices; Other Supplies/
Devices.
0280................................... Oncology; General
Classification.
0289................................... Oncology; Other Oncology.
0343................................... Nuclear Medicine; Diagnostic
Radiopharmaceuticals.
0344................................... Nuclear Medicine; Therapeutic
Radiopharmaceuticals.
0370................................... Anesthesia; General
Classification.
0371................................... Anesthesia; Anesthesia Incident
to Radiology.
0372................................... Anesthesia; Anesthesia Incident
to Other DX Services.
0379................................... Anesthesia; Other Anesthesia.
0390................................... Administration, Processing and
Storage for Blood and Blood
Components; General
Classification.
[[Page 60363]]
*0392.................................. Administration, Processing and
Storage for Blood and Blood
Components; Processing and
Storage.
0399................................... Administration, Processing and
Storage for Blood and Blood
Components; Other Blood
Handling.
0621................................... Medical Surgical Supplies--
Extension of 027X; Supplies
Incident to Radiology.
0622................................... Medical Surgical Supplies--
Extension of 027X; Supplies
Incident to Other DX Services.
*0623.................................. Medical Supplies--Extension of
027X, Surgical Dressings.
0624................................... Medical Surgical Supplies--
Extension of 027X; FDA
Investigational Devices.
0630................................... Pharmacy--Extension of 025X;
Reserved.
0631................................... Pharmacy--Extension of 025X;
Single Source Drug.
0632................................... Pharmacy--Extension of 025X;
Multiple Source Drug.
0633................................... Pharmacy--Extension of 025X;
Restrictive Prescription.
0681................................... Trauma Response; Level I
Trauma.
0682................................... Trauma Response; Level II
Trauma.
0683................................... Trauma Response; Level III
Trauma.
0684................................... Trauma Response; Level IV
Trauma.
0689................................... Trauma Response; Other.
0700................................... Cast Room; General
Classification.
0710................................... Recovery Room; General
Classification.
0720................................... Labor Room/Delivery; General
Classification.
0721................................... Labor Room/Delivery; Labor.
0732................................... EKG/ECG (Electrocardiogram);
Telemetry.
0762................................... Specialty Room--Treatment/
Observation Room; Observation
Room.
0801................................... Inpatient Renal Dialysis;
Inpatient Hemodialysis.
0802................................... Inpatient Renal Dialysis;
Inpatient Peritoneal Dialysis
(Non-CAPD).
0803................................... Inpatient Renal Dialysis;
Inpatient Continuous
Ambulatory Peritoneal Dialysis
(CAPD).
0804................................... Inpatient Renal Dialysis;
Inpatient Continuous Cycling
Peritoneal Dialysis (CCPD).
0809................................... Inpatient Renal Dialysis; Other
Inpatient Dialysis.
0810................................... Acquisition of Body Components;
General Classification.
0819................................... Inpatient Renal Dialysis; Other
Donor.
0821................................... Hemodialysis-Outpatient or
Home; Hemodialysis Composite
or Other Rate.
0824................................... Hemodialysis-Outpatient or
Home; Maintenance--100%.
0825................................... Hemodialysis-Outpatient or
Home; Support Services.
0829................................... Hemodialysis-Outpatient or
Home; Other OP Hemodialysis.
0942................................... Other Therapeutic Services
(also see 095X, an extension
of 094x); Education/Training.
*0943.................................. Other Therapeutic Services
(also see 095X, an extension
of 094X), Cardiac
Rehabilitation.
*0948.................................. Other Therapeutic Services
(also see 095X, an extension
of 094X), Pulmonary
Rehabilitation.
------------------------------------------------------------------------
In addition, we excluded: (1) claims that had zero costs after
summing all costs on the claim, and (2) claims containing packaging
flag number 3. Effective for services furnished on or after July 1,
2004, the I/OCE assigned packaging flag number 3 to claims on which
hospitals submitted token charges for a service with status indicator
``S'' or ``T'' (a major separately payable service under the OPPS) for
which the fiscal intermediary or MAC was required to allocate the sum
of charges for services with a status indicator equaling ``S'' or ``T''
based on the relative weight of the APC to which each code was
assigned. We do not believe that these charges, which were token
charges as submitted by the hospital, are valid reflections of hospital
resources. Therefore, we deleted these claims. We also deleted claims
for which the charges equaled the revenue center payment (that is, the
Medicare payment) on the assumption that where the charge equaled the
payment, to apply a CCR to the charge would not yield a valid estimate
of relative provider cost.
For the remaining claims, we then standardized 60 percent of the
costs of the claim (which we have previously determined to be the
labor-related portion) for geographic differences in labor input costs.
We made this adjustment by determining the wage index that applied to
the hospital that furnished the service and dividing the cost for the
separately paid HCPCS code furnished by the hospital by that wage
index. As has been our policy since the inception of the OPPS, we
proposed to use the pre-reclassified wage indices for standardization
because we believe that they better reflect the true costs of items and
services in the area in which the hospital is located than the post-
reclassification wage indices and, therefore, would result in the most
accurate unadjusted median costs.
We also excluded claims that were outside 3 standard deviations
from the geometric mean of units for each HCPCS code on the bypass list
(because, as discussed above, we used claims that contain multiple
units of the bypass codes).
After removing claims for hospitals with error CCRs, claims without
HCPCS codes, claims for immunizations not covered under the OPPS, and
claims for services not paid under the OPPS, approximately 58 million
claims were left. Using these 58 million claims, we created
approximately 99 million single and ``pseudo'' single claims, of which
we used 99 million single bills (after trimming out approximately
657,000 claims as discussed above in this section) in the CY 2010
median development and ratesetting.
We used these claims to calculate the CY 2010 median costs for each
separately payable HCPCS code and each APC. The comparison of HCPCS
code-specific and APC medians determines the applicability of the 2
times rule. Section 1833(t)(2) of the Act provides that, subject to
certain exceptions, the items and services within an APC group cannot
be considered comparable with respect to the use of resources if the
highest median (or mean cost, if elected by the Secretary) for an item
or service in the group is more than 2 times greater than the lowest
median cost for an item or service within the same group (the 2 times
rule). Finally, we reviewed the median costs for this final rule with
comment period and reassigned HCPCS codes to different APCs where we
believed that it was appropriate. Section III. of this final rule with
comment period includes a discussion of certain HCPCS code assignment
changes that resulted from examination of the median costs, review of
the public comments, and for other reasons. The APC medians were
recalculated after we reassigned the affected HCPCS codes. Both the
HCPCS code-specific medians and the APC medians were weighted to
account for the inclusion of multiple units of the bypass codes in the
creation of ``pseudo'' single bills.
[[Page 60364]]
Comment: Several commenters objected to the volatility of the OPPS
rates from year to year. The commenters asserted that the absence of
stability in the OPPS rates creates budgeting, planning, and operating
problems for hospitals, and that as more care is provided on an
outpatient, rather than inpatient basis, the need for stable payment
rates from one year to the next becomes more important to hospitals.
Some commenters suggested that CMS limit reductions in APC payments to
a set percentage, with one commenter noting that CMS dampened payment
decreases for blood and blood products to mitigate large payment
fluctuations in order to limit provider losses. One commenter suggested
that the median costs from claims be adjusted to limit changes from
year to year. Another commenter suggested that CMS perform a thorough
examination of the payment rates and examine billed charges, costs,
median and mean costs, and CCRs to isolate the source of the
fluctuations as well as mandate a review of all APCs that fluctuate
above a certain percentage, similar to the 2 times rule.
Response: There are a number of factors pertinent to the OPPS that
may cause median costs to change from one year to the next. Some of
these are a reflection of hospital behavior, and some of them are a
reflection of fundamental characteristics of the OPPS as defined in
statute. For example, the OPPS payment rates are based on hospital cost
report and claims data. However, hospital costs and charges change each
year and this results in both changes to the CCRs taken from the most
currently available cost reports and also differences in the charges on
the claims that are the basis of the calculation of the median costs on
which OPPS rates are based. Similarly, hospitals adjust their mix of
services from year to year by offering new services and ceasing to
furnish services and changing the proportion of the various services
they furnish, which have an impact on the CCRs that we derive from
their cost reports. CMS cannot stabilize these hospital-driven
fundamental inputs to the calculation of OPPS payment rates.
Moreover, there are other essential elements of the OPPS which
contribute to the changes in relative weights each year. These include,
but are not limited to, reassignments of HCPCS codes to APCs to rectify
2 times violations as required by the law, to address the costs of new
services, to address differences in hospitals' costs that may result
from changes in medical practice, and to respond to public comments.
Our efforts to improve payment accuracy may also contribute to payment
volatility in the short run, as may be the case when we are eventually
able to use more specific CCRs to estimate the costs of implantable
devices, based on the final policy that we adopted to disaggregate the
single cost center for medical supplies into two more specific cost
centers, as described in the FY 2009 IPPS final rule (73 FR 48458
through 48467). Moreover, for some services, we cannot avoid using
small numbers of claims, either because the volume of services is
naturally low or because the claims data do not facilitate the
calculation of a median cost for a single service. Where there are
small numbers of claims that are used in median calculation, there is
more volatility in the median cost from one year to the next. Lastly,
changes to OPPS payment policy (for example, changes to packaging) also
contribute to some extent to the fluctuations in the OPPS payment rates
for the same services from year to year.
We cannot avoid the naturally occurring volatility in the cost
report and claims data that hospitals submit and on which the payment
rates are based. Moreover (with limited exceptions), we reassign HCPCS
codes to APCs where it is necessary to avoid 2 times violations.
However, we have made other changes to resolve some of the other
potential reasons for instability from year to year. Specifically, we
continue to seek ways to use more claims data so that we have fewer
APCs for which there are small numbers of single bills used to set the
APC median costs. Moreover, we have tried to eliminate APCs with very
small numbers of single bills where we could do so. We recognize that
changes to payment policies, such as the packaging of payment for
ancillary and supportive services and the implementation of composite
APCs, may contribute to volatility in payment rates in the short term,
but we believe that larger payment packages and bundles should help to
stabilize payments in future years by enabling us to use more claims
data and by establishing payments for larger groups of services.
While we recognize the reasoning behind a policy that would dampen
both increases and decreases in the weights or payment rates of the
OPPS, this would not be as simple or beneficial as commenters have
implied. Implementing such a dampening policy would require the
assumption that payment policy is static from year to year. Based on
the commenters' own acknowledgement, and the data used to develop the
OPPS, we know that this is not true. Further, in seeking to mitigate
fluctuations in the OPPS, implementing such a system would make
payments less reflective of the true service costs. Dampening payments
across all APCs in this way could unfairly harm those hospitals whose
true cost for a service increases significantly, while inappropriately
benefiting those hospitals whose true cost for a service decreases
significantly. While one commenter requested that CMS adopt a policy to
investigate any APCs that fluctuate above a certain threshold, this
mandate would be unnecessary since we already examine all APCs that
experience significant median cost fluctuations, as described in the CY
2010 OPPS/ASC proposed rule (74 FR 35626 through 35627).
Comment: Some commenters asked that CMS provide an adjustment for
medical education costs under the OPPS because many of the costs of
teaching services are now incurred in the HOPD as services previously
furnished only in the inpatient setting are now being furnished in the
HOPD. They also noted that the OPPS did not have a teaching adjustment
while many of the other Medicare payment systems, such as inpatient,
psychiatric, and rehabilitation facilities, already include one. These
commenters stated that CMS indicated that it would study the costs and
payment differential among different classes of providers in the April
7, 2000 OPPS final rule but has not done so. They recommended that CMS
study whether the hospital outpatient costs of teaching hospitals are
higher than the costs of other hospitals for purposes of determining
whether there should be a teaching hospital adjustment. The commenters
explained that analysis of 2007 Medicare cost reports showed that the
average outpatient margins were -30.4 for major teaching hospitals, -
13.8 for other teaching hospitals, and -14.4 for nonteaching hospitals.
They believed that these findings demonstrated that the hospital
outpatient costs of major teaching hospitals are significantly greater
than the costs of other hospitals. The commenters requested that CMS
conduct its own analysis and that if that analysis showed a difference
due to the unique missions of teaching hospitals, CMS should add a
teaching adjustment to the OPPS.
Response: Unlike payment under the IPPS, the law does not provide
for payment for indirect medical education costs to be made under the
OPPS. Section 1833(t)(2)(E) of the Act states that the Secretary shall
establish, in a budget neutral manner ``* * * other adjustments as
determined to be necessary to ensure equitable payments,
[[Page 60365]]
such as adjustments for certain classes of hospitals.'' We have not
found such an adjustment to be necessary to ensure equitable payments
to teaching hospitals and, therefore, have not developed such an
adjustment. Furthermore, in this final rule with comment period, we
have developed payment weights that we believe provide appropriate and
adequate payment for the complex medical services, such as new
technology services and device-dependent procedures, which we
understand are furnished largely by teaching hospitals. We note that
teaching hospitals benefit from the recalibration of the APCs in this
final rule with comment period. The final CY 2010 impacts by class of
hospital are displayed in Table 73 in section XXI.B. of this final rule
with comment period.
After consideration of the public comments we received, we are
finalizing our proposed CY 2010 methodology for calculating the median
costs upon which the CY 2010 OPPS payment rates are based, with
modifications as discussed throughout this section.
In some cases, APC median costs are calculated using variations of
the process outlined above. Section II.A.2.d. of this final rule with
comment period that follows addresses the calculation of single APC
criteria-based median costs. Section II.A.2.e. of this final rule with
comment period discusses the calculation of composite APC criteria-
based median costs. Section X.B. of this final rule with comment period
addresses the methodology for calculating the median cost for partial
hospitalization services.
At the February 2009 APC Panel Meeting, the APC Panel recommended
that CMS study the claims data for any APC in which the calculated
payment reduction would be greater than 10 percent. The APC Panel also
recommended that CMS provide a list of APCs to the APC Panel at the
next meeting with a proposed payment rate change of greater than 10
percent. While we recognize the concerns the APC Panel expressed with
regards to cost variability in the system, we already engage in a
standard review process for all APCs that experience significant
changes in median costs. We study all significant changes in estimated
cost to determine the effect that proposed and final payment policies
have on the APC payment rates and ensure that these policies are
appropriate and that the intended cost estimation methodologies have
been correctly applied. We note that there are a number of factors that
cause APC median costs to change from one year to the next. Some of
these are a reflection of hospital behavior, and some of them are a
reflection of fundamental characteristics of the OPPS as defined in the
statute. With limited exceptions, we are required by law to reassign
HCPCS codes to APCs where it is necessary to avoid 2 times violations.
Thus, there are various mechanisms already in place to ensure that we
assess changes in cost and adjust APC weights accordingly or justify
why we have not made adjustments. We plan to continue our examination
of all APCs that experience changes of greater than 10 percent. In the
CY 2010 OPPS/ASC proposed rule (74 FR 35267), we indicated that we
would provide the APC Panel with a list of the APCs with proposed
changes in costs of more than 10 percent for CY 2010 at the next CY
2009 APC Panel meeting. Accordingly, we accepted this recommendation of
the APC Panel in full.
At the August 2009 meeting of the APC Panel, we provided the APC
Panel a list of all APCs fluctuating by more than 10 percent when
comparing the CY 2010 proposed rule APC median costs to those based on
CY 2009 final rule data. We found that the median costs for 7 APCs
decreased by 10 percent or more and the median costs for 63 APCs
increased by 10 percent or more. These changes occurred due to some of
the reasons described earlier, including reassignment of HCPCS codes
from one APC to another to resolve 2 times violations, modeling changes
such as the removal of lines for codes that were not payable in CY 2008
under the OPPS payment rules, low volumes of services influencing the
claims used to determine APC median costs, and updated cost and charge
information from hospital claims and cost reports. We noted that the
median costs for 63 APCs increased by 10 percent or more and that the
reasons for the increases were similar to the reasons for the decreases
of more than 10 percent but, in general, we found nothing that raised
concern regarding the data process we used to calculate the proposed
median costs. The APC Panel discussed the different APCs on the list
but did not express any significant concern with the fluctuations. As a
result, they did not make any further recommendations related to the
list of APCs with median costs fluctuating by greater than 10 percent.
At the February 2009 APC Panel meeting, we reviewed and examined
the data process in preparation for the CY 2010 rulemaking cycle. At
this meeting, the APC Panel recommended that the Data Subcommittee
continue its work and we accepted that recommendation. The APC Panel
further recommended at the August 2009 meeting that the Data
Subcommittee continue its work. We are accepting this most recent
recommendation, and we will continue to work closely with the APC
Panel's Data Subcommittee to prepare and review data and analyses
relevant to the APC configurations and OPPS payment policies for
hospital outpatient items and services.
d. Calculation of Single Procedure APC Criteria-Based Median Costs
(1) Device-Dependent APCs
Device-dependent APCs are populated by HCPCS codes that usually,
but not always, require that a device be implanted or used to perform
the procedure. For a full history of how we have calculated payment
rates for device-dependent APCs in previous years and a detailed
discussion of how we developed the standard device-dependent APC
ratesetting methodology, we refer readers to the CY 2008 OPPS/ASC final
rule with comment period (72 FR 66739 through 66742). Overviews of the
procedure-to-device edits and device-to-procedure edits used in
ratesetting for device-dependent APCs are available in the CY 2005 OPPS
final rule with comment period (69 FR 65761 through 65763) and the CY
2007 OPPS/ASC final rule with comment period (71 FR 68070 through
68071).
In the CY 2010 OPPS/ASC proposed rule (74 FR 35267), we proposed to
revise our standard methodology for calculating median costs for
device-dependent APCs, which utilizes claims data that generally
represent the full cost of the required device, to exclude claims that
contain the ``FC'' modifier. Specifically, we proposed to calculate the
median costs for device-dependent APCs for CY 2010 using only the
subset of single procedure claims from CY 2008 claims data that pass
the procedure-to-device and device-to-procedure edits; do not contain
token charges (less than $1.01) for devices; do not contain the ``FB''
modifier signifying that the device was furnished without cost to the
provider, supplier, or practitioner, or where a full credit was
received; and do not contain the ``FC'' modifier signifying that the
hospital received partial credit for the device. The ``FC'' modifier
became effective January 1, 2008, and is present for the first time on
claims that would be used in OPPS ratesetting for CY 2010. We stated in
the CY 2010 OPPS/ASC proposed rule (74 FR 35267) that we believe the
standard methodology for calculating median costs for device-
[[Page 60366]]
dependent APCs, further refined to exclude claims with the ``FC''
modifier, gives us the most appropriate median costs for device-
dependent APCs in which the hospital incurs the full cost of the
device.
The median costs for the majority of device-dependent APCs that
were calculated using the CY 2010 proposed rule claims data were
generally stable, with most median costs increasing moderately compared
to the median costs upon which the CY 2009 OPPS payment rates were
based. However, the median costs for APC 0225 (Implantation of
Neurostimulator Electrodes, Cranial Nerve) and APC 0418 (Insertion of
Left Ventricular Pacing Electrode) demonstrated significant
fluctuation. Specifically, the proposed CY 2010 median cost for APC
0225 increased approximately 49 percent compared to the final CY 2009
median cost, although this APC median cost had declined by
approximately the same proportion from CY 2008 to CY 2009. The proposed
CY 2010 median cost for APC 0418, which had decreased approximately 45
percent from CY 2008 to CY 2009, showed an increase of approximately 56
percent based on the claims data available for the CY 2010 proposed
rule. As indicated in the CY 2010 OPPS/ASC proposed rule (74 FR 35267),
we believe the fluctuations in median costs for these two APCs are a
consequence of the small number of single bills upon which the median
costs are based and the small number of providers of these services. As
we have stated in the past, some fluctuation in relative costs from
year to year is to be expected in a prospective payment system for low
volume device-dependent APCs, particularly where there are small
numbers of single bills from a small number of providers.
At the February 2009 meeting of the APC Panel, one presenter stated
that the assignment of the single-array cranial neurostimulator pulse
generator implantation procedure described by CPT code 61885 (Insertion
or replacement of cranial neurostimulator pulse generator or receiver,
direct or inductive coupling; with connection to a single electrode
array) to APC 0039 (Level I Implantation of Neurostimulator Generator),
along with the peripheral/gastric neurostimulator pulse generator
implantation procedure described by CPT code 64590 (Insertion or
replacement of peripheral or gastric neurostimulator pulse generator or
receiver, direct or inductive coupling) is not appropriate, given the
clinical and cost differences between the two procedures. According to
the presenter, the cranial procedure described by CPT code 61885 is
more similar clinically and in terms of resource utilization to the
spinal neurostimulator pulse generator implantation procedure described
by CPT code 63685 (Insertion or replacement of spinal neurostimulator
pulse generator or receiver, direct or inductive coupling), which is
the only CPT code assigned to APC 0222 (Level II Implantation of
Neurostimulator) for CY 2009. The presenter requested that the APC
Panel recommend that CMS restructure the existing configuration of
neurostimulator pulse generator implantation APCs for CY 2010 by
splitting APC 0039, so that procedures involving peripheral/gastric
neurostimulators and cranial neurostimulators would be in distinct
APCs, or by reassigning the cranial neurostimulator pulse generator
implantation procedure described by CPT code 61885 from APC 0039 to APC
0222. In response to this request, the APC Panel recommended that CMS
combine APC 0039 and APC 0222 for CY 2010, given the overall similarity
in median costs among the cranial, peripheral/gastric, and spinal
neurostimulator pulse generator implantation procedures assigned to
these two APCs. The APC Panel also recommended that CMS maintain the
configuration of APC 0315 (Level III Implantation of Neurostimulator
Generator) as it currently exists in CY 2009 for CY 2010. The dual-
array cranial neurostimulator pulse generator implantation procedure
described by CPT code 61886 (Insertion or replacement of cranial
neurostimulator pulse generator or receiver, direct or inductive
coupling; with connection to two or more electrode arrays) is currently
the only procedure assigned to APC 0315.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35267 through 35268),
we stated that we agree with the APC Panel that the median costs of the
procedures described by CPT codes 61885, 63685, and 64590 are
sufficiently similar to warrant placement of the CPT codes into a
single APC, rather than two APCs. We accepted the APC Panel's
recommendation and, therefore, proposed to reassign CPT code 63685 to
APC 0039, to delete APC 0222, and to maintain the current configuration
of APC 0315 for CY 2010. We also proposed to change the title of APC
0315 to ``Level II Implantation of Neurostimulator Generator'' to
reflect the proposed two-level, rather than three-level, structure of
the neurostimulator pulse generator implantation APCs.
In reviewing the APC Panel recommendation for consolidating APC
0039 and APC 0222, we observed that the median costs of the procedures
assigned to APC 0425 (Level II Arthroplasty or Implantation with
Prosthesis) and APC 0681 (Knee Arthroplasty) also are sufficiently
similar to warrant combining these two APCs into one APC. The proposed
median cost for the only procedure currently assigned to APC 0681,
described by CPT code 27446 (Arthroplasty, knee, condyle and plateau;
medial OR lateral compartment), was approximately $7,464 based on the
claims data available for the CY 2010 OPPS/ASC proposed rule. This
proposed median cost was very similar to the proposed median cost of
approximately $7,852 calculated for APC 0425, which included other
procedures involving the implantation of prosthetic devices into bone,
similar to the procedure described by CPT code 27446. Given the shared
resource and clinical characteristics of the procedures included in APC
0425 and the only procedure assigned to APC 0681 for CY 2009, in the CY
2010 OPPS/ASC proposed rule, we proposed to consolidate these two APCs
by reassigning CPT code 27446 to APC 0425, and deleting APC 0681. We
also noted that, over the past several years, the median cost for CPT
code 27446 has fluctuated due to a low volume of services being
performed by a small number of providers, and to a single provider
performing the majority of services (73 FR 68535). We indicated in the
CY 2010 OPPS/ASC proposed rule (74 FR 35268) that we believe by
reassigning CPT code 27446 to APC 0425 and deleting APC 0681, we can
maintain greater stability from year to year in the payment rate for
this knee arthroplasty service, while also paying appropriately for the
service.
At its August 2009 meeting, the APC Panel heard a joint
presentation from neurostimulator manufacturers who asserted that CMS'
proposal to consolidate spinal, peripheral/gastric, and single-array
cranial neurostimulator pulse generator implantation procedures into a
single APC does not adequately capture facility resources associated
with the different types of neurostimulator pulse generators involved
in these procedures and would undermine access to rechargeable
neurostimulators. The neurostimulator manufacturers asked the APC Panel
to recommend to CMS a revised, three-level APC configuration for
neurostimulator pulse generator implantation procedures that would
[[Page 60367]]
differentiate payment for procedures involving rechargeable and
nonrechargeable neurostimulators. Following discussion of this request,
the APC Panel recommended that CMS adopt the two-level neurostimulator
pulse generator implantation APC configuration proposed by CMS for CY
2010.
Comment: Many commenters supported CMS' proposal to continue using
the standard methodology for calculating median costs for device-
dependent APCs, revised to exclude claims that contain the ``FC''
modifier. The commenters stated that the exclusion of partial credit
claims would result in APC median costs that more appropriately reflect
true hospital costs. Some commenters also supported the mandatory
reporting of all HCPCS device C-codes to encourage hospitals to remain
vigilant in reporting the costs of performing services involving
devices. The commenters urged CMS to continue educating hospitals on
the importance of accurate coding for devices, supplies, and other
technologies to help ensure these items are more appropriately
reflected in future years' payment rates for outpatient services.
Some commenters recommended CMS continue examining and refining the
ratesetting methodology for procedures involving devices in order to
encourage the continued development and proliferation of new
technology. The commenters also encouraged CMS to develop mechanisms
for capturing the costs of devices included on multiple procedure
claims.
Response: We appreciate the commenters' support of the standard
device-dependent APC ratesetting methodology, including our proposal to
refine the methodology to exclude claims that contain the ``FC''
modifier. As we have stated in the past (73 FR 68535 through 68536), we
agree that accurate reporting of device, supply, and technology charges
will help to ensure that these items are appropriately accounted for in
future years' OPPS payment rates. We encourage stakeholders to
carefully review HCPCS code descriptors, as well as any guidance CMS
may have provided for specific HCPCS codes. In addition, we have
provided further instructions on the billing of medical and surgical
supplies in the October 2008 OPPS update (Transmittal 1599, Change
Request 6196, dated September 19, 2008) and the April 2009 OPPS update
(Transmittal 1702, Change Request 6416, dated March 13, 2009). For
HCPCS codes that are paid under the OPPS, providers may also submit
inquiries to the AHA Central Office on HCPCS, which serves as a
clearinghouse on the proper use of Level I HCPCS codes for hospitals
and certain Level II HCPCS codes for hospitals, physicians, and other
health professionals. Inquiries must be submitted using the approved
form, which may be downloaded from the AHA Web site (http://www.ahacentraloffice.org) and either faxed to 312-422-4583 or mailed
directly to the AHA Central Office: Central Office on HCPCS, American
Hospital Association, One North Franklin, Floor 29, Chicago, IL 60606.
We agree with the commenters that we should continue to encourage
the development and proliferation of new technology under the OPPS. We
have special mechanisms to provide payment for new technologies and
services under the OPPS, including new technology APCs and transitional
pass-through payments for certain devices. We refer readers to sections
III.C. and IV.A., respectively, of this final rule with comment period
for more information on these payment methodologies. For all OPPS
services, we continue our efforts to use the data from as many multiple
procedure claims as possible, through approaches such as use of the
bypass list and date splitting of claims as described further in
section II.A. of this final rule with comment period, and through
methodologies such as increased packaging and composite APCs. We refer
readers to section II.A.2.e. of this final rule with comment period for
a detailed summary of the public comments related to the establishment
of a composite payment methodology for procedures involving cardiac
resynchronization therapy defibrillators and pacemakers and our
responses.
Comment: Many commenters responded to CMS' proposal to revise the
APC configuration for neurostimulator pulse generator implantation
procedures from a three-level structure to a two-level structure. While
one commenter supported the proposal to combine the single-array
cranial neurostimulator pulse generator implantation procedure,
described by CPT code 61885 and used for vagus nerve stimulation, with
the spinal neurostimulator pulse generator implantation procedure,
described by CPT code 63685, many commenters argued that the proposed
two-level configuration for neurostimulator pulse generator
implantation procedures would threaten patient access to rechargeable
spinal neurostimulators. These commenters asserted that hospitals may
be unable to offer rechargeable spinal neurostimulator pulse generators
at the proposed CY 2010 payment rate for APC 0039, which, according to
the commenters, is substantially less than the cost of the device and
the CY 2009 payment rate for the procedure. Some commenters presented
an analysis of CY 2008 OPPS claims data available for the CY 2010 OPPS/
ASC proposed rule that demonstrated a $4,132 difference in costs for
spinal neurostimulator pulse generator implantation procedures
involving rechargeable devices compared to the same procedures
involving nonrechargeable devices. According to these commenters, this
difference in cost warrants a separate APC for rechargeable spinal
neurostimulator pulse generator procedures. They argued that while the
cost difference does not violate the 2 times rule, it is large enough
to influence hospitals to choose the lower cost nonrechargeable spinal
neurostimulator pulse generators instead of the rechargeable devices if
hospitals receive the same payment for the implantation procedure,
regardless of the type of technology that is used. Several commenters
noted that the threat to patient access to rechargeable spinal
neurostimulators should be of particular concern to CMS, given the
Agency's past recognition of the technology's ability to reduce the
need for device replacements and the associated surgical risks, thereby
reducing costs while providing optimal therapy.
Some commenters also stated that the consolidation of APC 0039 and
APC 0222 would result in a disproportionately small number of single
claims for procedures involving spinal neurostimulator pulse generators
being used in ratesetting compared to the number of single claims for
other types of neurostimulator pulse generator implantation procedures
(specifically, peripheral/gastric and single-array cranial), further
reducing the payment for these procedures relative to their costs. The
commenters pointed out that, because spinal neurostimulator pulse
generator implantation procedures are almost always performed with
permanent lead placement procedures, rather than being staged as is
common with other neurostimulator implantation procedures, they are
typically not captured in the single claims used to calculate the
median cost for consolidated APC 0039, upon which payment for that APC
would be based. Many commenters argued that the proposed policy would
be inconsistent with CMS' rationale in the CY 2008 OPPS/ASC final rule
with comment period for implementing the current
[[Page 60368]]
APC configuration for neurostimulator pulse generator implantation
procedures, which places the spinal neurostimulator pulse generator
implantation procedure in its own APC. According to the commenters, CMS
implemented a separate APC for this procedure because, unlike other
neurostimulator pulse generator implantation procedures that involve
only the less costly nonrechargeable devices, spinal neurostimulator
pulse generator implantation procedures utilize either the more costly
rechargeable device or the less costly nonrechargeable device. The
commenters summarized CMS' assessment in the CY 2008 OPPS/ASC final
rule with comment period that the placement of the procedure described
by CPT code 63685 as the only procedure in APC 0222 would enable CMS to
calculate payment rates for spinal neurostimulator implantation
procedures that reflect changes in surgical practice based on clinical,
rather than financial, considerations.
Many commenters asserted that CMS' proposed APC configuration for
neurostimulator pulse generator implantation procedures would result in
APC 0039 being overly broad and clinically heterogeneous. The
commenters stated that the spinal, peripheral/gastric, and single-array
cranial neurostimulator pulse generator implantation procedures
proposed for assignment to APC 0039 are clinically disparate and
involve widely diverse neurostimulator technologies (including vagus
nerve stimulators for epilepsy, sacral nerve stimulators for urinary
incontinence, gastric pacemakers for chronic nausea and vomiting, and
spinal neurostimulators for chronic neuropathic pain). One commenter
requested that the CY 2010 proposal for neurostimulator pulse generator
implantation procedures be reviewed by a pain management physician and
a certified coder working in pain management.
According to the commenters, in order to address these concerns,
CMS should differentiate payment for procedures involving rechargeable
and nonrechargeable neurostimulators by revising the current (CY 2009)
three-level APC payment structure for neurostimulator pulse generator
implantation procedures. The commenters stated that their recommended
configuration would group peripheral/gastric and spinal neurostimulator
pulse generator implantation procedures (described by CPT codes 64590
and 63685, respectively) involving nonrechargeable devices in Level 1;
single-array cranial neurostimulator pulse generator implantation
procedures (described by CPT code 61885) involving nonrechargeable
devices in Level 2; and dual-array cranial neurostimulator pulse
generator implantation procedures (described by CPT code 61886) and any
neurostimulator pulse generator implantation procedure involving
rechargeable devices in Level 3. According to the commenters, this APC
configuration for neurostimulator pulse generator implantation
procedures could be implemented by assigning APCs based on the presence
of HCPCS device C-codes present on claims or through the creation of
new Level II HCPCS G-codes that would distinguish procedures performed
to implant nonrechargeable neurostimulator pulse generators from those
performed to implant rechargeable neurostimulator pulse generators. The
commenters asserted that CMS has shown a willingness to use alternative
mapping schemes in the past to differentiate resource costs for
procedures involving technologies such as drug-eluting coronary stents,
implantable cardioverter defibrillators (ICDs), and linear accelerator-
based stereotactic radiosurgery (LINAC-SRS), when there are important
technology and facility resource cost differences that cannot be
identified through the use of existing CPT codes.
The commenters urged CMS to maintain the current neurostimulator
pulse generator implantation APC configuration as adopted in CY 2008 if
the Agency decides not to implement their recommended three-level
technology-specific APC configuration, or to create a four-level APC
configuration in which the existing APC 0039 is split, with one APC for
single-array cranial neurostimulator pulse generator implantation
procedures and a separate APC for peripheral/gastric neurostimulator
pulse generator implantation procedures. According to the commenters,
either approach would yield more accurate payment rates than CMS'
proposal for CY 2010.
Response: We do not agree with the commenters who argued that we
should not implement our CY 2010 proposal to revise the APC
configuration of neurostimulator pulse generator implantation
procedures from a three-level structure to a two-level structure. We
are finalizing our CY 2010 proposal to reassign CPT code 63685 to APC
0039, to delete APC 0222, and to maintain the current configuration of
APC 0315. We believe that the final CY 2010 median costs for the
neurostimulator pulse generator implantation procedures, described by
CPT codes 61885, 63685, and 64590, are sufficiently similar to warrant
their placement in a single APC, as demonstrated in Table 7 below. The
difference between the procedure with the highest median cost in APC
0039, described by CPT code 63685, and the procedure with the lowest
median cost in APC 0039, described by CPT code 64590, is approximately
$3,000. Even if we were to consider the difference in costs between
spinal neurostimulator pulse generator implantation procedures
described by CPT code 63685 when they are performed with a rechargeable
device compared to when they are performed with a nonrechargeable
device, estimated by the commenters to be approximately $4,000, the
grouping of these procedures in the same APC would not violate the 2
times rule. We also point out that, as demonstrated in Table 7, we use
a similar number of single claims with each of the CPT codes assigned
to APC 0039 to calculate the median cost upon which the final CY 2010
payment rate for APC 0039 is based.
We do not agree with the commenters that these modest differences
in costs, either among the various types of neurostimulator pulse
generator implantation procedures assigned to APC 0039 or among the
same types of procedures involving rechargeable versus nonrechargeable
devices, are sufficiently substantial to result in hospitals denying
access to the limited subset of patients for whom the more expensive
rechargeable technology is clinically indicated. We note that payment
based on a measure of central tendency is a principle of any
prospective payment system. As we have stated in the past (73 FR
68562), in some individual cases, payment exceeds the average cost, and
in other cases, payment is less than the average cost. On balance,
however, payment should approximate the relative cost of the average
case, recognizing that, as a prospective payment system, the OPPS is a
system of averages.
In addition to being similar in terms of resource utilization, we
believe the procedures described by CPT codes 61885, 63685, and 64590
are comparable from a clinical perspective because they all involve the
subcutaneous placement of a neurostimulator pulse generator. We do not
agree with the commenters who argued that these procedures should be
considered clinically disparate because they use widely diverse
technologies for very different clinical indications. It is not
uncommon under the OPPS to group procedures described by relatively
general HCPCS codes that
[[Page 60369]]
may utilize a wide variety of technologies and may be performed to
treat different patient populations in the same APC. Furthermore, as
stated in the CY 2009 OPPS/ASC final rule with comment period (73 FR
66537), the standard device-dependent APC ratesetting methodology does
not take into consideration patient diagnoses. In response to the
commenter who requested that the CY 2010 proposal for neurostimulator
pulse generator implantation procedures be reviewed by a pain
management physician and a certified coder working in pain management,
we note that the CMS staff involved in reviewing the clinical
characteristics of the APC groups include medical advisors from a
variety of specialties as well as certified coders.
We also do not agree that we should not implement the two-level APC
configuration for neurostimulator pulse generator implantation
procedures as proposed for CY 2010 because, as argued by some
commenters, it would be inconsistent with our rationale in the CY 2008
OPPS/ASC final rule with comment period to maintain a separate APC
solely for spinal neurostimulator pulse generator implantation
procedures. It is our standard process under the OPPS to reassess the
composition of APCs, including reviewing the median costs of individual
HCPCS codes, annually when we have the most current claims and Medicare
cost report data, and to propose through our annual rulemaking cycle
changes that we believe are necessary to maintain and improve the
clinical and resource homogeneity of APCs based on the updated data. In
CY 2008, the median costs for the single-array cranial and peripheral/
gastric neurostimulator pulse generator implantation procedures
described by CPT codes 61885 and 64590 of $12,799 and $10,954,
respectively, were more divergent from the median cost calculated for
the spinal neurostimulator pulse generator implantation procedure of
$15,150 using the CY 2006 claims and cost report data available at that
time, compared to the median costs for these procedures calculated from
the CY 2008 claims and cost report data available for this CY 2010
OPPS/ASC final rule with comment period, as demonstrated in Table 7
below.
Finally, we do not agree with the commenters that we should
differentiate payment for neurostimulator pulse generator implantation
procedures based on the type of technology that is implanted (that is,
rechargeable or nonrechargeable), nor do we agree with the commenters
that past CMS policy to use alternative mapping schemes to
differentiate resource costs for certain procedures, such as those
involving drug-eluting stents, ICDs, and LINAC-SRS, serves as a
precedent to do so. As we have stated in the past (72 FR 66715 through
66716 and 73 FR 68538), a policy to provide different payments for the
same procedures according to the types of devices implanted would not
be consistent with our overall strategy under the OPPS to encourage
hospitals to use resources more efficiently by increasing the size of
the payment bundles. The circumstances surrounding the payment policies
and coding configurations for drug-eluting stents (67 FR 66732 through
66734), ICDs (72 FR 66702 through 66703), and LINAC-SRS (72 FR 66734
through 66737) are markedly different from the circumstances
surrounding neurostimulator pulse generator implantation procedures. We
developed HCPCS G-codes to distinguish payment for procedures involving
drug-eluting stents from procedures involving non-drug-eluting stents
because drug-eluting stents did not meet the criteria for transitional
pass-through payment or for payment under a New Technology APC. Unlike
drug-eluting stents, rechargeable spinal neurostimulators were granted
pass-through status under the OPPS in CY 2006, which lasted until
December 31, 2007. In the case of ICDs, we created HCPCS G-codes to
gather cost data on single and dual chamber ICDs, but we did not
differentiate payment for ICD insertion based on the type of technology
that was used (72 FR 66703). Finally, our policy to utilize HCPCS G-
codes rather than CPT codes for payment under the OPPS for LINAC-SRS
treatment delivery services recognizes the vastly different capital
equipment costs required for various LINAC-SRS services, rather than
differences in the costs of single-use devices implanted in patients
during the same procedure.
Comment: Some commenters disagreed with CMS'' presentation at the
August 2009 APC Panel meeting of the proposed CY 2010 line-item median
costs for the two device HCPCS C-codes that describe neurostimulator
pulse generators, specifically HCPCS code C1767 (Generator,
neurostimulator (implantable), nonrechargeable) and HCPCS code C1820
(Generator, neurostimulator (implantable), with rechargeable battery
and charging system). The commenters disputed the accuracy of the data
presented by CMS, specifically that the line-item median costs for
HCPCS codes C1767 and C1820 are $9,606 and $9,636, respectively, based
on CY 2008 claims available for the CY 2010 OPPS/ASC proposed rule.
According to the commenters, these line-item median costs are
inconsistent with the commenters'' analyses of CY 2010 OPPS/ASC
proposed rule data, which indicated that the line-item median costs for
HCPCS codes C1767 and C1820 are $10,580 and $13,587, respectively. One
commenter urged CMS to reanalyze the data and to disregard the APC
Panel's support of the proposed CY 2010 APC configuration for
neurostimulator pulse generator implantation procedures if the data
were found to be erroneous. Another commenter characterized CMS''
presentation of the line-item median costs for HCPCS codes C1767 and
C1820 as incomplete because OPPS payment rates are based upon median
costs that include all packaged items and services associated with
providing a procedure as they appear on single claims, and not the
line-item median costs for individual devices. The commenter asked CMS
to ensure that all data presented to the APC Panel in the future is
full and appropriate information for decisionmaking.
Response: In response to the commenters'' concerns, we reassessed
our methodology for calculating the proposed CY 2010 line-item median
costs for HCPCS codes C1767 and C1820 and verified that the information
presented to the APC Panel is accurate based on the CY 2008 claims data
available for the CY 2010 OPPS/ASC proposed rule. The line-item
statistics for these HCPCS codes, along with all other HCPCS codes
recognized under the OPPS, are released to the public as part of the
OPPS limited data set. We do not agree with the commenters that the
presentation of these data was incomplete or inappropriate. We
frequently consider line-item median costs for devices and other
packaged items and services as one data element among several when we
evaluate the clinical and resource homogeneity of APCs, particularly
when stakeholders voice concerns that the costs of different items are
driving procedure costs or influencing hospitals'' decisions to provide
certain services. An advantage of the line-item median costs is that
they represent data from all OPPS claims, and not just the single
claims that we are able to use in ratesetting for procedures.
Therefore, we believe that a comparison of line-item costs is
particularly appropriate for different types of neurostimulator pulse
generators because one of the commenters'' concerns was that there are
relatively few single claims available
[[Page 60370]]
for ratesetting for the implantation of spinal neurostimulator pulse
generators. We would expect the device costs on multiple procedure
claims to be reflective of the hospital costs of these neurostimulator
pulse generators, because commenters stated that multiple procedure
claims resulted from the most typical spinal neurostimulator
implantation procedures. Furthermore, we would not expect there to be
significant packaged costs associated with the neurostimulator pulse
generators described by these device HCPCS codes. Therefore, we would
expect the line-item median costs to accurately reflect the
differential costs of non-rechargeable and rechargeable neurostimulator
technology. We note that the APC Panel members are well-acquainted with
the OPPS ratesetting methodology, including the use of single procedure
claims and not line-item median costs for individual items, to
calculate the median costs upon which OPPS payment rates are based.
Table 7--CY 2010 APC Configuration for Payment of Neurostimulator Pulse Generator Implantation Procedures
----------------------------------------------------------------------------------------------------------------
CY 2010 CY 2010 CY 2010
Revised APC CY 2010 CY 2010 CPT Code CPT Code CPT Code APC
CY 2010 APC Title for CY CPT Code Descriptor Median Single Median
2010 Cost Claims Cost
----------------------------------------------------------------------------------------------------------------
0039......................... Level I 61885 Insertion or $14,141 1,260 $13,766
Implantation replacement of
of Neuro cranial
stimulator neurostimulator
Generator. pulse generator or
receiver, direct or
inductive coupling;
with connection to
a single electrode
array.
63685 Insertion or 15,802 1,262 13,766
replacement of
spinal
neurostimulator
pulse generator or
receiver, direct or
inductive coupling.
64590 Insertion or 12,726 1,978 13,766
replacement of
peripheral or
gastric
neurostimulator
pulse generator or
receiver, direct or
inductive coupling.
----------------------------------------------------------------------------------------------------------------
0315......................... Level II 61886 Insertion or 18,350 1,004 18,350
Implantation replacement of
of Neuro cranial
stimulator neurostimulator
Generator. pulse generator or
receiver, direct or
inductive coupling;
with connection to
two or more
electrode arrays.
----------------------------------------------------------------------------------------------------------------
Comment: Several commenters expressed support for the proposed CY
2010 payment rate for the implantation of auditory osseointegrated
devices, described by CPT codes 69714 (Implantation, osseointegrated
implant, temporal bone, with percutaneous attachment to external speech
processor/cochlear stimulator; without mastoidectomy); 69715
(Implantation, osseointegrated implant, temporal bone, with
percutaneous attachment to external speech processor/cochlear
stimulator; with mastoidectomy); 69717 (Replacement (including removal
of existing device), osseointegrated implant, temporal bone, with
percutaneous attachment to external speech processor/cochlear
stimulator; without mastoidectomy); and 69718 (Replacement (including
removal of existing device), osseointegrated implant, temporal bone,
with percutaneous attachment to external speech processor/cochlear
stimulator; with mastoidectomy) and assigned to APC 0425. Other
commenters, however, stated that the proposed payment rate for APC 0425
is less than hospitals' device and service-related costs associated
with the procedures described by these CPT codes and urged CMS to
consider a slight increase in the payment for APC 0425.
Response: We agree with the commenters that the payment rate for
APC 0425, calculated from the standard device-dependent APC ratesetting
methodology, appropriately reflects hospitals' relative costs for
providing the procedures assigned to APC 0425 as reported to us in the
claims and cost report data. We used 1,410 single claims from CY 2008
to calculate the median cost upon which the final CY 2010 payment rate
for APC 0425 is based. The final CY 2010 median cost for APC 0425 is
approximately $7,932, slightly higher than the final CY 2009 median
cost for APC 0425 of $7,863. We note that we were able to use
significantly more single claims in ratesetting for APC 0425 for CY
2010 compared to CY 2009 (1,410 single claims from CY 2008 compared to
668 single claims from CY 2007). We disagree with the commenters who
requested an additional increase in the payment rate for APC 0425,
because this would artificially and inaccurately inflate payment rates.
A fundamental principle of the OPPS is that it is based on relative
weights, and as we have stated in the past (73 FR 68541), it is the
relativity of the costs to one another, rather than absolute cost, that
is important in setting payment rates. To deviate from our standard
OPPS ratesetting methodology and increase the payment rates for certain
procedures beyond their relatives costs as derived from claims and cost
report data would skew this relativity.
Comment: Some commenters supported CMS' proposal to reassign CPT
code 27446 to APC 0425 and to delete APC 0681. Other commenters,
however, opposed the consolidation of these two APCs, arguing that the
procedure described by CPT code 27446 is clinically dissimilar from the
arthroplasty procedures currently assigned to APC 0425. The commenters
recommended that CMS continue to maintain APC 0681 for CY 2010 and to
add other total knee arthroplasty procedures to this APC, along with
the procedure described by CPT code 27446.
Response: We disagree with the commenters who argued that it is
necessary to maintain APC 0681 specifically for knee arthroplasty
procedures because we do not believe it is appropriate to maintain an
APC that is not necessary to classify services into groups that are
similar clinically and in terms of resource utilization. We continue to
believe that CPT code 27446 is most appropriately assigned to APC 0425
for CY 2010, as we proposed, based on consideration of the procedure's
clinical and resource characteristics. As described in section XI.B. of
this final rule with comment
[[Page 60371]]
period, we are not removing any total knee arthroplasty procedures from
the inpatient list.
Comment: Several commenters supported the proposed payment rate for
the implantation of cochlear implants, described by CPT code 69930
(Cochlear device implantation, with or without mastoidectomy) and
assigned to APC 0259 (Level VII ENT Procedures). These commenters
stated that while hospitals' device and service-related costs for these
procedures likely still exceed the proposed payment rate for APC 0259,
they represent an improvement in payment relative to CY 2009 that may
lead to better access to care for Medicare beneficiaries.
Response: We appreciate the commenters' support of the proposed
payment rate for APC 0259. We believe that the standard device-
dependent APC ratesetting methodology results in a payment rate that
reflects hospitals' relative costs for providing the procedure assigned
to this APC as reported to us in the claims and cost report data.
Comment: One commenter concurred with CMS' proposal that APC 0385
(Level I Prosthetic Urological Procedures) and APC 0386 (Level II
Prosthetic Urological Procedures) continue to be recognized as device-
dependent APCs. The commenter supported CMS' continued application of
procedure-to-device edits for procedures assigned to these APCs.
Response: We appreciate the commenter's support of the continued
recognition of APC 0385 and 0386 as device-dependent APCs. We agree
that claims processing edits for devices that are integral to the
performance of procedures assigned to device-dependent APCs are an
important element of the standard device-dependent APC ratesetting
methodology.
Comment: One commenter urged CMS not to reduce the payment for the
procedure described by CPT code 62361 (Implantation or replacement of
device for intrathecal or epidural drug infusion; nonprogrammable
pump), which is assigned to APC 0227 (Implantation of Drug Infusion
Device). The commenter stated that patient access to this procedure is
limited due to recent payment cuts.
Response: The final CY 2010 median cost for APC 0227 of
approximately $13,268 is approximately 10 percent higher than the
median cost of $12,006, upon which the final CY 2009 payment rate was
based, and approximately 13 percent higher than the median cost of
$11,569, upon which the final CY 2008 payment rate was based. We
believe that the final CY 2010 median cost for APC 0227 of $13,268,
which is calculated using the standard device-dependent APC
methodology, results in a final CY 2010 payment rate that accurately
and appropriately reflects hospitals'' costs for providing the service
described by CPT code 62361 and will not result in any barriers to
patient care.
In summary, after consideration of the public comments we received,
we are finalizing our proposed CY 2010 payment policies for device-
dependent APCs, without modification. The CY 2010 OPPS payment rates
for device-dependent APCs are based on their median costs calculated
from CY 2008 claims and the most recent cost report data, using only
claims that pass the device edits, do not contain token charges for
devices, and do not have a modifier signifying that the device was
furnished without cost or with full or partial credit. We continue to
believe that the median costs calculated from the single claims that
meet these criteria represent the most valid estimated relative costs
of these services to hospitals when they incur the full cost of the
devices required to perform the procedures. The CY 2010 device-
dependent APCs are listed in Table 8 below.
Table 8--CY 2010 Device-Dependent APCs
------------------------------------------------------------------------
CY 2010 Status
CY 2010 APC indicator CY 2010 APC Title
------------------------------------------------------------------------
0039.......................... S Level I Implantation
of Neurostimulator
Generator
0040.......................... S Percutaneous
Implantation of
Neurostimulator
Electrodes
0061.......................... S Laminectomy,
Laparoscopy, or
Incision for
Implantation of
Neurostimulator
Electrodes
0082.......................... T Coronary or Non-
Coronary Atherectomy
0083.......................... T Coronary or Non-
Coronary Angioplasty
and Percutaneous
Valvuloplasty
0084.......................... S Level I
Electrophysiologic
Procedures
0085.......................... T Level II
Electrophysiologic
Procedures
0086.......................... T Level III
Electrophysiologic
Procedures
0089.......................... T Insertion/
Replacement of
Permanent Pacemaker
and Electrodes
0090.......................... T Insertion/
Replacement of
Pacemaker Pulse
Generator
0104.......................... T Transcatheter
Placement of
Intracoronary Stents
0106.......................... T Insertion/
Replacement of
Pacemaker Leads and/
or Electrodes
0107.......................... T Insertion of
Cardioverter-
Defibrillator
0108.......................... T Insertion/
Replacement/Repair
of Cardioverter-
Defibrillator Leads
0115.......................... T Cannula/Access
Device Procedures
0202.......................... T Level VII Female
Reproductive
Procedures
0225.......................... S Implantation of
Neurostimulator
Electrodes, Cranial
Nerve
0227.......................... T Implantation of Drug
Infusion Device
0229.......................... T Transcatheter
Placement of
Intravascular Shunts
0259.......................... T Level VII ENT
Procedures
0293.......................... T Level V Anterior
Segment Eye
Procedures
0315.......................... S Level II
Implantation of
Neurostimulator
Generator
0384.......................... T GI Procedures with
Stents
0385.......................... S Level I Prosthetic
Urological
Procedures
0386.......................... S Level II Prosthetic
Urological
Procedures
0418.......................... T Insertion of Left
Ventricular Pacing
Electrode
0425.......................... T Level II
Arthroplasty or
Implantation with
Prosthesis
0427.......................... T Level II Tube or
Catheter Changes or
Repositioning
0622.......................... T Level II Vascular
Access Procedures
0623.......................... T Level III Vascular
Access Procedures
0648.......................... T Level IV Breast
Surgery
[[Page 60372]]
0652.......................... T Insertion of
Intraperitoneal and
Pleural Catheters
0653.......................... T Vascular
Reconstruction/
Fistula Repair with
Device
0654.......................... T Insertion/
Replacement of a
Permanent Dual
Chamber Pacemaker
0655.......................... T Insertion/
Replacement/
Conversion of a
Permanent Dual
Chamber Pacemaker
0656.......................... T Transcatheter
Placement of
Intracoronary Drug-
Eluting Stents
0674.......................... T Prostate
Cryoablation
0680.......................... S Insertion of Patient
Activated Event
Recorders
------------------------------------------------------------------------
(2) Blood and Blood Products
Since the implementation of the OPPS in August 2000, we have made
separate payments for blood and blood products through APCs rather than
packaging payment for them into payments for the procedures with which
they are administered. Hospital payments for the costs of blood and
blood products, as well as for the costs of collecting, processing, and
storing blood and blood products, are made through the OPPS payments
for specific blood product APCs.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35269), we proposed to
continue to establish payment rates for blood and blood products using
our blood-specific CCR methodology, which utilizes actual or simulated
CCRs from the most recently available hospital cost reports to convert
hospital charges for blood and blood products to costs. This
methodology has been our standard ratesetting methodology for blood and
blood products since CY 2005. It was developed in response to data
analysis indicating that there was a significant difference in CCRs for
those hospitals with and without blood-specific cost centers, and past
comments indicating that the former OPPS policy of defaulting to the
overall hospital CCR for hospitals not reporting a blood-specific cost
center often resulted in an underestimation of the true hospital costs
for blood and blood products. Specifically, in order to address the
differences in CCRs and to better reflect hospitals' costs, we proposed
to continue to simulate blood CCRs for each hospital that does not
report a blood cost center by calculating the ratio of the blood-
specific CCRs to hospitals' overall CCRs for those hospitals that do
report costs and charges for blood cost centers. We would then apply
this mean ratio to the overall CCRs of hospitals not reporting costs
and charges for blood cost centers on their cost reports in order to
simulate blood-specific CCRs for those hospitals. We calculated the
median costs upon which the proposed CY 2010 payment rates for blood
and blood products were based using the actual blood-specific CCR for
hospitals that reported costs and charges for a blood cost center and a
hospital-specific simulated blood-specific CCR for hospitals that did
not report costs and charges for a blood cost center.
We stated in the CY 2010 OPPS/ASC proposed rule (74 FR 35269) that
we continue to believe the hospital-specific, blood-specific CCR
methodology better responds to the absence of a blood-specific CCR for
a hospital than alternative methodologies, such as defaulting to the
overall hospital CCR or applying an average blood-specific CCR across
hospitals. Because this methodology takes into account the unique
charging and cost accounting structure of each provider, we believe
that it yields more accurate estimated costs for these products. We
indicated that we believe continuing with this methodology in CY 2010
would result in median costs for blood and blood products that
appropriately reflect the relative estimated costs of these products
for hospitals without blood cost centers and, therefore, for these
blood products in general.
Comment: One commenter expressed appreciation for CMS' recognition
of the complexities of calculating payment rates for blood and blood
products and the accommodations CMS has made through the blood and
blood product ratesetting methodology to ensure the calculated rates
are as fair as possible. However, several commenters stated that the
proposed payment rates for many blood and blood products are less than
the costs hospitals incur acquiring, managing, and processing them, and
that the claims-based cost data for blood and blood products are error-
prone and subject to significant and unexplained fluctuations. They
noted that the payment decreases for several blood and blood products
seem inexplicable because prices for blood have been increasing due to
new technologies and tests required to ensure the continued safety of
the blood supply and increasingly expensive donor recruitment and
retention efforts. According to the commenters, a comparison of the
proposed APC payment changes for blood and blood products to the
producer price index (PPI) for blood and organ banks, which increased
3.1 percent from July 2008 to July 2009, indicates that the blood
product payment rates in the CY 2010 OPPS/ASC proposed rule do not
reflect overall pricing trends in the blood banking industry. The
commenters asked CMS to adjust the CY 2010 payment rates for blood and
blood products by increasing all of the CY 2009 payment rates by 3.1
percent, or by implementing a 3.1 percent payment floor for CY 2010
payment rates compared to CY 2009 payment rates for blood and blood
products. One commenter particularly urged CMS to apply a 3 percent
minimum increase in payment for the highest volume blood product,
described by HCPCS code P9016 (Red blood cells, leukocytes reduced,
each unit). The commenters asserted that the use of the PPI for blood
and organ banks in calculating hospital payment is not unprecedented.
They stated that in the CY 2005 OPPS final rule, CMS used the PPI for
blood and derivatives for human use in calculating the payment rates
for low-volume blood products. They also pointed out that CMS
recognized the value of the PPI for blood and organ banks by using it
to update blood and blood product prices in the market basket under the
IPPS for CY 2010.
Response: We continue to believe that using blood-specific CCRs
applied to hospital claims data results in payments that appropriately
reflect hospitals' relative costs of providing blood and blood products
as reported to us by hospitals. We do not believe it is necessary or
appropriate to use the PPI for blood and organ banks as a benchmark for
updating the payment rates for blood and blood products from year to
year, because it is not our standard process under the OPPS for any
item or service to update payment rates by implementing across-the-
board, product-specific inflation updates to the payment rates that
were in place the year before. Rather, we annually update
[[Page 60373]]
payment groups and payment weights using the most recently available
hospital claims and cost report data. This process allows us to
recalibrate the payment groups and payment weights in response to
changes in hospitals' costs from year to year. A fundamental principle
of the OPPS is that it is based on relative weights, and as we have
stated in the past (73 FR 68541), it is the relativity of the costs to
one another, rather than absolute cost, that is important in setting
payment rates. To deviate from our standard OPPS ratesetting
methodology and update the payment rates for blood and blood products
by the PPI would skew this relativity.
We also note that, as discussed in section II.B. of this final rule
with comment period, we are required by law to update the conversion
factor used to determine payment rates under the OPPS. For CY 2010, the
update is equal to the hospital inpatient market basket increase. The
PPI for blood and organ banks is one of several price proxies used to
calculate the hospital inpatient market basket (74 FR 43847), which
represents the change in price over time of the same mix (quantity and
intensity) of goods and services purchased to provide hospital
services. In this way, the PPI for blood and blood products is already
incorporated in the CY 2010 payment rates for blood and blood products.
Comment: One commenter noted that the proposed CY 2010 median costs
for several blood and blood products fluctuated significantly relative
to CY 2009. The commenter expressed concern about potentially large
payment decreases and noted that, in the past, CMS dampened payment
decreases for blood and blood products to limit product losses. The
commenter requested that CMS disclose the source of the fluctuations in
CY 2010 median costs for blood and blood products and implement a
dampening policy to mitigate significant payment fluctuations, not only
for blood and blood products but for all other services.
Response: As stated previously, we continue to believe that using
blood-specific CCRs applied to hospital claims data results in payments
that appropriately reflect hospitals' relative costs of providing blood
and blood products as reported to us by hospitals. We do not believe it
is necessary or appropriate to implement a dampening policy to mitigate
significant payment fluctuations, for blood and blood products or for
any other items and services payable under the OPPS, as described in
section II.A.2.c. of this final rule with comment period. As we have
stated in the past (73 FR 68541), it is our common practice to review
significant changes in median costs from year to year and from the
proposed rule to the final rule for a given calendar year. The final CY
2010 median costs for more than two-thirds of all blood and blood
products changed by a margin of less than 10 percent compared to the CY
2009 median costs. Of the remaining blood and blood products, 8
demonstrated decreases in median costs of greater than 10 percent, and
5 demonstrated increases in median costs of greater than 10 percent. We
determined that the fluctuations in median costs for these 13 blood and
blood products were due to contributions of additional claims, the
addition or removal of individual hospitals furnishing particular blood
and blood products, and revised cost report data. For all APCs whose
payment rates are based upon relative payment weights, we note that the
quality and accuracy of reported units and charges significantly
influence the median costs that are the basis for our payment rates,
especially for low volume items and services. Beyond our standard OPPS
trimming methodology (described in section II.A.2. of this final rule
with comment period) that we apply to those claims that have passed
various types of claims processing edits, it is not our general policy
to judge the accuracy of hospital coding and charging for purposes of
ratesetting.
Comment: One commenter recommended that CMS recognize plasma
protein fraction (PPF) products as drugs under the OPPS and assign
status indicator ``K'' (Nonpass-Through Drugs and Nonimplantable
Biologicals, Including Therapeutic Radiopharmaceuticals) to HCPCS codes
P9043 (Infusion, plasma protein fraction (human), 5%, 50 ml) and P9048
(Infusion, plasma protein fraction (human), 5%, 250 ml), rather than
assigning them status indicator ``R'' (Blood and Blood Products). The
commenter also requested that CMS instruct providers to use the
appropriate infusion CPT codes for administration of PPF, rather than
blood transfusion codes. According to the commenter, PPF is similar
clinically to albumin in terms of how it is derived and the patients
for whom it is indicated. The commenter also stated that, according to
the AABB, both albumin and PPF are blood derivatives that should be
billed with pharmacy revenue codes. According to the commenter, the
AABB also indicates that the administration of blood derivatives,
including PPF, should be billed with injection or infusion CPT codes
rather than blood transfusion CPT codes.
Response: We did not propose to change the status indicators for
the PPF products described by HCPCS codes P9043 and P9048 from ``R'' to
``K'' for CY 2010. Because changing the status indicators for these
products as the commenter recommended could have significant payment
implications, we believe we should not consider such a potential change
in policy without seeking input from all interested stakeholders
through our annual rulemaking cycle. Specifically, changing the status
indicator from ``R'' to ``K'' would require us to calculate the payment
rates for PPF using mean unit cost from hospital claims, as we
currently do for albumin products, rather than using our standard
blood-specific CCR methodology for blood and blood products.
We last addressed the issue of whether plasma-derived therapies and
their recombinant analogs should be considered blood and blood products
for purposes of payment under the OPPS in the CY 2003 OPPS final rule
with comment period (67 FR 66774) and the CY 2004 OPPS final rule with
comment period (68 FR 63455). We stated that, because these products
are highly processed and not manufactured by local blood banks, they do
not have the same access and safety concerns as other blood and blood
products. Therefore, we did not consider any plasma-derived products
and their recombinant analogs, including albumin and immune globulins,
to fall under the category of blood and blood products (67 FR 66774).
We are requesting comments on this final rule with comment period
that address whether PPF should be recognized as a blood and blood
product, designated with status indicator ``R,'' or as a nonpass-
through drug and biological, designated with status indicator ``K.''
Specifically, we are interested in how PPF is derived and manufactured,
and whether the same access and safety concerns that apply to the blood
and blood products recognized under the OPPS for payment purposes also
apply to PPF. Finally, we are interested in the relationship between
albumin and PPF, from clinical, manufacturing, and safety perspectives,
and whether there would be a rationale for treating these products
similarly for payment purposes under the OPPS. We will consider these
comments as we prepare for the CY 2011 annual rulemaking cycle.
Comment: One commenter asked if the product ``prepooled
cryoprecipitate''
[[Page 60374]]
would be added to the list of blood and blood products.
Response: The existing HCPCS code that describes cryoprecipitate
products, P9012 (Cryoprecipitate, each unit), is recognized under the
OPPS for payment purposes as a blood and blood product. We note there
is an established process in place for requesting a revision to the
Level II HCPCS codes if stakeholders believe the current codes cannot
adequately address all clinical circumstances. The Level II HCPCS
coding system is a comprehensive and standardized system that
classifies similar products that are medical in nature into categories
for the purpose of efficient claims processing. The process and
criteria for revising Level II HCPCS codes is available on the CMS Web
site at: http://www.cms.hhs.gov/MedHCPCSGenInfo/02_HCPCSCODINGPROCESS.asp#TopOfPage.
After consideration of the public comments we received, we are
finalizing, without modification, our proposal to calculate the median
costs upon which the CY 2010 payment rates for blood and blood products
are based using the blood-specific CCR methodology that we have
utilized since CY 2005. We believe that continuing this methodology in
CY 2010 results in median costs for blood and blood products that
appropriately reflect the relative estimated costs of these products
for hospitals without blood cost centers and, therefore, for these
products in general.
We refer readers to Addendum B to this final rule with comment
period for the final CY 2010 payment rates for blood and blood
products, which are identified with status indicator ``R.'' For more
detailed discussion of the blood-specific CCR methodology, we refer
readers to the CY 2005 OPPS proposed rule (69 FR 50524 through 50525).
For a full history of OPPS payment for blood and blood products, we
refer readers to the CY 2008 OPPS/ASC final rule with comment period
(72 FR 66807 through 66810).
(3) Single Allergy Tests
In the CY 2010 OPPS/ASC proposed rule (74 FR 35269), we proposed to
continue with our methodology of differentiating single allergy tests
(``per test'') from multiple allergy tests (``per visit'') by assigning
these services to two different APCs to provide accurate payments for
these tests in CY 2010. Multiple allergy tests are currently assigned
to APC 0370 (Allergy Tests), with a median cost calculated based on the
standard OPPS methodology. We provided billing guidance in CY 2006 in
Transmittal 804 (issued on January 3, 2006) specifically clarifying
that hospitals should report charges for the CPT codes that describe
single allergy tests to reflect charges ``per test'' rather than ``per
visit'' and should bill the appropriate number of units of these CPT
codes to describe all of the tests provided. However, as noted in the
CY 2010 OPPS/ASC proposed rule (74 FR 35269), our CY 2008 claims data
available for that proposed rule for APC 0381 did not reflect improved
and more consistent hospital billing practices of ``per test'' for
single allergy tests. The median cost of APC 0381, calculated for the
proposed rule according to the standard single claims OPPS methodology,
was approximately $55, significantly higher than the CY 2009 median
cost of APC 0381 of approximately $23 calculated according to the ``per
unit'' methodology, and greater than we would expect for these
procedures that are to be reported ``per test'' with the appropriate
number of units. Some claims for single allergy tests still appear to
provide charges that represent a ``per visit'' charge, rather than a
``per test'' charge. Therefore, consistent with our payment policy for
single allergy tests since CY 2006, we proposed to calculate a ``per
unit'' median cost for APC 0381, based upon 530 claims containing
multiple units or multiple occurrences of a single CPT code. The
proposed CY 2010 median cost for APC 0381 using the ``per unit''
methodology was approximately $29. For a full discussion of this
methodology, we refer readers to the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66737).
We did not receive any public comments on our CY 2010 proposal for
payment of single allergy tests. Therefore, we are finalizing our CY
2010 proposal, without modification, to calculate a ``per unit'' median
cost for APC 0381 as described above in this section. The final CY 2010
median cost of APC 0381 is approximately $29.
(4) Echocardiography Services
In CY 2008, we implemented a policy whereby payment for all
contrast agents is packaged into the payment for the associated imaging
procedure, regardless of whether the contrast agent met the OPPS drug
packaging threshold. Section 1833(t)(2)(G) of the Act requires us to
create additional APC groups of services for procedures that use
contrast agents to classify them separately from those procedures that
do not utilize contrast agents. To reconcile this statutory provision
with our final policy of packaging all contrast agents, for CY 2008, we
calculated HCPCS code-specific median costs for all separately payable
echocardiography procedures that may be performed with contrast agents
by isolating single and ``pseudo'' single echocardiography claims with
the following CPT codes where a contrast agent was also billed on the
claim:
93303 (Transthoracic echocardiography for congenital
cardiac anomalies; complete);
93304 (Transthoracic echocardiography for congenital
cardiac anomalies; follow-up or limited study);
93307 (Echocardiography, transthoracic, real-time with
image documentation (2D) with or without M-mode recording; complete);
93308 (Echocardiography, transthoracic, real-time with
image documentation (2D) with or without M-mode recording; follow-up or
limited study);
93312 (Echocardiography, transesophageal, real time with
image documentation (2D) (with or without M-mode recording); including
probe placement, image acquisition, interpretation and report);
93315 (Transesophageal echocardiography for congenital
cardiac anomalies; including probe placement, image acquisition,
interpretation and report);
93318 (Echocardiography, transesophageal (TEE) for
monitoring purposes, including probe placement, real time 2-dimensional
image acquisition and interpretation leading to ongoing (continuous)
assessment of (dynamically changing) cardiac pumping function and to
therapeutic measures on an immediate time basis); and
93350 (Echocardiography, transthoracic, real-time with
image documentation (2D), with or without M-mode recording, during rest
and cardiovascular stress test using treadmill, bicycle exercise and/or
pharmacologically induced stress, with interpretation and report).
After reviewing HCPCS code-specific median costs, we determined
that all echocardiography procedures that may be performed with
contrast agents are reasonably similar both clinically and in terms of
resource use. In CY 2008, we created APC 0128 (Echocardiogram with
Contrast) to provide payment for echocardiography procedures that are
performed with a contrast agent. We refer readers to the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66643 through 66646) for more
information on this methodology.
In order for hospitals to identify and receive appropriate payment
for echocardiography procedures performed with contrast beginning in CY
2008, we created eight new HCPCS codes (C8921
[[Page 60375]]
through C8928) that corresponded to the related CPT echocardiography
codes and assigned them to the newly created APC 0128. We instructed
hospitals to report the CPT codes when performing echocardiography
procedures without contrast and to report the new HCPCS C-codes when
performing echocardiography procedures with contrast, or without
contrast followed by with contrast. As is our standard policy with
regard to new codes, the APC assignment of these codes was then open to
comment in that final rule.
We used the same process to calculate median costs for these codes
for CY 2009 as we used for CY 2008 to separately identify
echocardiography services provided with contrast and those provided
without contrast because the data reported under these new codes were
not yet available for CY 2009 ratesetting.
In addition, for CY 2009, the American Medical Association (AMA)
revised several CPT codes in the 93000 series to more specifically
describe particular services provided during echocardiography
procedures. The CY 2009 descriptor for new CPT code 93306
(Echocardiography, transthoracic real-time with image documentation
(2D), includes M-mode recording, when performed, complete, with
spectral Doppler echocardiography, and with color flow Doppler
echocardiography) includes the services described in CY 2008 by three
CPT codes: 93307; 93320 (Doppler echocardiography, pulsed wave and/or
continuous wave with spectral display; complete); and 93325 (Doppler
echocardiography color flow velocity mapping). Therefore, the service
described in CY 2009 by new CPT code 93306 was reported in the CY 2008
data with three CPT codes, specifically CPT codes 93307, 93320, and
93325. In CY 2008, the hospital received separate payment for CPT code
93307 through APC 0269 (Level II Echocardiogram without Contrast Except
Transesophageal), into which payment for the other two services was
packaged. The revised CY 2009 descriptor of CPT code 93307 explicitly
excludes services described by CPT codes 93320 and 93325.
To estimate the hospital costs of CPT codes 93306 and 93307 based
on their CY 2009 descriptors and the corresponding HCPCS codes C8929
and C8923 for CY 2009, we used claims data from CY 2007. As described
in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68542
through 68544), we manipulated our CY 2007 single and ``pseudo'' single
claims data to simulate the new CY 2009 definitions of these services.
Specifically, we selected claims for CPT code 93307 on which CPT codes
93320 and 93325 were also present and we treated the summed costs on
these claims as if they were a single procedure claim for CPT code
93306. Similarly, we selected single claims for CPT code 93307 to
reflect the newly revised descriptor for CY 2009; that is, we included
those claims where CPT code 93307 was not billed with packaged CPT code
93320 or CPT code 93325 on the same claim. We then applied our CY 2009
methodology for calculating HCPCS code-specific median costs for these
echocardiography procedures with and without contrast by dividing the
new set of claims for CPT codes 93306 and 93307 into those billed with
and without contrast agents. We assigned the costs for simulated CPT
codes 93306 and 93307 reported without contrast to those CPT codes. We
then assigned the costs for simulated CPT codes 93306 and 93307
reported with contrast to new HCPCS code C8929 (Transthoracic
echocardiography with contrast, or without contrast followed by with
contrast, real-time with image documentation (2D), includes M-mode
recording, when performed, complete, with spectral Doppler
echocardiography, and with color flow Doppler echocardiography) and
revised HCPCS code C8923 (Transthoracic echocardiography with contrast,
or without contrast followed by with contrast, real-time with image
documentation (2D), includes M-mode recording, when performed,
complete, without spectral or color Doppler echocardiography),
respectively. In the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68542 through 68544), we assigned these CPT and HCPCS codes to
APCs for CY 2009 based on their simulated median costs and clinical
characteristics. New CY 2009 CPT code 93306 and HCPCS code C8929 were
assigned comment indicator ``NI'' in that final rule with comment
period, to signify that they were new codes whose interim final OPPS
treatment was open to comment on that final rule with comment period.
The CY 2010 OPPS/ASC proposed rule was the first opportunity to
have claims data available from hospitals for echocardiography services
performed with contrast (or without contrast followed by with contrast)
and reported with HCPCS codes C8921 through C8928. With the exception
of HCPCS code C8923, which had a significant change in its code
descriptor for CY 2009, in the CY 2010 OPPS/ASC proposed rule (74 FR
35271), we proposed to use our standard methodology to set the CY 2010
OPPS payment rates for these echocardiography services performed with
contrast, taking into consideration their HCPCS code-specific median
costs from CY 2008 claims.
For CY 2010 ratesetting, we proposed to employ an alternative
ratesetting methodology for CPT codes 93306 and 93307 and HCPCS codes
C8929 and C8923 that is similar to the approach we used for CY 2009 in
order to account for the new codes and revised code descriptors for
which CY 2008 data are unavailable. However, in the case of the
proposed CY 2010 cost estimation, our CY 2008 claims for CPT code 93307
were only for services performed without contrast, and we have CY 2008
claims for HCPCS C8923 for the comparable services performed with
contrast. Specifically, we selected claims for CPT code 93307 on which
CPT codes 93320 and 93325 were also present and we treated the summed
costs on these claims as if they were a single procedure claim for CPT
code 93306 in order to simulate the median cost for CPT code 93306, for
which CY 2008 claims data are not available. We then selected single
claims for CPT code 93307 to reflect the newly revised descriptor for
CY 2009; that is, we included those claims where CPT code 93307 was not
billed with either packaged CPT code 93320 or CPT code 93325 on the
same claim in order to simulate an appropriate CY 2010 proposed median
cost for CPT code 93307. We assigned the costs of HCPCS code C8923 when
reported with CPT codes 93320 and 93325 to HCPCS code C8929 and the
costs of HCPCS code C8923 when reported without CPT code 93320 or 93325
to HCPCS code C8923.
Following publication of the CY 2009 OPPS/ASC final rule with
comment period, several stakeholders brought a number of concerns to
our attention, including the interim APC assignment of new CPT code
93351 (Echocardiography, transthoracic, real-time with image
documentation (2D), includes M-mode recording, when performed, during
rest and cardiovascular stress test using treadmill, bicycle exercise
and/or pharmacologically induced stress, with interpretation and
report; including performance of continuous electrocardiographic
monitoring, with physician supervision) and the corresponding new HCPCS
code C8930 (Transthoracic echocardiography, with contrast, or without
contrast followed by with contrast, real-time with image documentation
(2D), includes M-mode recording, when performed, during rest and
cardiovascular stress test using
[[Page 60376]]
treadmill, bicycle exercise and/or pharmacologically induced stress,
with interpretation and report; including performance of continuous
electrocardiographic monitoring, with physician supervision). These
stakeholders noted that new CY 2009 CPT code 93351 was created to
include the services reported previously by CPT codes 93015
(Cardiovascular stress test using maximal or submaximal treadmill or
bicycle exercise, continuous electrocardiographic monitoring, and/or
pharmacological stress; with physician supervision, with interpretation
and report) and 93350 (Echocardiography, transthoracic, real-time with
image documentation (2D), includes M-mode recording, when performed,
during rest and cardiovascular stress test using treadmill, bicycle
exercise and/or pharmacologically induced stress, with interpretation
and report). Because new CY 2009 CPT code 93351 was meant to include
the services previously reported with both the CPT codes for a
transthoracic echocardiogram during rest and stress (CPT code 93350 is
recognized under the OPPS) and a cardiovascular stress test (CPT code
93017 is recognized under the OPPS, rather than CPT code 93015), these
stakeholders disagreed with our assignments of both CPT codes 93350 and
93351 to APC 0269 for CY 2009.
Upon review of these concerns and our CY 2008 data, in the CY 2010
OPPS/ASC proposed rule (74 FR 35271), we proposed for CY 2010 to use an
alternative methodology to simulate median costs for CPT code 93351 and
corresponding HCPCS code C8930, for which CY 2008 claims data are
unavailable, and for CPT code 93350 and corresponding HCPCS code C8928
(Transthoracic echocardiography with contrast, or without contrast
followed by with contrast, real-time with image documentation (2D),
includes M-mode recording, when performed, during rest and
cardiovascular stress test using treadmill, bicycle exercise and/or
pharmacologically induced stress, with interpretation and report). That
is, we proposed to use claims that contain both CPT codes 93350 and
93017 (Cardiovascular stress test using maximal or submaximal treadmill
or bicycle exercise, continuous electrocardiographic monitoring, and/or
pharmacological stress; tracing only, without interpretation and
report) to simulate the median cost for CPT code 93351. We also
proposed to use the remaining claims that contain CPT code 93350 but
that do not contain CPT code 93017 to develop the proposed CY 2010
median cost for CPT code 93350. For our proposed rule analysis, we
identified over 74,000 CY 2008 claims with both CPT code 93350 and CPT
code 93017 on the same date of service and no other separately paid
services appearing on the same date after applying our bypass
processing logic, discussed in section II.A.1.b. of the proposed rule
(74 FR 35240 through 35241). We treated these modified claims
containing both CPT codes 93350 and 93017 as a single service and we
calculated a proposed median cost of approximately $604. Therefore, for
CY 2010, we proposed to reassign CPT code 93351 to revised APC 0270
(Level III Echocardiogram without Contrast), which had a proposed APC
median cost of approximately $596. We proposed to continue to assign
CPT code 93350 to APC 0269, which had a proposed APC median cost of
approximately $456, based on its proposed HCPCS code-specific median
cost of approximately $406 based on approximately 11,000 single claims.
Furthermore, we proposed to use claims for HCPCS code C8928 that are
reported with CPT code 93017 on the same claim to simulate the CY 2010
median cost for HCPCS code C8930. We identified over 4,000 claims in
the proposed rule data with both HCPCS code C8930 and CPT code 93017 on
the same date of service and no other separately paid services
appearing on the same date after applying our bypass processing logic,
discussed in section II.A.1.b. of the proposed rule (74 FR 35240
through 35241), that we modified to treat HCPCS code C8930 and CPT code
93017 as a single service. We calculated a HCPCS code-specific proposed
median cost of approximately $706. Therefore, we proposed to continue
to assign HCPCS code C8930 to APC 0128 with a proposed APC median cost
of approximately $660. We also proposed to continue to assign HCPCS
code C8928 to APC 0128, based on its HCPCS code-specific proposed
median cost of approximately $595 based on approximately 1,000 single
claims.
Comment: One commenter on the CY 2009 OPPS/ASC final rule with
comment period addressed the interim final treatment of new CPT code
93306 for CY 2009. The commenter requested that CMS not recognize CPT
code 93306 under the OPPS because this code represents the combination
of three services already described by existing CPT codes 93307, 93320,
and 93325. Alternatively, the commenter recommended that CMS could
instruct hospitals to continue billing CPT codes 93320 and 93325 in
association with CPT code 93306 in order to encourage consistent
reporting of services described by CPT codes 93320 and 93325 when they
are furnished with any echocardiography service. The commenter believed
that requiring the use of CPT code 93306 may confuse hospitals, as
other echocardiography services require the separate reporting of CPT
codes 93320 and 93325 when these additional procedures are performed.
Because there are already existing codes for the services described by
CPT code 93306 and hospitals could inappropriately stop reporting CPT
codes 93320 and 93325 in association with other echocardiography
services, the commenter requested that CMS not recognize CPT code 93306
for payment under the OPPS. According to the commenter, under all
circumstances, hospitals would continue to report CPT code 93320 or CPT
code 93325 when they are performed with any echocardiography procedure,
a practice preferred by the commenter. Similarly, the commenter
recommended that CMS not recognize the corresponding HCPCS code C8929
that describes CPT code 93306 when furnished with contrast because the
contrast echocardiography procedure could also be reported using
existing HCPCS code C8921 and CPT codes 93320 and 93325.
Response: As is our standard methodology, we review new CPT codes
annually and assign status indicators to all new codes and provide APC
assignments, if applicable, for codes that describe services that may
be performed in the hospital outpatient department (which includes
provider-based clinics located on and off campus). We consider CPT code
93306 to be part of the standard CPT code set hospitals use for
reporting services under the OPPS, and the service described by the
code is one that we believe could be furnished to a hospital outpatient
and potentially covered and, therefore, paid by Medicare under the
OPPS. We incorporated CPT code 93306 in the CY 2009 OPPS/ASC final rule
with comment period, assigning it a separately payable status indicator
and APC, consistent with our belief that the service described by this
code could be appropriately reported by hospitals when they furnish the
service in the HOPD. Furthermore, as described in the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68543), we used a special cost
estimation methodology to estimate the expected cost of CPT code 93306
based on hospital claims data for the individual predecessor codes in
order to inform our interim final assignment of CPT code 93306 to a
clinical APC for CY 2009.
[[Page 60377]]
Regarding the commenter's alternative suggestion that we instruct
hospitals to continue to report CPT codes 93320 and 93325 when
performed in association with the procedure described by CPT code
93306, we will not instruct hospitals to continue to report CPT codes
93320 and 93325 when billing for CPT code 93306 because CPT code 93306
incorporates the services described by CPT codes 93320 and 93325 in its
code descriptor. Billing separately for these services when reporting
CPT 93306 would not be consistent with correct coding principles and
could create greater confusion and unnecessary burden for hospitals.
Whenever possible, hospitals have repeatedly encouraged us to follow
standard coding guidelines in order to reduce their administrative
burden in reporting services differently for Medicare, and our
recognition of CPT code 93306 for payment under the OPPS is consistent
with hospitals' general request to us.
Finally, as we are continuing to instruct hospitals to use CPT code
93306 for CY 2010, it continues to be appropriate for hospitals to bill
using HCPCS code C8929 when furnishing the service described by CPT
code 93306 with contrast. In the case of CPT code 93306 and other CPT
codes for echocardiography services, we have developed parallel HCPCS
C-codes to report each procedure when furnished with contrast in order
to provide payment through separate APCs for those echocardiography
services furnished with and without contrast.
Comment: Several commenters on the CY 2010 OPPS/ASC proposed rule
expressed support for the revisions to the echocardiography APCs
included in the CY 2010 OPPS/ASC proposed rule. One commenter noted
appreciation for the proposed reassignment of CPT code 93351 from APC
0269 to APC 0270. However, one commenter on the CY 2009 OPPS/ASC final
rule with comment period suggested that the new CY 2009 CPT code 93351
should not be recognized for payment under the OPPS. The commenter
reasoned that the comprehensive service described by CPT code 93351 is
comprised of two services previously reported with CPT codes 93350 and
93015: CPT code 93015 includes physician supervision and
interpretation, which are not hospital outpatient services; and CPT
code 93015 is reported by nonhospital practitioners and is not
recognized for payment under the OPPS.
In addition, a commenter on the CY 2010 OPPS/ASC proposed rule
stated that a more appropriate treatment of CPT code 93351 under the
OPPS would be to not recognize this code for payment under the OPPS
but, rather, to continue to recognize for payment several existing CPT
codes which, when reported in combination, would describe the service
that would otherwise be reported with CPT code 93351 alone. The
commenter believed that CPT code 93351 was created specifically for
services performed in nonfacility settings and that the intent of the
CPT Editorial Committee was to limit the use of the code to nonfacility
settings only. The commenter stated that correspondence from CMS
indicated that CPT code 93351 would be billable only when provided in a
physician's office or independent laboratory settings.
Response: As is our standard methodology, we review new CPT codes
annually and assign status indicators to all new codes and provide APC
assignments, if applicable, for codes that describe services that may
be performed in the HOPD (which includes provider-based clinics located
on and off campus). The CPT code descriptor for CPT code 93351 makes no
mention that the code is restricted from use in the HOPD, or that its
use is limited to nonfacility settings. Further, there are no
additional CPT instructions that would limit the reporting of CPT code
93351 to nonfacility or nonhospital settings. We consider this CPT code
to be part of the standard CPT code set hospitals use for reporting
services under the OPPS, and the service described by the code is one
that we believe could be furnished to a hospital outpatient and
potentially covered and, therefore, paid by Medicare under the OPPS.
CPT code 93351 describes a service that would previously have been
reported with CPT codes 93350 and 93017 under the OPPS. While the
commenter was correct that we do not recognize CPT code 93015 for
payment under the OPPS, a code that describes a cardiovascular stress
test with interpretation and report, we do recognize CPT code 93017,
which describes the tracing only for the cardiovascular stress test. We
incorporated CPT code 93351 in the CY 2009 OPPS/ASC final rule with
comment period, assigning it a separately payable status indicator and
APC, consistent with our belief that the service described by this code
could be appropriately reported by hospitals when they furnish the
service in the HOPD. Furthermore, we established professional component
(PC) and technical component (TC) payments under the MPFS for CPT code
93351, also consistent with our belief that the CPT code may be
reported for services in facility settings, such as independent
laboratory settings. We have communicated no information to the public
that states that Medicare hospital outpatient payment would not be made
if this CPT code were reported by a hospital for services furnished to
hospital outpatients.
We proposed a methodology for identifying the hospital outpatient
claims and isolating the hospital charges that would be associated with
this procedure for CY 2010 in order to develop an appropriate hospital
outpatient payment for the associated facility resources for the
existing services that would be reported and paid under the new CPT
code. Specifically, we proposed to use claims that contain both CPT
codes 93350 and 93017 to simulate the median cost for CPT code 93351
and proposed to reassign CPT code 93351 from APC 0269 to revised APC
0270 for CY 2010 based on its simulated median cost. We continue to
believe that this CPT code may be reported for OPPS services described
by the code, and that our proposed CY 2010 cost estimation methodology
accurately simulates a median cost for this new code that reflects the
associated hospital resources for the component services that are newly
described by this single CPT code.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to reassign CPT
code 93351 to APC 0270 based on a simulated CPT-specific median cost
identified from over 80,000 CY 2008 claims with both CPT code 93350 and
CPT code 93017 on the same date of service and no other separately paid
services appearing on the same date after applying our bypass
processing logic, as discussed above. We calculated a final CPT-
specific median cost of approximately $605 for CPT code 93351 and a
final CY 2010 APC median cost for APC 0270 of approximately $591.
Comment: One commenter on the CY 2009 OPPS/ASC final rule with
comment period requested that CMS delete HCPCS code C8930
(Transthoracic echocardiography, with contrast, or without contrast
followed by with contrast, real-time with image documentation (2D),
includes M-mode recording, when performed, during rest and
cardiovascular stress test using treadmill, bicycle exercise and/or
pharmacologically induced stress, with interpretation and report;
including performance of continuous electrocardiographic monitoring,
with physician supervision) as the services
[[Page 60378]]
described by this code could be reported using CPT code 93017
(Cardiovascular stress test using maximal or submaximal treadmill or
bicycle exercise, continuous electrocardiographic monitoring, and/or
pharmacological stress; tracing only, without interpretation and
report) and HCPCS code C8928 (Transthoracic echocardiography with
contrast, or without contrast followed by with contrast, real-time with
image documentation (2D), includes M-mode recording, when performed,
during rest and cardiovascular stress test using treadmill, bicycle
exercise and/or pharmacologically induced stress, with interpretation
and report).
Response: As described above, we are continuing to recognize the
service described by CPT code 99351, which is the noncontrast
echocardiography procedure that is parallel to HCPCS code C8930 for the
same procedures provided with contrast. As previously noted, we have
developed parallel HCPCS C-codes to report each echocardiography
procedure when furnished with contrast in order to provide payment
through separate APCs for those echocardiography services furnished
with and without contrast. While we understand that the service
reported under HCPCS code C8930 may be reported using a combination of
a CPT code and a HCPCS C-code, we do not believe that this would be
appropriate because the noncontrast echocardiography service is
reported with a single CPT code. Hospitals are generally instructed to
use the HCPCS code that most appropriately and specifically describes
the service that was provided, including not unbundling component
services that could otherwise be separately reported. In this instance,
HCPCS code C8930 would be the most specific code that describes the
full service provided when the component services that would otherwise
be reported by CPT code 93017 and HCPCS code C8928 are provided
together. Our CY 2010 ratesetting methodology for HCPCS code C8928 is
based on claims data and specifically excludes those cases when the
service was furnished along with the procedure described by CPT code
93017. On the other hand, our CY 2010 ratesetting methodology for HCPCS
code C8930 specifically includes cases where the services described by
HCPCS code C8928 and CPT code 93017 were provided together. In that
way, we are able to base CY 2010 payment for all of these services on
their actual or simulated hospital costs in the context of the CPT and
HCPCS C-codes that will be reported in CY 2010.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to continue to
recognize HCPCS code C8930 for OPPS payment. For CY 2010, HCPCS code
C8930 continues to be assigned to APC 0128, with a final CY 2010 APC
median cost of approximately $645.
Comment: One commenter on the CY 2009 OPPS/ASC final rule with
comment period requested that CMS not recognize CPT code 93352 (Use of
echocardiographic contrast agent during stress echocardiography), as
the OPPS has already developed Level II HCPCS C-codes to identify
echocardiography procedures performed with contrast.
Response: During our review of CPT code 93352 for the CY 2009 OPPS/
ASC final rule with comment period, we assigned an interim final status
indicator ``M'' (Not paid under the OPPS) to CPT code 93352 for CY
2009. In our CY 2010 OPPS/ASC proposed rule, we proposed to continue
this status indicator assignment for CY 2010.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to assign status
indicator ``M'' to CPT code 93352.
Comment: A few commenters requested that CPT code 93318
(Echocardiography, transesophageal (TEE) for monitoring purposes,
including probe placement, real time 2-dimensional image acquisition
and interpretation leading to ongoing (continuous) assessment of
(dynamically changing) cardiac pumping function and to therapeutic
measures on an immediate time basis) not be reassigned to APC 0269 as
proposed for CY 2010. Instead, these commenters requested that CPT code
93318 continue to be assigned to APC 0270 for CY 2010. Commenters
stated that CPT code 93318 is clinically similar to CPT code 93312
(Echocardiography, transesophageal, real time with image documentation
(2D) (with or without M-mode recording); including probe placement,
image acquisition, interpretation and report), and because CPT code
93312 is assigned to APC 0270, CPT code 93318 should be assigned to APC
0270 as well. While these commenters noted that the reassignment of CPT
code 93318 to APC 0269 would be most consistent with its CPT-specific
median cost presented in the proposed rule, they stated that the
unexplained volatility in the cost of CPT code 93318 suggests that
clinical homogeneity should be the deciding factor when assigning this
service to an APC.
Response: As is our standard process, for the CY 2010 proposed
rule, we reviewed each APC for clinical cohesiveness and resource
homogeneity. As the commenters noted, we proposed to reassign CPT code
93318 to APC 0269 as we believed that the proposed CPT-specific median
cost more closely matched the median cost of APC 0269. While we
continue to believe that the CPT-specific median cost of CPT 93318
(approximately $472) closely resembles the median cost of APC 0269
(approximately $447), upon further review, we agree with the commenter
that the clinical characteristics of the procedure described by CPT
code 93318 are similar to the procedure described by CPT code 93312. We
also note that we have only 344 single and 593 total claims for CPT
code 93318 from only 188 providers in comparison to 29,987 single and
52,342 total claims for CPT code 93312 from 2,093 providers. We believe
the limited claims data from relatively few providers contribute to the
variability in cost observed for CPT code 93318 and agree with the
commenters that this procedure should remain assigned to APC 0270 for
CY 2010.
After consideration of the public comments we received, we are not
finalizing our proposal to reassign CPT code 93318 to APC 0269.
Instead, for CY 2010, we are continuing to assign CPT code 93318 to APC
0270, with a final CY 2010 APC median cost of approximately $591.
Comment: Several commenters supported the continuation of separate
APCs for payment of echocardiography procedures with contrast and
without contrast. While these commenters were generally supportive of
the proposed ratesetting methodology, they were concerned that the
proposed payment rate for APC 0128 of approximately $683 was
insufficient to cover the costs associated with providing the
echocardiogram and the related contrast materials and services for
HCPCS codes C8921 (Transthoracic echocardiography with contrast, or
without contrast followed by with contrast, for congenital cardiac
anomalies; complete); C8925 (Transesophageal echocardiography (TEE)
with contrast, or without contrast followed by with contrast, real time
with image documentation (2D) (with or without M-mode recording);
including probe placement, image acquisition, interpretation and
report); C8926 (Transesophageal echocardiography (TEE) with contrast,
or without contrast followed by with contrast, for congenital cardiac
anomalies; including probe
[[Page 60379]]
placement, image acquisition, interpretation and report); and C8930
(Transthoracic echocardiography, with contrast, or without contrast
followed by with contrast, real-time with image documentation (2D),
includes M-mode recording, when performed, during rest and
cardiovascular stress test using treadmill, bicycle exercise and/or
pharmacologically induced stress, with interpretation and report;
including performance of continuous electrocardiographic monitoring,
with physician supervision). Specifically, the commenters noted that
the noncontrast equivalent procedures (described by CPT codes 93303,
93312, 93315, and 93351) were all proposed for assignment to APC 0270,
with a proposed payment rate of approximately $600. The commenters
believed that the difference between the proposed payment rate for
these procedures with contrast and without contrast is too small to
cover the cost of the contrast material used in these procedures. The
commenters suggested that CMS reassign HCPCS codes C8921, C8925, C8926,
and C8930 to a new APC for echocardiography procedures performed with
contrast or that CMS provide separate payment for the contrast material
used in these procedures.
Response: The final payment differential between APC 0270, where
CPT codes 99303, 99312, 99315, and 99351 are assigned, and APC 0128,
where the corresponding HCPCS codes for the same procedures with
contrast (HCPCS codes C8921, C8925, C8926, and C8930) are assigned, is
the difference between approximately $645 and approximately $591 of
$54. We believe this differential provides an appropriate higher
payment to those hospitals that furnish these procedures with contrast
and appropriately accounts for the cost of the contrast material, which
is required for all of the services assigned to APC 0128. HCPCS codes
C8921, C8925, C8926, and C8930 have median costs that range from a low
of approximately $178 to a high of approximately $712. Each of these
HCPCS codes was reported by fewer than 170 providers in CY 2008. The
median costs of these services span most of the range of median costs
of HCPCS codes assigned to APC 0128, and they do not form a cluster of
high cost procedures in the APC such that they would warrant assignment
to a new clinical APC. In contrast, the median costs of CPT codes
99303, 99312, 99315, and 99351 span a much narrower range, from a low
of approximately $505 to a high of approximately $605. Two of these CPT
codes were reported by more than 1,500 providers in CY 2008. Clearly,
fewer providers are reporting the echocardiogram procedures with
contrast, and we expect that the hospital cost distribution for that
subset of hospitals could be different than the cost distribution of
the large number of providers reporting the procedures without
contrast. Therefore, no conclusions can be drawn about the aggregate
OPPS payment to that subset of hospitals for all of their
echocardiogram services in comparison to the aggregate echocardiogram
costs of the subset of hospitals specifically based on the payment
rates for APCs 0128 and 0270. The OPPS is a prospective payment system
that relies on hospital charge and cost report data from the hospitals
that furnish the services in order to determine relative costs.
Therefore, we believe that our prospective payment rates calculated
based on the costs of those providers furnishing the procedures in CY
2008 provide appropriate payment to the providers that will furnish the
services in CY 2010.
In summary, after consideration of the public comments we received,
we are finalizing our CY 2010 proposals for payment of echocardiography
procedures with and without contrast, with modifications. We are
finalizing our proposed methodologies for simulating the median costs
of CPT codes 93306, 93307, 93351, and 93350 for which there are no CY
2008 hospital claims data for these specific CPT codes, as discussed
above. In addition, we are finalizing our proposed methodologies for
simulating the median costs of HCPCS codes C8929, C8923, C8930, and
C8928 for which there are no CY 2008 hospital claims data for these
specific HCPCS codes, as discussed above. We are not finalizing our
proposal to reassign CPT code 93318 to APC 0269; instead, we are
maintaining the assignment of CPT code 93318 to APC 0270 for CY 2010.
Finally, we are finalizing our proposal to assign HCPCS codes C8921,
C8925, C8926, and C8930 to APC 0128 for CY 2010.
Table 9 below shows CY 2010 CPT codes for billing echocardiography
services without contrast, their final APC assignments for CY 2010, and
the corresponding HCPCS codes for use when echocardiography services
are performed with contrast (or without contrast followed by with
contrast), along with their final APC assignments for CY 2010.
BILLING CODE 4120-01-P
[[Page 60380]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.022
[[Page 60381]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.023
[[Page 60382]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.024
[[Page 60383]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.025
BILLING CODE 4120-01-C
Finally, in the CY 2010 OPPS/ASC proposed rule (74 FR 35275), for
CY 2010, based upon our proposed APC configurations, we also proposed
to revise the titles of our existing series of echocardiography APCs to
more accurately describe the groups of services identified by CPT codes
93303 through 93352 and HCPCS codes C8921 through C8930 that are
assigned to these APCs. We proposed to rename APCs 0269, 0270, and 0697
as described in Table 7 of the proposed rule.
Comment: One commenter supported the proposed revisions to the
echocardiography APC titles and configurations.
Response: We appreciate the support for our proposal.
We are finalizing our proposal to rename APCs 0269, 0270, and 0697
without modification. Therefore, we are adopting as final the titles of
these APCs as reflected in Table 10 below:
Table 10--CY 2010 Echocardiography APCs
------------------------------------------------------------------------
Final CY 2010
Final CY 2010 APC CY 2010 APC title approximate APC
median cost
------------------------------------------------------------------------
0128...................... Echocardiogram With $645
Contrast.
0269...................... Level II Echocardiogram 447
Without Contrast.
[[Page 60384]]
0270...................... Level III Echocardiogram 591
Without Contrast.
0697...................... Level I Echocardiogram 262
Without Contrast.
------------------------------------------------------------------------
(5) Nuclear Medicine Services
In CY 2008, we began packaging payment for diagnostic
radiopharmaceuticals into the payment for the associated nuclear
medicine procedure. (For a discussion regarding the distinction between
diagnostic and therapeutic radiopharmaceuticals, we refer readers to
the CY 2008 OPPS/ASC final rule with comment period at 72 FR 66636.)
Prior to the implementation of this policy, diagnostic
radiopharmaceuticals were subject to the standard OPPS drug packaging
methodology whereby payments are packaged when the estimated mean per
day product costs fall at or below the annual packaging threshold for
drugs, biologicals (other than implantable biologicals), and
radiopharmaceuticals.
Packaging costs into a single aggregate payment for a service,
encounter, or episode-of-care is a fundamental principle that
distinguishes a prospective payment system from a fee schedule. In
general, packaging the costs of supportive items and services into the
payment for the independent procedure or service with which they are
associated encourages hospital efficiencies and also enables hospitals
to manage their resources with maximum flexibility. All nuclear
medicine procedures require the use of at least one radiopharmaceutical
or other radiolabeled product, and there are only a small number of
radiopharmaceuticals that may be appropriately billed with each
diagnostic nuclear medicine procedure. For the OPPS, we distinguish
diagnostic radiopharmaceuticals from therapeutic radiopharmaceuticals
for payment purposes, and this distinction is recognized in the Level
II HCPCS codes for diagnostic radiopharmaceuticals that include the
term ``diagnostic'' along with a radiopharmaceutical in their HCPCS
code descriptors. As we stated in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66635), we believe that our policy to package
payment for diagnostic radiopharmaceuticals (other than those already
packaged when their per day costs are below the packaging threshold for
OPPS drugs, biologicals, and radiopharmaceuticals) is consistent with
OPPS packaging principles, provides greater administrative simplicity
for hospitals, and encourages hospitals to use the most clinically
appropriate and cost efficient diagnostic radiopharmaceutical for each
study. For more background on this policy, we refer readers to
discussions in the CY 2008 OPPS/ASC proposed rule (72 FR 42667 through
42672) and the CY 2008 OPPS/ASC final rule with comment period (72 FR
66635 through 66641).
For CY 2008 ratesetting, we used only claims for nuclear medicine
procedures that contained a diagnostic radiopharmaceutical in
calculating the median costs for APCs that include nuclear medicine
procedures (72 FR 66639). This is similar to the established
methodology used for device-dependent APCs before claims reflecting the
procedure-to-device edits were included in our claims data. For CY
2008, we also implemented claims processing edits (called procedure-to-
radiolabeled product edits) requiring the presence of a
radiopharmaceutical (or other radiolabeled product) HCPCS code when a
separately payable nuclear medicine procedure is present on a claim.
Similar to our practice regarding the procedure-to-device edits that
have been in place for some time, we continually review comments and
requests for changes related to these edits and, based on our review,
may update the edit list during our quarterly update process if
necessary. The radiolabeled product and procedure HCPCS codes that are
included in these edits can be viewed on the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/01_overview.asp.
The CY 2008 OPPS claims that are subject to the procedure-to-
radiolabeled product edits were not available for setting payment rates
in CY 2009. Therefore, as described in the CY 2009 OPPS/ASC final rule
with comment period (73 FR 68545), we continued to use our established
CY 2008 methodology for setting the payment rates for APCs that
included nuclear medicine procedures for CY 2009. We used an updated
list of radiolabeled products, including but not limited to diagnostic
radiopharmaceuticals, from the procedure-to-radiolabeled product edit
file to identify single and ``pseudo'' single claims for nuclear
medicine procedures that also included at least one eligible
radiolabeled product. Using this subset of claims, we followed our
standard OPPS ratesetting methodology to calculate median costs for
nuclear medicine procedures and their associated APCs. As in CY 2008,
when we set APC median costs based on single and ``pseudo'' single
claims that also included at least one radiolabeled product on our edit
file, we observed an equivalent or higher median cost than that
calculated from all single and ``pseudo'' single bills. We believe that
this methodology appropriately ensured that the costs of diagnostic
radiopharmaceuticals were included in the CY 2009 ratesetting process
for these APCs.
As discussed in section II.A.4.b.(1) of the proposed rule (74 FR
35287) and this final rule with comment period, during the September
2007 APC Panel meeting, the APC Panel requested that CMS evaluate the
impact of expanded packaging on beneficiaries. Also, during the March
2008 APC Panel meeting, the APC Panel requested that CMS report to the
APC Panel at the first meeting in CY 2009 the impact of packaging on
net payments for patient care. In response to these requests, we shared
data with the APC Panel at the February 2009 APC Panel meeting that
compared the frequency of the billing of diagnostic
radiopharmaceuticals billed under the OPPS in CY 2007, before the
packaging of all diagnostic radiopharmaceuticals went into effect, to
the frequency of the billing of those same products in CY 2008, their
first year of packaged payment. We also reviewed information about the
aggregate payment for diagnostic radiopharmaceuticals and nuclear
medicine procedures during those same 2 years. A summary of these data
analyses is provided in section II.A.4.b.(1) of this final rule with
comment period.
In addition to these aggregate analyses of total frequency and
payment, we also presented our analyses of the number of hospitals
performing nuclear medicine scans and the specific diagnostic
radiopharmaceuticals appearing with
[[Page 60385]]
cardiac and tumor imaging nuclear medicine procedures, excluding
positron emission tomography (PET) scans, by classes of hospitals
between the CY 2007 claims processed through September 30, 2007 and the
CY 2008 claims processed through September 30, 2008. At the March 2008
APC Panel meeting, the APC Panel also recommended that we evaluate the
usage and frequency, geographic distribution, and size and type of
hospitals performing nuclear medicine studies using radioisotopes to
assess beneficiaries' access and that we present these analyses at the
first APC Panel meeting in CY 2009. The number of all hospitals
reporting any nuclear medicine procedure declined by 2 percent between
the CY 2007 claims data and the CY 2008 claims data. Across several
classes of hospitals (urban and rural, teaching and nonteaching, and
small and large OPPS service volume), the number of hospitals billing
any nuclear medicine procedure declined by up to 4 percent over that
same time period. With regard to the specific diagnostic
radiopharmaceuticals reported with cardiac and tumor imaging nuclear
medicine procedure, we generally observed comparable distributions of
radiopharmaceuticals between the CY 2007 claims data and the CY 2008
claims data. However, the utility of this analysis was limited due to
the introduction of the procedure-to-radiolabeled product claims
processing edits discussed above. There are nuclear medicine procedures
reported with a diagnostic radiopharmaceutical HCPCS code on the CY
2008 claims that would have not necessarily been billed with a
diagnostic radiopharmaceutical HCPCS code on the CY 2007 claims.
Specifically, we observed an increase in billing for many
radiopharmaceuticals, some new and costly, between the CY 2007 claims
data and the CY 2008 claims data. We do not know how much of this was
attributable to changes in hospitals' use of radiopharmaceuticals or to
the CY 2008 introduction of the procedure-to-radiolabeled product edits
that require a radiolabeled product on the claim for payment of the
nuclear medicine procedure. With the exception of the notable increases
in the frequencies of certain radiopharmaceutical HCPCS codes that
potentially resulted from the introduction of these edits, in general,
hospital billing patterns for diagnostic radiopharmaceuticals
associated with cardiac and tumor imaging nuclear medicine scans did
not change dramatically between CY 2007 and CY 2008 for all hospitals
and classes of hospitals. We concluded that very few hospitals stopped
providing nuclear medicine procedures as a result of our CY 2008 policy
to package payment for diagnostic radiopharmaceuticals and that, in
general, hospitals did not decrease their use of expensive
radiopharmaceuticals.
As a result of the discussions of the APC Panel following our
presentation of the analyses of the impact of packaging payment for all
diagnostic radiopharmaceuticals in the OPPS, the APC Panel further
recommended that CMS continue to analyze the impact on beneficiaries of
increased packaging of diagnostic radiopharmaceuticals and provide more
detailed analyses at the next APC Panel meeting. Further, the APC Panel
requested that, in the more detailed analyses of packaging of
diagnostic radiopharmaceuticals by type of nuclear medicine scan, CMS
analyze the data according to the specific CPT codes billed with the
diagnostic radiopharmaceuticals. We stated in the CY 2010 OPPS/ASC
proposed rule (74 FR 35277) that we are accepting the APC Panel's
recommendation and would provide additional data to the APC Panel at an
upcoming meeting. We did not share additional data related to
diagnostic radiopharmaceuticals with the APC Panel at the most recent
August 2009 meeting because we believe the APC Panel's discussions
would benefit from analyses of an additional year of claims data after
CY 2008. Therefore, we plan to incorporate analysis of CY 2009 claims
into the information we will present to the APC Panel for its review at
the winter 2010 meeting.
At the February 2009 meeting of the APC Panel, the Panel commended
CMS for its effort to date to tailor the resource-based APC system to
facilitate appropriate payment for diagnostic and therapeutic
radiopharmaceuticals. The APC Panel recommended that CMS continue its
dialogue with professional societies, vendors, and other stakeholders
to improve the accuracy of APC payments for these complex items and
services, including consideration of developing composite APCs. We
appreciate the support of the APC Panel, and we are accepting the APC
Panel's recommendation to continue to communicate with interested
stakeholders regarding payment for radiopharmaceuticals and the
associated procedures. We regularly accept meetings from interested
parties throughout the year, and we encourage stakeholders to continue
a dialogue with us during the rulemaking cycle and throughout the year.
Our response to the APC Panel's recommendation regarding composite APCs
is included in our response to the public comments summarized below.
For CY 2010 ratesetting, we are able to use CY 2008 OPPS claims
that were subject to the procedure-to-radiolabeled product claims
processing edits incorporated into the I/OCE prior to payment of claims
in order to develop single and ``pseudo'' single claims for nuclear
medicine procedures according to our standard methodology. We believe
that using the CY 2008 claims data for these services without further
editing for the presence of a radiolabeled product is now appropriate
for CY 2010 because these claims reflect all possible relationships
between the nuclear medicine procedures and their associated
radiolabeled products that we have accommodated for payment of nuclear
medicine procedures. Moreover, as we indicated in the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68548 through 68549), in the rare
circumstance where a diagnostic radiopharmaceutical is not provided in
association with a nuclear medicine procedure, for example, because a
beneficiary receives a therapeutic radiopharmaceutical as part of a
hospital inpatient stay and then returns to the HOPD for a nuclear
medicine scan without needing a diagnostic radiopharmaceutical to be
administered again for the study, we believe it is appropriate to use
these claims for ratesetting purposes. We believe that just as these
situations are representative of the performance of a nuclear medicine
scan, it is also appropriate to include them for ratesetting purposes.
Comment: A number of commenters opposed CMS' proposed policy to
package payment for all diagnostic radiopharmaceuticals into payment
for their associated nuclear medicine procedures. They noted that the
majority of diagnostic radiopharmaceuticals are not interchangeable
and, for that reason, CMS' policy of packaging payment for all
diagnostic radiopharmaceuticals into their associated nuclear medicine
procedures does not foster hospital efficiencies. Some commenters
expressed concern that packaging diagnostic radiopharmaceuticals into
payment for associated nuclear medicine procedures results in
overpayment of many procedures, especially those using existing low-
cost radiopharmaceuticals, while the bundled payment would be
insufficient for newer, and likely more expensive,
radiopharmaceuticals.
In addition, the commenters requested that, if CMS continues to
[[Page 60386]]
package payment for diagnostic radiopharmaceuticals into payment for
their associated nuclear medicine procedures, CMS revise the nuclear
medicine APCs to provide differential payments for nuclear medicine
procedures when used with different radiopharmaceuticals. Several
commenters identified the series of tumor/infection imaging APCs,
including APCs 0406 (Level I Tumor/Infection Imaging), 0408 (Level III
Tumor/Infection Imaging), and 0414 (Level II Tumor/Infection Imaging),
for CMS' attention to ensure appropriate payment for low volume, high
cost radiopharmaceuticals. One commenter specifically suggested a
composite APC for certain combinations of a tumor imaging scan and
specific diagnostic radiopharmaceuticals.
Several commenters noted that there is wide variation in the costs
of diagnostic radiopharmaceuticals, and that composite APCs for
specific combinations of procedures and diagnostic radiopharmaceuticals
would be necessary to ensure adequate payment to hospitals using
expensive diagnostic radiopharmaceuticals. Other commenters suggested
that the significant clinical and resource diversity of
radiopharmaceuticals packaged into nuclear imaging procedures amounted
to a violation of the 2 times rule. The commenters explained that, just
as diagnostic radiopharmaceuticals are not interchangeable, certain
radiopharmaceuticals are indicated for particular types of diseases,
such as cancer, and are not clinically similar to other
radiopharmaceuticals used for other purposes, such as tumor imaging.
Response: As we discussed in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68547), we understand that the selection of a
diagnostic radiopharmaceutical for a particular nuclear medicine
procedure is a complex decision based on many factors, including
patient-specific factors, and that not every diagnostic
radiopharmaceutical is fully interchangeable with others. However, as
stated in the CY 2008 OPPS/ASC final rule with comment period (72 FR
66617) and in the CY 2009 OPPS/ASC final rule with comment period (73
FR 68546), we believe that nonspecific packaging (as opposed to
selected code packaging) based on combinations of items and services
observed on hospital claims is fully appropriate because of the myriad
combinations of items and services that can be appropriately provided
together. Under the OPPS, we package payment for ancillary, supportive,
and interrelated items and services into payment for the independent
services they accompany. As we discuss in section II.A.4. of this final
rule with comment period, packaging promotes hospital efficiencies
through numerous means, not only just through the choice of which
radiopharmaceutical to use for a specific nuclear medicine scan. While
all diagnostic radiopharmaceuticals may not be interchangeable, we
believe that packaging the costs of diagnostic radiopharmaceuticals,
however differential those costs may be, into the payment for nuclear
medicine services that use these products is appropriate, whether there
is one product or multiple products that could be used to furnish the
particular service provided to an individual patient. The OPPS has a
history of packaging items that are not necessarily interchangeable. It
is our longstanding practice to package payment for nonpass-through
implantable medical devices into payment for the procedure in which
they are used, notwithstanding that there may be different devices or
combinations of devices that could be used to furnish a service. (For a
more complete discussion of the history of packaging items, we refer
readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR
66639).) Therefore, in accordance with our understanding that a
diagnostic radiopharmaceutical is never provided without an
accompanying nuclear medicine scan, we believe that it is appropriate
to package the payment for all diagnostic radiopharmaceuticals into the
payment for the associated nuclear medicine procedure.
With regard to suggested composites or other revisions designed to
isolate specific nuclear medicine scans with a subset of diagnostic
radiopharmaceuticals, as we discussed in the CY 2009 OPPS/ASC final
rule with comment period (73 FR 68546), we do not believe that the
inability to substitute one diagnostic radiopharmaceutical for another
is a compelling reason for creating composite APCs, as explained below.
We developed composite APCs to provide a single payment for two or more
services that are typically performed together during a single clinical
encounter and that result in the provision of a complete service.
Composite APCs differ from packaging. Composite APCs provide a single
payment for specific combinations of independent services that would
otherwise be separately payable if they were not provided together,
while packaging entails associating the cost of ancillary, supportive,
and interrelated services and supplies with a distinct service or
composite service. Composite APCs are intended to expand the OPPS
payment bundles to encourage hospital efficiencies. Providing a single
payment for a specific combination of a diagnostic radiopharmaceutical
with a particular nuclear medicine procedure would not constitute a
composite APC and would provide no incentives for hospital efficiency.
Specifically, a diagnostic radiopharmaceutical would never be
separately payable under the OPPS when furnished alone, so the
combination of a diagnostic radiopharmaceutical and a nuclear medicine
procedure would not meet the definition of a composite APC as described
above. From the perspective of value-based purchasing, we see no
benefit to paying for many individual diagnostic radiopharmaceutical
and nuclear medicine procedure combinations over paying separately for
both the item and service, beyond an appearance of bundling. Such an
approach would add complexity to ratesetting and would create
challenges and cost instability because payments would be based on data
from small numbers of claims for certain HCPCS code pairs. As noted
above, there are many items and services that we package under the OPPS
that are similarly not interchangeable with other related items and
services. Therefore, we are not accepting the APC Panel's
recommendation to explore developing composite APCs for diagnostic
radiopharmaceuticals and nuclear medicine procedures.
We understand that, by packaging payment for a range of products
such as diagnostic radiopharmaceuticals, payment for the associated
nuclear medicine procedure may be more or less than the hospital's cost
for these services in a given case. As stated in the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66639) and the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68546), we note that a
fundamental characteristic of a prospective payment system is that
payment is to be set at an average for the service which, by
definition, means that some services are paid more or less than the
average.
We discussed in the CY 2008 OPPS/ASC final rule with comment period
(72 FR 66640) and the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68546) the issue of variability in radiopharmaceutical costs or
other packaged costs creating potential 2 times violations. We note
that 2 times violations are specific to the total cost of the primary
service, nuclear medicine
[[Page 60387]]
scans in this case, including packaged costs. We have performed our
standard review of the APCs using updated CY 2008 claims data for this
final rule with comment period and, as a result, have not identified
any 2 times violations in the APCs containing nuclear medicine
procedures, when calculated as described above. (For more information
on the 2 times rule, we refer readers to sections III.B.2. and III.B.3.
of this final rule with comment period.)
Comment: Several commenters expressed concern that CMS was relying
on edits in the claims processing system in order to identify those
claims that would be used for CY 2010 ratesetting purposes. These
commenters suggested that CMS continue to require a diagnostic
radiopharmaceutical in order to use a nuclear medicine claim for
ratesetting purposes for at least another 2 years in order to ensure
that the claims editing process is working properly and that all
hospital costs are reflected in the median costs of nuclear medicine
procedures.
One commenter noted that CMS' methodology for setting payment rates
for nuclear medicine services may be flawed. This commenter contended
that CMS should not solely rely on the claims processing edits in order
to determine which claims are to be used for ratesetting purposes. The
commenter suggested that, even though CMS is using claims that have
passed the nuclear medicine-to-radiolabeled product edits, CMS'
ratesetting methodology may exclude the cost of diagnostic
radiopharmaceuticals when calculating median costs for associated
nuclear medicine procedures. Specifically, the commenter stated that
the program logic that creates ``pseudo'' single procedure claims may
separate a nuclear medicine scan and the associated diagnostic
radiopharmaceutical when the diagnostic radiopharmaceutical appears on
a different day and, therefore, CMS would not package the cost of the
diagnostic radiopharmaceutical when setting the median cost for the
nuclear medicine procedure. The commenter added that CMS' ratesetting
methodology for ``pseudo'' single procedure claims relies on the date
of service to identify associated packaged costs. Therefore, the
commenter requested that CMS use only single and ``pseudo'' single
nuclear medicine procedure claims that also contain a diagnostic
radiopharmaceutical in order to set payment rates for nuclear medicine
procedures. More specifically, several commenters requested that CMS
not reassign CPT code 78803 (Radiopharmaceutical localization of tumor
or distribution of radiopharmaceutical agent(s); tomographic (SPECT))
to APC 0414 (Level II Tumor/Infection Imaging) as proposed, but instead
assign CPT code 78803 to APC 0408 (Level III Tumor/Infection Imaging).
One commenter believed that the use of ``pseudo'' single procedure
claims to calculate payment rates may have neglected to include the
cost of the radiopharmaceutical or other scans that may have been
performed on other dates of service and reported on other claims.
Response: As we indicated in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 42669), we are aware that several diagnostic
radiopharmaceuticals may be used for multiple day studies; that is, a
particular diagnostic radiopharmaceutical may be administered on one
day and a related diagnostic nuclear medicine procedure may be
performed on a subsequent day. While we understand that multiple-day
episodes for diagnostic radiopharmaceuticals and the related diagnostic
nuclear medicine procedures occur, we found the occurrence of nuclear
medicine scans on a different date of service to be a small proportion
of all diagnostic nuclear medicine imaging procedures appearing with
the radiopharmaceutical. Specifically, our analysis at that time
indicated that, roughly, 15 diagnostic radiopharmaceuticals have a
half-life longer than one day such that they could support diagnostic
nuclear medicine scans on different days. Excluding the 5 percent of
diagnostic radiopharmaceutical claims that had no matching diagnostic
nuclear medicine scan for the same beneficiary, we found that a
diagnostic nuclear medicine scan was reported on the same day as a
coded diagnostic radiopharmaceutical 90 percent or more of the time for
10 of these 15 diagnostic radiopharmaceuticals. Further, we found that
between 80 and 90 percent of single bills for each of the remaining 5
diagnostic radiopharmaceuticals had a diagnostic nuclear medicine scan
on the same day.
Moreover, as the commenter noted, the potential separation of a
diagnostic radiopharmaceutical and the associated nuclear medicine
procedure would only be relevant to the ``pseudo'' single procedure
claims. In the ``natural'' single bills we use for ratesetting, we
package costs across dates of service. Overall, in examining the CY
2008 claims data available for this final rule with comment period, we
observed that ``natural'' single claims constituted a majority of all
single procedure claims used to calculate median costs for APCs with
nuclear medicine procedures. Further, we acknowledge that we expect to
lose packaged costs on a small proportion of claims when we create
``pseudo'' single procedure claims by splitting claims based on dates
of service. This is an inevitable consequence of the ``pseudo'' single
procedure claim creation process. We believe that the tradeoff is a
minor one given the significant benefit of additional claims data, and
the vast majority of commenters generally supported our ``pseudo''
single procedure claim methodology. Finally, we note that the nuclear
medicine procedure-to-radiolabeled product I/OCE claims processing
edits (http://www.cms.hhs.gov/HospitalOutpatientPPS/02_device_procedure.asp) to which the commenters referred include therapeutic
radiopharmaceuticals and brachytherapy sources. Claims that pass these
claims processing edits and enter into the ratesetting methodology
without a diagnostic radiopharmaceutical reported on the claim are
factored into ratesetting for nuclear medicine procedures as we do not
expect that every nuclear medicine procedure would be billed with a
diagnostic radiopharmaceutical, although we do expect each to be billed
with a radiolabeled product. We note that the only time that we would
not expect a nuclear medicine procedure to be billed with a
radiolabeled product on an outpatient claim would be in the rare
circumstance where a therapeutic radiopharmaceutical is provided in an
inpatient setting and a nuclear medicine procedure associated with this
radiopharmaceutical is subsequently furnished in the HOPD. In this
specific circumstance, we would expect that hospitals would bill HCPCS
code C9898 (Radiolabeled product provided during a hospital inpatient
stay) in place of the radiolabeled product. Nuclear medicine scans are
sometimes performed after the application of brachytherapy sources or
the provision of a therapeutic radiopharmaceutical and in these cases
the administration of an additional source of radioactivity (a
diagnostic radiopharmaceutical) may not be required. While
brachytherapy sources and therapeutic radiopharmaceuticals would be
paid separately under the OPPS, we believe it is appropriate for us to
include the costs of the scans that include a brachytherapy source or
therapeutic radiopharmaceutical (or where a therapeutic
radiopharmaceutical used for the scan was furnished to an inpatient)
but lack a diagnostic radiopharmaceutical in
[[Page 60388]]
calculating the median cost of the nuclear medicine procedure because
these claims represent the hospital costs for the scans furnished under
these circumstances. We previously discussed this issue in the CY 2009
OPPS/ASC final rule with comment period (73 FR 68647 through 68648).
We believe that the single and ``pseudo'' single procedure claims
resulting from our standard ratesetting methodology accurately capture
the cost of providing nuclear medicine scans under a variety of
clinical scenarios for several reasons discussed above and summarized
again here. First, previous analyses demonstrated that a significant
percentage of nuclear medicine procedures are reported on the same day
as diagnostic radiopharmaceuticals with an extended half-life and, in
these cases, our ratesetting methodology would capture these diagnostic
radiopharmaceutical costs. We acknowledge that diagnostic
radiopharmaceuticals with an extended half-life may be administered on
a different day than the performance of the accompanying nuclear
medicine scan. However, administration of the diagnostic
radiopharmaceutical on a different day does not mean that these costs
are not captured in our APC median costs for nuclear medicine
procedures. The majority of the single procedure claims that we use to
estimate APC median cost for APCs with nuclear medicine scans are
``natural'' single procedure claims that package all identified
packaged costs (including diagnostic radiopharmaceuticals) into the
nuclear medicine procedures, irrespective of the dates of service.
While our standard ratesetting methodology also relies on ``pseudo''
single procedure claims that, by definition, represent only a single
service date and potentially eliminate the cost of a packaged
diagnostic radiopharmaceutical with an extended half-life billed on a
different date of service than the nuclear medicine scan, the potential
to ignore packaged costs on other dates of service is true for all
procedures for which we use ``pseudo'' single procedure claims in
ratesetting. This small loss of packaging is a tradeoff in adopting our
methodology for breaking down multiple procedure claims through the
bypass process, as discussed in section II.A.1.b. of this final rule
with comment period. Finally, not all claims for nuclear medicine
procedures should include a diagnostic radiopharmaceutical because they
may include another type of radiolabeled product (such as a
brachytherapy source or therapeutic radiopharmaceutical), and these
additional radiolabeled products are not packaged. In short, we believe
that, overall, the single procedure claims for nuclear medicine scans,
both ``natural'' and ``pseudo'' single procedure claims, together
appropriately represent the full cost of providing various nuclear
medicine procedures and result in accurate APC median costs. Therefore,
our standard OPPS ratesetting methodology of using median costs
calculated from claims data according to our standard methodology from
those claims that passed the I/OCE claims processing edits adequately
captures the costs of diagnostic radiopharmaceuticals associated with
diagnostic nuclear medicine procedures that are not provided on the
same date of service.
Specifically with regard to our proposed reassignment of CPT code
78803, with a CPT code-specific median cost of approximately $561, to
APC 0414, with an APC median cost of approximately $506, we note that
we have almost 3,000 single claims upon with the median cost of CPT
code 78803 is based. This CPT code-specific median cost is
significantly lower than the median cost of APC 0408 of approximately
$954, the APC assignment requested by the commenters and the highest
level APC in the tumor/infection imaging series. Therefore, we believe
the most appropriate CY 2010 APC assignment for CPT code 78803 is APC
0414, as we proposed for CY 2010. As stated above, we believe that our
standard ratesetting methodology adequately incorporates the packaged
diagnostic radiopharmaceutical costs associated with nuclear medicine
procedures, including the procedure described by CPT code 78803.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to package the
costs of all diagnostic radiopharmaceuticals into payment for the
associated nuclear medicine procedures utilizing our standard OPPS
ratesetting methodology that is applied to claims that passed the
nuclear medicine procedure-to-radiolabeled product I/OCE claims
processing edits in CY 2008. We also are finalizing our CY 2010
proposal, without modification, to reassign CPT code 78003 to APC 0414,
with an APC median cost of approximately $506.
Comment: A number of commenters cited concerns regarding the
proposed APC assignments and proposed payment rates for a number of
nuclear medicine procedures. These commenters believed that the
proposed APC assignments of certain nuclear medicine procedures led to
clinically diverse procedures being grouped together for payment
purposes.
Specifically, one commenter requested that: (1) CPT code 78645
(Cerebrospinal fluid flow, imaging (not including introduction of
material); shunt evaluation) be reassigned from APC 0403 (Level I
Nervous System Imaging) to APC 0402 (Level II Nervous System Imaging);
(2) CPT code 78608 (Brain imaging, positron emission tomography (PET);
metabolic evaluation) be reassigned from APC 0308 (Non-Myocardial
Positron Emission Tomography (PET) Imaging) to a more appropriate APC;
and (3) CPT codes 78000 (Thyroid uptake; single determination) and
78001 (Thyroid uptake; multiple determinations) be reassigned from APC
0389 (Level I Non-imaging Nuclear Medicine) to APC 0392 (Level II Non-
Imaging Nuclear Medicine).
Response: We have performed our annual review of all the procedures
and APC groupings for this final rule with comment period based on
updated CY 2008 claims data. The CPT code-specific median cost of CPT
code 78645 is approximately $246 based on 434 single claims, which is
reasonably close to the median cost of APC 0403 of approximately $195,
where we proposed to assign the service. The commenter recommended
assignment of CPT code 78645 to APC 0402, in the same nervous system
imaging series, with a significantly higher APC median cost of
approximately $573. Based on this review of the costs and clinical
characteristics of other services assigned to these nervous system
imaging APCs, we continue to believe CPT code 78645 is most
appropriately assigned to APC 0403 as we proposed.
There is a single APC for nonmyocardial PET scans, APC 0308, with
an APC median cost of approximately $1,028. The median costs of all CPT
codes assigned to that APC, including CPT codes for positron emission
tomography (PET) scans and PET/computed tomography (CT) scans and CPT
code 78608 for a metabolic evaluation of the brain using PET range from
approximately $849 to $1,093, demonstrating very significant resource
similarity across all of these procedures. Therefore, we do not agree
with the commenter that the proposed configuration of APC 0308 should
be modified because all of these nonmyocardial services that use PET
technology demonstrate very similar costs and share clinical similarity
as well.
[[Page 60389]]
With regard to the thyroid scans described by CPT codes 78000 and
78001, these procedures have CPT code-specific median costs of
approximately $91 and $121 based on 1,167 and 982 single claims,
respectively. The CPT code-specific median costs of these two
procedures are very close to the median cost of APC 0389 of
approximately $112, where we proposed to assign them for CY 2010. CPT
codes 78000 and 78001 are the only services assigned to this APC with
significant volume, and the APC median cost is mostly a reflection of
the costs of procedures reported with two codes. In contrast, the
median cost of APC 0392, their recommended placement according to the
commenter, is approximately $179, substantially greater than the median
costs of the two thyroid studies. Furthermore, if we were to reassign
CPT codes 78000 and 78001 to APC 0392 as the commenter suggested, the
median cost of APC 0392 would decrease to reflect the costs of these
two procedures because, based on number of single claims for CPT codes
78000 and 78001, their costs would significantly affect the median cost
of the APC. Therefore, we do not believe any changes to the proposed
APC assignments of CPT codes 78000 or 78001 are justified.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposals, without modification, to assign CPT
code 78645 to APC 0403, CPT code 79608 to APC 0308, CPT code 78000 to
APC 0389, and CPT code 78001 to APC 0389. The approximate APC median
costs of these APCs are as follows: APC 0403 at $195; APC 0308 at
$1,028; and APC 0389 at $112.
Comment: A few commenters requested that CMS not reassign CPT code
78807 (Radiopharmaceutical localization of inflammatory process;
tomographic (SPECT)) to APC 0406 (Level I Tumor/Infection Imaging) as
proposed. These commenters noted that CPT code 78807 is more clinically
similar to CPT codes 78805 (Radiopharmaceutical localization of
inflammatory process; limited area) and 78806 (Radiopharmaceutical
localization of inflammatory process; whole body) that are assigned to
APC 0414. Therefore, the commenters requested that CMS continue to
assign CPT code 78807 to APC 0414 for CY 2010.
Response: We proposed to assign CPT code 78807, with a CPT code-
specific median cost of approximately $371 based on 251 single claims,
to APC 0406, with an APC median cost of approximately $287. The
significant individual services included in APC 0406 have a range of
median costs, from approximately $232 to approximately $371. APC 0406
includes a number of tumor or infection imaging nuclear medicine
procedures. Comparatively, APC 0414, where the commenters requested
that we assign CPT code 78807, has an APC median cost of approximately
$506 and includes significant services with CPT code-specific median
costs from approximately $382 to approximately $561. CPT codes 78805
and 78806 are both assigned to APC 0414 and have CPT code-specific
median costs of approximately $477 and $538, respectively,
significantly higher than the median cost of CPT code 78807. Therefore,
we do not believe that there is a reason to assign CPT code 78807 to
APC 0414, which principally includes services with significantly higher
median costs than CPT code 78807. We note that CPT code 78807 is a
SPECT scan to localize an inflammatory process, while the other two
codes do not describe services that use SPECT technology. Therefore, we
do not believe that CPT code 78807 is sufficiently similar to CPT codes
78805 and 78806 from clinical or resource perspectives to warrant
assignment to the mid-level tumor/infection imaging APC along with the
other two services.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to assign CPT
code 78807 to APC 0406, with an APC median cost of approximately $287.
Comment: Several commenters requested that CMS: (1) Not reassign
CPT code 78610 (Brain imaging, vascular flow only) to APC 0403 as
proposed but instead assign CPT code 78610 to APC 0402; (2) not
reassign CPT code 78601 (Brain imaging, less than 4 static views; with
vascular flow) to APC 0402 as proposed but instead assign CPT code
78601 to APC 0403; and (3) not reassign CPT code 78003
(Radiopharmaceutical localization of tumor or distribution of
radiopharmaceutical agent(s); tomographic (SPECT)) to APC 0389 as
proposed but instead assign CPT code 78003 to APC 0392.
Response: We proposed to assign CPT code 78610, with a CPT-specific
median cost of approximately $211, to APC 0403, with an APC median cost
of approximately $195. The significant services included in APC 0403
have a range of median costs, from approximately $156 to approximately
$246. Comparatively, APC 0402, where the commenters requested that we
assign CPT code 78610, has an APC median cost of approximately $573 and
includes significant services with CPT code-specific median costs from
approximately $540 to approximately $587. We do not believe that
reassignment of CPT code 78610 to APC 0402 would be appropriate, given
the procedure's relatively low median cost, although we recognize that
we have few claims for the procedures. We continue to believe that
payment for the resources required to provide CPT code 78610 is
appropriately reflected through the procedure's assignment to APC 0403.
We proposed to assign CPT code 78601, with a CPT code-specific
median cost of approximately $436, to APC 0402 with an APC median cost
of approximately $573. The significant services included in APC 0402
have a range of median costs from approximately $540 to approximately
$587. Comparatively, APC 0403, where the commenters requested that we
assign CPT code 78601, has an APC median cost of approximately $195 and
includes significant services with CPT code-specific median costs
ranging from approximately $156 to approximately $246. Although we have
few claims for CPT code 78601, we continue to believe it is most
appropriately assigned to APC 0402 for CY 2010.
We proposed to assign CPT code 78003, with a CPT code-specific
median cost of approximately $82, to APC 0389 with an APC median cost
of approximately $112. There are two services included in APC 0389 that
have a significant volume, CPT codes 78000 and 78001. These two CPT
codes both have higher CPT code-specific median costs than CPT code
78003, approximately $91 and $121, respectively. Comparatively, APC
0392, where the commenters requested that we assign CPT code 78003, has
an APC median cost of approximately $179. Based on its median cost, we
continue to believe that the resources required for CPT code 78003 are
appropriately reflected through its assignment to APC 0389.
Comment: A few commenters expressed their appreciation that the CY
2010 OPPS/ASC proposed rule included a proposed increase in payment for
PET services compared to CY 2009 payment rates. These commenters also
noted their concerns that hospital claims data for PET services are not
predictable and that volatile data over the last several years may
limit access to PET services. Some commenters urged CMS to use external
data when setting payment rates for these services, while others
suggested that CMS continue to monitor data to ensure that payment for
these services is sufficient to cover the hospital costs for these
resources.
[[Page 60390]]
Response: As we stated in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68547), while we utilized external data in the
early years of the OPPS for ratesetting for a few services, we now rely
on the cost data from claims as the system has matured and we have
gained additional experience in ratesetting for HOPD services. The
foundation of a system of relative weights like the OPPS is the
relativity of the costs of all services to one another, as derived from
a standardized system that uses standardized inputs and a consistent
methodology. Further, the OPPS is a prospective payment system that
relies on hospital charges and cost report data from the hospitals that
furnish the services in order to determine relative costs. Therefore,
we believe that our prospective payment rates, calculated based on the
costs of those providers furnishing the procedures in CY 2008, provide
appropriate payment to the providers who will furnish the services in
CY 2010. We continue to believe that this standard ratesetting
methodology accurately provides payment for PET services provided to
hospital outpatients.
In summary, after consideration of the public comments we received,
we are finalizing our CY 2010 proposals, without modification, for the
configuration of nuclear medicine APCs. The final CY 2010 median costs
for these APCs, as proposed, are calculated according to the standard
OPPS ratesetting methodology as applied to claims for nuclear medicine
procedures that passed the CY 2008 nuclear medicine procedure-to-
radiolabeled product I/OCE claims processing edits. These edits ensure
that the claims that are taken through our standard ratesetting
process, as described in section II.A.2.b. of this final rule with
comment period, that incorporates the creation of ``natural'' single
and ``pseudo'' single claims, include the radiolabeled product
necessary for the performance of the associated nuclear medicine
procedure.
(6) Hyperbaric Oxygen Therapy
Since the implementation of the OPPS in August 2000, the OPPS has
recognized HCPCS code C1300 (Hyperbaric oxygen under pressure, full
body chamber, per 30 minute interval) for hyperbaric oxygen therapy
(HBOT) provided in the hospital outpatient setting. In the CY 2005 OPPS
final rule with comment period (69 FR 65758 through 65759), we
finalized a ``per unit'' median cost calculation for APC 0659
(Hyperbaric Oxygen) using only claims with multiple units or multiple
occurrences of HCPCS code C1300 because delivery of a typical HBOT
service requires more than 30 minutes. We observed that claims with
only a single occurrence of the code were anomalies, either because
they reflected terminated sessions or because they were incorrectly
coded with a single unit. In the same rule, we also established that
HBOT would not generally be furnished with additional services that
might be packaged under the standard OPPS APC median cost methodology.
This enabled us to use claims with multiple units or multiple
occurrences. Finally, we also used each hospital's overall CCR to
estimate costs for HCPCS code C1300 from billed charges rather than the
CCR for the respiratory therapy or other departmental cost centers. The
public comments on the CY 2005 OPPS proposed rule effectively
demonstrated that hospitals report the costs and charges for HBOT in a
wide variety of cost centers. Since CY 2005, we have used this
methodology to estimate the median cost for HBOT. The median costs of
HBOT using this methodology have been relatively stable for the last 4
years. In the CY 2010 OPPS/ASC proposed rule (74 FR 35277), we proposed
to continue using the same methodology to estimate a ``per unit''
median cost for HCPCS code C1300 for CY 2010 of approximately $108,
using 279,139 claims with multiple units or multiple occurrences.
We did not receive any public comments on our proposal to continue
to use our established ratesetting methodology for calculating the
median cost of APC 0659 for payment of HBOT. Therefore, we are
finalizing, without modification, our CY 2010 proposal to continue to
use our established ratesetting methodology for calculating the median
cost of APC 0659 for payment of HBOT, with a final CY 2010 median cost
of approximately $106.
(7) Payment for Ancillary Outpatient Services When Patient Expires
(-CA Modifier)
In the November 1, 2002 final rule with comment period (67 FR
66798), we discussed the creation of the new HCPCS CA modifier to
address situations where a procedure on the OPPS inpatient list must be
performed to resuscitate or stabilize a patient (whose status is that
of an outpatient) with an emergent, life-threatening condition, and the
patient dies before being admitted as an inpatient. In Transmittal A-
02-129, issued on January 3, 2003, we instructed hospitals on the use
of this modifier. For a complete description of the history of the
policy and the development of the payment methodology for these
services, we refer readers to the CY 2007 OPPS/ASC final rule with
comment period (71 FR 68157 through 68158).
In the CY 2010 OPPS/ASC proposed rule (74 FR 35277 through 35278),
we proposed to continue to use our established ratesetting methodology
for calculating the median cost of APC 0375 (Ancillary Outpatient
Services When Patient Expires) and to continue to make one payment
under APC 0375 for the services that meet the specific conditions for
using modifier -CA. We proposed to calculate the relative payment
weight for APC 0375 by using all claims reporting a status indicator
``C'' procedure appended with the -CA modifier, using estimated costs
from claims data for line-items with a HCPCS code assigned status
indicator ``G,'' ``H,'' ``K,'' ``N,'' ``Q1,'' ``Q2,'' ``Q3,'' ``R,''
``S,'' ``T,'' ``U,'' ``V,'' and ``X'' and charges for packaged revenue
codes without a HCPCS code. We continue to believe that this
methodology results in the most appropriate aggregate median cost for
the ancillary services provided in these unusual clinical situations.
We believe that hospitals are reporting the -CA modifier according
to the policy initially established in CY 2003. We note that the claims
frequency for APC 0375 has been relatively stable over the past few
years. Although the median cost for APC 0375 has increased, the median
in the CY 2008 data used for development of rates for CY 2010 was only
slightly higher than that for CY 2009. Variation in the median cost for
APC 0375 is expected because of the small number of claims and because
the specific cases are grouped by the presence of the -CA modifier
appended to an inpatient procedure and not according to the standard
APC criteria of clinical and resource homogeneity. Cost variation for
APC 0375 from year to year is anticipated and acceptable as long as
hospitals continue judicious reporting of the -CA modifier. Table 8 of
the proposed rule (74 FR 35278) showed the number of claims and the
proposed median costs for APC 0375 for CYs 2007, 2008, and 2009. For CY
2010, we proposed a median cost for APC 0375 of approximately $5,784.
We did not receive any public comments regarding this proposal.
Therefore, we are finalizing our CY 2010 proposal, without
modification, to continue to use our established ratesetting
methodology for calculating the median cost of APC 0375, which has a
final CY 2010 APC median cost of approximately $5,911.
[[Page 60391]]
Table 11 below shows the number of claims and the final median cost
for APC 0375 from CY 2007 to CY 2010.
Table 11--Claims for Ancillary Outpatient Services When Patient Expires
(-CA Modifier) for CYs 2007 to 2010
------------------------------------------------------------------------
Number of APC median
Prospective payment year claims cost
------------------------------------------------------------------------
CY 2007................................. 260 $3,549
CY 2008................................. 183 4,945
CY 2009................................. 168 5,545
CY 2010................................. 182 5,911
------------------------------------------------------------------------
e. Calculation of Composite APC Criteria-Based Median Costs
As discussed in the CY 2008 OPPS/ASC final rule with comment period
(72 FR 66613), we believe it is important that the OPPS enhance
incentives for hospitals to provide only necessary, high quality care
and to provide that care as efficiently as possible. For CY 2008, we
developed composite APCs to provide a single payment for groups of
services that are typically performed together during a single clinical
encounter and that result in the provision of a complete service.
Combining payment for multiple independent services into a single OPPS
payment in this way enables hospitals to manage their resources with
maximum flexibility by monitoring and adjusting the volume and
efficiency of services themselves. An additional advantage to the
composite APC model is that we can use data from correctly coded
multiple procedure claims to calculate payment rates for the specified
combinations of services, rather than relying upon single procedure
claims which may be low in volume and/or incorrectly coded. Under the
OPPS, we currently have composite APC policies for extended assessment
and management services, low dose rate (LDR) prostate brachytherapy,
cardiac electrophysiologic evaluation and ablation services, mental
health services, and multiple imaging services. We refer readers to the
CY 2008 OPPS/ASC final rule with comment period for a full discussion
of the development of the composite APC methodology (72 FR 66611
through 66614 and 66650 through 66652).
While we continue to consider the development and implementation of
larger payment bundles, such as composite APCs (a long-term policy
objective for the OPPS), and continue to explore other areas where this
payment model may be utilized, in the CY 2010 OPPS/ASC proposed rule,
we did not propose any new composite APCs for CY 2010 so that we may
monitor the effects of the existing composite APCs on utilization and
payment. In response to our CY 2009 proposal to apply a composite
payment methodology to multiple imaging procedures provided on the same
date of service, several public commenters stated that we should
proceed cautiously as we expand service bundling. They commented that
we should not implement additional composite methodologies until
adequate data are available to evaluate the composite policies'
effectiveness and impact on beneficiary access to care (73 FR 68561
through 68562).
In response to the concerns of the public commenters and the APC
Panel, in the CY 2010 OPPS proposed rule (74 FR 35278 through 35279) we
reviewed the CY 2008 claims data for claims processed through September
30, 2008, for the services in the following composite APCs: APC 8000
(Cardiac Electrophysiologic Evaluation and Ablation Composite); APC
8001 (Low Dose Rate Prostate Brachytherapy Composite); APC 8002 (Level
I Extended Assessment and Evaluation Composite); and APC 8003 (Level II
Extended Assessment and Evaluation Composite). Our analyses did not
consider inflation, changes in beneficiary population, or other
comparable variables that can affect changes in aggregate payment from
year to year. We found that the average payment for the package of
services in both APC 8000 and APC 8001 increased from CY 2007, when
payments were made for all individual services, to CY 2008 under the
composite payment methodology. We also noted that the proposed median
costs for these composite APCs for CY 2010 were higher than the median
costs upon which the CY 2009 payments were based. We believe that, in
part, this is because we used more claims data for common clinical
scenarios to calculate the median costs of these APCs than we were able
to use prior to the implementation of the composite payment
methodology.
With regard to APCs 8002 and 8003, we compared payment for all
visits appearing with observation services in CY 2007 with payments for
all visits appearing with observation services in CY 2008 and found
that total payment for visits and observation services increased from
approximately $197 million to $270 million for claims processed through
September 30 in each year. We attribute this increase in payments, in
part, to the introduction of a composite payment for visits and
observation through the extended assessment and management composite
methodology that occurred for CY 2008 and that did not incorporate the
International Classification of Diseases, Ninth Edition, Clinical
Modification (ICD-9-CM) diagnosis criteria previously necessary for
separate payment of observation.
At its February 2009 meeting, the APC Panel recommended that CMS
evaluate the implications of creating composite APCs for cardiac
resynchronization therapy (CRT) services with a defibrillator or
pacemaker and report its findings to the APC Panel. The APC Panel also
recommended at its August 2009 meeting that CMS reconsider creating a
new composite APC or group of composite APCs for CRT procedures. While
we did not propose any new composite APCs for CY 2010, we are accepting
both of these APC Panel recommendations. We will reconsider creating
composite APCs for CRT services and evaluate the implications of such a
potential policy change, and report our findings to the APC Panel at a
future meeting. We also will consider bringing other potential
composite APCs to the APC Panel for further discussion.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35279), we proposed to
continue for CY 2010 our established composite APC policies for
extended assessment and management, LDR prostate brachytherapy, cardiac
electrophysiologic evaluation and ablation, mental health services, and
multiple imaging services, as discussed
[[Page 60392]]
in sections II.A.2.e.(1), II.A.2.e.(2), II.A.2.e.(3), II.A.2.e.(4), and
II.A.2.e.(5), respectively, of this final rule with comment period.
Comment: Several commenters supported the development and
implementation of the composite APC methodology, remarking that it is
consistent with the principles of a prospective payment system and
provides more appropriate payment rates through the use of multiple
procedure claims for certain services. Many of these commenters also
supported CMS' decision to monitor the existing composite APCs' effects
on beneficiary access, utilization, and payment for at least another
year before implementing additional composite APCs.
Other commenters, however, expressed disappointment that CMS did
not propose additional composite APCs for CY 2010 in order to improve
OPPS payment accuracy and include more correctly coded, multiple
procedure claims in ratesetting. Some commenters recommended the
development of composite APCs for nuclear medicine tumor or infection
imaging services that encompass multiple days and multiple procedures,
with separate payment for the associated diagnostic
radiopharmaceuticals.
In addition, many commenters supported the development of composite
APCs for CRT with defibrillator (CRT-D) or pacemaker (CRT-P)
implantation. They indicated that the procedures involved in the
implantation of CRT-D and CRT-P are separately payable services that,
if coded correctly, are always represented by the submission of two CPT
codes. According to the commenters, the number of single procedure CRT
claims available for CY 2010 ratesetting is very low compared to the
total number of claims submitted for CRT-D and CRT-P procedures. They
argued that the establishment of a composite APC methodology for CRT-D
and CRT-P would greatly increase the number of claims used in
ratesetting, thereby lessening the year-to-year fluctuations in payment
rates for CRT. The commenters also stated that the APC Panel advised
CMS to use its discretion in forming one or a group of composite APCs
for CRT without the need to report back to the APC Panel. They urged
CMS to take this advice and move forward with the composite APC
methodology for CRT-D and CRT-P for CY 2010.
Response: We appreciate the commenters' support of the composite
APC methodology. As stated in the CY 2010 OPPS/ASC proposed rule (74 FR
35279), we will continue to review the claims data for the impact of
all of the composite APCs on payments to hospitals and on services to
beneficiaries and will take such data into consideration before
proposing or implementing new composite APCs. We recognize the concerns
expressed with respect to our CY 2009 proposal by the public commenters
that moving ahead too quickly with any nonstandard OPPS payment
methodology (even one such as composite APCs that may improve the
accuracy of the OPPS payment rates by utilizing more complete claims
for common clinical scenarios in ratesetting) could have unintended
consequences and requires close monitoring. Because the multiple
imaging composite APCs were implemented for the first time in CY 2009,
we will not have data available for such monitoring until early CY
2010. Therefore, we continue to believe that it is in the best interest
of hospitals and the continuing refinement of the OPPS that we not
implement any new composite APC policies for at least one year.
As previously stated, we are accepting the recommendation made by
the APC Panel at its August 2009 meeting that we reconsider creating a
new composite APC or group of composite APCs for CRT-D and CRT-P
procedures. We will evaluate the implications of such a potential
policy change and report our findings to the APC Panel at a future
meeting. We note that, while the APC Panel did recommend we reconsider
creating a new composite APC or group of composite APCs for CRT-D and
CRT-P, the Panel did not specify that we should move forward with the
composite APC methodology for CRT-D and CRT-P for CY 2010 without first
reporting back to the APC Panel, as some commenters indicated. We do
not believe it would be appropriate to implement new composite APCs for
CRT-D and CRT-P procedures for CY 2010 because neither we nor the
public have had the opportunity to evaluate fully all of the
implications of such a potential policy change, which may require
complex claims processing logic or new claims processing edits and may
have significant, unanticipated effects on the payment rates of other
services. We also note that the total volume of claims that would
qualify for a CRT-P composite APC in particular would be very low; in
the past, we have explored composite APCs only for combinations of
services that are commonly performed together (73 FR 68551). Because of
the complex issues for these procedures with significant device costs,
we believe that it is particularly important that the APC Panel and the
public, through the annual rulemaking cycle, have the opportunity to
comment on the development of composite APCs for CRT-D and CRT-P
procedures.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to continue our
established composite APC policies for extended assessment and
management, LDR prostate brachytherapy, cardiac electrophysiologic
evaluation and ablation, mental health services, and multiple imaging
services, as discussed in sections II.A.2.e.(1), II.A.2.e.(2),
II.A.2.e.(3), II.A.2.e.(4), and II.A.2.e.(5), respectively, of this
final rule with comment period.
(1) Extended Assessment and Management Composite APCs (APCs 8002 and
8003)
In the CY 2010 OPPS/SC proposed rule (74 FR 35279 through 35280),
we proposed to continue to include composite APC 8002 (Level I Extended
Assessment and Management Composite) and composite APC 8003 (Level II
Extended Assessment and Management Composite) in the OPPS. For CY 2008,
we created these two composite APCs to provide payment to hospitals in
certain circumstances when extended assessment and management of a
patient occur (an extended visit). In most circumstances, observation
services are supportive and ancillary to the other services provided to
a patient. In the circumstances when observation care is provided in
conjunction with a high level visit or direct referral and is an
integral part of a patient's extended encounter of care, payment is
made for the entire care encounter through one of two composite APCs as
appropriate.
As defined for the CY 2008 OPPS, composite APC 8002 describes an
encounter for care provided to a patient that includes a high level
(Level 5) clinic visit or direct referral for observation services in
conjunction with observation services of substantial duration (72 FR
66648 through 66649). Composite APC 8003 describes an encounter for
care provided to a patient that includes a high level (Level 4 or 5)
Type A emergency department visit, a high level (Level 5) Type B
emergency department visit, or critical care services in conjunction
with observation services of substantial duration. HCPCS code G0378
(Observation services, per hour) is assigned status indicator ``N,''
signifying that its payment is always packaged. As noted in the CY 2008
OPPS/ASC final rule with comment period (72 FR 66648 through 66649),
the Integrated Outpatient Code Editor
[[Page 60393]]
(I/OCE) evaluates every claim received to determine if payment through
a composite APC is appropriate. If payment through a composite APC is
inappropriate, the I/OCE, in conjunction with the OPPS Pricer,
determines the appropriate status indicator, APC, and payment for every
code on a claim. The specific criteria that must be met for the two
extended assessment and management composite APCs to be paid are
provided below in the description of the claims that were selected for
the calculation of the proposed CY 2010 median costs for these
composite APCs. We did not propose to change these criteria for the CY
2010 OPPS.
When we created composite APCs 8002 and 8003 for CY 2008, we
retained as general reporting requirements for all observation services
those criteria related to physician order and evaluation,
documentation, and observation beginning and ending time as listed in
the CY 2008 OPPS/ASC final rule with comment period (72 FR 66812).
These are more general requirements that encourage hospitals to provide
medically reasonable and necessary care and help to ensure the proper
reporting of observation services on correctly coded hospital claims
that reflect the full charges associated with all hospital resources
utilized to provide the reported services. We did not propose to change
these reporting requirements for the CY 2010 OPPS. However, as
discussed below, the APC Panel at its February 2009 meeting requested
that CMS issue guidance clarifying the correct method for reporting the
starting time for observation services. The APC Panel noted that the
descriptions of the start time for observation services located in the
Medicare Claims Processing Manual (Pub. 100-4), Chapter 4, sections
290.2.2 through 290.5, cause confusion for hospitals. We accepted this
recommendation and issued clarifying guidance in the Claims Processing
Manual through Transmittal 1745, Change Request 6492, issued May 22,
2009 and implemented July 6, 2009.
As noted in detail in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66802 through 66805 and 66814), we saw a normal and
stable distribution of clinic and emergency department visit levels in
the OPPS claims data through CY 2006 available at that time. We stated
that we did not expect to see an increase in the proportion of visit
claims for high level visits as a result of the new composite APCs
adopted for CY 2008. Similarly, we stated that we expected that
hospitals would not purposely change their visit guidelines or
otherwise upcode clinic and emergency department visits reported with
observation care solely for the purpose of composite payment. As stated
in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66648),
we expect to carefully monitor any changes in billing practices on a
service-specific and hospital-specific level to determine whether there
is reason to request that Quality Improvement Organizations (QIOs)
review the quality of care furnished, or to request that Benefit
Integrity contractors or other contractors review the claims against
the medical record.
When we compared total payments for all visits appearing with
observation services in CY 2007 to payments in CY 2008, using claims
processed through September 30 in CY 2007 and CY 2008, we observed a 37
percent increase in total payments. We believe this increase is, in
part, attributable to the expansion of payment under the extended
assessment and management composites to all ICD-9-CM diagnoses. To
confirm this, we calculated the percentage of visit HCPCS codes billed
with HCPCS code G0378 (Observation services, per hour) between CY 2007
and CY 2008 and compared the percentage associated with visit codes
included in the extended assessment and management composites in each
year. If hospitals had inappropriately changed their visit reporting
behavior to maximize payment through the new composite APCs, we would
expect to see significant changes in the percentage of visit HCPCS
codes included in the composite APCs billed with observation services
relative to all other visit HCPCS codes billed with observation
services between CY 2007 and CY 2008. We did not observe a sizable
increase in the proportion of visit HCPCS codes included in the
composite APCs relative to the proportion of all other visit HCPCS
codes billed with observation services. For example, the percentage of
claims billed with CPT code 99285 (Emergency department visit for the
evaluation and management of a patient (Level 5)) and HCPCS code G0378
was 51 percent in the CY 2007 data and 54 percent in the CY 2008 data.
Similarly, the percentage of claims billed with CPT code 99284
(Emergency department visit for the evaluation and management of a
patient (Level 4)) and HCPCS code G0378 decreased only slightly from 28
percent in the CY 2007 data to 27 percent in the CY 2008 data. We
concluded that, although the volume of visits billed with HCPCS code
G0378 increased between CY 2007 and CY 2008, the overall pattern of
billing visit levels did not change significantly. We stated that we
will continue to carefully monitor any changes in billing practices on
a service-specific and hospital-specific level.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35280), we proposed to
continue for CY 2010 the extended assessment and management composite
APC payment methodology for APCs 8002 and 8003. As stated earlier, we
also proposed to continue the general reporting requirements for
observation services reported with HCPCS code G0378. We continue to
believe that the composite APCs 8002 and 8003 and related policies
provide the most appropriate means of paying for these services. We
proposed to calculate the median costs for APCs 8002 and 8003 using all
single and ``pseudo'' single procedure claims for CY 2008 that meet the
criteria for payment of each composite APC.
Specifically, to calculate the proposed median costs for composite
APCs 8002 and 8003, we selected single and ``pseudo'' single claims
that met each of the following criteria:
1. Did not contain a HCPCS code to which we have assigned status
indicator ``T'' that is reported with a date of service 1 day earlier
than the date of service associated with HCPCS code G0378. (By
selecting these claims from single and ``pseudo'' single claims, we had
already assured that they would not contain a code for a service with
status indicator ``T'' on the same date of service.);
2. Contained 8 or more units of HCPCS code G0378; and
3. Contained one of the following codes:
In the case of composite APC 8002, HCPCS code G0379
(Direct referral of patient for hospital observation care) on the same
date of service as G0378; or CPT code 99205 (Office or other outpatient
visit for the evaluation and management of a new patient (Level 5)); or
CPT code 99215 (Office or other outpatient visit for the evaluation and
management of an established patient (Level 5)) provided on the same
date of service or one day before the date of service for HCPCS code
G0378. We refer readers to section XII.E. of the CY 2010 OPPS/ASC
proposed rule (74 FR 35370 through 35371) and section XII.E. of this
final rule with comment period for a full discussion of our proposed
revision of the code descriptor for HCPCS code G0379 and the final
policy for CY 2010.
In the case of composite APC 8003, CPT code 99284
(Emergency department visit for the evaluation and management of a
patient (Level 4)); CPT code 99285 (Emergency department visit for the
[[Page 60394]]
evaluation and management of a patient (Level 5)); CPT code 99291
(Critical care, evaluation and management of the critically ill or
critically injured patient; first 30-74 minutes); or HCPCS code G0384
(Level 5 Hospital Emergency Department Visit Provided in a Type B
Emergency Department) provided on the same date of service or one day
before the date of service for HCPCS code G0378. (As discussed in
detail in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68684), we finalized our proposal to add HCPCS code G0384 to the
eligibility criteria for composite APC 8003 for CY 2009.)
We applied the standard packaging and trimming rules to the claims
before calculating the proposed CY 2010 median costs. The proposed CY
2010 median cost resulting from this process for composite APC 8002 was
approximately $384, which was calculated from 14,981 single and
``pseudo'' single bills that met the required criteria. The proposed CY
2010 median cost for composite APC 8003 was approximately $709, which
was calculated from 154,843 single and ``pseudo'' single bills that met
the required criteria. This is the same methodology we used to
calculate the medians for composite APCs 8002 and 8003 for the CY 2008
OPPS (72 FR 66649).
As discussed further in section IX. of the CY 2010 OPPS/ASC
proposed rule (74 FR 35350) and this final rule with comment period,
and consistent with our CY 2008 and CY 2009 final policies, when
calculating the median costs for the clinic, Type A emergency
department visit, Type B emergency department visit, and critical care
APCs (0604 through 0617 and 0626 through 0630), we utilize our
methodology that excludes those claims for visits that are eligible for
payment through the two extended assessment and management composite
APCs, that is APC 8002 or APC 8003. We believe that this approach
results in the most accurate cost estimates for APCs 0604 through 0617
and 0626 through 0630 for CY 2010.
At the August 2009 meeting of the APC Panel, the APC Panel
recommended that CMS provide the Visits and Observation Subcommittee
with an analysis of calendar year 2009 claims data for clinic, ED (Type
A and B), and extended assessment and management composite APCs at the
next meeting of the APC Panel. The APC Panel also recommended that CMS
provide the Visits and Observation Subcommittee with continued analyses
of observation services, as previously provided to the APC Panel,
including data on frequency, length of stay, and common diagnoses, as
well as recovery audit contractor (RAC) data on these subjects if
available. Furthermore, the APC Panel recommended that CMS provide the
Visits and Observation Subcommittee with analyses of the most common
diagnoses and services associated with Type A and Type B ED visits at
the next meeting of the APC Panel, including analysis by hospital-
specific characteristics. Finally, the APC Panel recommended that the
work of the Visits and Observation Subcommittee continue. We accept all
of these recommendations and will present the available requested data
at the winter 2010 meeting of the APC Panel.
In summary, in the CY 2010 OPPS/ASC proposed rule (74 FR 35279
through 35280), we proposed to continue to include for CY 2010
composite APC 8002 (Level I Extended Assessment and Management
Composite) and composite APC 8003 (Level II Extended Assessment and
Management Composite) in the OPPS. We proposed to continue the extended
assessment and management composite APC payment methodology and
criteria that we finalized for CY 2009. We also proposed to calculate
the median costs for APCs 8002 and 8003 using all single and ``pseudo''
single procedure claims from CY 2008 that meet the criteria for payment
of each composite APC. We did not propose to change the reporting
requirements for observation services for the CY 2010 OPPS. However, in
CY 2009 we did issue further clarifying guidance in the Medicare Claims
Processing Manual related to observation start time.
Comment: Several commenters expressed appreciation for CMS'
issuance of clarifying guidance for reporting the beginning and ending
times of observation services.
Response: We appreciate these comments and note again that the
guidance was issued in the Claims Processing Manual through Transmittal
1745, Change Request 6492, issued May 22, 2009, and implemented July 6,
2009.
Comment: Several commenters requested clarification of the
reporting of observation services in relation to maternity care paid
under another payer's policies and in relation to changes in patient
status from inpatient to outpatient using Condition Code 44. One
commenter pointed out that references to ``observation status'' versus
``inpatient admission'' are potentially confusing for beneficiaries and
physicians.
Response: Each of these comments/questions is outside of the scope
of the proposals in the CY 2010 OPPS/ASC proposed rule. However, we
will consider the possibility of addressing these concerns through
other available mechanisms, as appropriate. We note that we have
continued to emphasize that observation care is a hospital outpatient
service, ordered by a physician and reported with a HCPCS code, like
any other outpatient service. It is not a patient status for Medicare
purposes.
After consideration of the public comments we received, we are
finalizing, without modification, our CY 2010 proposal to continue to
include composite APC 8002 and composite APC 8003 in the OPPS and to
continue the extended assessment and management composite APC payment
methodology and criteria that we finalized for CY 2009. We also are
calculating the median costs for APCs 8002 and 8003 using all single
and ``pseudo'' single procedure claims from CY 2008 that meet the
criteria for payment of each composite APC. The final CY 2010 median
cost resulting from this methodology for composite APC 8002 is
approximately $378, which was calculated from 17,074 single and
``pseudo'' single bills that met the required criteria. The final CY
2010 median cost for composite APC 8003 is approximately $699, which
was calculated from 176,226 single and ``pseudo'' single bills that met
the required criteria.
(2) Low Dose Rate (LDR) Prostate Brachytherapy Composite APC (APC 8001)
LDR prostate brachytherapy is a treatment for prostate cancer in
which hollow needles or catheters are inserted into the prostate,
followed by permanent implantation of radioactive sources into the
prostate through the needles/catheters. At least two CPT codes are used
to report the composite treatment service because there are separate
codes that describe placement of the needles/catheters and the
application of the brachytherapy sources: CPT code 55875 (Transperineal
placement of needles or catheters into prostate for interstitial
radioelement application, with or without cystoscopy) and CPT code
77778 (Interstitial radiation source application; complex). Generally,
the component services represented by both codes are provided in the
same operative session in the same hospital on the same date of service
to the Medicare beneficiary being treated with LDR brachytherapy for
prostate cancer. As discussed in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66653), OPPS payment rates for CPT code 77778, in
[[Page 60395]]
particular, had fluctuated over the years. We were frequently informed
by the public that reliance on single procedure claims to set the
median costs for these services resulted in use of only incorrectly
coded claims for LDR prostate brachytherapy because a correctly coded
claim should include, for the same date of service, CPT codes for both
needle/catheter placement and application of radiation sources, as well
as separately coded imaging and radiation therapy planning services
(that is, a multiple procedure claim).
In order to base payment on claims for the most common clinical
scenario, and to further our goal of providing payment under the OPPS
for a larger bundle of component services provided in a single hospital
encounter, beginning in CY 2008, we provide a single payment for LDR
prostate brachytherapy when the composite service, reported as CPT
codes 55875 and 77778, is furnished in a single hospital encounter. We
base the payment for composite APC 8001 (LDR Prostate Brachytherapy
Composite) on the median cost derived from claims for the same date of
service that contain both CPT codes 55875 and 77778 and that do not
contain other separately paid codes that are not on the bypass list. In
uncommon occurrences in which the services are billed individually,
hospitals continue to receive separate payments for the individual
services. We refer readers to the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66652 through 66655) for a full history of OPPS
payment for LDR prostate brachytherapy and a detailed description of
how we developed the LDR prostate brachytherapy composite APC.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35281), we proposed
for CY 2010 to continue paying for LDR prostate brachytherapy services
using the composite APC methodology proposed and implemented for CY
2008 and CY 2009. That is, we proposed to use CY 2008 claims on which
both CPT codes 55875 and 77778 were billed on the same date of service
with no other separately paid procedure codes (other than those on the
bypass list) to calculate the payment rate for composite APC 8001.
Consistent with our CY 2008 and CY 2009 practice, we proposed not to
use the claims that meet these criteria in the calculation of the
median costs for APCs 0163 (Level IV Cystourethroscopy and Other
Genitourinary Procedures) and 0651 (Complex Interstitial Radiation
Source Application), the APCs to which CPT codes 55875 and 77778 are
assigned, respectively. The median costs for APCs 0163 and 0651 would
continue to be calculated using single and ``pseudo'' single procedure
claims. We continue to believe that this composite APC contributes to
our goal of creating hospital incentives for efficiency and cost
containment, while providing hospitals with the most flexibility to
manage their resources. We also continue to believe that data from
claims reporting both services required for LDR prostate brachytherapy
provide the most accurate median cost upon which to base the composite
APC payment rate.
Using partial year CY 2008 claims data available for the CY 2010
OPPS/ASC proposed rule, we were able to use 669 claims that contained
both CPT codes 77778 and 55875 to calculate the median cost upon which
the proposed CY 2010 payment for composite APC 8001 was based. The
proposed median cost for composite APC 8001 for CY 2010 was
approximately $3,106. This was an increase compared to the CY 2009
OPPS/ASC final rule with comment period in which we calculated a final
median cost for this composite APC of approximately $2,967 based on a
full year of CY 2007 claims data. The CY 2010 proposed median cost for
this composite APC was slightly less than $3,268, the sum of the
proposed median costs for APCs 0163 and 0651 ($2,453+$815), the APCs to
which CPT codes 55875 and 77778 map if one service is billed on a claim
without the other. We stated in the CY 2010 OPPS/ASC proposed rule (74
FR 35281) that we believe the proposed CY 2010 median cost for
composite APC 8001 of approximately $3,106, calculated from claims we
believe to be correctly coded, would result in a reasonable and
appropriate payment rate for this service in CY 2010.
Comment: Several commenters requested changes to the bypass list
that could potentially affect the number of claims used to calculate
the median costs upon which payments for several APCs involving
radiation oncology services, including APC 8001, are based. In
particular, some commenters requested CMS add CPT code 77470 (Special
treatment procedure (eg, total body irradiation, hemibody radiation,
per oral, endocavitary or intraoperative cone irradiation)), CPT code
77328 (Brachytherapy isodose plan; complex (multiplane isodose plan,
volume implant calculations, over 10 sources/ribbons used, special
spatial reconstruction, remote afterloading brachytherapy, over 12
sources), and CPT code 77295 (Therapeutic radiology simulation-aided
field setting; 3-dimensional) to the bypass list in order to utilize
more single claims in calculating the median costs of APC 8001 and
other APCs for radiation oncology services. According to one
commenter's analysis, the addition of these CPT codes to the bypass
list would result in a 17 percent increase in the median cost for APC
8001.
Response: As discussed in detail in section II.A.1.b. of this final
rule with comment period, we are not adding CPT codes 77470, 77328, and
77295 to the list of bypass codes for CY 2010 ratesetting, but we are
adding several other CPT codes for radiation oncology services. The
addition of these codes to the bypass list results in a modest increase
in the number of single claims used to calculate the median cost upon
which the final payment rate for CY 2010 for APC 8001 is based, but
does not result in a significant increase or decrease in the median
cost itself.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to continue
paying for LDR prostate brachytherapy services using the composite APC
methodology implemented in CY 2008. We were able to use 906 claims that
contained both CPT codes 77778 and 55875 to calculate the median cost
upon which the CY 2010 final payment for composite APC 8001 is based.
The final median cost for composite APC 8001 for CY 2010 is
approximately $3,084. We note that this is slightly less than $3,303,
the approximate sum of the median costs for APC 0163 and APC 0651
($2,418 + $885), the APCs to which CPT codes 55875 and 77778 map if one
service is billed on a claim without the other. These CPT codes are
assigned status indicator ``Q3'' in Addendum B to this final rule with
comment period to identify their status as potentially payable through
a composite APC. Their composite APC assignment is identified in
Addendum M to this final rule with comment period.
(3) Cardiac Electrophysiologic Evaluation and Ablation Composite APC
(APC 8000)
Cardiac electrophysiologic evaluation and ablation services
frequently are performed in varying combinations with one another
during a single episode-of-care in the hospital outpatient setting.
Therefore, correctly coded claims for these services often include
multiple codes for component services that are reported with different
CPT codes and that, prior to CY 2008, were always paid separately
through different APCs (specifically, APC 0085 (Level II
Electrophysiologic Evaluation), APC 0086 (Ablate Heart Dysrhythm
Focus),
[[Page 60396]]
and APC 0087 (Cardiac Electrophysiologic Recording/Mapping). As a
result, there would never be many single bills for cardiac
electrophysiologic evaluation and ablation services, and those that are
reported as single bills would often represent atypical cases or
incorrectly coded claims. As described in the CY 2008 OPPS/ASC final
rule with comment period (72 FR 66655 through 66659), the APC Panel and
the public expressed persistent concerns regarding the limited and
reportedly unrepresentative single bills available for use in
calculating the median costs for these services according to our
standard OPPS methodology.
Effective January 1, 2008, we established APC 8000 (Cardiac
Electrophysiologic Evaluation and Ablation Composite) to pay for a
composite service made up of at least one specified electrophysiologic
evaluation service and one specified electrophysiologic ablation
service. Calculating a composite APC for these services allowed us to
utilize many more claims than were available to establish the
individual APC median costs for these services, and we also saw this
composite APC as an opportunity to advance our stated goal of promoting
hospital efficiency through larger payment bundles. In order to
calculate the median cost upon which the payment rate for composite APC
8000 is based, we used multiple procedure claims that contained at
least one CPT code from group A for evaluation services and at least
one CPT code from group B for ablation services reported on the same
date of service on an individual claim. Table 9 in the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66656) identified the CPT codes
that are assigned to groups A and B. For a full discussion of how we
identified the group A and group B procedures and established the
payment rate for the cardiac electrophysiologic evaluation and ablation
composite APC, we refer readers to the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66655 through 66659). Where a service in group A
is furnished on a date of service that is different from the date of
service for a code in group B for the same beneficiary, payments are
made under the appropriate single procedure APCs and the composite APC
does not apply.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35282), we proposed to
continue for CY 2010 to pay for cardiac electrophysiologic evaluation
and ablation services using the composite APC methodology proposed and
implemented for CY 2008 and CY 2009. Consistent with our CY 2008 and CY
2009 practice, we proposed not to use the claims that meet the
composite payment criteria in the calculation of the median costs for
APC 0085 and APC 0086, to which the CPT codes in both groups A and B
for composite APC 8000 are otherwise assigned. Median costs for APCs
0085 and 0086 would continue to be calculated using single procedure
claims. We continue to believe that the composite APC methodology for
cardiac electrophysiologic evaluation and ablation services is the most
efficient and effective way to use the claims data for the majority of
these services and best represents the hospital resources associated
with performing the common combinations of these services that are
clinically typical. Furthermore, this approach creates incentives for
efficiency by providing a single payment for a larger bundle of major
procedures when they are performed together, in contrast to continued
separate payment for each of the individual procedures.
Using partial year CY 2008 claims data available for the proposed
rule, we were able to use 6,975 claims containing a combination of
group A and group B codes and calculated a proposed median cost of
approximately $10,105 for composite APC 8000. This was an increase
compared to the CY 2009 OPPS/ASC final rule with comment period in
which we calculated a final median cost for this composite APC of
approximately $9,206 based on a full year of CY 2007 claims data. We
stated in the CY 2010 OPPS/ASC proposed rule (74 FR 35282) that we
believe the proposed median cost of $10,105 calculated from a high
volume of correctly coded multiple procedure claims would result in an
accurate and appropriate proposed payment for cardiac
electrophysiologic evaluation and ablation services when at least one
evaluation service is furnished during the same clinical encounter as
at least one ablation service. Table 9 of the CY 2010 OPPS/ASC proposed
rule (74 FR 35282) listed the groups of procedures upon which we
proposed to base composite APC 8000 for CY 2010.
Comment: Several commenters supported CMS' proposal to continue
using the composite APCs created in CY 2008, in particular the
composite APC for cardiac electrophysiologic evaluation and ablation
services. One commenter also supported the modest increase in payment
for this APC, stating that it is reflective of the increased costs of
providing these important services to patients.
Response: We appreciate commenters' support for the composite
payment methodology in general and the composite APC for cardiac
electrophysiologic evaluation and ablation in particular.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to continue
paying for cardiac electrophysiologic evaluation and ablation services
using the composite APC methodology implemented for CY 2008. For this
final rule with comment period, we were able to use 7,599 claims from
CY 2008 containing a combination of group A and group B codes and
calculated a final median cost of approximately $10,026 for composite
APC 8000. This is an increase compared to the CY 2009 OPPS/ASC final
rule with comment period in which we calculated a final median cost of
approximately $9,206 based a full year of CY 2007 claims data. We
believe that the final median cost of $10,026 calculated from a high
volume of correctly coded multiple procedure claims results in an
accurate and appropriate final payment for cardiac electrophysiologic
evaluation and ablation services when at least one evaluation service
is furnished during the same clinical encounter as at least one
ablation service. Table 12 below lists the groups of procedures upon
which we are basing composite APC 8000 for CY 2010. These CPT codes are
assigned status indicated ``Q3'' in Addendum B to this final rule with
comment period to identify their status as potentially payable through
a composite APC. Their composite APC assignment is identified in
Addendum M to this final rule with comment period.
[[Page 60397]]
Table 12--Groups of Cardiac Electrophysiologic Evaluation and Ablation Procedures Upon Which Composite APC 8000
is Based
----------------------------------------------------------------------------------------------------------------
Final single
Codes used in combinations: At least one in Group A and one in CY 2010 CPT code CY 2010 Final CY 2010
Group B code APC SI (composite)
----------------------------------------------------------------------------------------------------------------
Group A:
Comprehensive electrophysiologic evaluation with right 93619 0085 Q3
atrial pacing and recording, right ventricular pacing and
recording, His bundle recording, including insertion and
repositioning of multiple electrode catheters, without
induction or attempted induction of arrhythmia............
Comprehensive electrophysiologic evaluation including 93620 0085 Q3
insertion and repositioning of multiple electrode
catheters with induction or attempted induction of
arrhythmia; with right atrial pacing and recording, right
ventricular pacing and recording, His bundle recording....
Group B:
Intracardiac catheter ablation of atrioventricular node 93650 0085 Q3
function, atrioventricular conduction for creation of
complete heart block, with or without temporary pacemaker
placement.................................................
Intracardiac catheter ablation of arrhythmogenic focus; for 93651 0086 Q3
treatment of supraventricular tachycardia by ablation of
fast or slow atrioventricular pathways, accessory
atrioventricular connections or other atrial foci, singly
or in combination.........................................
Intracardiac catheter ablation of arrhythmogenic focus; for 93652 0086 Q3
treatment of ventricular tachycardia......................
----------------------------------------------------------------------------------------------------------------
(4) Mental Health Services Composite APC (APC 0034)
In the CY 2010 OPPS/ASC proposed rule (74 FR 35282 through 35283),
we proposed to continue our longstanding policy of limiting the
aggregate payment for specified less resource-intensive mental health
services furnished on the same date to the payment for a day of partial
hospitalization, which we consider to be the most resource-intensive of
all outpatient mental health treatment for CY 2010. We refer readers to
the April 7, 2000 OPPS final rule with comment period (65 FR 18455) for
the initial discussion of this longstanding policy. We stated in the CY
2010 OPPS/ASC proposed rule that we continue to believe that the costs
associated with administering a partial hospitalization program
represent the most resource-intensive of all outpatient mental health
treatment. Therefore, we do not believe that we should pay more for a
day of individual mental health services under the OPPS than the
partial hospitalization per diem payment.
As discussed in the CY 2010 OPPS/ASC proposed rule (74 FR 35356
through 35357), for CY 2010 we proposed to continue using the two
tiered payment approach for partial hospitalization services that we
implemented in CY 2009: one APC for days with three services (APC 0172)
(Level I Partial Hospitalization (3 services)) and one APC for days
with four or more services (APC 0173) (Level II Partial Hospitalization
(4 or more services)) (74 FR 35282 through 35283). When a CMHC or
hospital provides three units of partial hospitalization services and
meets all other partial hospitalization payment criteria, we proposed
that the CMHC or hospital be paid through APC 0172. When the CMHC or
hospital provides 4 or more units of partial hospitalization services
and meets all other partial hospitalization payment criteria, we
proposed that the CMHC or hospital be paid through APC 0173. We
proposed to set the CY 2010 payment rate for mental health services
composite APC 0034 (Mental Health Services Composite) at the same rate
as we proposed for APC 0173, which is the maximum partial
hospitalization per diem payment. We stated in the CY 2010 OPPS/ASC
proposed rule that we believe this APC payment rate would provide the
most appropriate payment for composite APC 0034, taking into
consideration the intensity of the mental health services and the
differences in the HCPCS codes for mental health services that could be
paid through this composite APC compared with the HCPCS codes that
could be paid through partial hospitalization APC 0173. When the
aggregate payment for specified mental health services provided by one
hospital to a single beneficiary on one date of service based on the
payment rates associated with the APCs for the individual services
exceeds the maximum per diem partial hospitalization payment, we
proposed that those specified mental health services would be assigned
to APC 0034. We proposed that APC 0034 would continue to have the same
payment rate as APC 0173 and that the hospital would continue to be
paid one unit of APC 0034. The I/OCE currently determines, and we
proposed for CY 2010 that it would continue to determine, whether to
pay these specified mental health services individually or to make a
single payment at the same rate as the APC 0173 per diem rate for
partial hospitalization for all of the specified mental health services
furnished by the hospital on that single date of service.
We also proposed to continue assigning status indicator ``Q3''
(Codes that May be Paid Through a Composite APC) to the HCPCS codes
that are assigned to composite APC 0034 in Addendum M, and to continue
assigning status indicator ``S'' (Significant Procedure, Not Discounted
when Multiple), as adopted for CY 2009, to APC 0034 for CY 2010 (74 FR
35283).
Comment: One commenter expressed concern that using claims data
from CMHCs and hospitals to calculate the payment rate for APC 0173
would result in reduced access not only for hospital-based partial
hospitalization services but also for other less intensive mental
health services provided in hospital outpatient departments. The
commenter stated that CMS should use hospital data to calculate the
payment rates for hospital services.
Response: As discussed in section X. of this final rule with
comment period, the final CY 2010 payment rates for APCs 0172 and 0173
are calculated using hospital-only cost data for CY 2010, rather than
using both hospital and CMHC cost data. This final policy results in an
increase in the median cost for APC 0173 from approximately $200 in CY
2009 to approximately $209. As noted in the CY 2008 OPPS/ASC final rule
with comment period (72 FR 66739), we continue to believe that the
costs associated with administering a partial hospitalization program
[[Page 60398]]
represent the most resource intensive of all outpatient mental health
treatment, and we do not believe that we should pay more for a day of
individual mental health services under the OPPS. The mental health
payment limitation will rise and fall in the same manner as payment for
partial hospitalization services.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to limit the
aggregate payment for specified less intensive outpatient mental health
services furnished on the same date by a hospital to the payment for a
day of partial hospitalization, specifically APC 0173. For CY 2010, we
also are finalizing our proposal, without modification, to assign
status indicator ``Q3'' to those HCPCS codes that describe the
specified mental health services to which APC 0034 applies in Addendum
B to this final rule with comment period. Lastly, we are finalizing our
proposal to continue assigning status indicator ``S'' (Significant
Procedure, Not Discounted When Multiple) to APC 0034.
(5) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and
8008)
Prior to CY 2009, hospitals received a full APC payment for each
imaging service on a claim, regardless of how many procedures were
performed during a single session using the same imaging modality.
Based on extensive data analysis, we determined that this practice
neither reflected nor promoted the efficiencies hospitals can achieve
when performing multiple imaging procedures during a single session (73
FR 41448 through 41450). As a result of our data analysis, and in
response to ongoing recommendations from MedPAC to improve payment
accuracy for imaging services under the OPPS, we expanded the composite
APC model developed in CY 2008 to multiple imaging services. Effective
January 1, 2009, we provide a single payment each time a hospital bills
more than one imaging procedure within an imaging family on the same
date of service. We utilize three imaging families based on imaging
modality for purposes of this methodology: ultrasound, computed
tomography (CT) and computed tomographic angiography (CTA), and
magnetic resonance imaging (MRI) and magnetic resonance angiography
(MRA). The HCPCS codes subject to the multiple imaging composite
policy, and their respective families, are listed in Table 8 of the CY
2009 OPPS/ASC final rule with comment period (73 FR 68567 through
68569).
While there are three imaging families, there are five multiple
imaging composite APCs due to the statutory requirement at section
1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging
services provided with and without contrast. While the ultrasound
procedures included in the policy do not involve contrast, both CT/CTA
and MRI/MRA scans can be provided either with or without contrast. The
five multiple imaging composite APCs established in CY 2009 are: APC
8004 (Ultrasound Composite); APC 8005 (CT and CTA without Contrast
Composite); APC 8006 (CT and CTA with Contrast Composite); APC 8007
(MRI and MRA without Contrast Composite); and APC 8008 (MRI and MRA
with Contrast Composite). We define the single imaging session for the
``with contrast'' composite APCs as having at least one or more imaging
procedures from the same family performed with contrast on the same
date of service. For example, if the hospital performs an MRI without
contrast during the same session as at least one other MRI with
contrast, the hospital will receive payment for APC 8008, the ``with
contrast'' composite APC.
Hospitals continue to use the same HCPCS codes to report imaging
procedures, and the I/OCE determines when combinations of imaging
procedures qualify for composite APC payment or map to standard (sole
service) APCs for payment. We make a single payment for those imaging
procedures that qualify for composite APC payment, as well as any
packaged services furnished on the same date of service. The standard
(noncomposite) APC assignments continue to apply for single imaging
procedures and multiple imaging procedures performed across families.
For a full discussion of the development of the multiple imaging
composite APC methodology, we refer readers to the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68559 through 68569).
As we discussed in the CY 2010 OPPS/ASC proposed rule (74 FR
35283), during the February 2009 meeting of the APC Panel, the APC
Panel heard from stakeholders who claimed that a composite payment is
not appropriate when multiple imaging procedures are provided on the
same date of service but at different times. Some APC Panel members
expressed concern that the same efficiencies that may be gained when
multiple imaging procedures are performed during the same sitting may
not be gained if a significant amount of time passes between the second
and subsequent imaging procedures, when the patient may leave not only
the scanner, but also the radiology department or hospital. The APC
Panel recommended that CMS continue to work with stakeholders to
examine different options for APCs for multiple imaging sessions and
multiple imaging procedures.
We accepted the APC Panel recommendation that CMS continue to work
with stakeholders to examine different options for APCs for multiple
imaging sessions and multiple imaging procedures. However, as we stated
in the CY 2010 OPPS/ASC proposed rule (74 FR 35283 through 35284), we
do not believe it is appropriate to make modifications to the multiple
imaging composite policy for CY 2010. We indicated that we continue to
believe that composite payment is appropriate even when procedures are
provided on the same date of service but at different times, because
hospitals do not expend the same facility resources each and every time
a patient is seen for a distinct imaging service in a separate imaging
session. In most cases, we expect that patients in those circumstances
would receive imaging procedures at different times during a single
prolonged hospital outpatient encounter, and that the efficiencies that
may be gained from providing multiple imaging procedures during a
single session are achieved in such ways as not having to register the
patient again, or not having to re-establish new intravenous access for
an additional study when contrast is required. Furthermore, we stated
that even if the same level of efficiencies could not be gained for
multiple imaging procedures performed on the same date of service but
at different times, we expect that any higher costs associated with
these cases would be reflected in the claims data and cost reports we
use to calculate the median costs for the multiple imaging composite
APCs and, therefore, in their payment rates.
In summary, in the CY 2010 OPPS/ASC proposed rule (74 FR 35284),
for CY 2010 we proposed to continue paying for all multiple imaging
procedures within an imaging family performed on the same date of
service using the multiple imaging composite payment methodology, and
we proposed no changes from the final CY 2009 policy. The proposed CY
2010 payment rates for the five multiple imaging composite APCs (APC
8004, APC 8005, APC 8006, APC 8007, and APC 8008) were based on median
costs calculated from the partial year CY 2008 claims available for the
proposed rule that would have qualified for composite payment under the
current policy (that
[[Page 60399]]
is, those claims with more than one procedure within the same family on
a single date of service). To calculate the proposed median costs, we
used the same methodology that we used to calculate the final CY 2009
median costs for these composite APCs. That is, we removed any HCPCS
codes in the OPPS imaging families that overlapped with codes on our
bypass list (``overlap bypass codes'') to avoid splitting claims with
multiple units or multiple occurrences of codes in an OPPS imaging
family into new ``pseudo'' single claims. The imaging HCPCS codes that
we removed from the bypass list for purposes of calculating the
proposed multiple imaging composite APC median costs appeared in Table
11 of the CY 2010 OPPS/ASC proposed rule (74 FR 35286). We integrated
the identification of imaging composite ``single session'' claims, that
is, claims with multiple imaging procedures within the same family on
the same date of service, into the creation of ``pseudo'' single claims
to ensure that claims were split in the ``pseudo'' single process into
accurate reflections of either a composite ``single session'' imaging
service or a standard sole imaging service resource cost. Like all
single bills, the new composite ``single session'' claims were for the
same date of service and contained no other separately paid services in
order to isolate the session imaging costs. Our last step after
processing all claims through the ``pseudo'' single process was to
reassess the remaining multiple procedure claims using the full bypass
list and bypass process in order to determine if we could make other
``pseudo'' single bills. That is, we assessed whether a single
separately paid service remained on the claim after removing line-items
for the ``overlap bypass codes.''
We were able to identify 1.7 million ``single session'' claims out
of an estimated 2.5 million potential composite cases from our
ratesetting claims data, or well over half of all eligible claims, to
calculate the proposed CY 2010 median costs for the multiple imaging
composite APCs. The HCPCS codes subject to the proposed multiple
imaging composite policy and their respective families were listed in
Table 10 of the proposed rule (74 FR 35284 through 35285).
Comment: Many commenters asserted that a single composite APC
payment is not appropriate when multiple imaging services of the same
modality are provided on the same date of service but at different
times. They argued that the same efficiencies that may be gained when
multiple imaging procedures are performed during the same sitting may
not be realized if a significant amount of time passes between the
first and subsequent imaging procedures, when the patient may have to
be repositioned or may have to leave not only the scanner, but also the
radiology department or hospital. The commenters stated that, in such
cases, facilities must expend equivalent facility resources in each
sitting as if the sittings occurred on different dates of service. They
noted that not all of these costs are reflected in claims data and,
therefore, would not be reflected in the multiple imaging composite APC
payment rates. The commenters requested that CMS allow hospitals to
report modifier -59 when multiple imaging services of the same modality
are provided at different times on the same date of service, and that
such cases be excluded from the multiple imaging composite payment
methodology. They stated that such an approach is necessary to
recognize the provider costs when imaging services must be provided at
different sittings due to clinical need or safety requirements. One
commenter also asked CMS to work with the AMA to create new CPT codes
that describe combined procedures so that providers could use those
codes when they provide multiple imaging services in a single session.
The commenter argued that utilization of such codes would be easier for
providers and would facilitate the capturing of charge data that could
be used to create new APCs or payment policies that reflect economies
of scale for combined procedures reported through claims data.
Response: We do not agree with the commenters that multiple imaging
procedures of the same modality provided on the same date of service
but at different times should be exempt from the multiple imaging
composite payment methodology. As we indicated in the CY 2010 OPPS/ASC
proposed rule (74 FR 35283 through 35284) and the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68565), we believe that composite
payment is appropriate even when procedures are provided on the same
date of service but at different times because hospitals do not expend
the same facility resources each and every time a patient is seen for a
distinct imaging service in a separate imaging session. In most cases,
we expect that patients in these circumstances would receive imaging
procedures at different times during a single prolonged hospital
outpatient encounter. The efficiencies that may be gained from
providing multiple imaging procedures during a single session are
achieved in ways other than merely not having to reposition the
patient. For example, a patient who has two MRI procedures 3 hours
apart during a single hospital outpatient encounter would not have to
be registered again, and hospital staff might not have to explain the
procedure in detail prior to the second scan. In the case of multiple
procedures involving contrast that are provided at different times
during a single hospital outpatient encounter, establishment of new
intravenous access for the second study would not be necessary. Even if
the same level of efficiencies could not be gained for multiple imaging
procedures performed on the same date of service but at different
times, we expect that any higher costs associated with these cases
would be reflected in the claims data and cost reports we use to
calculate the median costs for the multiple imaging composite APCs and,
therefore, in the payment rates for the multiple imaging composite
APCs. We do not believe it is necessary or appropriate for hospitals to
report imaging procedures provided on the same date of service but
during different sittings any differently than they would report
imaging procedures performed consecutively in one sitting with no time
in between the imaging services.
We also do not agree with the commenter that it is necessary to
create new CPT codes that describe combined services to ease the burden
of hospital billing and improve claims data for ratesetting. As we
stated in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68565), certain combination CPT codes, specifically those single codes
that describe imaging procedures without contrast and then followed by
contrast, already allow for hospitals to report commonly performed
combinations of imaging procedures in one anatomic area using a single
CPT code. Hospitals can continue to use existing codes to report
multiple imaging services by reporting multiple HCPCS codes, and for
ratesetting, we use the charges reported to us by hospitals on claims
for those multiple imaging services to calculate composite APC payment
rates. The I/OCE determines whether composite APC payment applies to a
claim, so the composite payment policy creates no additional
administrative burden for hospitals.
Comment: Several commenters asserted that the multiple imaging
composite payment methodology could have a disproportionately negative
effect on cancer centers and trauma units, where patients frequently
require more than two imaging services during a
[[Page 60400]]
hospital encounter. They argued that the use of a single composite APC
payment for an imaging modality regardless of the number of services
provided is only appropriate if the underlying claims data used to set
the ``average'' payment rate reflect an average number of services
furnished by all providers. According to the commenters, certain
providers, such as cancer centers and trauma hospitals, face systematic
underpayment of multiple imaging services due to their unique patient
population because they routinely provide a greater than average number
of imaging services in one sitting or multiple sittings on the same
date of service. The commenters stated that, at the same time, all
other hospitals experience systematic overpayment.
Response: We do not agree with the commenters that the underlying
claims data used to calculate the median costs upon which the payment
rates for the multiple imaging composite APCs are inappropriate for
payment of all hospitals, or that the multiple imaging composite
payment methodology is likely to have a disproportionately negative
effect on cancer centers and trauma units. In the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68562 through 68563), we explored
data from CY 2007 claims in response to similar concerns from
commenters and a recommendation by the APC Panel at its August 2008
meeting. An analysis of diagnosis codes present on the CY 2007 multiple
imaging ``single session'' claims did show more variability in the
number of scans for cancer patients compared to patients with noncancer
diagnoses, consistent with commenters' concerns. We observed that, for
several of the more commonly reported cancer diagnoses, more than half
of the patients received more than two imaging procedures on the same
day, while generally lower proportions of patients with noncancer
diagnoses received more than two imaging procedures on a single date of
service. We did not observe the same pattern for trauma diagnoses. As
we stated in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68562), we do not believe that the higher rate of variability that we
observed in the number of scans cancer patients receive was so extreme,
however, that the mix of services hospitals provide to patients with
diagnoses other than cancer would not balance out higher numbers of
scans for cancer patients.
We continue to believe that OPPS hospitals demonstrate sufficient
variability in the number of imaging procedures they provide to a
single patient on the same day that it is unlikely any particular class
of hospital would experience disproportionate financial effects from
the multiple imaging composite payment methodology. For CY 2009, the
first year of implementation of the multiple imaging composite APC
methodology, the modeled impacts of payment changes by class of
hospital due to APC recalibration (where the effects of the multiple
imaging composite payment methodology and other APC recalibration would
be observed), were very modest across classes of hospital, ranging from
-2.5 percent to +1.9 percent (73 FR 68799 through 68800).
The goal of the multiple imaging composite payment methodology is
to establish incentives for efficiency through larger payment bundles
based on the practice patterns of OPPS hospitals as a whole. We
acknowledge that there may be a small number of dedicated cancer
centers that, relative to other hospitals paid under the OPPS, may
provide a higher proportion of imaging services to cancer patients that
involve three or more scans. However, as discussed above, our prior
analyses do not lead us to believe that any class of hospitals would
experience significantly negative effects from the multiple imaging
composite payment methodology. We note that we establish national
payment policies for the OPPS and, while certain policies may have
greater or lesser impact on individual hospitals, on average we believe
that the total OPPS payment to a hospital for all of its services is
appropriate. Our modeled estimates of changes in total payment for
classes of hospitals between CY 2008 and CY 2009 support this
conclusion. We do not believe it would be appropriate to establish
national policy based on considerations of the service mix of
individual hospitals, or to exclude individual hospitals from national
policy because of the impact a specific policy may have on one
component of a hospital's operations as a result of a particular
hospital's service mix. Furthermore, we note that several cancer
centers are held permanently harmless under section 1833(t)(7)(D)(ii)
of the Act in order to account for the fact that they may be more
costly and have different practice patterns than other hospitals paid
under the OPPS.
Comment: Some commenters questioned the adequacy of the proposed
multiple imaging composite APC payment rates for sessions involving
three or more imaging procedures, and expressed general concern that
multiple imaging composite payment methodology would limit beneficiary
access to imaging services. For example, these commenters asserted that
the multiple imaging composite payment methodology could create
incentives for hospitals to require patients who need more than two
imaging procedures to return for additional sittings on other days if
the costs for sessions in which more than two procedures are performed
far exceed the multiple imaging composite APC payment rates.
Response: As we stated in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68562), we do not believe that, in aggregate,
OPPS payment for multiple imaging services will be inadequate under the
multiple imaging composite payment methodology so as to limit
beneficiary access, even considering the minority of cases in which
hospitals provide more than two imaging procedures on a single date of
service. The median costs upon which the payment rates for the multiple
imaging composite APCs are based are calculated using CY 2008 claims
that would have qualified for composite payment, including those with
only two imaging procedures and those with substantially higher numbers
of imaging procedures. Payment based on a measure of central tendency
is a principle of any prospective payment system. In some individual
cases payment exceeds the average cost and in other cases payment is
less than the average cost. On balance, however, payment should
approximate the relative cost of the average case, recognizing that, as
a prospective payment system, the OPPS is a system of averages.
We also do not agree with the commenters that the multiple imaging
composite payment methodology will result in hospitals requiring
patients who need more than two imaging procedures to return for
additional sittings on other days. As we stated in the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68562), we do not believe that,
in general, hospitals would routinely and for purposes of financial
gain put patients at unnecessary risk of harm from radiation or
contrast exposure, or inconvenience them or risk lack of timely
followup to the point of making them return to the hospital on separate
days to receive medically necessary diagnostic studies. However, we
again note that we do have the capacity to examine our claims data for
patterns of fragmented care. If we were to find a pattern in which a
hospital appears to be fragmenting imaging services across multiple
days for individual beneficiaries, we could refer it for review by the
Quality Improvement Organizations (QIOs) with
[[Page 60401]]
respect to the quality of care furnished, or for review by the Program
Safeguard Contractors of claims against the medical record, as
appropriate to the circumstances we found.
Comment: Several commenters urged CMS to standardize cost reporting
for both advanced imaging procedures and other problematic cost centers
before it makes any methodological changes to OPPS payment
methodologies, including a composite policy for multiple imaging
procedures. One commenter was concerned that observed efficiencies in
the multiple imaging composite APC median costs are the result of
inaccurate cost report data only and do not reflect true efficiencies
from multiple imaging services provided during a single session.
According to the commenter, CMS should implement separate cost centers
for CT and MRI procedures and the revised revenue code-to-cost center
crosswalk, as recommended in the July 2008 report by RTI International
(RTI) entitled, ``Refining Cost to Charge Ratios for Calculating APC
and DRG Relative Payment Weights.'' The commenter stated that the
creation of the new standard cost centers and the adoption of the
revised revenue code-to-cost center crosswalk would provide much more
accurate charge and cost data for these imaging modalities, and that
the true efficiencies associated with providing multiple imaging
procedures in a single session may only be discernable once these data
are available. The commenter also remarked that the adoption of these
changes would result in significant shifts in the underlying CCRs for
all APCs, thereby impacting all relative weights and payment rates
across all services over time.
Response: We published information regarding the proposed draft
hospital cost report CMS-2552-10 in the Federal Register on July 2,
2009 and the proposed agency information collection activities were
open for a 60-day review and comment period (74 FR 31738). The comment
period ended August 31, 2009. The proposed cost report can be viewed
at: http://www.cms.hhs.gov/PaperworkReductionActof1995/PRAL/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=2&sortOrder=descending&itemID=CMS1224069&intNumPerPage=10.
We will consider all comments received during the comment period in our
determination of whether to create new modality-specific standard
diagnostic radiology cost centers.
As noted in our response to a comment regarding the recommendations
included in RTI's July 2008 report entitled, ``Refining Cost to Charge
Ratios for Calculating APC and DRG Relative Payment Weights'' (73 FR
68526), the current cost report form already includes nonstandard cost
centers for CT Scanning and MRI. We also explained that under the
principle of departmental apportionment of costs at Sec. 413.53
hospitals are required to report separately the costs and charges for
each ancillary department for which charges are customarily billed if
the corresponding cost and charge information is accumulated separately
in the provider's accounting system. We believe the nonstandard cost
center information for CT Scanning and MRI that we currently collect
reflects costs and charges for CT Scanning and MRI and we use these
data to estimate median costs for ratesetting.
In the meantime, we believe it is fully appropriate to continue the
multiple imaging composite payment methodology, which we believe
improves the accuracy of OPPS payment rates and promotes efficiency
among hospitals. As we stated in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68563), the most recent hospital cost report data
are the best and most consistent estimate of relative costs that we
have available to us for all hospitals for all hospital services. We
will continue to use these data to estimate APC median costs. Should
revised cost report data become available for CT and MRI procedures,
our composite methodology would automatically incorporate that
additional precision into the multiple imaging composite APC median
cost estimates.
Comment: One commenter stated that the differential in the CY 2010
proposed payment rates for APC 8007 and APC 8008 appears adequate to
account for the substantial differences in costs between magnetic
resonance procedures when performed with and without contrast. The
commenter asked CMS to evaluate the claims available for the CY 2010
OPPS/ASC final rule with comment period to ensure that payment rates
for the two APCs reflect the incremental costs for the contrast agent
and contrast administration included in APC 8008.
Response: We agree with the commenter regarding the appropriateness
of the proposed differential in payment rates for APC 8007 and APC 8008
for CY 2010. The median costs upon which the CY 2010 final payment
rates for APC 8007 and APC 8008 are based ($706 and $986, respectively)
also appropriately reflect differences in costs for MRI and MRA imaging
sessions with and without the administration of contrast.
Comment: One commenter stated that there was a discrepancy in CMS'
estimated volume of APC 8005 single claims for the CY 2010 OPPS/ASC
proposed rule. The commenter indicated that CMS' estimated volume of
APC 8005 single claims increased by approximately one-third from the CY
2007 claims used in CY 2009 ratesetting to the CY 2008 claims available
for the CY 2010 OPPS/ASC proposed rule. The commenter noted that this
increase was inconsistent with the commenter's data analysis, which
indicated that the total volume of single claims for APC 8005 did not
increase significantly over this same time period.
Response: We reviewed the CY 2007 ``single session'' claims data
used in ratesetting for APC 8005 for the CY 2009 OPPS/ASC final rule
with comment period, and the CY 2008 ``single session'' claims data
used in ratesetting for APC 8005 for the CY 2010 OPPS/ASC proposed
rule. For the CY 2009 final rule, we identified 429,525 ``single
session'' claims out of 809,483 potential composite cases to calculate
the median cost for APC 8005. For the CY 2010 OPPS/ASC proposed rule,
we identified 423,890 ``single session'' claims out of 810,469
potential composite cases to calculate the median cost for APC 8005.
These published data do not demonstrate an increase of approximately
one-third in the volume of ``single session'' claims from the CY 2007
claims used to calculate the median costs upon which the CY 2009 final
payment rates are based compared to the CY 2008 claims used to
calculate the median costs upon which the CY 2010 proposed payment
rates are based, as the commenter indicated. For this final rule with
comment period, we identified 455,191 ``single session'' claims (an
increase of approximately 6 percent compared to CY 2009) out of 882,581
potential composite cases (an increase of approximately 9 percent
compared to CY 2009) to calculate the median cost of APC 8005.
Comment: Many commenters requested that CMS thoroughly evaluate the
impact of the multiple imaging composite payment methodology and
commended CMS for not proposing to expand the multiple imaging
composite payment methodology for CY 2010. Commenters asked CMS to
review claims data to ensure that hospitals are being adequately paid
for providing multiple imaging services, that patients are not being
required by hospitals to return to the hospital on multiple days for
imaging services, and that certain types or classes of hospitals are
not being negatively affected before moving forward with any additional
imaging
[[Page 60402]]
composite policies. One commenter noted that while CMS will have data
available from CY 2009 to analyze for the winter 2010 APC Panel
meeting, the commenter believed that such analyses would be more
meaningful if claims data through CY 2012 are use to show impacts and a
change in hospital behavior under the composite payment policy.
Commenters also stated that any expansion of the multiple imaging
composite payment methodology should be subject to full public comment.
Response: We appreciate the commenters' support of our proposal not
to implement any significant changes to the composite APC methodology
for CY 2010 so that we may monitor the effects of the existing
composite APCs on utilization and payment. We also appreciate the
commenters' thoughtful suggestions for data analysis that can be
performed toward that end once CY 2009 claims data become available and
in the longer term. We will take commenters' suggestions into
consideration as we review the CY 2009 claims data for the impact of
the multiple imaging composite APCs on payments to hospitals and on
services to beneficiaries.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to continue
paying for all multiple imaging procedures within an imaging family
performed on the same date of service using the multiple imaging
composite payment methodology. The CY 2010 payment rates for the five
multiple imaging composite APCs (APC 8004, APC 8005, APC 8006, APC
8007, and APC 8008) are based on median costs calculated from the CY
2008 claims that would have qualified for composite payment under the
current policy (that is, those claims with more than one procedure
within the same family on a single date of service). Using the same
ratesetting methodology described in the CY 2010 OPPS/ASC proposed rule
(74 FR 35284), we were able to identify 1.8 million ``single session''
claims out of an estimated 2.7 million potential composite cases from
our ratesetting claims data, or well over half of all eligible claims,
to calculate the final CY 2010 median costs for the multiple imaging
composite APCs.
Table 13 below lists the HCPCS codes subject to the final multiple
imaging composite policy and their respective families for CY 2010. We
note that we have updated Table 13 to reflect HCPCS coding changes for
CY 2010. Specifically, we added CPT code 74261 (Computed tomographic
(CT) colonography, diagnostic, including image postprocessing; without
contrast material) and CPT code 74262 (Computed tomographic (CT)
colonography, diagnostic, including image postprocessing, with contrast
materials(s) including non-contrast images, if performed) to the CT and
CTA family, and removed CPT code 0067T (Computed tomographic (CT)
colonography (ie, virtual colonoscopy); diagnostic), which was replaced
by these CPT codes. The HCPCS codes listed in Table 13 are assigned
status indicated ``Q3'' in Addendum B to this final rule with comment
period to identify their status as potentially payable through a
composite APC. Their composite APC assignment is identified in Addendum
M to this final rule with comment period. Table 14 below lists the
imaging services subject to the composite methodology that overlap with
HCPCS codes on the CY 2010 bypass list.
BILLING CODE 4120-01-P
[[Page 60403]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.026
[[Page 60404]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.027
[[Page 60405]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.028
[[Page 60406]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.029
[[Page 60407]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.030
BILLING CODE 4120-01-C
3. Calculation of OPPS Scaled Payment Weights
Using the APC median costs discussed in sections II.A.1. and
II.A.2. of this final rule with comment period, we calculated the final
relative payment weights for each APC for CY 2010 shown in Addenda A
and B to this final rule with comment period. In years prior to CY
2007, we standardized all the relative payment weights to APC 0601 (Mid
Level Clinic Visit) because mid-level clinic visits were among the most
frequently performed services in the hospital outpatient setting. We
assigned APC 0601 a relative payment weight of 1.00 and divided the
median cost for each APC by the median cost for APC 0601 to derive the
relative payment weight for each APC.
Beginning with the CY 2007 OPPS (71 FR 67990), we standardized all
of the relative payment weights to APC 0606 (Level 3 Clinic Visits)
because we deleted APC 0601 as part of the reconfiguration of the
clinic visit APCs. We selected APC 0606 as the base because APC 0606
was the mid-level clinic visit APC (that is, Level 3 of five levels).
Therefore, for CY 2010, to maintain consistency in using a median
[[Page 60408]]
for calculating unscaled weights representing the median cost of some
of the most frequently provided services, we proposed to continue to
use the median cost of the mid-level clinic visit APC, APC 0606, to
calculate unscaled weights. Following our standard methodology, but
using the proposed CY 2010 median cost for APC 0606, for CY 2010 we
assigned APC 0606 a relative payment weight of 1.00 and divided the
median cost of each APC by the proposed median cost for APC 0606 to
derive the proposed unscaled relative payment weight for each APC. The
choice of the APC on which to base the proposed relative weights for
all other APCs did not affect the payments made under the OPPS because
we scale the weights for budget neutrality.
Section 1833(t)(9)(B) of the Act requires that APC reclassification
and recalibration changes, wage index changes, and other adjustments be
made in a budget neutral manner. Budget neutrality ensures that the
estimated aggregate weight under the OPPS for CY 2010 is neither
greater than nor less than the estimated aggregate weight that would
have been made without the changes. To comply with this requirement
concerning the APC changes, we proposed to compare the estimated
aggregate weight using the CY 2009 scaled relative weights to the
estimated aggregate weight using the CY 2010 unscaled relative weights.
For CY 2009, we multiply the CY 2009 scaled APC relative weight
applicable to a service paid under the OPPS by the volume of that
service from CY 2008 claims to calculate the total weight for each
service. We then add together the total weight for each of these
services in order to calculate an estimated aggregate weight for the
year. For CY 2010, we perform the same process using the CY 2010
unscaled weights rather than scaled weights. We then calculate the
weight scaler by dividing the CY 2009 estimated aggregate weight by the
CY 2010 estimated aggregate weight. The service mix is the same in the
current and prospective years because we use the same set of claims for
service volume in calculating the aggregate weight for each year. For a
detailed discussion of the weight scaler calculation, we refer readers
to the OPPS claims accounting document available on the CMS Web site
at: http://www.cms.hhs.gov/HospitalOutpatientPPS/. We included payments
to CMHCs in our comparison of estimated unscaled weight in CY 2010 to
estimated total weight in CY 2009 using CY 2008 claims data and holding
all other things constant. Based on this comparison, we adjusted the
unscaled relative weights for purposes of budget neutrality. In our
proposal for CY 2010, the proposed CY 2010 unscaled relative payment
weights were adjusted by multiplying them by a proposed weight scaler
of 1.2863 to ensure budget neutrality of the proposed CY 2010 relative
weights.
Section 1833(t)(14)(H) of the Act, as added by section 621(a)(1) of
Public Law 108-173, states that, ``Additional expenditures resulting
from this paragraph shall not be taken into account in establishing the
conversion factor, weighting and other adjustment factors for 2004 and
2005 under paragraph (9) but shall be taken into account for subsequent
years.'' Section 1833(t)(14) of the Act provides the payment rates for
certain ``specified covered outpatient drugs.'' Therefore, the cost of
those specified covered outpatient drugs (as discussed in section
V.B.3. of the proposed rule (74 FR 35324 through 35333) and this final
rule with comment period) was included in the proposed budget
neutrality calculations for the CY 2010 OPPS.
We did not receive any public comments on the proposed methodology
for calculating scaled weights from the median costs for the CY 2010
OPPS. Therefore, we are finalizing our proposed methodology, without
modification, including updating of the budget neutrality scaler for
this final rule with comment period. Under this methodology, the final
unscaled payment weights were adjusted by a weight scaler of 1.3222 for
this final rule with comment period. The final scaled relative payment
weights listed in Addenda A and B to this final rule with comment
period incorporate the recalibration adjustments discussed in sections
II.A.1. and II.A.2. of this final rule with comment period.
4. Changes to Packaged Services
a. Background
The OPPS, like other prospective payment systems, relies on the
concept of averaging, where the payment may be more or less than the
estimated cost of providing a service or bundle of services for a
particular patient, but with the exception of outlier cases, the
payment is adequate to ensure access to appropriate care. Packaging and
bundling payment for multiple interrelated services into a single
payment create incentives for providers to furnish services in the most
efficient way by enabling hospitals to manage their resources with
maximum flexibility, thereby encouraging long-term cost containment.
For example, where there are a variety of supplies that could be used
to furnish a service, some of which are more expensive than others,
packaging encourages hospitals to use the least expensive item that
meets the patient's needs, rather than to routinely use a more
expensive item. Packaging also encourages hospitals to negotiate
carefully with manufacturers and suppliers to reduce the purchase price
of items and services or to explore alternative group purchasing
arrangements, thereby encouraging the most economical health care.
Similarly, packaging encourages hospitals to establish protocols that
ensure that necessary services are furnished, while carefully
scrutinizing the services ordered by practitioners to maximize the
efficient use of hospital resources. Finally, packaging payments into
larger payment bundles promotes the stability of payment for services
over time. Packaging and bundling also may reduce the importance of
refining service-specific payment because there is more opportunity for
hospitals to average payment across higher cost cases requiring many
ancillary services and lower cost cases requiring fewer ancillary
services.
Decisions about packaging and bundling payment involve a balance
between ensuring that payment is adequate to enable the hospital to
provide quality care and establishing incentives for efficiency through
larger units of payment. In the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66610 through 66659), we adopted the packaging of
payment for items and services in the seven categories listed below
into the payment for the primary diagnostic or therapeutic modality to
which we believe these items and services are typically ancillary and
supportive. The seven categories are guidance services, image
processing services, intraoperative services, imaging supervision and
interpretation services, diagnostic radiopharmaceuticals, contrast
media, and observation services. We specifically chose these categories
of HCPCS codes for packaging because we believe that the items and
services described by the codes in these categories are the HCPCS codes
that are typically ancillary and supportive to a primary diagnostic or
therapeutic modality and, in those cases, are an integral part of the
primary service they support.
We assign status indicator ``N'' to those HCPCS codes that we
believe are always integral to the performance of the primary modality;
therefore, we always package their costs into the costs
[[Page 60409]]
of the separately paid primary services with which they are billed.
Services assigned status indicator ``N'' are unconditionally packaged.
We assign status indicator ``Q1'' (``STVX-Packaged Codes''), ``Q2''
(``T-Packaged Codes''), or ``Q3'' (Codes that may be paid through a
composite APC) to each conditionally packaged HCPCS code. An ``STVX-
packaged code'' describes a HCPCS code whose payment is packaged when
one or more separately paid primary services with the status indicator
of ``S,'' ``T,'' ``V,'' or ``X'' are furnished in the hospital
outpatient encounter. A ``T-packaged code'' describes a code whose
payment is packaged when one or more separately paid surgical
procedures with the status indicator of ``T'' are provided during the
hospital encounter. ``STVX-packaged codes'' and ``T-packaged codes''
are paid separately in those uncommon cases when they do not meet their
respective criteria for packaged payment. ``STVX-packaged codes'' and
``T-packaged HCPCS codes'' are conditionally packaged. We refer readers
to section XIII.A.1. of this final rule with comment period for a
complete listing of status indicators.
We use the term ``dependent service'' to refer to the HCPCS codes
that represent services that are typically ancillary and supportive to
a primary diagnostic or therapeutic modality. We use the term
``independent service'' to refer to the HCPCS codes that represent the
primary therapeutic or diagnostic modality into which we package
payment for the dependent service. We note that, in future years as we
consider the development of larger payment groups that more broadly
reflect services provided in an encounter or episode-of-care, it is
possible that we might propose to bundle payment for a service that we
now refer to as ``independent.''
In addition, in the CY 2008 OPPS/ASC final rule with comment period
(72 FR 66650 through 66659), we finalized additional packaging for the
CY 2008 OPPS, which included the establishment of new composite APCs
for CY 2008, specifically APC 8000 (Cardiac Electrophysiologic
Evaluation and Ablation Composite), APC 8001 (LDR Prostate
Brachytherapy Composite), APC 8002 (Level I Extended Assessment &
Management Composite), and APC 8003 (Level II Extended Assessment &
Management Composite). In the CY 2009 OPPS/ASC final rule with comment
period (73 FR 68559 through 68569), we expanded the composite APC model
to one new clinical area, multiple imaging services. We created five
multiple imaging composite APCs for payment in CY 2009 that incorporate
statutory requirements to differentiate between imaging services
provided with contrast and without contrast as required by section
1833(t)(2)(G) of the Act. The multiple imaging composite APCs are: APC
8004 (Ultrasound Composite); APC 8005 (CT and CTA without Contrast
Composite); APC 8006 (CT and CTA with Contrast Composite); APC 8007
(MRI and MRA without Contrast Composite); and APC 8008 (MRI and MRA
with Contrast Composite). We discuss composite APCs in more detail in
section II.A.2.e. of this final rule with comment period.
Hospitals include charges for packaged services on their claims,
and the estimated costs associated with those packaged services are
then added to the costs of separately payable procedures on the same
claims in establishing payment rates for the separately payable
services. We encourage hospitals to report all HCPCS codes that
describe packaged services that were provided, unless the CPT Editorial
Panel or CMS provide other guidance. If a HCPCS code is not reported
when a packaged service is provided, it can be challenging to track
utilization patterns and resource costs.
b. Packaging Issues
(1) Packaged Services Addressed by the February 2009 APC Panel
Recommendations
The Packaging Subcommittee of the APC Panel was established to
review packaged HCPCS codes. In deciding whether to package a service
or pay for a code separately, we have historically considered a variety
of factors, including whether the service is normally provided
separately or in conjunction with other services; how likely it is for
the costs of the packaged code to be appropriately mapped to the
separately payable codes with which it was performed; and whether the
expected cost of the service is relatively low. As discussed in section
II.A.4.a. of this final rule with comment period regarding our
packaging approach for CY 2008, we established packaging criteria that
apply to seven categories of codes whose payments are packaged.
During the September 2007 APC Panel meeting, the APC Panel
requested that CMS evaluate the impact of expanded packaging on
beneficiaries. During the March 2008 APC Panel meeting, the APC Panel
requested that CMS report to the Panel at the first Panel meeting in CY
2009 regarding the impact of packaging on net payments for patient
care. In response to these requests, we shared data with the APC Panel
at the February 2009 APC Panel meeting that compared the frequency of
specific categories of services billed under the OPPS in CY 2007,
before the expanded packaging went into effect, to the frequency of
those same categories of services in CY 2008, their first year of
packaged payment. In each category, the HCPCS codes that we compared
are the ones that we identified in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66659 through 66664) as fitting into one of the
seven packaging categories listed in section II.A.4.a. of this final
rule with comment period. The data shared with the APC Panel at the
February 2009 APC Panel meeting compared CY 2007 claims processed
through September 30, 2007 to CY 2008 claims processed through
September 30, 2008. We did not make any adjustments for inflation,
changes in Medicare population, or other variables that potentially
influenced billing between CY 2007 and CY 2008. These data represent
about 60 percent of the full year data. A summary of these data
analyses is provided below.
Analysis of the diagnostic radiopharmaceuticals category showed
that the frequency of the reporting of diagnostic radiopharmaceuticals
increased by 1 percent between the first 9 months of CY 2007 and the
first 9 months of CY 2008. In CY 2007, some diagnostic
radiopharmaceuticals were packaged and others were separately payable,
depending on whether their per day mean costs fell above or below the
$55 drug packaging threshold for CY 2007. All diagnostic
radiopharmaceuticals were uniformly packaged in CY 2008. Two percent
more hospitals reported one or more diagnostic radiopharmaceuticals
during CY 2008 as compared to CY 2007. Effective for CY 2008, we first
required reporting of a radiolabeled product (including diagnostic
radiopharmaceuticals) when billing a nuclear medicine procedure, and we
believe that the increases in frequency and the number of reporting
hospitals reflect hospitals meeting this reporting requirement.
We also found that nuclear medicine procedures (into which
diagnostic radiopharmaceuticals were packaged) and associated
diagnostic radiopharmaceuticals were billed approximately 3 million
times during the first 9 months of both CY 2007 and CY 2008. Further
analysis revealed that we paid hospitals over $637 million for nuclear
medicine procedures and diagnostic radiopharmaceuticals during the
first 9 months of CY 2007, when diagnostic radiopharmaceuticals were
separately payable, and over $619
[[Page 60410]]
million for nuclear medicine procedures and diagnostic
radiopharmaceuticals during the first 9 months of CY 2008, when payment
for diagnostic radiopharmaceuticals was packaged. This represented a 3
percent decrease in aggregate payment between the first 9 months of CY
2007 and the first 9 months of CY 2008.
Using the same data, we calculated an average payment per service
or item billed (including nuclear medicine procedures and packaged or
separately payable diagnostic radiopharmaceuticals) of $203 in CY 2007
and $198 in CY 2008 for nuclear medicine procedures. This represented a
decrease of 2 percent in average payment per item or service billed
between CY 2007 and CY 2008. It is unclear how much of the decrease in
estimated aggregate or average per service or item billed payment may
be due to packaging payment for diagnostic radiopharmaceuticals (and
other services that were newly packaged for CY 2008) and how much may
be due to the usual annual APC recalibration and typical fluctuations
in service frequency. However, we believe that all of these factors
likely contributed to the slight decrease in aggregate payment in CY
2008, as compared to CY 2007. Overall, the observed changes between CY
2007 and CY 2008 were very small and indicated that there has been very
little change in frequency or aggregate payment in this clinical area
between CY 2007 and CY 2008.
We similarly analyzed 9 months of CY 2007 and CY 2008 data related
to all services that were packaged during CY 2008 because they were
categorized as guidance services. Analysis of the guidance category
(which includes image-guided radiation therapy services) showed that
the frequency of guidance services increased by 2 percent between the
first 9 months of CY 2007 and the first 9 months of CY 2008. One
percent fewer hospitals reported one or more guidance services during
CY 2007 as compared to CY 2008.
We further analyzed 9 months of CY 2007 and CY 2008 claims data for
radiation oncology services that would be accompanied by radiation
oncology guidance. We found that radiation oncology services (including
radiation oncology guidance services) were billed approximately 4
million times in CY 2007 and 3.9 million times in CY 2008, representing
a decrease in frequency of approximately 5 percent between CY 2007 and
CY 2008. These numbers represented each instance where a radiation
oncology service or a radiation oncology guidance service was billed.
Our analysis indicated that hospitals were paid over $818 million for
radiation oncology services and radiation oncology guidance services
under the OPPS during the first 9 months of CY 2007, when radiation
oncology guidance services were separately payable. During the first 9
months of CY 2008, when payments for radiation oncology guidance were
packaged, hospitals were paid over $740 million for radiation oncology
services under the OPPS. This $740 million included packaged payment
for radiation oncology guidance services and represented a 10 percent
decrease in aggregate payment from CY 2007 to CY 2008. Using the first
9 months of data for both CY 2007 and CY 2008, we calculated an average
payment per radiation oncology service or item billed of $201 in CY
2007 and $190 in CY 2008, representing a decrease of 5 percent from CY
2007 to CY 2008. It is unclear how much of the decrease in aggregate
payment and the decrease in average payment per service provided may be
due to packaging payment for radiation oncology guidance services (and
other services that were newly packaged for CY 2008) and how much may
be due to the usual annual APC recalibration and typical fluctuations
in service frequency. This analysis is discussed in further detail
below, under ``Recommendation 1'' in this section of this final rule
with comment period. In that analysis, we demonstrated that the volume
of some packaged radiation oncology guidance services increased during
the period, leading us to conclude that, irrespective of the decline in
the frequency of radiation oncology services in general, hospitals did
not appear to be changing their practice patterns specifically in
response to packaged payment for radiation oncology guidance services.
We similarly analyzed 9 months of CY 2007 and CY 2008 data related
to all services that were packaged during CY 2008 because they were
categorized as intraoperative services. Analysis of the intraoperative
category (which includes intravascular ultrasound (IVUS), intracardiac
echocardiography (ICE), and coronary fractional flow reserve (FFR))
showed minimal changes in the frequency and the number of reporting
hospitals between CY 2007 and CY 2008.
We found that cardiac catheterization and other percutaneous
vascular procedures that would typically be accompanied by IVUS, ICE
and FFR (including IVUS, ICE, and FFR) were billed approximately
375,000 times in CY 2007 and approximately 400,000 times in CY 2008,
representing an increase of 8 percent in the number of services and
items billed between CY 2007 and CY 2008. Further analysis revealed
that the OPPS paid hospitals over $912 million for cardiac
catheterizations, other related services, and IVUS, ICE, and FFR in CY
2007, when IVUS, ICE, and FFR were separately payable. In the first 9
months of CY 2008, the OPPS paid hospitals approximately $1.1 billion
for cardiac catheterization and other percutaneous vascular procedures
and IVUS, ICE, and FFR, when payments for IVUS, ICE, and FFR were
packaged. This represented a 25 percent increase in payment from CY
2007 to CY 2008. Using the 9 months of data for both CY 2007 and CY
2008, we calculated an average payment per service or item provided of
$2,430 in CY 2007 and $2,800 in CY 2008 for cardiac catheterization and
other related services. This represented an increase of 15 percent in
average payment per item or service from CY 2007 to CY 2008.
We could not determine how much of the 25 percent increase in
aggregate payment for these services may be due to the packaging of
payment for IVUS, ICE, and FFR (and other services that were newly
packaged for CY 2008) and how much may be due to the usual annual APC
recalibration and typical fluctuations in service frequency. However,
we believe that all of these factors contributed to the increase in
payment between these 2 years.
The three remaining packaging categories (excluding observation
services, which are further discussed in section II.A.2.e.(1) of this
final rule with comment period), contrast agents, image processing
services, and imaging supervision and interpretation services, showed
minimal changes in frequency between CY 2007 and CY 2008, ranging from
a 2 percent increase to a 1 percent decrease in frequency. Similarly,
when examining the number of hospitals reporting these services, the
data showed similar numbers of hospitals reporting these services in CY
2007, when these services were separately payable, and CY 2008, when
they were packaged. Specifically, the percentage change in the number
of reporting hospitals for these categories between CY 2007 and CY 2008
ranged from 0 percent to a decrease of 1 percent.
In summary, these preliminary data indicated that hospitals in
aggregate did not appear to have significantly changed their service
reporting patterns as a result of the expanded packaging adopted for
the OPPS beginning in CY 2008.
The APC Panel's Packaging Subcommittee reviewed the packaging
status of several CPT codes and reported
[[Page 60411]]
its findings to the APC Panel at its February 2009 meeting. The full
report of the February 18 and 19, 2009 APC Panel meeting can be found
on the CMS Web site at: http://www.cms.hhs.gov/FACA/05_AdvisoryPanelonAmbulatoryPaymentClassificationGroups.asp. The APC Panel
accepted the report of the Packaging Subcommittee, heard several
presentations related to packaged services, discussed the deliberations
of the Packaging Subcommittee, and recommended that--
1. CMS pay separately for radiation therapy guidance services
performed in the treatment room for 2 years and then reevaluate
packaging on the basis of claims data. (Recommendation 1)
2. CMS continue to analyze the impact of increased packaging on
beneficiaries and provide more detailed versions of the analyses
presented at the February 2009 meeting of services initially packaged
in CY 2008 at the next Panel meeting. In addition, the Panel requested
that, in the more detailed analyses of radiation oncology services that
would be accompanied by radiation oncology guidance, CMS stratify the
data according to the type of radiation oncology service, specifically,
intensity modulated radiation therapy, stereotactic radiosurgery,
brachytherapy, and conventional radiation therapy. (Recommendation 2)
3. CMS continue to analyze the impact on beneficiaries of increased
packaging of diagnostic radiopharmaceuticals and provide more detailed
analyses at the next Panel meeting. In addition, the Panel requested
that, in the more detailed analyses of packaging of diagnostic
radiopharmaceuticals by type of nuclear medicine scan, CMS break down
the data according to the specific CPT codes billed with the diagnostic
radiopharmaceuticals. (Recommendation 3)
4. CPT code 36592 (Collection of blood specimen using established
central or peripheral catheter, venous, not otherwise specified) remain
assigned to APC 0624 (Phlebotomy and Minor Vascular Access Device
Procedures) for CY 2010. (Recommendation 4)
5. The Packaging Subcommittee continue its work until the next APC
Panel meeting. (Recommendation 5)
In the proposed rule, we addressed each of these recommendations in
turn in the discussion that follows.
Recommendation 1
In the CY 2010 OPPS/ASC proposed rule (74 FR 35289), we did not
propose to pay separately for radiation therapy guidance services
provided in the treatment room for CY 2010, which would have been
consistent with the APC Panel's recommendation. Instead, we proposed to
maintain the packaged status of radiation therapy guidance services
performed in the treatment room for CY 2010.
As discussed below in this section, during the February 2009 APC
Panel meeting, we presented data that estimated that aggregate payment
for radiation oncology services, including the payment for radiation
oncology guidance services, decreased by approximately 10 percent
between the first 9 months of CY 2007 (before the expanded packaging
went into effect) and the first 9 months of CY 2008 (after the expanded
packaging went into effect). This decline may be attributable to many
factors, including lower payment rates for common radiation oncology
services in CY 2008 specifically and generally reduced volume for
separately paid radiation oncology services. The APC Panel expressed
concern that this aggregate payment decrease could inhibit patient
access to technologically advanced and clinically valuable radiation
oncology guidance services whose payment became packaged effective
January 1, 2008.
While we presented data to the APC Panel comparing payment between
CY 2007 and CY 2008 in response to past APC Panel recommendations, we
note that we made changes to the bypass list for CY 2009 to ensure that
we more fully captured all packaged costs on each claim, which resulted
in significantly increased payment rates for many of these radiation
oncology services for CY 2009, as compared to the CY 2008 payment rates
for these services.
Specifically, as discussed in detail in the CY 2009 OPPS/ASC final
rule with comment period (73 FR 68575), in response to public comments
received, several radiation oncology CPT codes had been included on the
bypass list for the CY 2008 OPPS, although they failed to meet the
empirical criteria for inclusion on the bypass list. For CY 2009, we
removed from the bypass list those radiation oncology codes that did
not meet the empirical criteria. As a result of these changes to the
bypass list, the CY 2009 median costs for several common radiation
oncology APCs increased by more than 9 percent as compared to the CY
2008 median costs, while the median costs for some of the other lower
volume radiation oncology APCs, most notably the brachytherapy source
application APCs, declined. For example, as noted in the CY 2009 OPPS/
ASC final rule with comment period (73 FR 68575), these changes to the
bypass list resulted in payment for the common combination of intensity
modulated radiation therapy (IMRT) and image-guided radiation therapy
(IGRT) increasing from $348 in CY 2008 to $411 in CY 2009. Notably, the
CY 2007 total payment rate for this combination of services, before the
expanded packaging went into effect, was $403.
We do not yet have CY 2009 claims data reflecting utilization based
on the payment rates in effect for CY 2009. However, we do not expect
that an overall per-service payment comparison between CY 2007 and CY
2009 would likely demonstrate a significant decrease in payment for
radiation oncology services because we have adopted a significant
increase in the CY 2009 payment rates for the most common radiation
oncology services. In addition, we note that CY 2010 proposed rule data
indicated that the CY 2010 APC median costs applicable to most
radiation oncology services experienced increases of approximately 2 to
15 percent when compared to their CY 2009 final rule median costs.
Although a small number of other lower volume radiation oncology APCs,
most notably the brachytherapy and stereotactic radiosurgery APCs,
experienced declines in median costs, we do not expect that an overall
per-service payment comparison between CY 2007 and CY 2010 would likely
demonstrate a significant decrease in payment for radiation oncology
services over this time period.
While we understand that the CY 2007 to CY 2008 aggregate payment
comparison provided to the APC Panel during the February 2009 meeting
may have contributed to the APC Panel's particular concern about
payment for radiation oncology services for CY 2010, we do not believe
that packaging payment for radiation oncology guidance services has
primarily caused this decline. In addition, we do not believe that
beneficiaries' access to these services has been limited as a result of
packaging payment for radiation oncology guidance services. In the data
presented to the APC Panel at the February 2009 meeting, the number of
all packaged guidance services provided during the first 9 months of CY
2008 represented a 2 percent increase from the number of guidance
services provided during the first 9 months of CY 2007. Further,
although the CY 2008 volume of the radiation oncology guidance codes
that we newly packaged for CY 2008 varied, with some of the services
experiencing increases in volume and others experiencing decreases in
volume, in aggregate, the reporting of radiation oncology
[[Page 60412]]
guidance services increased by 4 percent in the first 9 months of
claims for CY 2008, as compared to the first 9 months of CY 2007, and
the number of hospitals reporting these services also increased. This
further supports our belief that, irrespective of the decline in the
frequency of radiation oncology services in general, hospitals do not
appear to be changing their practice patterns specifically in response
to packaged payment for radiation oncology guidance services.
Therefore, in the CY 2010 OPPS/ASC proposed rule (74 FR 35289), we
did not propose to pay separately for radiation therapy guidance
services performed in the treatment room for 2 years as the APC Panel
recommended. Instead, for CY 2010, we proposed to maintain the packaged
status of all radiation therapy guidance services, including those
radiation therapy guidance services performed in the treatment room.
A summary of the public comments and our response on the CY 2010
proposal to package payment for radiation therapy guidance services are
included in section II.A.4.b.(2) of this final rule with comment
period.
Recommendation 2
In the CY 2010 OPPS/ASC proposed rule (74 FR 35290), we stated that
we are accepting the APC Panel recommendation to continue to analyze
the impact of increased packaging on beneficiaries and to share more
data with the APC Panel. We noted that we would carefully consider
which additional data would be most informative for the APC Panel and
would discuss these data with the APC Panel at the next CY 2009 APC
Panel meeting and/or the first CY 2010 APC Panel meeting. We did not
share additional packaging data with the APC Panel at the most recent
August 2009 meeting because we believe the APC Panel's discussions
would benefit from analyses of an additional year of claims data after
CY 2008. Therefore, we plan to incorporate analysis of CY 2009 claims
into the information we will bring to the APC Panel for its review at
the winter 2010 meeting. Similarly, in the proposed rule, we noted that
we would determine what additional detailed data related to radiation
oncology services would be helpful to the APC Panel and would share
these data at the next CY 2009 APC Panel meeting and/or the first CY
2010 APC Panel meeting. We did not share additional data related to
radiation oncology services with the APC Panel at the most recent
August 2009 meeting because we believe the APC Panel's discussions
would benefit from analyses of an additional year of claims data after
CY 2008. Therefore, we plan to incorporate analysis of CY 2009 claims
into the information we will bring to the APC Panel for its review at
the winter 2010 meeting.
A summary of the public comments and our response regarding the
impact of the CY 2010 packaging proposal are included in section
II.A.4.b.(2) of this final rule with comment period.
Recommendation 3
In the CY 2010 OPPS/ASC proposed rule (74 FR 35290), we stated that
we are accepting the APC Panel's recommendation that CMS continue to
analyze the impact on beneficiaries of increased packaging of
diagnostic radiopharmaceuticals and provide more detailed analyses at
the next APC Panel meeting. In these analyses of diagnostic
radiopharmaceuticals by type of nuclear medicine scan, the APC Panel
further recommended that CMS analyze the data according to the specific
CPT codes billed with the diagnostic radiopharmaceuticals. This APC
Panel recommendation is discussed in detail in section II.A.2.d.(5) of
this final rule with comment period. In the proposed rule, we noted
that we are accepting the APC Panel's recommendation and would provide
additional data to the APC Panel at an upcoming meeting. We did not
share additional data related to diagnostic radiopharmaceuticals and
nuclear medicine scans with the APC Panel at the most recent August
2009 meeting because we believe the APC Panel's discussions would
benefit from analyses of an additional year of claims data after CY
2008. Therefore, we plan to incorporate analysis of CY 2009 claims into
the information we will bring to the APC Panel for its review at the
winter 2010 meeting.
A summary of the public comments and our response on the CY 2010
proposal to package payment for diagnostic radiopharmaceuticals into
payment for the associated nuclear medicine procedures are included in
sections II.A.2.d.(5) and V.B.2.d. of this final rule with comment
period.
Recommendation 4
In the CY 2010 OPPS/ASC proposed rule (74 FR 35290), we proposed to
continue for CY 2010 to treat CPT code 36592 (Collection of blood
specimen using established central or peripheral catheter, venous, not
otherwise specified) as an ``STVX packaged code'' and to assign it to
APC 0624 (Phlebotomy and Minor Vascular Access Device Procedures), the
same APC to which CPT code 36591 (Collection of blood specimen from a
completely implantable venous access device) is currently assigned as
the APC Panel recommended. CPT code 36592 became effective January 1,
2008 and was assigned interim status indicator ``N'' in the CY 2008
OPPS/ASC final rule with comment period. For CY 2009, in response to
public comments, we proposed to treat CPT code 36592 as a conditionally
packaged code, with assignment to APC 0624. In the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68576), we discussed the public
comments we received regarding our proposed treatment of CPT code
36592. Several of these commenters supported our proposal to treat CPT
code 36592 as a conditionally packaged code with assignment to APC
0624. We stated in the CY 2009 OPPS/ASC final rule with comment period
that when cost data for CPT code 36592 became available for the CY 2010
OPPS annual update, we would reevaluate whether assignment to APC 0624
continued to be appropriate.
Based on our analysis of claims data, our clinical understanding of
the service, and our discussion with the APC Panel Packaging
Subcommittee, in the CY 2010 OPPS/ASC proposed rule (74 FR 35290), we
proposed to maintain the assignment of CPT code 36592 to APC 0624 for
CY 2010, consistent with the APC Panel recommendation, and we proposed
to continue to treat CPT code 36592 as an ``STVX packaged code'' and
assign it to APC 0624. We noted that we expect hospitals to follow the
CPT guidance related to CPT codes 36591 and 36592 regarding when these
services should be appropriately reported.
We received no public comments on the CY 2010 proposal to maintain
the assignment of CPT code 36592 to APC 0624 and treat it as an ``STVX
packaged code,'' so we are finalizing our proposal, without
modification.
Recommendation 5
In response to the APC Panel's recommendation for the Packaging
Subcommittee to remain active until the next APC Panel meeting, in the
CY 2010 OPPS/ASC proposed rule (74 FR 35290) we noted that we have
accepted this recommendation and the APC Panel Packaging Subcommittee
remains active. We stated that additional issues and new data
concerning the packaging status of codes would be shared for its
consideration as information becomes available. We continue to
encourage submission of common clinical scenarios involving currently
packaged HCPCS codes to the Packaging Subcommittee for its ongoing
review. We also encourage recommendations of
[[Page 60413]]
specific services or procedures whose payment would be most
appropriately packaged under the OPPS. Additional detailed suggestions
for the Packaging Subcommittee should be submitted by e-mail to
[email protected] with Packaging Subcommittee in the subject line.
The Packaging Subcommitee has remained active; the Subcommittee's
last meeting to discuss packaging issues was the August 2009 meeting.
(2) Packaged Services Addressed by the August 2009 APC Panel
Recommendations
The APC Panel met again on August 5 and 6, 2009 to hear public
presentations on the proposals set forth in the CY 2010 OPPS/ASC
proposed rule. The APC Panel's Packaging Subcommittee reviewed the
packaging status of several CPT codes and reported its findings to the
APC Panel. The full report of the August 5 and 6, 2009 APC Panel
meeting can be found on the CMS Web site at: http://www.cms.hhs.gov/FACA/05_AdvisoryPanelonAmbulatoryPaymentClassificationGroups.asp. The
APC Panel accepted the report of the Packaging Subcommittee, heard
several presentations related to packaged services, discussed the
deliberations of the Packaging Subcommittee, and recommended that--
1. CMS submit to the Packaging Subcommittee, for its ongoing
review, common clinical scenarios involving currently packaged HCPCS
codes and recommendations of specific services or procedures for which
payment would be most appropriately packaged under the OPPS.
(Recommendation 6)
2. When CMS changes the dollar amount of the drug packaging
threshold and determines that some drugs within a single therapeutic
class fall on either side of the packaging threshold, CMS consider
packaging all of the drugs within that class on the basis of feedback
from providers, the APC Panel, and stakeholders. (Recommendation 7)
3. CMS continue to study the impact of increased packaging on
beneficiaries. (Recommendation 8)
4. The work of the APC Packaging Subcommittee continue.
(Recommendation 9)
With respect to these August 2009 APC Panel recommendations, we are
accepting recommendations 6, 8, and 9. We are continuing the work of
the APC Panel Packaging Subcommitee, and we appreciate the Packaging
Subcommitee's expertise and experience regarding packaging under the
OPPS and the valuable advice the Subcommittee continues to provide to
us. We will continue to bring to the Subcommittee's attention clinical
scenarios identified by us or the public regarding services that are
currently packaged or are candidates for future packaging under the
OPPS. As discussed above, we also will continue to study the impact of
increased packaging on Medicare beneficiaries, as the APC Panel has
previously recommended to us. We did not share additional packaging
data with the APC Panel at the most recent August 2009 meeting because
we believe the APC Panel's discussions would benefit from analyses of
an additional year of claims data after CY 2008. Therefore, we plan to
incorporate analysis of CY 2009 claims into the information we will
bring to the APC Panel for its review at the winter 2010 meeting.
Finally, our response to recommendation 7 regarding the packaging of
payment for all drugs in the same therapeutic class is discussed in
section V.B.2.c. of this final rule with public comment.
Comment: Many commenters expressed a wide range of views on the
existing policies for packaging payment for categories of services that
CMS proposed to continue for CY 2010. One commenter claimed that while
packaging provides an incentive for providers to deliver services in
the most efficient, cost-effective manner possible, payment bundles
that are too small do not enhance efficiencies, while payment bundles
that are too large may carry excessive copayments for patients who need
only a small proportion of services in the bundle. Another commenter
suggested that CMS' packaging policy is likely to lead to less
efficient use of resources, limited access to innovative treatment
options, and greater instability in payments because, unlike the
incentives from packaging under the IPPS, under the OPPS, the hospital
would receive greater payment by bringing the outpatient back for a
second visit or admitting the patient for inpatient care than by
utilizing a more costly approach to providing an outpatient service
that would be paid the same, regardless of the approach. The commenter
also stated that when an APC's payment rate is significantly less than
the cost of a technology, hospitals have a strong disincentive to use
that technology, even if it could reduce the costs of care at a later
date and provide better care to the patient.
Several commenters asserted that the implications of OPPS packaging
policies are unknown due to a lack of transparency in the OPPS
ratesetting process and methodology used to determine payment for
packaged services, potentially leading to inappropriate payment and
underutilization of image-guidance services. The commenters believed
that packaging payment for image-guidance leads to hospitals
discouraging physicians from using guidance services and that,
therefore, CMS should not package payment for image-guidance services.
Several commenters urged CMS to consider establishing a 2 to 3 year
data collection period during which separate payment would be made for
new technology or new applications of existing technology. The
commenters further suggested that the data could then be used to
evaluate the impact of packaging on clinical utilization and payment
and could also be used to determine whether to package or maintain
separate payment for the services in the future. Another commenter
recommended that CMS adopt a threshold policy that would be similar to
the existing policy used to identify packaged drugs, under which
separate payment would be made for all services with a median cost in
excess of a nominal threshold amount.
Response: We continue to believe that packaging creates incentives
for hospitals and their physician partners to work together to
establish appropriate protocols that eliminate unnecessary services
where they exist and institutionalize approaches to providing necessary
services more efficiently. With respect to new services or new
applications of existing technology, we believe that packaging payment
for ancillary and dependent services creates appropriate incentives for
hospitals to seriously consider whether a new service or a new
technology offers a benefit that is sufficient to justify the cost of
the new service or technology. Where this review results in reductions
in services that are only marginally beneficial or hospitals' choices
not to utilize certain technologies, we believe that this could
improve, rather than harm, the quality of care for Medicare
beneficiaries because every service furnished in a hospital carries
some level of risk to the patient. Moreover, we believe that hospitals
strive to provide the best care they can to the patients they serve so
that when new technologies are proven to improve the quality of care,
their utilization will increase appropriately, whether the payment for
them is packaged or not.
However, we are aware that there are financial pressures on
hospitals that might motivate some providers to split services among
different hospital encounters in such a way as to maximize payments.
While we do not expect that hospitals would routinely change the way
they furnish services or the way they bill for services in order
[[Page 60414]]
to maximize payment, we recognize that it would be possible and we
consider that possibility as we annually review hospital claims data.
We will to continue examine claims data for patterns of fragmented
care, and if we find a pattern in which a hospital appears to be
dividing care across multiple days, we will refer it for investigation
to the QIO or to the program safeguard contractor, as appropriate to
the circumstances we find.
In section II.A.1. of this final rule with comment period, we
discuss the established methodology we use to incorporate the costs of
packaged services into payment for the associated independent
procedures. In response to those commenters with concerns about
transparency of the ratesetting process that incorporates packaged
costs, in general, we package the costs of services into the payment
for the major separately paid procedure on the same claim on which the
packaged service appears. Hence, it is the practice of hospitals with
regard to reporting and charging for packaged services that determines
the separately paid service into which the cost of a packaged service
is incorporated and the amount of packaged cost included the payment
for that separately paid procedure.
Regarding the recommendation that we establish a cost threshold
that would guide the packaging of services, we do not agree that this
approach would result in appropriate packaging of costs for dependent
ancillary services. A threshold policy could create incentives for
hospitals to increase charges to ensure that payment for certain
services was made separately, and the result would be contrary to the
creation of incentives for prudent assessment of the costs and benefits
of these services. Furthermore, as we stated in the CY 2009 OPPS/ASC
final with comment period (73 FR 68572), it is not clear whether one
set of packaging principles or one threshold could apply to the wide
variety of services under the OPPS. Finally, to adopt a policy that
would only package services that are low cost ancillary and supportive
services would essentially negate the concept of averaging that is an
underlying premise of a prospective payment system because hospitals
would not have a particular incentive to provide care more efficiently.
We believe it is important to continue to advance value-based
purchasing by Medicare in the hospital outpatient setting by furthering
the focus on value of care rather than volume. While we acknowledge the
concerns of the commenters and, as discussed below, are committed to
considering the impact of packaging payment on Medicare beneficiaries
further in the future, we must balance the concerns of the commenters
with our goal of continuing to encourage efficient use of hospital
resources. As we noted in the CY 2009 OPPS/ASC final rule with comment
period in our response to comments on the CY 2009 OPPS/ASC proposed
rule (73 FR 68572) and as we note in our responses to public comments
on the CY 2010 OPPS/ASC proposed rule, the suggestions and packaging
criteria recommended by most commenters are focused almost exclusively
on preventing packaging, rather than on determining when packaging
would be appropriate. We also welcome suggestions from the public on
approaches to packaging that would encourage efficient use of hospital
resources.
Comment: Several commenters commended CMS for reviewing and
accepting the APC Panel's February 2009 recommendation that CMS
continue to analyze the impact of increased packaging on Medicare
beneficiaries. The commenters expressed concern about CMS' current
packaging policy and urged CMS to conduct a more detailed review of the
hospital claims data in order to verify that current OPPS packaging
policies and methodologies are accomplishing CMS' goals. A few
commenters offered recommendations for additional data analyses for CMS
to consider in the ongoing efforts to study the impact of increased
packaging under the OPPS. The commenters recommended that CMS compare
utilization of currently packaged services billed and paid separately
under the OPPS in CY 2007, before the packaging of additional
categories of services went into effect, to the frequency of those same
services that were packaged in CY 2008 and later, after the packaging
of additional categories of services went into effect. The commenters
requested that CMS conduct these studies at the CPT code level. The
commenters also recommended that CMS conduct a hospital-level review of
the data, in addition to an overall review, and compare overall
utilization by packaged HCPCS code for CYs 2005 and 2006 to CYs 2007,
2008, and 2009. Another commenter, in support of a provider-level
review of the data, asserted that reviewing the data for packaged
services at a national aggregate level can easily mask the behavioral
changes of classes of hospitals and, therefore, concluded that more
detailed analysis is needed to determine the impact of the policy.
Several commenters requested that CMS present its analyses in the final
rule with comment period and at upcoming APC Panel meetings and consult
with relevant stakeholders before proposing any additional packaging
changes. The commenters also recommended that CMS make the data
underlying payments for packaged services, including utilization rates
and median costs, publicly available to enhance the transparency of its
decision making so that stakeholders could assess whether the payment
rates truly reflect the costs of providing the bundle of services.
Response: We agree that it is important to examine our claims data
to assess the impact of packaging to the extent we can do so. During
the September 2007 APC Panel meeting, the APC Panel requested that CMS
evaluate the impact of expanded packaging on Medicare beneficiaries. At
the March 2008 APC Panel meeting, the APC Panel requested that CMS
report to the APC Panel at the first meeting in CY 2009 regarding the
impact of packaging on net payments for patient care. In response to
these requests, we shared the first available CY 2008 claims data with
the APC Panel at the February 2009 APC Panel meeting. In that analysis,
we compared the frequency of specific categories of services we newly
packaged for CY 2008 as they were billed under the OPPS in CY 2007,
before expanded packaging went into effect, to the frequency of those
same categories of services in CY 2008, their first year of packaged
payment. In each category, the HCPCS codes that we compared are the
ones that we identified in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66659 through 66664) as fitting into one of the seven
packaging categories listed in section II.A.4.a. of this final rule
with comment period. The data shared with the APC Panel at the February
2009 APC Panel meeting compared CY 2007 claims processed through
September 30, 2007, to CY 2008 claims processed through September 30,
2008, and represented about 60 percent of the full year data. We did
not make any adjustments for inflation, changes in Medicare population,
or other variables that potentially influenced billing between CY 2007
and CY 2008. A summary of these data analyses was included in the CY
2010 OPPS/ASC proposed rule (74 FR 35287 through 35289) and is
reiterated above.
We note that we plan to present subsequent analyses that compare CY
2007 claims processed through September 30, 2007, to CY 2008 claims
processed through September 30, 2008, and to CY 2009 claims processed
[[Page 60415]]
through September 30, 2009, to the APC panel at the APC Panel's winter
2010 meeting. We do not anticipate providing analyses using claims for
services furnished during CY 2005 or CY 2006 because the packaging of
the seven categories of services was effective for services furnished
on and after January 1, 2008, and, therefore, we view CY 2007, the year
immediately preceding the year that the packaging expansion went into
effect, to be the base year for our comparisons. In addition, we do not
anticipate providing the analyses at a provider-specific level or at a
HCPCS code level. It is not clear to us how we would be able to use an
analysis at the provider-specific level or the HCPCS code level or what
value such an analysis would have in the context of national packaging
policies for the OPPS.
We note that we make available a considerable amount of data for
public analysis each year through the supporting data files that are
posted on the CMS Web site in association with the display of the
proposed and final rules. In addition, we make available the public use
files of claims and a detailed narrative description of our data
process for the annual OPPS/ASC proposed and final rules that the
public can use to perform any desired analyses. Therefore, commenters
are able to examine and analyze these data to develop specific
information to support their requests for changes to payments under the
OPPS, whether with regard to separate payment for a packaged service or
other issues. We understand that the OPPS is a complex payment system
and that it may be difficult to determine the quantitative amount of
packaged cost included in the median cost for every independent
service. However, based on the complex and detailed public comments on
prior proposed rules that we have received, some commenters have
performed meaningful analyses at a detailed and service-specific level
based on the public claims data available.
With regard to the commenters' request that we not expand OPPS
packaging until after we have produced data on the impact of packaging
policy changes and consulted with stakeholders, we note that we
establish all significant OPPS payment policies, including the
packaging status of each HCPCS code, through the annual rulemaking
process. Integral to this process is a detailed explanation of the
claims data on which we base our proposals and the availability of the
claims from which we develop those data for the use of the public to
perform any level of analysis they choose. Moreover, the OPPS/ASC
annual rulemaking process provides a 60-day public comment period, as
well as public presentations and discussion of the proposals at the
summer APC Panel meeting. We also reply to all public comments that are
within the scope of the OPPS/ASC proposed rule when we issue the OPPS/
ASC final rule with comment period. In addition, we regularly meet with
parties throughout the year who want to share their views on topics of
interest to them. All of these activities and discussions provide
significant information and opportunities for the public to influence
and inform policy changes that we may be considering.
Comment: Some commenters expressed concern about the impact that
packaging payment for services described by separate HCPCS codes could
have on the submission of claims data by hospitals for those packaged
codes and, therefore, with the validity of conclusions that could be
drawn from impact analyses performed by CMS. One commenter questioned
CMS' assumption that the OPPS packaging policies would allow continued
collection of the data necessary to set appropriate, stable payment
rates in the future. The commenter believed that greater packaging may
eliminate hospitals' incentive to code for items and services for which
separate payment is not made. The commenter further argued that CMS'
past experiences with packaging payment for ancillary items and
services indicate that hospitals do not report HCPCS codes for items
and services that do not directly affect hospital payment. Similarly,
the commenter explained that, under the IPPS, hospitals report only the
data required to assign a case to the highest paying appropriate
diagnosis-related group (DRG), even though other data might affect
payment in the long term. The commenter saw no reason to believe that
the current OPPS packaging approach would have a different outcome
unless CMS gives clear instructions that hospitals should continue
coding for all items and services used in the care of patients and
provides an incentive to report packaged items and services.
Several commenters argued that the costs of new services are not
reflected in the historical claims data CMS uses to set payment rates.
The commenters believed that if CMS were to package payment for a new
imaging service under the same criteria proposed for many existing
imaging services, not only would CMS have no basis for determining how
much the new service costs in its first 2 years of availability, but
also CMS would provide no incentive to hospitals to report codes and
charges for the new service for use in future OPPS ratesetting. The
commenters further asserted that the resulting incomplete data would
lead to inappropriate payments for independent services that, in turn,
would limit access to care and would discourage continued innovation to
improve patient care.
Response: We do not believe that there will be a significant change
in what hospitals report and charge for the outpatient services they
furnish to Medicare beneficiaries and other patients as a result of our
current packaging methodology. Medicare cost reporting standards
specify that hospitals must impose the same charges for Medicare
patients as for other patients. We are often told by hospitals that
many private payers pay based on a percentage of charges and that, in
accordance with Medicare cost reporting rules and generally accepted
accounting principles, hospital chargemasters do not differentiate
between the charges to Medicare patients and other patients. Therefore,
we have no reason to believe that hospitals will stop reporting HCPCS
codes and charges for packaged services they provide to Medicare
beneficiaries. As we stated in the CY 2009 OPPS/ASC final rule with
comment period (74 FR 68575), we strongly encourage hospitals to report
a charge for each packaged service they furnish, either by billing the
packaged HCPCS code and a charge for that service if separate reporting
is consistent with CPT and CMS instructions, by increasing the charge
for the separately paid associated service to include the charge for
the packaged service, or by reporting the charge for the packaged
service with an appropriate revenue code but without a HCPCS code. Any
of these means of charging for the packaged service will result in the
cost of the packaged service being incorporated into the cost we
estimate for the separately paid service. If a HCPCS code is not
reported when a packaged service is provided, we acknowledge that it
can be challenging to specifically track the utilization patterns and
resource cost of the packaged service itself. However, we have no
reason to believe that hospitals have not considered the cost of the
packaged service in reporting charges for the independent, separately
paid service.
We expect that hospitals, as other prudent businesses, have a
quality review process that ensures that they accurately and completely
report the services they furnish, with appropriate charges for those
services to Medicare
[[Page 60416]]
and all other payers. We encourage hospitals to report all HCPCS codes
that describe packaged services that were furnished, unless the CPT
Editorial Panel or CMS provides other guidance. To the extent that
hospitals include separate charges for packaged services on their
claims, the estimated costs of those packaged services are then added
to the costs of separately paid procedures on the same claims and used
in establishing payment rates for the separately paid services.
Comment: One commenter argued that CMS' packaging methodology for
guidance services used in radiation oncology procedures is not
transparent. Specifically, the commenter claimed that CMS packaged
payment for the radiation oncology image-guidance services (shown in
Table 15) into the payment for independent radiation therapy services
(shown in Table 16) without publishing its packaging methodology. The
commenter further stated that the lack of transparency regarding CMS'
packaging methodology is of concern to the radiation oncology
community, and that it would be helpful if CMS published the
information used in the APC Panel's determination of packaging and
payment rates.
Table 15--Packaged Radiation Oncology Guidance Services
------------------------------------------------------------------------
CY 2010 CPT code CY 2010 Long descriptor
------------------------------------------------------------------------
77421............................. Stereoscopic X ray guidance for
localization of target volume for
the delivery of radiation therapy.
77014............................. Computed tomography guidance for
placement of radiation fields.
77417............................. Therapeutic radiology port film(s).
76950............................. Ultrasonic guidance for aspiration
of ova, imaging supervision and
interpretation.
------------------------------------------------------------------------
Table 16--Separately Paid Radiation Therapy Services
------------------------------------------------------------------------
CY 2010 CPT code CY 2010 Long descriptor
------------------------------------------------------------------------
77402........................ Radiation treatment delivery, single
treatment area, single port or parallel
opposed ports, simple blocks or no
blocks; up to 5MeV.
77403........................ Radiation treatment delivery, single
treatment area, single port or parallel
opposed ports, simple blocks or no
blocks; 6-10MeV.
77404........................ Radiation treatment delivery, single
treatment area, single port or parallel
opposed ports, simple blocks or no
blocks; 11-19 MeV.
77406........................ Radiation treatment delivery, single
treatment area, single port or parallel
opposed ports, simple blocks or no
blocks; 20 MeV or greater.
77407........................ Radiation treatment delivery, 2 separate
treatment areas, 3 or more ports on a
single treatment area, use of multiple
blocks; up to 5 MeV.
77408........................ Radiation treatment delivery, 2 separate
treatment areas, 3 or more ports on a
single treatment area, use of multiple
blocks; 6-10 MeV.
77409........................ Radiation treatment delivery, 2 separate
treatment areas, 3 or more ports on a
single treatment area, use of multiple
blocks; 11-19 MeV.
77411........................ Radiation treatment delivery, 2 separate
treatment areas, 3 or more ports on a
single treatment area, use of multiple
blocks; 20 MeV or greater.
77412........................ Radiation treatment delivery, 3 or more
separate treatment areas, custom
blocking, tangential ports, wedges,
rotational beam, compensators, electron
beam; up to 5 MeV.
77413........................ Radiation treatment delivery, 3 or more
separate treatment areas, custom
blocking, tangential ports, wedges,
rotational beam, compensators, electron
beam; 6-10 MeV.
77414........................ Radiation treatment delivery, 3 or more
separate treatment areas, custom
blocking, tangential ports, wedges,
rotational beam, compensators, electron
beam; 11-19 MeV.
77416........................ Radiation treatment delivery, 3 or more
separate treatment areas, custom
blocking, tangential ports, wedges,
rotational beam, compensators, electron
beam; 20 MeV or greater.
77417........................ Therapeutic radiology port film(s).
77418........................ Intensity modulated treatment delivery,
single or multiple fields/arcs, via
narrow spatially and temporally
modulated beams, binary, dynamic MLC,
per treatment session.
------------------------------------------------------------------------
Response: Although the APC Panel provides valuable advice with
regard to the establishment of OPPS payment policies and payment rates,
the APC Panel does not, as the commenter suggested, determine what
services are packaged under the OPPS or establish OPPS payment rates.
We adopt the OPPS payment policies regarding packaging and other issues
and establish payment rates through the annual rulemaking cycle.
In general, payment for a packaged HCPCS code is included in the
payment for the independent service with which it is associated, to the
extent that the cost of the packaged service is reflected on the single
procedure claims that are used to calculate the median cost for the
independent, separately paid service. We intend to further examine the
packaging of image-guidance for radiation therapy in the analyses of
the impact of packaging that we plan to discuss with the APC Panel at
the winter 2010 meeting. However, as we describe earlier in this
section, we make available a considerable amount of data for public
analysis each year, provide the claims we use to calculate median
costs, and provide a detailed narrative description of our data process
that the public can use to analyze any topic of interest to them.
Comment: One commenter supported CMS' goal of increased efficiency
in hospital outpatient care. However, the commenter was concerned that
packaging payment for services too soon could create access problems
for technologies that would otherwise improve patient outcomes and
reduce costs. The commenter urged CMS to reinstate separate payment in
CY 2010 for ICE, FFR, and IVUS until a thorough analysis has been
performed on the impact of packaging payment for these services,
including the rate of change in their utilization over time and market
penetration.
[[Page 60417]]
Response: As discussed earlier in this section, in response to the
request from the APC Panel that CMS evaluate the impact of expanded
packaging on Medicare beneficiaries, we analyzed 9 months of CY 2007
and CY 2008 data related to all services that were packaged during CY
2008. Analysis of the intraoperative category (which includes IVUS,
ICE, and FFR) showed minimal changes in the frequency and the number of
hospitals reporting these packaged services between CY 2007 and CY
2008. The IVUS, ICE, and FFR services studied specifically included CPT
codes 37250 (Intravascular ultrasound (non-coronary vessel) during
diagnostic evaluation and/or therapeutic intervention; initial vessel);
37251 (Intravascular ultrasound (non-coronary vessel) during diagnostic
evaluation and/or therapeutic intervention; each additional vessel);
92978 (Intravascular ultrasound (coronary vessel or graft) during
diagnostic evaluation and/or therapeutic intervention including imaging
supervision, interpretation and report; initial vessel); 92979
(Intravascular ultrasound (coronary vessel or graft) during diagnostic
evaluation and/or therapeutic intervention including imaging
supervision, interpretation and report; each additional vessel); 93662
(Intracardiac echocardiography during therapeutic/diagnostic
intervention, including imaging supervision and interpretation); 93571
(Intravascular Doppler velocity and/or pressure derived coronary flow
reserve measurement (coronary vessel or graft) during coronary
angiography including pharmacologically induced stress, initial
vessel); and 93572 (Intravascular Doppler velocity and/or pressure
derived coronary flow reserve measurement (coronary vessel or graft)
during coronary angiography including pharmacologically induced stress,
each additional vessel).
As discussed previously, in February 2009 we presented an analysis
to the APC Panel that showed an increase of 8 percent in the number of
services billed and an increase in aggregate payment of 25 percent in
CY 2008, when IVUS, ICE and FFR were packaged, in comparison to CY 2007
when IVUS, ICE and FFR were paid separately. Additionally, we intend to
continue our analysis of the impact of greater packaging on Medicare
beneficiaries and to present additional data to the APC Panel at the
winter 2010 meeting.
We note that IVUS, ICE, and FFR services are existing, established
technologies and that hospitals have provided some of these services in
the HOPD since the implementation of the OPPS in CY 2000. IVUS, FFR,
and ICE are all dependent services that are always provided in
association with independent services. Given the increase in the number
of services furnished and the associated payment between CY 2007 and CY
2008, we have seen no evidence from our claims data that beneficiary
access to care is being harmed by packaging payment for IVUS, ICE, and
FFR services. We believe that packaging creates appropriate incentives
for hospitals and their physician partners to carefully consider the
technologies that are used in the care of patients, in order to ensure
that technologies are selected for use in each case based on their
expected benefit to a particular Medicare beneficiary.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposals, without modification, to packaged
payment for the seven categories of services, including guidance
services, image processing services, intraoperative services, imaging
supervision and interpretation services, diagnostic
radiopharmaceuticals, contrast media, and observation services. We
refer readers to section V.B.2.d. of this final rule with comment
period for further discussion of our final policy to package payment
for contrast agents and diagnostic radiopharmaceuticals. We refer
readers to section II.A.2.e.(1) for further discussion of our final
policy to pay for observation services through extended assessment and
management composite APCs under certain circumstances. We plan to
discuss with the APC Panel additional analyses of the impact of
packaging these categories of services at the winter 2010 APC Panel
meeting.
(3) Other Service-Specific Packaging Issues
The APC Panel also recommended that CMS reassign CPT code 76098
(Radiological examination, surgical specimen) from APC 0317 (Level II
Miscellaneous Radiology Procedures) to APC 0260 (Level I Plain Film),
and to place CPT code 76098 on the bypass list. Based on our analysis
of the CY 2010 claims containing CPT 76098 and clinical review of the
services being furnished, in the CY 2010 OPPS/ASC proposed rule (74 FR
35241), we proposed to treat CPT code 76098 as a ``T- packaged'' code
for CY 2010 with continued assignment to APC 0317. As discussed above,
a ``T-packaged code,'' identified with status indicator ``Q2,''
describes a code whose payment is packaged when one or more separately
paid surgical procedures with a status indicator of ``T'' are provided
during the hospital encounter. The assignment of status indicator
``Q2'' to CPT code 76098 would result in more claims data being
available to set the median costs for the surgical procedures with
which CPT code 76098 is most commonly billed (for example, CPT code
19101 (Biopsy of breast, percutaneous, needle core, not using image
guidance; open incisional)), while continuing to provide appropriate
separate payment that reflects the costs of the service, including its
packaged costs, when it is not billed with a surgical procedure.
Further discussion related to the proposal is included in section
II.A.1.b. of this final rule with comment period.
Comment: One commenter requested that CPT code 76098 remain
separately payable instead of conditionally packaged. The commenter
acknowledged that radiological examination of a surgical specimen is
performed in conjunction with a surgical procedure most of the time but
asserted that when the service is conditionally packaged, surgical
procedure payment would not cover the cost of the radiological
examination of a surgical specimen.
Response: We continue to believe that when CPT code 76098 is
furnished on the same date of service as a major separately payable
procedure, CPT code 76098 is a dependent service that is ancillary and
supportive to the independent service with which it is performed and
that, therefore, it is most appropriate to package the cost of CPT code
76098 into the payment for the independent, separately paid procedure.
The full cost of CPT code 76098 is packaged into the cost of the
independent, separately paid procedure to the extent that the
hospital's charge for the packaged service, when reduced to cost by the
hospital's applicable CCR, results in an accurate reflection of the
cost of the packaged service. As we stated in the CY 2009 OPPS/ASC
final rule with comment period (74 FR 68575), we strongly encourage
hospitals to report a charge for each packaged service they furnish,
either by billing the packaged HCPCS code and a charge for that service
if separate reporting is consistent with CPT and CMS instructions, by
increasing the charge for the separately paid associated service to
include the charge for the packaged service, or by reporting the charge
for the packaged service with an appropriate revenue code but without a
HCPCS code. Any of these means of charging for the packaged service
will result in the costs of the packaged service being incorporated
into the cost we estimate for the separately paid
[[Page 60418]]
service. We note that further discussion of CPT code 76098 as it
relates to the commenters' requests to add this code to the bypass list
is included in section II.A.1.b. of this final rule with comment
period.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to assign CPT
code 76098 status indicator ``Q2'' to signify that the service is
packaged when it is reported with a separately paid procedure that has
a status indicator of ``T'' on the same date of service and separately
paid under APC 0317 when it is not reported on the same date of service
with a separately paid surgical procedure that has a status indicator
of ``T.'' The final CY 2010 APC median cost of APC 0317 is
approximately $374.
Comment: A number of commenters disagreed with CMS' proposal to
package electrodiagnostic guidance for chemodenervation procedures. The
commenters asserted that paying chemodenervation procedures at the same
rate, regardless of the use of electrodiagnostic guidance, may
discourage providers from using guidance to place a needle filled with
a potentially fatal substance like botulinum toxin. They urged CMS to
consider providing a separate payment for electrodiagnostic needle
guidance to ensure that quality of care is not compromised.
Response: While the commenters did not identify specific
chemodenervation guidance CPT codes, we note that the costs of
chemodenervation guidance services, specifically CPT codes 95873
(Electrical stimulation for guidance in conjunction with
chemodenervation (List separately in addition to code for primary
procedure)) and 95874 (Needle electromyography for guidance in
conjunction with chemodenervation (list separately in addition to code
for primary procedure)) are reflected in the median costs of the
independent, separately paid chemodenervation procedures as a function
of the frequency that chemodenervation services are reported with a
particular guidance CPT code. We recognize that, in some cases,
supportive and ancillary dependent services are furnished at a high
frequency with independent services, and in other cases, they are
furnished with independent services at a low frequency. Nonetheless, we
believe that packaging should reflect the reality of how these services
are furnished. Moreover, we believe that hospitals make prudent and
appropriate patient care decisions with regard to when they furnish
packaged services.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to
unconditionally package payment for chemodenervation guidance services
described by CPT codes 95873 and 95874. These CPT codes are, therefore,
assigned status indicator ``N'' in Addendum B to this final rule with
comment period.
Comment: One commenter objected to the assignment of status
indicator ``N'' to a number of guidance procedures and requested that
CMS conditionally packaged these services so that they could be paid
separately if they are the only services furnished in a hospital
encounter. The commenter believed that it is not appropriate that the
hospital receives no payment when these services are furnished in
preparation for a surgical procedure that is canceled after the
services have been furnished but before the patient is taken to the
operating room. The procedures of concern to the commenter include CPT
codes 19290 (Preoperative placement of needle localization wire,
breast;); 19291 (Preoperative placement of needle localization wire,
breast; each additional lesion (List separately in addition to code for
primary procedure)); 19295 (Image guided placement, metallic
localization clip, percutaneous, during breast biopsy (List separately
in addition to code for primary procedure)); 77031 (Stereotactic
localization guidance for breast biopsy or needle placement (e.g., for
wire localization or for injection), each lesion, radiological
supervision and interpretation)); 77032 (Mammographic guidance for
needle placement, breast (e.g., for wire localization or for
injection), each lesion, radiological supervision and interpretation);
and 76942 (Ultrasonic guidance for needle placement (e.g., biopsy,
aspiration, injection, localization device), imaging supervision and
interpretation).
Response: We appreciate the commenter's submission of this clinical
scenario for our review. The APC Panel Packaging Subcommittee provides
substantive advice to us on the packaging of services, either
conditionally or unconditionally under the OPPS, and the Subcommittee
members bring broad and deep expertise and experience to their review
of clinical scenarios. Therefore, we will review these services and the
scenario described by the commenter with the APC Panel's Packaging
Subcommittee at the winter 2010 APC Panel meeting.
After review of the public comment we received, we are finalizing
our CY 2010 proposal, without modification, to unconditionally package
payment for CPT codes 19290, 19291, 19295, 77031, 77032, and 76942.
These CPT codes are assigned status indicator ``N'' in Addendum B to
this final rule with comment period. We will review the OPPS treatment
of these CPT codes with the APC Panel Packaging Subcommittee at the
winter 2010 APC Panel meeting.
Comment: One commenter suggested that it is very challenging for
hospitals to determine they were paid correctly for services furnished
because of CMS' ``Q'' status indicators and the complexity of
determining which HCPCS codes should be separately paid. The commenter
asked that CMS make the claims processing system more transparent.
Response: We acknowledge that the OPPS is a complex payment system
and that it is difficult to determine the correct payment for a service
that is subject to conditional packaging. Addendum D1 to this final
rule with comment period describes how services that appear in Addendum
B with status indicators ``Q1,'' ``Q2,'' and ``Q3'' are treated in
claims processing. In the case of conditionally packaged codes with
status indicators ``Q1'' or ``Q2,'' where the criteria for separate
payment are not met, these codes are treated as packaged services. We
assign status indicators ``Q1'' and ``Q2'' to conditionally packaged
services to indicate that they are usually packaged, except for special
circumstances when they are separately payable. Through the I/OCE
claims processing logic, the status indicator of a conditionally
packaged service reported on a claim is changed either to ``N'' or the
status indicator of the APC to which the code is assigned for separate
payment, depending upon the presence or absence of other OPPS services
also reported on the claim with the same date of service. Status
indicator ``Q3'' indicates that the code is a member of a composite
APC. Addendum M includes the HCPCS codes for all services that are paid
either through single code APCs or composite APCs when the criteria for
composite APC payment are met. A full discussion of the composite
criteria for each composite APC (to which status indicator ``Q3''
applies) is included in section II.A.2.e. of this final rule with
comment period.
In addition to the availability of these resources that describe
whether a service is separately payable or packaged (in the case of
services with status indicators ``Q1'' or ``Q2'') or a member of a
composite APC (in the case of services with status indicator ``Q3''),
the quarterly I/OCE and the OPPS Pricer that are used by the Fiscal
Intermediary
[[Page 60419]]
Standard System (FISS) to process claims paid under the OPPS are both
available to the public each calendar quarter. The I/OCE instructions
and specifications that are utilized for OPPS and non-OPPS payment for
hospital outpatient services are available quarterly for download on
the CMS Web site at: http://www.cms.hhs.gov/OutpatientCodeEdit/02_OCEQtrReleaseSpecs.asp#TopOfPage. Providers interested in purchasing
the I/OCE software should visit the authorized distributor's Web site
at http://www.ntis.gov/products/oceapc.aspx for more information on how
to obtain the software. There is no OPPS Pricer application for
personal computers at this time. However, providers can download the
files that contain the logic, rates, wage indices, and off-set amounts
used by the OPPS Pricer program to calculate APC rates, copayments, and
deductibles from the CMS Web site at: http://www.cms.hhs.gov/PCPricer/08_OPPS.asp.
B. Conversion Factor Update
Section 1833(t)(3)(C)(ii) of the Act requires us to update the
conversion factor used to determine payment rates under the OPPS on an
annual basis. Under the authority in section 1833(t)(3)(C)(iv) of the
Act, for CY 2010, the update is equal to the hospital inpatient market
basket percentage increase applicable to hospital discharges under
section 1886(b)(3)(B)(iii) of the Act. The final hospital market basket
increase for FY 2010 published in the FY 2010 IPPS/LTCH PPS final rule
(74 FR 44002) is 2.1 percent. To set the OPPS conversion factor for CY
2010, we increased the CY 2009 conversion factor of $66.059, as
specified in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68584 through 68585), by 2.1 percent. Hospitals that fail to meet the
reporting requirements of the Hospital Outpatient Quality Data
Reporting Program (HOP QDRP) are subject to a reduction of 2.0
percentage points from the market basket update to the conversion
factor. For a complete discussion of the HOP QDRP requirements and the
payment reduction for hospitals that fail to meet those requirements,
we refer readers to section XVI. of this final rule with comment
period.
In accordance with section 1833(t)(9)(B) of the Act, we further
adjusted the conversion factor for CY 2010 to ensure that any revisions
we made to our updates for a revised wage index and rural adjustment
are made on a budget neutral basis. We calculated an overall budget
neutrality factor of 0.9997 for wage index changes by comparing total
payments from our simulation model using the FY 2010 IPPS final wage
index values to those payments using the current (FY 2009) IPPS wage
index values. For CY 2010, we did not propose a change to our rural
adjustment policy. Therefore, the budget neutrality factor for the
rural adjustment is 1.0000.
For this final rule with comment period, we estimated that pass-
through spending for both drugs and biologicals and devices for CY 2010
will equal approximately $45.5 million, which represents 0.14 percent
of total projected CY 2010 OPPS spending. Therefore, the conversion
factor was also adjusted by the difference between the 0.11 percent
estimate of pass-through spending set aside for CY 2009 and the 0.14
percent estimate of CY 2010 pass-through spending. Finally, estimated
payments for outliers remain at 1.0 percent of total OPPS payments for
CY 2010.
The market basket increase update factor of 2.1 percent for CY
2010, the required wage index budget neutrality adjustment of
approximately 0.9997, and the adjustment of 0.03 percent of projected
OPPS spending for the difference in the pass-through spending set aside
resulted in a full market basket conversion factor for CY 2010 of
$67.406. To calculate the CY 2010 reduced market basket conversion
factor for those hospitals that fail to meet the requirements of the
HOP QDRP for the full CY 2010 payment update, we made all other
adjustments discussed above, but used a reduced market basket increase
update factor of 0.1 percent. This resulted in a reduced market basket
conversion factor for CY 2010 of $66.086 for those hospitals that fail
to meet the HOP QDRP requirements.
We did not receive any public comments on the calculation of the
conversion factor. Therefore, we are finalizing our CY 2010 proposal,
without modification, to update the OPPS conversion factor by the FY
2010 IPPS market basket increase update factor of 2.1 percent,
resulting in a final full conversion factor of $67.406 and in a reduced
conversion factor of $66.086 for those hospitals that fail to meet the
HOP QDRP reporting requirements for the full CY 2010 payment update.
C. Wage Index Changes
Section 1833(t)(2)(D) of the Act requires the Secretary to
determine a wage adjustment factor to adjust, for geographic wage
differences, the portion of the OPPS payment rate, which includes the
copayment standardized amount, that is attributable to labor and labor-
related cost. This adjustment must be made in a budget neutral manner
and budget neutrality is discussed in section II.B. of this final rule
with comment period.
The OPPS labor-related share is 60 percent of the national OPPS
payment. This labor-related share is based on a regression analysis
that determined that approximately 60 percent of the costs of services
paid under the OPPS were attributable to wage costs. We confirmed that
this labor-related share for outpatient services is still appropriate
during our regression analysis for the payment adjustment for rural
hospitals in the CY 2006 OPPS final rule with comment period (70 FR
68553). Therefore, in the CY 2010 OPPS/ASC proposed rule (74 FR 35291),
we did not propose to revise this policy for the CY 2010 OPPS. We refer
readers to section II.G. of this final rule with comment period for a
description and example of how the wage index for a particular hospital
is used to determine the payment for the hospital.
As discussed in section II.A.2.c. of this final rule with comment
period, for estimating national median APC costs, we standardize 60
percent of estimated claims costs for geographic area wage variation
using the same FY 2010 pre-reclassified wage indices that the IPPS uses
to standardize costs. This standardization process removes the effects
of differences in area wage levels from the determination of a national
unadjusted OPPS payment rate and the copayment amount.
As published in the original OPPS April 7, 2000 final rule with
comment period (65 FR 18545), the OPPS has consistently adopted the
final IPPS wage indices as the wage indices for adjusting the OPPS
standard payment amounts for labor market differences. Thus, the wage
index that applies to a particular acute care short-stay hospital under
the IPPS also applies to that hospital under the OPPS. As initially
explained in the September 8, 1998 OPPS proposed rule, we believed and
continue to believe that using the IPPS wage index as the source of an
adjustment factor for the OPPS is reasonable and logical, given the
inseparable, subordinate status of the HOPD within the hospital
overall. In accordance with section 1886(d)(3)(E) of the Act, the IPPS
wage index is updated annually. Therefore, in accordance with our
established policy, we proposed to use the final FY 2010 version of the
IPPS wage indices used to pay IPPS hospitals to adjust the CY 2010 OPPS
payment rates and copayment amounts for geographic differences in labor
cost for all providers that participate in the
[[Page 60420]]
OPPS, including providers that are not paid under the IPPS (referred to
in this section as ``non-IPPS'' providers).
We note that the final FY 2010 IPPS wage indices continue to
reflect a number of adjustments implemented over the past few years,
including revised Office of Management and Budget (OMB) standards for
defining geographic statistical areas (Core-Based Statistical Areas or
CBSAs), reclassification to different geographic areas, rural floor
provisions and the accompanying budget neutrality adjustment, an
adjustment for out-migration labor patterns, an adjustment for
occupational mix, and a policy for allocating hourly wage data among
campuses of multicampus hospital systems that cross CBSAs. For the FY
2010 wage indices, these changes include a continuing transition to the
new reclassification threshold criteria that were finalized in the FY
2009 IPPS final rule (73 FR 48568 through 48570), updated 2007-2008
occupational mix survey data, and a continuing transition to state-
level budget neutrality for the rural and imputed floors. We refer
readers to the FY 2010 IPPS/LTCH PPS final rule (74 FR 43823) for a
detailed discussion of all final changes to the FY 2010 IPPS wage
indices. In addition, we refer readers to the CY 2005 OPPS final rule
with comment period (69 FR 65842 through 65844) and subsequent OPPS
rules for a detailed discussion of the history of these wage index
adjustments as applied under the OPPS.
The IPPS wage indices that we proposed to adopt in the CY 2010
OPPS/ASC proposed rule (74 FR 35291) include all reclassifications that
are approved by the Medicare Geographic Classification Review Board
(MGCRB) for FY 2010.
As noted in the CY 2009 OPPS/ASC final rule with comment period (73
FR 68585), after issuance of the CY 2009 OPPS/ASC proposed rule,
section 124 of Public Law 110-275 further extended geographic
reclassifications under section 508 and certain special exception
reclassifications until September 30, 2009. We did not make any
proposals related to these provisions for the CY 2009 OPPS wage indices
in our CY 2009 proposed rule because Public Law 110-275 was enacted
after issuance of the CY 2009 OPPS/ASC proposed rule. In accordance
with section 124 of Public Law 110-275, for CY 2009, we adopted all
section 508 geographic reclassifications through September 30, 2009.
Similar to our treatment of section 508 reclassifications extended
under Public Law 110-173 as described in the CY 2009 OPPS/ASC final
rule with comment period (73 FR 68586), hospitals with section 508
reclassifications revert to their home area wage index, with out-
migration adjustment if applicable, or a current MGCRB
reclassification, from October 1, 2009 to December 31, 2009. As we did
for CY 2008, we also have extended the special exception wage indices
for certain hospitals through December 31, 2009, under the OPPS, in
order to give these hospitals the special exception wage indices under
the OPPS for the same time period as under the IPPS. We refer readers
to the Federal Register notice published subsequent to the FY 2009 IPPS
final rule for a detailed discussion of the changes to the wage indices
as required by section 124 of Public Law 110-275 (73 FR 57888). Because
the provisions of section 124 of Public Law 110-275 expire in 2009 and
are not applicable to FY 2010, we did not make any proposals related to
those provisions for the OPPS wage indices for CY 2010.
For purposes of the OPPS, we proposed to continue our policy in CY
2010 to allow non-IPPS hospitals paid under the OPPS to qualify for the
out-migration adjustment if they are located in a section 505 out-
migration county. We note that because non-IPPS hospitals cannot
reclassify, they are eligible for the out-migration wage adjustment.
Table 4J in the FY 2010 IPPS final rule (74 FR 44118 through 44125), as
subsequently corrected at 74 FR 51506, identifies counties eligible for
the out-migration adjustment and providers receiving the adjustment. As
we have done in prior years, we are reprinting Table 4J, as corrected,
as Addendum L to this final rule with comment period, with the addition
of non-IPPS hospitals that will receive the section 505 out-migration
adjustment under the CY 2010 OPPS.
As stated earlier in this section, we continue to believe that
using the IPPS wage indices as the source of an adjustment factor for
the OPPS is reasonable and logical, given the inseparable, subordinate
status of the HOPD within the hospital overall. Therefore, we proposed
to use the final FY 2010 IPPS wage indices for calculating the OPPS
payments in CY 2010. With the exception of the out-migration wage
adjustment table (Addendum L to this final rule with comment period),
which includes non-IPPS hospitals paid under the OPPS, we are not
reprinting the FY 2010 IPPS final wage indices referenced in this
discussion of the wage index. We refer readers to the CMS Web site for
the OPPS at: http://www.cms.hhs.gov/HospitalOutpatientPPS/. At this
link, readers will find a link to the FY 2010 IPPS final wage index
tables.
Comment: Several commenters expressed support for the CMS proposal
to extend the IPPS wage indices to the OPPS in CY 2010, consistent with
prior year policies under the OPPS.
Response: We appreciate the support expressed by commenters for our
proposed CY 2010 wage index policies.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to use the final
FY 2010 IPPS wage indices to adjust the OPPS standard payment amounts
for labor market differences.
D. Statewide Average Default CCRs
In addition to using CCRs to estimate costs from charges on claims
for ratesetting, CMS uses overall hospital-specific CCRs calculated
from the hospital's most recent cost report to determine outlier
payments, payments for pass-through devices, and monthly interim
transitional corridor payments under the OPPS during the PPS year.
Medicare contractors cannot calculate a CCR for some hospitals because
there is no cost report available. For these hospitals, CMS uses the
statewide average default CCRs to determine the payments mentioned
above until a hospital's Medicare contractor is able to calculate the
hospital's actual CCR from its most recently submitted Medicare cost
report. These hospitals include, but are not limited to, hospitals that
are new, have not accepted assignment of an existing hospital's
provider agreement, and have not yet submitted a cost report. CMS also
uses the statewide average default CCRs to determine payments for
hospitals that appear to have a biased CCR (that is, the CCR falls
outside the predetermined ceiling threshold for a valid CCR) or for
hospitals whose most recent cost report reflects an all-inclusive rate
status (Medicare Claims Processing Manual, Pub. 100-04, Chapter 4,
Section 10.11). In the CY 2010 OPPS/ASC proposed rule (74 FR 35292), we
proposed to update the default ratios for CY 2010 using the most recent
cost report data. We discuss our policy for using default CCRs,
including setting the ceiling threshold for a valid CCR, in the CY 2009
OPPS/ASC final rule with comment period (73 FR 68594 through 68599) in
the context of our adoption of an outlier reconciliation policy for
cost reports beginning on or after January 1, 2009.
For CY 2010, we used our standard methodology of calculating the
statewide average default CCRs using the same hospital overall CCRs
that we
[[Page 60421]]
use to adjust charges to costs on claims data for setting the CY 2010
proposed OPPS relative weights. Table 12 that was published in the CY
2010 OPPS/ASC proposed rule (74 FR 35293 through 35294) listed the
proposed CY 2010 default urban and rural CCRs by State and compared
them to last year's default CCRs. These CCRs are the ratio of total
costs to total charges from each hospital's most recently submitted
cost report, for those cost centers relevant to outpatient services
weighted by Medicare Part B charges. We also adjusted ratios from
submitted cost reports to reflect final settled status by applying the
differential between settled to submitted overall CCR for the cost
centers relevant to outpatient services from the most recent pair of
final settled and submitted cost reports. We then weighted each
hospital's CCR by the volume of separately paid line-items on hospital
claims corresponding to the year of the majority of cost reports used
to calculate the overall CCRs. We refer readers to the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66680 through 66682) and prior
OPPS rules for a more detailed discussion of our established
methodology for calculating the statewide average default CCRs,
including the hospitals used in our calculations and our trimming
criteria.
For this CY 2010 OPPS/ASC final rule with comment period,
approximately 44 percent of the submitted cost reports utilized in the
default ratio calculations represented data for cost reporting periods
ending in CY 2008 and 55 percent were for cost reporting periods ending
in CY 2007. For Maryland, we used an overall weighted average CCR for
all hospitals in the nation as a substitute for Maryland CCRs. Few
hospitals in Maryland are eligible to receive payment under the OPPS,
which limits the data available to calculate an accurate and
representative CCR. In general, observed changes in the statewide
average default CCRs between CY 2009 and CY 2010 are modest and the few
significant changes are associated with areas that have a small number
of hospitals.
We did not receive any public comments concerning our CY 2010
proposal to apply our standard methodology of calculating the statewide
average default CCRs using the same hospital overall CCRs that we use
to adjust charges to costs on claims data for setting the CY 2010
proposed OPPS relative weights. Therefore, we are finalizing the
statewide average default CCRs as shown in Table 17 below for OPPS
services furnished on or after January 1, 2010.
BILLING CODE 4120-01-P
[[Page 60422]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.031
[[Page 60423]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.032
[[Page 60424]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.033
BILLING CODE 4120-01-C
E. OPPS Payment to Certain Rural and Other Hospitals
1. Hold Harmless Transitional Payment Changes Made by Public Law 110-
275 (MIPPA)
When the OPPS was implemented, every provider was eligible to
receive an additional payment adjustment (called either transitional
corridor payments or transitional outpatient payment (TOPs)) if the
payments it received for covered OPD services under the OPPS were less
than the payments it would have received for the same services under
the
[[Page 60425]]
prior reasonable cost-based system (referred to as the pre-BBA amount).
Section 1833(t)(7) of the Act provides that the transitional corridor
payments are temporary payments for most providers and were intended to
ease their transition from the prior reasonable cost-based payment
system to the OPPS system. There are two exceptions to this provision,
cancer hospitals and children's hospitals, and those hospitals receive
the transitional corridor payments on a permanent basis. Section
1833(t)(7)(D)(i) of the Act originally provided for transitional
corridor payments to rural hospitals with 100 or fewer beds for covered
OPD services furnished before January 1, 2004. However, section 411 of
Public Law 108-173 amended section 1833(t)(7)(D)(i) of the Act to
extend these payments through December 31, 2005, for rural hospitals
with 100 or fewer beds. Section 411 also extended the transitional
corridor payments to SCHs located in rural areas for services furnished
during the period that began with the provider's first cost reporting
period beginning on or after January 1, 2004, and ended on December 31,
2005. Accordingly, the authority for making transitional corridor
payments under section 1833(t)(7)(D)(i) of the Act, as amended by
section 411 of Public Law 108-173, for rural hospitals having 100 or
fewer beds and SCHs located in rural areas expired on December 31,
2005.
Section 5105 of Public Law 109-171 reinstituted the TOPs for
covered OPD services furnished on or after January 1, 2006, and before
January 1, 2009, for rural hospitals having 100 or fewer beds that are
not SCHs. When the OPPS payment was less than the provider's pre-BBA
amount, the amount of payment was increased by 95 percent of the amount
of the difference between the two payment systems for CY 2006, by 90
percent of the amount of that difference for CY 2007, and by 85 percent
of the amount of that difference for CY 2008.
For CY 2006, we implemented section 5105 of Public Law 109-171
through Transmittal 877, issued on February 24, 2006. In the
Transmittal, we did not specifically address whether TOPs apply to
essential access community hospitals (EACHs), which are considered to
be SCHs under section 1886(d)(5)(D)(iii)(III) of the Act. Accordingly,
under the statute, EACHs are treated as SCHs. In the CY 2007 OPPS/ASC
final rule with comment period (71 FR 68010), we stated that EACHs were
not eligible for TOPs under Public Law 109-171. However, we stated they
were eligible for the adjustment for rural SCHs. In the CY 2007 OPPS/
ASC final rule with comment period (71 FR 68010 and 68228), we updated
Sec. 419.70(d) of our regulations to reflect the requirements of
Public Law 109-171.
In the CY 2009 OPPS/ASC proposed rule (73 FR 41461), we stated
that, effective for services provided on or after January 1, 2009,
rural hospitals having 100 or fewer beds that are not SCHs would no
longer be eligible for TOPs, in accordance with section 5105 of Public
Law 109-171. However, subsequent to issuance of the CY 2009 OPPS/ASC
proposed rule, section 147 of Public Law 110-275 amended section
1833(t)(7)(D)(i) of the Act by extending the period of TOPs to rural
hospitals with 100 beds or fewer for 1 year, for services provided
before January 1, 2010. Section 147 of Public Law 110-275 also extended
TOPs to SCHs (including EACHs) with 100 or fewer beds for covered OPD
services provided on or after January 1, 2009, and before January 1,
2010. In accordance with section 147 of Public Law 110-275, when the
OPPS payment is less than the provider's pre-BBA amount, the amount of
payment is increased by 85 percent of the amount of the difference
between the two payment systems for CY 2009.
For CY 2009, we revised our regulations at Sec. Sec. 419.70(d)(2)
and (d)(4) and added a new paragraph (d)(5) to incorporate the
provisions of section 147 of Public Law 110-275. In addition, we made
other technical changes to Sec. 419.70(d)(2) to more precisely capture
our existing policy and to correct an inaccurate cross-reference. We
also made technical corrections to the cross-references in paragraphs
(e), (g), and (i) of Sec. 419.70. In the CY 2010 OPPS/ASC proposed
rule (74 FR 35295), for CY 2010, we proposed to make a technical
correction to the heading of Sec. 419.70(d)(5) to correctly identify
the policy as described in the subsequent regulation text. The
paragraph heading should indicate that the adjustment applies to small
SCHs, rather than to rural SCHs.
Effective for services provided on or after January 1, 2010, rural
hospitals and SCHs (including EACHs) having 100 or fewer beds will no
longer be eligible for hold harmless TOPs, in accordance with section
147 of Public Law 110-275.
2. Adjustment for Rural SCHs Implemented in CY 2006 Related to Public
Law 108-173 (MMA)
In the CY 2006 OPPS final rule with comment period (70 FR 68556),
we finalized a payment increase for rural SCHs of 7.1 percent for all
services and procedures paid under the OPPS, excluding drugs,
biologicals, brachytherapy sources, and devices paid under the pass-
through payment policy in accordance with section 1833(t)(13)(B) of the
Act, as added by section 411 of Public Law 108-173. Section 411 gave
the Secretary the authority to make an adjustment to OPPS payments for
rural hospitals, effective January 1, 2006, if justified by a study of
the difference in costs by APC between hospitals in rural areas and
hospitals in urban areas. Our analysis showed a difference in costs for
rural SCHs. Therefore, for the CY 2006 OPPS, we finalized a payment
adjustment for rural SCHs of 7.1 percent for all services and
procedures paid under the OPPS, excluding separately payable drugs and
biologicals, brachytherapy sources, and devices paid under the pass-
through payment policy, in accordance with section 1833(t)(13)(B) of
the Act.
In CY 2007, we became aware that we did not specifically address
whether the adjustment applies to EACHs, which are considered to be
SCHs under section 1886(d)(5)(D)(iii)(III) of the Act. Thus, under the
statute, EACHs are treated as SCHs. Therefore, in the CY 2007 OPPS/ASC
final rule with comment period (71 FR 68010 and 68227), for purposes of
receiving this rural adjustment, we revised Sec. 419.43(g) to clarify
that EACHs are also eligible to receive the rural SCH adjustment,
assuming these entities otherwise meet the rural adjustment criteria.
Currently, fewer than 10 hospitals are classified as EACHs and as of CY
1998, under section 4201(c) of Public Law 105-33, a hospital can no
longer become newly classified as an EACH.
This adjustment for rural SCHs is budget neutral and applied before
calculating outliers and copayment. As stated in the CY 2006 OPPS final
rule with comment period (70 FR 68560), we would not reestablish the
adjustment amount on an annual basis, but we may review the adjustment
in the future and, if appropriate, would revise the adjustment. We
provided the same 7.1 percent adjustment to rural SCHs, including
EACHs, again in CY 2008 and CY 2009. Further, in the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68590), we updated the
regulations at Sec. 419.43(g)(4) to specify, in general terms, that
items paid at charges adjusted to costs by application of a hospital-
specific CCR are excluded from the 7.1 percent payment adjustment.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35295), for the CY
2010 OPPS, we proposed to continue our policy of a budget neutral 7.1
percent payment adjustment for rural SCHs, including EACHs, for all
services and procedures paid under the OPPS,
[[Page 60426]]
excluding separately payable drugs and biologicals, devices paid under
the pass-through payment policy, and items paid at charges reduced to
costs. We intend to reassess the 7.1 percent adjustment in the near
future by examining differences between urban and rural hospitals'
costs using updated claims, cost reports, and provider information.
Comment: A number of commenters generally supported the proposal to
continue the rural SCH (including EACHs) adjustment for CY 2010 OPPS.
Several commenters also asked that CMS extend for CY 2010 the TOPs
payment policies that were in effect for CY 2009. The commenters
recommended that CMS evaluate the differences in cost between urban and
rural hospitals over an extended 3-year period using updated claims,
cost reports, and provider information. They further suggested that,
during the 3-year period in which CMS would be gathering data, CMS pay
SCHs and rural hospitals with less than 100 beds that are not SCHs the
greater of the TOPs payment in effect for CY 2009 or the OPPS payment
for the applicable calendar year plus the 7.1 percent rural adjustment,
whichever is greater. The commenters claimed that CMS' reversal of the
TOPs allowance after only 1 year of reimplementation for certain rural
hospitals was unreasonable and could irreparably harm those rural
hospitals absent a safety net mechanism in place.
Response: We agree that it is appropriate to continue the 7.1
percent adjustment for rural SCHs (including EACHs) as we proposed for
CY 2010. However, we are not extending the CY 2009 TOPs payment
policies for rural hospitals with 100 beds or less and for SCHs
(including EACHs) with 100 or fewer beds for CY 2010. Section
1833(t)(7)(D)(i)(II) of the Act provides that, in the case of a
hospital located in a rural area with 100 beds or fewer and that is not
a sole community hospital, for covered OPD services furnished on or
after January 1, 2006 and before January 1, 2010, for which the PPS
amount is less than the pre-BBA amount, the amount of payment should be
increased by the applicable percentage of the amount of such
difference. Section 1833(t)(7)(D)(i)(III) of the Act also extends TOPs
to SCHs (including EACHs) with 100 or fewer beds for covered OPD
services provided on or after January 1, 2009 and before January 1,
2010, under the specific circumstances outlined in the statute.
Therefore, sections 1833(t)(D)(i)(II) and (III) of the Act specifically
expire TOPs payment to these categories of hospitals for services
furnished on and after January 1, 2010. Accordingly, in CY 2010,
neither rural SCHs nor rural hospitals with less than 100 beds will
receive payment at whichever is greater, the TOPs payment in place for
CY 2009 or payment for CY 2010, which includes the rural adjustment for
rural SCHs, because sections 1833(t)(7)(D)(i)(II) and (III) of the Act
expire TOPS payments as explained above. As we indicate above, we
intend to reassess the 7.1 percent rural adjustment in the near future
by examining differences between urban and rural hospitals' costs using
updated claims, cost reports, and provider information.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to apply the 7.1
percent payment adjustment to rural SCHs for most services paid under
the CY 2010 OPPS, excluding drugs, biologicals, and devices paid under
the pass-through payment policy, and items paid at charges adjusted to
cost. We also are making a technical correction to the heading of Sec.
419.70(d)(5) to correctly identify the policy described in the
regulation text of Sec. 419.70(d)(5). The paragraph heading indicates
that the adjustment applies to small SCHs, rather than to rural SCHs.
F. Hospital Outpatient Outlier Payments
1. Background
Currently, the OPPS pays outlier payments on a service-by-service
basis. For CY 2009, the outlier threshold is met when the cost of
furnishing a service or procedure by a hospital exceeds 1.75 times the
APC payment amount and exceeds the APC payment rate plus a $1,800
fixed-dollar threshold. We introduced a fixed-dollar threshold in CY
2005 in addition to the traditional multiple threshold in order to
better target outliers to those high cost and complex procedures where
a very costly service could present a hospital with significant
financial loss. If the cost of a service meets both of these
conditions, the multiple threshold and the fixed-dollar threshold, the
outlier payment is calculated as 50 percent of the amount by which the
cost of furnishing the service exceeds 1.75 times the APC payment rate.
Before CY 2009, this outlier payment had historically been considered a
final payment by longstanding OPPS policy. We implemented a
reconciliation process similar to the IPPS outlier reconciliation
process for cost reports with cost reporting periods beginning on or
after January 1, 2009 (73 FR 68594 through 68599).
It has been our policy for the past several years to report the
actual amount of outlier payments as a percent of total spending in the
claims being used to model the proposed OPPS. We previously estimated
that CY 2008 outlier payments were approximately 0.73 percent of the
total CY 2008 OPPS payments (73 FR 68592). Our current estimate of
total outlier payments as a percent of total CY 2008 OPPS payment,
using CY 2008 claims processed through June 30, 2009, and the revised
OPPS expenditure estimate for the 2009 Trustees Report, is
approximately 1.2 percent of the total aggregated OPPS payments.
Therefore, for CY 2008, we estimate that we paid approximately 0.2
percent more than the CY 2008 outlier target of 1.0 percent of total
aggregated OPPS payments.
As explained in the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68594), we set our projected target for aggregate outlier
payments at 1.0 percent of the aggregate total payments under the OPPS
for CY 2009. The outlier thresholds were set so that estimated CY 2009
aggregate outlier payments would equal 1.0 percent of the total
aggregated payments under the OPPS. Using our final rule CY 2008 claims
data and CY 2009 payment rates, we currently estimate that the
aggregate outlier payments for CY 2009 would be approximately 1.03
percent of the total CY 2009 OPPS payments. The difference between 1.0
percent and 1.03 percent is reflected in the regulatory impact analysis
in section XXI.B. of this final rule with comment period. We note that
we provide estimated CY 2010 outlier payments for hospitals and CMHCs
with claims included in the claims data that we used to model impacts
in the Hospital-Specific Impacts--Provider-Specific Data file on the
CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/.
2. Outlier Calculation
In the CY 2010 OPPS/ASC proposed rule (74 FR 35296), we proposed to
continue our policy of estimating outlier payments to be 1.0 percent of
the estimated aggregate total payments under the OPPS in CY 2010. We
proposed that a portion of that 1.0 percent, specifically 0.02 percent,
would be allocated to CMHCs for PHP outlier payments. This is the
amount of estimated outlier payments that would result from the
proposed CMHC outlier threshold as a proportion of total estimated
outlier payments. As discussed in section X.C. of this final rule with
comment period, for CMHCs, we proposed that if a CMHC's cost for
partial hospitalization services, paid under either APC 0172 (Level I
Partial
[[Page 60427]]
Hospitalization (3 services)) or APC 0173 (Level II Partial
Hospitalization (4 or more services)), exceeds 3.40 times the payment
for APC 0173, the outlier payment would be calculated as 50 percent of
the amount by which the cost exceeds 3.40 times the APC 0173 payment
rate. For further discussion of CMHC outlier payments, we refer readers
to section X.C. of this final rule with comment period.
To ensure that the estimated CY 2010 aggregate outlier payments
would equal 1.0 percent of estimated aggregate total payments under the
OPPS, we proposed that the hospital outlier threshold be set so that
outlier payments would be triggered when the cost of furnishing a
service or procedure by a hospital exceeds 1.75 times the APC payment
amount and exceeds the APC payment rate plus a $2,225 fixed-dollar
threshold. This proposed threshold reflected the methodology discussed
below in this section, as well as the proposed APC recalibration for CY
2010.
We calculated the fixed-dollar threshold for the CY 2010 OPPS/ASC
proposed rule using largely the same methodology as we did in CY 2009
(73 FR 41462). For purposes of estimating outlier payments for the CY
2010 OPPS/ASC proposed rule, we used the hospital-specific overall
ancillary CCRs available in the April 2009 update to the Outpatient
Provider-Specific File (OPSF). The OPSF contains provider-specific
data, such as the most current CCR, which are maintained by the
Medicare contractors and used by the OPPS Pricer to pay claims. The
claims that we use to model each OPPS update lag by 2 years. For the CY
2010 OPPS/ASC proposed rule, we used CY 2008 claims to model the CY
2010 OPPS. In order to estimate the CY 2010 hospital outlier payments
for the CY 2010 OPPS/ASC proposed rule, we inflated the charges on the
CY 2008 claims using the same inflation factor of 1.1511 that we used
to estimate the IPPS fixed-dollar outlier threshold for the FY 2010
IPPS/LTCH PPS proposed rule (74 FR 24245). For 1 year, the inflation
factor we used was 1.0729. The methodology for determining this charge
inflation factor was discussed in the FY 2010 IPPS/LTCH PPS proposed
rule (74 FR 24245). As we stated in the CY 2005 OPPS final rule with
comment period (69 FR 65845), we believe that the use of this charge
inflation factor is appropriate for the OPPS because, with the
exception of the routine service cost centers, hospitals use the same
cost centers to capture costs and charges across inpatient and
outpatient services.
As noted in the CY 2007 OPPS/ASC final rule with comment period (71
FR 68011), we are concerned that we could systematically overestimate
the OPPS hospital outlier threshold if we did not apply a CCR inflation
adjustment factor. Therefore, we proposed to apply the same CCR
inflation adjustment factor that we proposed to apply for the FY 2010
IPPS outlier calculation to the CCRs used to simulate the CY 2010 OPPS
outlier payments that determine the fixed-dollar threshold.
Specifically, for CY 2010, we proposed to apply an adjustment of 0.9840
to the CCRs that were in the April 2009 OPSF to trend them forward from
CY 2009 to CY 2010. The methodology for calculating this adjustment is
discussed in the FY 2010 IPPS/LTCH PPS proposed rule (74 FR 24245
through 24247) and the FY 2010 IPPS/LTCH PPS final rule (74 FR 44007
through 44011).
Therefore, to model hospital outlier payments for the CY 2010 OPPS/
ASC proposed rule, we applied the overall CCRs from the April 2009 OPSF
file after adjustment (using the proposed CCR inflation adjustment
factor of 0.9840 to approximate CY 2010 CCRs) to charges on CY 2008
claims that were adjusted (using the proposed charge inflation factor
of 1.1511 to approximate CY 2010 charges). We simulated aggregated CY
2010 hospital outlier payments using these costs for several different
fixed-dollar thresholds, holding the 1.75 multiple threshold constant
and assuming that outlier payment would continue to be made at 50
percent of the amount by which the cost of furnishing the service would
exceed 1.75 times the APC payment amount, until the total outlier
payments equaled 1.0 percent of aggregated estimated total CY 2010 OPPS
payments. We estimated that a proposed fixed-dollar threshold of
$2,225, combined with the proposed multiple threshold of 1.75 times the
APC payment rate, would allocate 1.0 percent of aggregated total OPPS
payments to outlier payments. We proposed to continue to make an
outlier payment that equals 50 percent of the amount by which the cost
of furnishing the service exceeds 1.75 times the APC payment amount
when both the 1.75 multiple threshold and the proposed fixed-dollar
$2,225 threshold are met. For CMHCs, if a CMHC's cost for partial
hospitalization services, paid under either APC 0172 or APC 0173,
exceeds 3.40 times the payment for APC 0173, the outlier payment would
be calculated as 50 percent of the amount by which the cost exceeds
3.40 times the APC 0173 payment rate.
Section 1833(t)(17)(A) of the Act, which applies to hospitals as
defined under section 1886(d)(1)(B) of the Act, requires that hospitals
that fail to report data required for the quality measures selected by
the Secretary, in the form and manner required by the Secretary under
1833(t)(17)(B) of the Act, incur a 2.0 percentage point reduction to
their OPD fee schedule increase factor, that is, the annual payment
update factor. The application of a reduced OPD fee schedule increase
factor results in reduced national unadjusted payment rates that will
apply to certain outpatient items and services furnished by hospitals
that are required to report outpatient quality data and that fail to
meet the HOP QDRP requirements. For hospitals that fail to meet the HOP
QDRP requirements, we proposed to continue our policy that we
implemented in CY 2009 that the hospitals' costs would be compared to
the reduced payments for purposes of outlier eligibility and payment
calculation. For more information on the HOP QDRP, we refer readers to
section XVI. of this final rule with comment period.
Comment: Several commenters supported the proposal to increase the
outlier fixed-dollar threshold to maintain a target outlier spending
percentage of 1.0 percent. One commenter requested that CMS not
overestimate the fixed-dollar outlier threshold by decreasing the CY
2010 proposed threshold proportionally to only account for the amount
Medicare paid in excess of the 1 percent target outlier percentage in
CY 2009. A few commenters suggested that the target outlier spending
percentage be raised. One commenter recommended that the target outlier
spending percentage be raised to maintain the $1,800 fixed-dollar
threshold that is in effect for CY 2009. Another commenter requested
that CMS increase the amount of outlier payment from 50 percent to 80
percent of the difference between the OPPS payment and the estimated
provider cost for the service to make OPPS outlier policy more
consistent with IPPS outlier policy. One commenter expressed concern
that changes in outlier payments disproportionately affected the safety
net hospitals. One commenter supported the proposal to use the same
assumptions regarding charge inflation and CCR inflation as under the
IPPS.
Response: We appreciate the commenters' support regarding the
development of the OPPS outlier policy. We are not raising the
threshold to recover the 0.03 percent of OPPS payment that we estimate
was paid in
[[Page 60428]]
addition to the target outlier percent of 1 percent for CY 2009 because
we do not adjust the fixed-dollar threshold in future years for either
paying too much or too little in outlier payments in past years. We are
not increasing the percent of total OPPS payment that we attribute to
outlier payments, either for general purposes or to maintain the $1,800
threshold for CY 2010, because we continue to believe that it is
appropriate to maintain the target outlier percentage of 1 percent of
total payment under the OPPS and to have a fixed-dollar threshold so
that OPPS outlier payments are made only where the hospital would
experience a significant loss for supplying a particular service.
Similarly, we are not increasing the outlier payment percentage from 50
percent to 80 percent of the difference between the amount by which the
cost of furnishing the service exceeds 1.75 times the APC payment rate
because we do not believe that hospitals carry the same level of risk
when they furnish outpatient hospital services as when they furnish
inpatient hospital services. OPPS outlier payments are intended to
protect hospitals from excessive losses when providing an
extraordinarily costly service, and we believe that the potential for
loss when furnishing OPPS services is limited. Payment bundles under
the OPPS are small relative to those under the IPPS, and the OPPS pays
separately for many services. The OPPS would pay hospitals for many
individual services provided to a very costly patient reducing their
financial risk. Patients for whom a hospital may incur extraordinary
costs for providing individual OPPS services would usually require
hospital admission. As described above, outlier payments are designed
to protect hospitals from financial risk in providing services to
costly patients, and are not designed to affect any specific hospital
classes, such as safety net hospitals. With regard to the application
of charge inflation factors, we agree that the charge inflation factors
that apply to inpatient hospitals services are equally applicable to
services provided under the OPPS. Therefore, as specified below, we are
applying the charge inflation factors that were used to calculate the
outlier fixed-dollar threshold for the IPPS in the calculation of the
fixed-dollar threshold for the CY 2010 OPPS.
Comment: Several commenters asked that CMS eliminate outlier
payments for CMHCs and use the funds allocated to outlier payments for
CMHCs to increase payments for services provided by CMHCs.
Response: Outlier payments to CMHCs are discussed in section X.C.
of this final rule with public comment. We respond to this comment as
part of that discussion.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal for the outlier calculation, without
modification, as outlined below.
3. Final Outlier Calculation
For CY 2010, we are applying the overall CCRs from the July 2009
OPSF file with a CCR adjustment factor of 0.988 to approximate CY 2010
CCRs to charges on the final CY 2008 claims that were adjusted to
approximate CY 2010 charges (using the final 2-year charge inflation
factor of 1.1418). We simulated aggregated CY 2010 hospital outlier
payments using these costs for several different fixed-dollar
thresholds, holding the 1.75 multiple threshold constant and assuming
that outlier payment would continue to be made at 50 percent of the
amount by which the cost of furnishing the service would exceed 1.75
times the APC payment amount, until the total outlier payments equaled
1.0 percent of aggregated estimated total CY 2010 OPPS payments. We
estimate that a fixed-dollar threshold of $2,175, combined with the
multiple threshold of 1.75 times the APC payment rate, will allocate
1.0 percent of aggregated total OPPS payments to outlier payments.
In summary, for CY 2010, we will continue to make an outlier
payment that equals 50 percent of the amount by which the cost of
furnishing the service exceeds 1.75 times the APC payment amount when
both the 1.75 multiple threshold and the final fixed-dollar $2,175
threshold are met. For CMHCs, if a CMHC's cost for PHP services, paid
under either APC 0172 or APC 0173, exceeds 3.40 times the payment for
APC 0173, the outlier payment is calculated as 50 percent of the amount
by which the cost exceeds 3.40 times the APC 0173 payment rate. We
estimate that this threshold will allocate 0.03 percent of outlier
payments to CMHCs for PHP outlier payments.
4. Outlier Reconciliation
In the CY 2009 OPPS/ASC final rule with comment period (73 CFR
68599), we adopted as final policy a process to reconcile hospital or
CMHC outlier payments at cost report settlement for services furnished
during cost reporting periods beginning in CY 2009. OPPS outlier
reconciliation ensures accurate outlier payments for those facilities
whose CCRs fluctuate significantly relative to the CCRs of other
facilities, and who receive a significant amount of outlier payments.
OPPS outlier reconciliation thresholds are provided in the Medicare
Claims Processing Manual (Pub. 100-4), Chapter 4, Section 10.7.2.1,
reevaluated annually, and modified if necessary. When the cost report
is settled, reconciliation of outlier payments will be based on the
hospital-specific overall ancillary CCR, calculated as the ratio of
costs and charges computed from the cost report at the time the cost
report coinciding with the service dates is settled. Reconciling
outlier payments ensures that the outlier payments made are appropriate
and that final outlier payments reflect the most accurate cost data. In
the CY 2009 OPPS/ASC final rule with comment period (73 FR 68599), we
also finalized a proposal to adjust the amount of final outlier
payments determined during reconciliation for the time value of money.
The OPPS outlier reconciliation process will require recalculating
outlier payments for individual claims in order to accurately determine
the net effect of a change in a hospital's or CMHC's overall CCR on the
facility's total outlier payments. For cost reporting periods beginning
in CY 2009, Medicare contractors will begin to identify cost reports
that require outlier reconciliation as a component of cost report
settlement. At this time, CMS continues to develop a method for
reexamining claims to calculate the change in total outlier payments in
order to reconcile outlier payments for these cost reports.
As under the IPPS, we do not adjust the fixed-dollar threshold or
amount of total OPPS payment set aside for outlier payments for
reconciliation activity. The predictability of the fixed-dollar
threshold is an important component of a prospective payment system. We
do not adjust the prospectively set outlier threshold for the amount of
outlier payment reconciled at cost report settlement because such
action would be contrary to the prospective nature of the system. Our
outlier threshold calculation assumes that overall ancillary CCRs
accurately estimate hospital costs based on the information available
to us at the time we set the prospective fixed-dollar outlier
threshold. For these reasons, we are not incorporating any assumptions
about the effects of reconciliation into our calculation of the OPPS
fixed-dollar outlier threshold.
Comment: A number of commenters asked that CMS report the amount of
outlier reconciliation activity, including aggregate amounts recovered
by provider type and region. They suggested that, if the reconciled
amounts are significant, these amounts
[[Page 60429]]
should be factored into the annual fixed-dollar outlier threshold.
Several commenters supported the current reconciliation thresholds
identified in the CMS manual (Medicare Claims Processing Manual (Pub.
100-04), Chapter 4, Section 10.7.2.1). One commenter asked that CMS
apply the outlier reconciliation thresholds established in manual
instructions to the claims used for estimating outlier payment and the
fixed-dollar threshold to achieve the most accurate estimates possible.
Response: We revised Worksheet E, Part B, of the Medicare hospital
cost report form CMS 2552-10 to collect OPPS outlier reconciliation
information for cost reports beginning on or after January 1, 2009.
This information will be available to the public through the Hospital
Cost Report Information System (HCRIS). We do not expect to take
outlier reconciliation amounts into account in our projections of
future outlier payments. We believe that the reconciliation CCR and
outlier payment thresholds implemented in the final rule (73 CFR 68599)
are generous and that most hospitals will not be subject to outlier
reconciliation upon cost report settlement. Further, it is difficult to
predict the specific hospitals that will have CCRs and outlier payments
reconciled in any given year. We also note that reconciliation occurs
because hospitals' actual CCRs for the cost reporting period are
different than the interim CCRs used to calculate outlier payment when
a bill is processed. Our fixed-dollar threshold calculation assumes
that CCRs accurately estimate hospital costs based on information
available to us at the time we set the prospective fixed-dollar outlier
threshold. We do not believe that estimating the fixed-dollar threshold
to estimate the amount of payment that may be recovered as a result of
outlier reconciliation in any given year would necessarily result in a
more accurate estimate of outlier payments or a more accurate
calculation of the fixed-dollar threshold for outlier payment for the
prospective payment year. For these reasons, we will not make any
assumptions about the amount of anticipated reconciliation of outlier
payments on the outlier threshold calculation.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, for an OPPS
outlier reconciliation policy. We are implementing the outlier
reconciliation policy for each hospital and CMHC for services furnished
during cost reporting periods beginning in CY 2010, and we are
including an adjustment for the time value of money.
G. Calculation of an Adjusted Medicare Payment From the National
Unadjusted Medicare Payment
The basic methodology for determining prospective payment rates for
HOPD services under the OPPS is set forth in existing regulations at 42
CFR part 419, subparts C and D. The payment rate for most services and
procedures for which payment is made under the OPPS is the product of
the conversion factor calculated in accordance with section II.B. of
this final rule with comment period and the relative weight determined
under section II.A. of this final rule with comment period. Therefore,
the final national unadjusted payment rate for most APCs contained in
Addendum A to this final rule with comment period and for most HCPCS
codes to which separate payment under the OPPS has been assigned in
Addendum B to this final rule with comment period was calculated by
multiplying the final CY 2010 scaled weight for the APC by the final CY
2010 conversion factor.
We note that section 1833(t)(17) of the Act, which applies to
hospitals as defined under section 1886(d)(1)(B) of the Act, requires
that hospitals that fail to submit data required to be submitted on
quality measures selected by the Secretary, in the form and manner and
at a time specified by the Secretary, receive a 2.0 percentage point
reduction to their OPD fee schedule increase factor, that is, the
annual payment update factor. The application of a reduced OPD fee
schedule increase factor results in reduced national unadjusted payment
rates that apply to certain outpatient items and services provided by
hospitals that are required to report outpatient quality data and that
fail to meet the Hospital Outpatient Quality Data Reporting Program
(HOP QDRP) requirements. For further discussion of the payment
reduction for hospitals that fail to meet the requirements of the HOP
QDRP, we refer readers to section XVI.D. of this final rule with
comment period.
We demonstrate in the steps below how to determine the APC payments
that would be made in a calendar year under the OPPS to a hospital that
fulfills the HOP QDRP requirements and to a hospital that fails to meet
the HOP QDRP requirements for a service that has any of the following
status indicator assignments: ``P,'' ``Q1,'' ``Q2,'' ``Q3,'' ``R,''
``S,'' ``T,'' ``U,'' ``V,'' or ``X'' (as defined in Addendum D1 to this
final rule with comment period), in a circumstance in which the
multiple procedure discount does not apply, the procedure is not
bilateral, and conditionally packaged services (status indicator of
``Q1'' and ``Q2'') qualify for separate payment. We note that blood and
blood products with status indicator ``R'' are not subject to wage
adjustment but are subject to reduced payments when a hospital fails to
meet the HOP QDRP requirements, as outlined in the steps and examples
below.
Individual providers interested in calculating the payment amount
that they would receive for a specific service from the national
unadjusted payment rates presented in Addenda A and B to this final
rule with comment period should follow the formulas presented in the
following steps. For purposes of the payment calculations below, we
refer to the national unadjusted payment rate for hospitals that meet
the requirements of the HOP QDRP as the ``full'' national unadjusted
payment rate. We refer to the national unadjusted payment rate for
hospitals that fail to meet the requirements of the HOP QDRP as the
``reduced'' national unadjusted payment rate. The reduced national
unadjusted payment rate is calculated by multiplying the reporting
ratio of 0.98 times the ``full'' national unadjusted payment rate. The
national unadjusted payment rate used in the calculations below is
either the full national unadjusted payment rate or the reduced
national unadjusted payment rate, depending on whether the hospital met
its HOP QDRP requirements in order to receive the full CY 2010 OPPS
increase factor.
Step 1. Calculate 60 percent (the labor-related portion) of the
national unadjusted payment rate. Since the initial implementation of
the OPPS, we have used 60 percent to represent our estimate of that
portion of costs attributable, on average, to labor. We refer readers
to the April 7, 2000 OPPS final rule with comment period (65 FR 18496
through 18497) for a detailed discussion of how we derived this
percentage. We confirmed that this labor-related share for hospital
outpatient services is still appropriate during our regression analysis
for the payment adjustment for rural hospitals in the CY 2006 OPPS
final rule with comment period (70 FR 68553).
The formula below is a mathematical representation of Step 1 and
identifies the labor-related portion of a specific payment rate for a
specific service.
X is the labor-related portion of the national unadjusted payment rate.
X = .60 * (national unadjusted payment rate)
[[Page 60430]]
Step 2. Determine the wage index area in which the hospital is
located and identify the wage index level that applies to the specific
hospital. The wage index values assigned to each area reflect the
geographic statistical areas (which are based upon OMB standards) to
which hospitals are assigned for FY 2010 under the IPPS,
reclassifications through the MGCRB, section 1886(d)(8)(B) ``Lugar''
hospitals, reclassifications under section 1886(d)(8)(E) of the Act, as
defined in Sec. 412.103 of the regulations and hospitals designated as
urban under section 601(g) of Public Law 98-21. We note that the
reclassifications of hospitals under section 508 of Public Law 108-173,
as extended by section 124 of Public Law 110-275, expired on September
30, 2009, and will not be applicable under the IPPS for FY 2010.
Therefore, these reclassifications will not apply to the CY 2010 OPPS.
For further discussion of the changes to the FY 2010 IPPS wage indices,
as applied to the CY 2010 OPPS, we refer readers to section II.C. of
this final rule with comment period. The wage index values include the
occupational mix adjustment described in section II.C. of this final
rule with comment period that was developed for the FY 2010 IPPS final
payment rates published in the Federal Register on August 27, 2009 (74
FR 43827).
Step 3. Adjust the wage index of hospitals located in certain
qualifying counties that have a relatively high percentage of hospital
employees who reside in the county, but who work in a different county
with a higher wage index, in accordance with section 505 of Public Law
108-173. Addendum L to this final rule with comment period contains the
qualifying counties and the final wage index increase developed for the
FY 2010 IPPS and published as Table 4J in the FY 2010 IPPS final rule
(74 FR 44118 through 44125), as corrected in the Federal Register on
October 2, 2009 (74 FR 51506) This step is to be followed only if the
hospital is not reclassified or redesignated under section 1886(d)(8)
or section 1886(d)(10) of the Act.
Step 4. Multiply the applicable wage index determined under Steps 2
and 3 by the amount determined under Step 1 that represents the labor-
related portion of the national unadjusted payment rate.
The formula below is a mathematical representation of Step 4 and
adjusts the labor-related portion of the national payment rate for the
specific service by the wage index.
Xa is the labor-related portion of the national unadjusted payment rate
(wage adjusted).
Xa = .60 * (national unadjusted payment rate) * applicable wage
index.
Step 5. Calculate 40 percent (the nonlabor-related portion) of the
national unadjusted payment rate and add that amount to the resulting
product of Step 4. The result is the wage index adjusted payment rate
for the relevant wage index area.
The formula below is a mathematical representation of Step 5 and
calculates the remaining portion of the national payment rate, the
amount not attributable to labor, and the adjusted payment for the
specific service.
Y is the nonlabor-related portion of the national unadjusted payment
rate.
Y = .40 * (national unadjusted payment rate)
Adjusted Medicare Payment = Y + Xa
Step 6. If a provider is a SCH, set forth in the regulations at
Sec. 412.92, or an EACH, which is considered to be a SCH under section
1886(d)(5)(D)(iii)(III) of the Act, and located in a rural area, as
defined in Sec. 412.64(b), or is treated as being located in a rural
area under Sec. 412.103, multiply the wage index adjusted payment rate
by 1.071 to calculate the total payment.
The formula below is a mathematical representation of Step 6 and
applies the rural adjustment for rural SCHs.
Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment
* 1.071
We have provided examples below of the calculation of both the full
and reduced national unadjusted payment rates that would apply to
certain outpatient items and services performed by hospitals that meet
and that fail to meet the HOP QDRP requirements, using the steps
outlined above. For purposes of this example, we use a provider that is
located in Wayne, New Jersey that is assigned to CBSA 35644. This
provider bills one service that is assigned to APC 0019 (Level I
Excision/Biopsy). The CY 2010 full national unadjusted payment rate for
APC 0019 is $294.06. The reduced national unadjusted payment rate for a
hospital that fails to meet the HOP QDRP requirements is $288.17. This
reduced rate is calculated by multiplying the reporting ratio of 0.98
by the full unadjusted payment rate for APC 0019.
The FY 2010 wage index for a provider located in CBSA 35644 in New
Jersey is 1.3005. The labor-related portion of the full national
unadjusted payment is $229.45 (.60 * $294.06 * 1.3005). The labor-
related portion of the reduced national unadjusted payment is $224.85
(.60 * $288.17 * 1.3005). The nonlabor-related portion of the full
national unadjusted payment is $117.62 (.40 * $294.06). The nonlabor-
related portion of the reduced national unadjusted payment is $115.26
(.40 * $288.17). The sum of the labor-related and nonlabor-related
portions of the full national adjusted payment is $347.07 ($229.45 +
$117.62). The sum of the reduced national adjusted payment is $340.11
($224.85 + $115.26).
We did not receive any public comments concerning our proposed
methodology for calculating an adjusted payment from the national
unadjusted Medicare payment amount for CY 2010. Therefore, we are
finalizing our proposed CY 2010 methodology, without modification.
H. Beneficiary Copayments
1. Background
Section 1833(t)(3)(B) of the Act requires the Secretary to set
rules for determining the unadjusted copayment amounts to be paid by
beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of
the Act specifies that the Secretary must reduce the national
unadjusted copayment amount for a covered OPD service (or group of such
services) furnished in a year in a manner so that the effective
copayment rate (determined on a national unadjusted basis) for that
service in the year does not exceed a specified percentage. As
specified in section 1833(t)(8)(C)(ii)(V) of the Act, for all services
paid under the OPPS in CY 2010, and in calendar years thereafter, the
percentage is 40 percent of the APC payment rate.
Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered
OPD service (or group of such services) furnished in a year, the
national unadjusted copayment amount cannot be less than 20 percent of
the OPD fee schedule amount. Sections 1834(d)(2)(C)(ii) and
(d)(3)(C)(ii) of the Act further require that the copayment for
screening flexible sigmoidoscopies and screening colonoscopies be equal
to 25 percent of the payment amount. Since the beginning of the OPPS,
we have applied the 25-percent copayment to screening flexible
sigmoidoscopies and screening colonoscopies.
2. Copayment Policy
In the CY 2010 OPPS/ASC proposed rule (74 FR 35298), for CY 2010,
we proposed to determine copayment amounts for new and revised APCs
using the same methodology that we implemented beginning in CY 2004.
(We refer readers to the November 7,
[[Page 60431]]
2003 OPPS final rule with comment period (68 FR 63458)). In addition,
we proposed to use the same standard rounding principles that we have
historically used in instances where the application of our standard
copayment methodology would result in a copayment amount that is less
than 20 percent and cannot be rounded, under standard rounding
principles, to 20 percent. (We refer readers to the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66687) in which we discuss our
rationale for applying these rounding principles.) The national
unadjusted copayment amounts for services payable under the OPPS that
will be effective January 1, 2010, are shown in Addenda A and B to this
final rule with comment period. As discussed in section XVI.D. of this
final rule with comment period, as we proposed, we are providing that,
for CY 2010, the Medicare beneficiary's minimum unadjusted copayment
and national unadjusted copayment for a service to which a reduced
national unadjusted payment rate applies will equal the product of the
reporting ratio and the national unadjusted copayment, or the product
of the reporting ratio and the minimum unadjusted copayment,
respectively, for the service.
Comment: One commenter recommended that CMS continue its
educational outreach and keep Medicare beneficiaries informed about the
benefits of supplemental/secondary insurance in reducing their out-of-
pocket costs for orthopedic procedures.
Response: We appreciate the commenter's support for our educational
efforts on the availability of supplemental/secondary insurance and
refer beneficiaries seeking information about their Medicare benefits
and supplemental/secondary insurance coverage to the Web site at:
http://www.medicare.gov.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, for determining
APC copayment amounts.
3. Calculation of an Adjusted Copayment Amount for an APC Group
Individuals interested in calculating the national copayment
liability for a Medicare beneficiary for a given service provided by a
hospital that met or failed to meet its HOP QDRP requirements should
follow the formulas presented in the following steps.
Step 1. Calculate the beneficiary payment percentage for the APC by
dividing the APC's national unadjusted copayment by its payment rate.
For example, using APC 0019, $64.51 is 22 percent of the full national
unadjusted payment rate of $294.06. For APCs with only a minimum
unadjusted copayment in Addendum A and B of this final rule with
comment period, identify a beneficiary payment percentage of 20
percent.
The formula below is a mathematical representation of Step 1 and
calculates national copayment as a percentage of national payment for a
given service.
B is the beneficiary payment percentage.
B = National unadjusted copayment for APC/national unadjusted payment
rate for APC
Step 2. Calculate the appropriate wage-adjusted payment rate for
the APC for the provider in question, as indicated in Steps 2 through 4
under section II.G. of this final rule with comment period. Calculate
the rural adjustment for eligible providers as indicated in Step 6
under section II.G. of this final rule with comment period.
Step 3. Multiply the percentage calculated in Step 1 by the payment
rate calculated in Step 2. The result is the wage-adjusted copayment
amount for the APC.
The formula below is a mathematical representation of Step 3 and
applies the beneficiary percentage to the adjusted payment rate for a
service calculated under section II.G. of this final rule with comment
period, with and without the rural adjustment, to calculate the
adjusted beneficiary copayment for a given service.
Wage-adjusted copayment amount for the APC = Adjusted Medicare Payment
* B
Wage-adjusted copayment amount for the APC (SCH or EACH) = (Adjusted
Medicare Payment * 1.071) * B
Step 4. For a hospital that failed to meet its HOP QDRP
requirements, multiply the copayment calculated in Step 3 by the
reporting ratio of 0.98.
The unadjusted copayments for services payable under the OPPS that
will be effective January 1, 2010, are shown in Addenda A and B to this
final rule with comment period. We note that the national unadjusted
payment rates and copayment rates shown in Addenda A and B to this
final rule with comment period reflect the full market basket
conversion factor increase, as discussed in section XVI.D. of this
final rule with comment period.
III. OPPS Ambulatory Payment Classification (APC) Group Policies
A. OPPS Treatment of New CPT and Level II HCPCS Codes
CPT and Level II HCPCS codes are used to report procedures,
services, items, and supplies under the hospital OPPS. Specifically,
CMS recognizes the following codes on OPPS claims: (1) Category I CPT
codes, which describe medical services and procedures; (2) Category III
CPT codes, which describe new and emerging technologies, services, and
procedures; and (3) Level II HCPCS codes, which are used primarily to
identify products, supplies, temporary procedures, and services not
described by CPT codes. CPT codes are established by the AMA and the
Level II HCPCS codes are established by the CMS HCPCS Workgroup. These
codes are updated and changed throughout the year. CPT and HCPCS code
changes that affect the OPPS are published both through the annual
rulemaking cycle and through the OPPS quarterly update Change Requests
(CRs). CMS releases new Level II HCPCS codes to the public or
recognizes the release of new CPT codes by the AMA and makes these
codes effective (that is, the codes can be reported on Medicare claims)
outside of the formal rulemaking process via OPPS quarterly update CRs.
This quarterly process offers hospitals access to codes that may more
accurately describe items or services furnished and/or provides payment
or more accurate payment for these items or services in a timelier
manner than if CMS waited for the annual rulemaking process. We solicit
comments on these new codes and finalize our proposals related to these
codes through our annual rulemaking process.
We note that we sought public comments in the CY 2009 OPPS/ASC
final rule with comment period on the new CPT and Level II HCPCS codes
that were effective January 1, 2009. We also sought public comments in
the CY 2009 OPPS/ASC final rule with comment period on the new Level II
HCPCS codes effective October 1, 2008. These new codes with an
effective date of October 1, 2008 or January 1, 2009 were flagged with
comment indicator ``NI'' (New code, interim APC assignment; comments
will be accepted on the interim APC assignment for the new code) in
Addendum B to the CY 2009 OPPS/ASC final rule with comment period to
indicate that we were assigning them an interim payment status and an
APC and payment rate, if applicable, which were subject to public
comment following publication of the CY 2009 OPPS/ASC final rule with
comment period. Summaries of public comments on the codes flagged with
comment indicator ``NI'' in the CY 2009 OPPS/ASC final rule with
comment period and our responses are included in the sections of this
final rule with
[[Page 60432]]
comment period that are relevant to the services described by those
codes.
In Table 13 of the CY 2010 OPPS/ASC proposed rule (74 FR 35299),
which is reproduced as Table 18 in this final rule with comment period,
we summarized our process for updating codes through our OPPS quarterly
update CRs, seeking public comment, and finalizing their treatment
under the OPPS.
Table 18--Comment Timeframe for New or Revised HCPCS Codes
----------------------------------------------------------------------------------------------------------------
OPPS quarterly update CR Type of code Effective date Comments sought When finalized
----------------------------------------------------------------------------------------------------------------
April 1, 2009................... Level II HCPCS April 1, 2009..... CY 2010 OPPS/ASC CY 2010 OPPS/ASC
Codes. proposed rule. final rule with
comment period.
July 1, 2009.................... Level II HCPCS July 1, 2009...... CY 2010 OPPS/ASC CY 2010 OPPS/ASC
Codes. proposed rule. final rule with
comment period.
Category I July 1, 2009...... CY 2010 OPPS/ASC CY 2010 OPPS/ASC
(certain vaccine proposed rule. final rule with
codes) and comment period.
Category III CPT
Codes.
October 1, 2009................. Level II HCPCS October 1, 2009... CY 2010 OPPS/ASC CY 2011 OPPS/ASC
Codes. final rule with final rule with
comment period. comment period.
January 1, 2010................. Level II HCPCS January 1, 2010... CY 2010 OPPS/ASC CY 2011 OPPS/ASC
Codes. final rule with final rule with
Comment Period. comment period.
Category I and January 1, 2010... CY 2010 OPPS/ASC CY 2011 OPPS/ASC
Category III CPT final rule with final rule with
Codes. comment period. comment period.
----------------------------------------------------------------------------------------------------------------
1. Treatment of New Level II HCPCS Codes and Category I CPT Vaccine
Codes and Category III CPT Codes
In the April 1 and July 1 CRs for CY 2009, we made effective a
total of 13 new Level II HCPCS codes that were not addressed in the CY
2009 OPPS/ASC final rule with comment period that updated the OPPS and
we allowed separate payment for 12 of these new codes. Through the
April 1, 2009 CR, we also changed the OPPS status indicator for one
existing Level II HCPCS code from the interim status indicator
designated in the CY 2009 OPPS/ASC final rule with comment period to a
status indicator that allowed separate pass-through payment for this
code. In addition to the changes for Level II HCPCS codes, we made
effective 5 new Category I vaccine and Category III CPT codes that were
not addressed in the CY 2009 OPPS/ASC final rule with comment period
that updated the OPPS and we allowed separate payment for 3 of these
new codes.
Through the April 2009 OPPS quarterly update CR (Transmittal 1702,
Change Request 6416, dated March 13, 2009), we allowed separate payment
for a total of 2 additional Level II HCPCS codes, specifically existing
HCPCS code C9247 (Iobenguane, I-123, diagnostic, per study dose, up to
10 millicuries) and new HCPCS code C9249 (Injection, certolizumab
pegol, 1 mg). HCPCS code C9249, which received separate payment as a
result of its pass-through status under the OPPS, was made effective on
April 1, 2009. HCPCS code C9247 was released January 1, 2009 through
the January 2009 OPPS quarterly update CR (Transmittal 1657, Change
Request 6320, dated December 31, 2008). From January 1, 2009 through
March 31, 2009, HCPCS code C9247 was packaged under the OPPS and
assigned status indicator ``N'' (Items and Services Packaged into APC
Rates). We note that between January 1, 2009 through March 31, 2009,
HCPCS code C9247 was recognized as a nonpass-through diagnostic
radiopharmaceutical. Because nonpass-through diagnostic
radiopharmaceuticals are packaged under the OPPS, there was no separate
APC payment for HCPCS code C9247 from January 1, 2009 through March 31,
2009. However, effective April 1, 2009, HCPCS code C9247 was allowed
separate pass-through payment and its status indicator was revised from
``N'' to ``G'' (Pass-Through Drugs and Biologicals).
In the CY 2010 OPPS/ASC proposed rule, we solicited public comments
on the status indicators and APC assignments of HCPCS codes C9247 and
C9249, which were listed in Table 14 of that proposed rule (74 FR
35301) and now appear in Table 19 of this final rule with comment
period.
We did not receive any public comments on the proposed APC
assignments and status indicators for HCPCS codes C9247 and C9249.
However, for CY 2010, the HCPCS Workgroup replaced both HCPCS C-codes
with permanent HCPCS codes. Specifically, C9247 was replaced with A9582
(Iodine I-123 iobenguane, diagnostic, per study dose, up to 15
millicuries) and C9249 was replaced with J0718 (Injection, certolizumab
pegol, 1 mg). Consistent with our general policy of using permanent
HCPCS codes if appropriate rather than HCPCS C-codes for the reporting
of drugs under the OPPS in order to streamline coding, we are showing
the replacement HCPCS codes in Table 19 that will replace the HCPCS C-
codes effective January 1, 2010. Both HCPCS C-codes will be deleted
December 31, 2009. Because HCPCS code J0718 describes the same drug and
the same dosage currently designated by HCPCS code C9249 and this drug
will continue on pass-through status in CY 2010, we are assigning HCPCS
code J0718 the same status indicator and APC as its predecessor C-code,
as shown in Table 19. Although the dosage descriptor of HCPCS code
A9582 indicates ``per study dose, up to 15 millicuries'' and the
descriptor of its predecessor C-code designates ``per study dose, up to
10 millicuries,'' because we believe that the reporting of one unit for
a study dose would be the same in almost all cases under either HCPCS
code, we are assigning HCPCS code A9582 to the same APC as its
predecessor C-code, as shown in Table 19. The recommended dose of I-123
iobenguane is 10 millicuries for adult patients, so we expect that
hospitals would report 1 unit of new HCPCS code A9582 for the typical
dose in CY 2010, just as they would have reported one unit of HCPCS
code C9247 previously for the typical dose. We also note this
diagnostic radiopharmaceutical will continue on
[[Page 60433]]
pass-through status in CY 2010; therefore, its CY 2010 status indicator
remains as ``G.'' Because we did not receive any public comments on the
new Level II HCPCS codes that were implemented in April 2009, we are
adopting as final, without modification, our proposal to assign the
Level II HCPCS codes listed in Table 19 to the APCs and status
indicators as proposed for CY 2010.
Table 19 below shows the final APC and status indicator assignments
for both HCPCS codes A9582 and J0718.
Table 19--Level II HCPCS Codes WITH A Change in OPPS Status Indicator or Newly Implemented in April 2009
----------------------------------------------------------------------------------------------------------------
CY 2010 long Final CY 2010 status Final CY 2010
CY 2010 HCPCS code CY 2009 HCPCS code descriptor indicator APC
----------------------------------------------------------------------------------------------------------------
A9582.................. C9247.................. Iodine I-123 G..................... 9247
iobenguane,
diagnostic, per study
dose, up to 15
millicuries.
J0718.................. C9249.................. Injection, G..................... 9249
certolizumab pegol, 1
mg.
----------------------------------------------------------------------------------------------------------------
Through the July 2009 OPPS quarterly update CR (Transmittal 107,
Change Request 6492, dated May 22, 2009), which included HCPCS codes
that were made effective July 1, 2009, we allowed separate payment for
a total of 11 new Level II HCPCS codes for pass-through drugs and
biologicals and nonpass-through drugs and nonimplantable biologicals.
Specifically, we provided separate payment for HCPCS codes C9250 (Human
plasma fibrin sealant, vapor-heated, solvent-detergent (Artiss), 2ml);
C9251 (Injection, C1 esterase inhibitor (human), 10 units); C9252
(Injection, plerixafor, 1 mg); C9253 (Injection, temozolomide, 1 mg);
C9360 (Dermal substitute, native, non-denatured collagen, neonatal
bovine origin (SurgiMend Collagen Matrix), per 0.5 square centimeters);
C9361 (Collagen matrix nerve wrap (NeuroMend Collagen Nerve Wrap), per
0.5 centimeter length); C9362 (Porous purified collagen matrix bone
void filler (Integra Mozaik Osteoconductive Scaffold Strip), per 0.5
cc); C9363 (Skin substitute, Integra Meshed Bilayer Wound Matrix, per
square centimeter); C9364 (Porcine implant, Permacol, per square
centimeter); Q2023 (Injection, factor viii (antihemophilic factor,
recombinant) (Xyntha), per i.u.); and Q4116 (Skin substitute, Alloderm,
per square centimeter).
Although HCPCS code Q4115 (Skin substitute, Alloskin, per square
centimeter) was made effective July 1, 2009, because ASP pricing
information was not available at the time the code was made effective,
the HCPCS code was not paid separately and it was assigned status
indicator ``M'' (Items and Services Not Billable to the Fiscal
Intermediary/MAC) in the CY 2010 OPPS/ASC proposed rule (74 FR 35300
through 35301). For the October 2009 OPPS quarterly update, the status
indicator for HCPCS code Q4115 was revised from ``M'' to K'' (Nonpass-
Through Drugs and Biologicals) effective October 1, 2009 because
pricing information was available, and this product was paid separately
as a new biological HCPCS code based on the ASP methodology, consistent
with the final CY 2009 policy and the final CY 2010 policy for payment
of new drug and biological HCPCS codes without pass-through status. The
change in status indicator assignment was announced through the October
2009 OPPS quarterly update CR (Transmittal 1803, Change Request 6626,
dated August 28, 2009).
In the CY 2010 OPPS/ASC proposed rule, we solicited public comments
on the status indicators, APC assignments, and payment rates of these
codes, which were listed in Table 15 of that proposed rule (74 FR
35301) and now appear in Table 20 of this final rule with comment
period. Because of the timing of the proposed rule, the codes
implemented in the July 2009 OPPS update were not included in Addendum
B of that proposed rule, while those codes based upon the April 2009
OPPS update were included in Addendum B. In the CY 2009 OPPS/ASC
proposed rule, we proposed to assign the new HCPCS codes for CY 2010 to
the designated APCs listed in Table 15 for each HCPCS code and
incorporate them into our final rule with comment period for CY 2010,
which is consistent with our annual APC updating policy.
We did not receive any public comments on the proposed APC
assignments, payment rates, and status indicators designated for the
codes listed in Table 15 of the proposed rule. However, for CY 2010,
the HCPCS Workgroup created permanent HCPCS J-codes for 4 of the 11
separately payable drug codes. Consistent with our general policy of
using permanent HCPCS codes if appropriate rather than HCPCS C-codes
for the reporting of drugs under the OPPS in order to streamline
coding, we are showing the HCPCS J-codes in Table 20 of this final rule
with comment period that will replace the HCPCS C-codes effective
January 1, 2010. HCPCS code C9251 is replaced with J0598 (Injection, C1
esterase inhibitor (human), 10 units); C9252 with J2562 (Injection,
plerixafor, 1 mg); C9253 is replaced with J9328 (Injection,
temozolomide, 1 mg); and Q2023 is replaced with J7185 (Injection,
factor viii (antihemophilic factor, recombinant) (Xyntha), per i.u.).
The HCPCS J-codes describe the same drugs and the same dosages as the
HCPCS C-codes that will be deleted December 31, 2009. We note that
HCPCS C-codes are temporary national HCPCS codes. To avoid duplication,
temporary national HCPCS codes, such as ``C,'' ``G,'' ``K,'' and ``Q''
codes, are generally deleted once permanent national HCPCS codes are
created that describe the same item, service, or procedure. Because
three of the four new HCPCS J-codes describe the same drugs and the
same dosages that are currently designated by HCPCS codes C9251, C9252,
and C9253 and all three of these drugs will continue on pass-through
status in CY 2010, we are assigning the HCPCS J-codes to the same APCs
and status indicators as their predecessor HCPCS C-codes, as shown in
Table 20. That is, HCPCS code J0598 is assigned to the same APC and
status indicator as HCPCS code C9251 (APC 9251); HCPCS code J2562 is
assigned to APC 9252; and HCPCS J9328 is assigned to APC 9253. Also, we
note that, effective January 1, 2010, HCPCS code Q2023 will be replaced
with HCPCS code J7185, which has the same descriptor and is assigned to
the same APC and status indicator as HCPCS code Q2023.
Because we did not receive any public comments on the new Level II
HCPCS codes that were implemented in July 2009, we are adopting as
final, without modification, our proposal to assign the Level II HCPCS
codes listed in Table 20 to the APCs and status indicators as proposed
for CY 2010.
[[Page 60434]]
Table 20--New Level II HCPCS Codes Implemented in July 2009
----------------------------------------------------------------------------------------------------------------
Final CY
CY 2010 HCPCS code CY 2009 HCPCS code CY 2010 Long descriptor 2010 status Final CY
indicator 2010 APC
----------------------------------------------------------------------------------------------------------------
C9250.............................. C9250................. Human plasma fibrin G 9250
sealant, vapor-heated,
solvent-detergent
(Artiss), 2ml.
J0598.............................. C9251................. Injection, C1 esterase G 9251
inhibitor (human), 10
units.
J2562.............................. C9252................. Injection, plerixafor, 1 mg G 9252
J9328.............................. C9253................. Injection, temozolomide, 1 G 9253
mg.
C9360.............................. C9360................. Dermal substitute, native, G 9360
non-denatured collagen,
neonatal bovine origin
(SurgiMend Collagen
Matrix), per 0.5 square
centimeters.
C9361.............................. C9361................. Collagen matrix nerve wrap G 9361
(NeuroMend Collagen Nerve
Wrap), per 0.5 centimeter
length.
C9362.............................. C9362................. Porous purified collagen G 9362
matrix bone void filler
(Integra Mozaik
Osteoconductive Scaffold
Strip), per 0.5 cc.
C9363.............................. C9363................. Skin substitute, Integra G 9363
Meshed Bilayer Wound
Matrix, per square
centimeter.
C9364.............................. C9364................. Porcine implant, Permacol, G 9364
per square centimeter.
J7185.............................. Q2023................. Injection, factor viii K 1268
(antihemophilic factor,
recombinant) (Xyntha), per
i.u..
Q4115.............................. Q4115................. Skin substitute, Alloskin, K 1287
per square centimeter.
Q4116.............................. Q4116................. Skin substitute, Alloderm, K 1270
per square centimeter.
----------------------------------------------------------------------------------------------------------------
In the CY 2010 OPPS/ASC proposed rule (74 FR 35300), we proposed to
continue our established policy of recognizing Category I CPT vaccine
codes for which FDA approval is imminent and Category III CPT codes
that the AMA releases in January of each year for implementation in
July through the OPPS quarterly update process. Under the OPPS,
Category I vaccine codes and Category III CPT codes that are released
on the AMA Web site in January are made effective in July of the same
year through the July OPPS quarterly update CR, consistent with the
AMA's implementation date for the codes. Through the July 2009 OPPS
quarterly update CR, we allowed separate payment for 3 of the 5 new
Category I vaccine and Category III CPT Codes effective July 1, 2009.
Specifically, as displayed in Table 16 of the CY 2010 OPPS/ASC proposed
rule (74 FR 35301) and reproduced in this final rule with comment
period as Table 21, we allowed payment for CPT codes 0199T (Physiologic
recording of tremor using accelerometer(s) and gyroscope(s), (including
frequency and amplitude) including interpretation and report); 0200T
(Percutaneous sacral augmentation (sacroplasty), unilateral
injection(s), including the use of a balloon or mechanical device (if
utilized), one or more needles); and 0201T (Percutaneous sacral
augmentation (sacroplasty), bilateral injections, including the use of
a balloon or mechanical device (if utilized), two or more needles). We
note that CPT code 0202T (Posterior vertebral joint(s) arthroplasty
(e.g., facet joint[s] replacement) including facetectomy, laminectomy,
foraminotomy and vertebral column fixation, with or without injection
of bone cement, including fluoroscopy, single level, lumbar spine) was
assigned status indicator ``C'' (Inpatient Procedures) because we
believe that this procedure may only be safely performed on Medicare
beneficiaries in the hospital inpatient setting. In addition, CPT code
90670 (Pneumococcal conjugate vaccine, 13 valent, for intramuscular
use), a Category I CPT vaccine code, was assigned status indicator
``E'' (Items, Codes, and Services not paid by Medicare when submitted
on outpatient claims (any outpatient bill type)) because the drug has
not yet been approved by the FDA for marketing.
Because the July 2009 OPPS quarterly update CR was issued close to
the publication of the CY 2010 OPPS/ASC proposed rule, the Category I
vaccine and Category III CPT codes implemented through the July 2009
OPPS quarterly update CR were not be included in Addendum B to the
proposed rule, but these codes were listed in Table 16 of the proposed
rule. Additionally, we proposed to incorporate them into Addendum B to
this CY 2010 OPPS/ASC final rule with comment period, which is
consistent with our annual OPPS update policy.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35301), we solicited
public comments on the proposed status indicators, APC assignments, and
payment rates for the new Category I and III CPT codes. We did not
receive any public comments on our proposals for CPT codes 0199T,
0200T, 0201T, 0202T, and 90670. Therefore, we are finalizing our CY
2010 proposals for these codes, without modification. The final CY 2010
status indicators and APC assignments for CPT codes 0199T, 0200T,
0201T, 0202T, and 90670 are listed in Table 21 below, as well as in
Addendum B to this final rule with comment period.
Table 21--Category I Vaccine and Category III CPT Codes Implemented in July 2009
----------------------------------------------------------------------------------------------------------------
Final CY
CY 2010 HCPCS code CY 2010 long descriptor 2010 status Final CY 2010 APC
indicator
----------------------------------------------------------------------------------------------------------------
0199T............................ Physiologic recording of tremor using S 0215
accelerometer(s) and gyroscope(s),
(including frequency and amplitude)
including interpretation and report.
0200T............................ Percutaneous sacral augmentation T 0049
(sacroplasty), unilateral injection(s),
including the use of a balloon or
mechanical device (if utilized), one or
more needles.
[[Page 60435]]
0201T............................ Percutaneous sacral augmentation T 0050
(sacroplasty), bilateral injections,
including the use of a balloon or
mechanical device (if utilized), two or
more needles.
0202T............................ Posterior vertebral joint(s) arthroplasty C Not
(e.g., facet joint[s] replacement) applicable.
including facetectomy, laminectomy,
foraminotomy and vertebral column fixation,
with or without injection of bone cement,
including fluoroscopy, single level, lumbar
spine.
90670............................ Pneumococcal conjugate vaccine, 13 valent, E Not
for intramuscular use. applicable.
----------------------------------------------------------------------------------------------------------------
2. Process for New Level II HCPCS Codes and Category I and Category III
CPT Codes for Which We Are Soliciting Public Comments on the CY 2010
OPPS/ASC Final Rule With Comment Period
As has been our practice in the past, we incorporate those new
Category I and III CPT codes and new Level II HCPCS codes that are
effective January 1 in the final rule with comment period updating the
OPPS for the following calendar year. These codes are released to the
public via the CMS HCPCS (for Level II HCPCS codes) and AMA Web sites
(for CPT codes), and also through the January OPPS quarterly update
CRs. In the past, we also have released new Level II HCPCS codes that
are effective October 1 through the October OPPS quarterly update CRs
and incorporated these new codes in the final rule with comment period
updating the OPPS for the following calendar year. All of these codes
are flagged with comment indicator ``NI'' in Addendum B to the OPPS/ASC
final rule with comment period to indicate that we are assigning them
an interim payment status which is subject to public comment.
Specifically, the status indicator and the APC assignment, and payment
rate, if applicable, for all such codes flagged with comment indicator
``NI'' are open to public comment in this final rule with comment
period, and we respond to these comments in the final rule with comment
period for the next calendar year's OPPS/ASC update. In the CY 2010
OPPS/ASC proposed rule (74 FR 35302), we proposed to continue this
process for CY 2010. Specifically, for CY 2010, we proposed to include
in Addendum B to the CY 2010 OPPS/ASC final rule with comment period
the new Category I and III CPT codes effective January 1, 2010
(including those Category I vaccine and Category III CPT codes that
were released by the AMA in July 2009) that would be incorporated in
the January 2010 OPPS quarterly update CR and the new Level II HCPCS
codes, effective October 1, 2009 or January 1, 2010, that would be
released by CMS in its October 2009 and January 2010 OPPS quarterly
update CRs. Excluding those Category I vaccine and Category III CPT
codes that were released by the AMA in July 2009 which were subject to
comment in the CY 2010 OPPS/ASC proposed rule as described above, these
codes would be flagged with comment indicator ``NI'' in Addendum B to
this CY 2010 OPPS/ASC final rule with comment period to indicate that
we have assigned them an interim OPPS payment status. We proposed that
their status indicators and their APC assignments and payment rates, if
applicable, would be open to public comment in the CY 2010 OPPS/ASC
final rule with comment period and would be finalized in the CY 2011
OPPS/ASC final rule with comment period.
Comment: One commenter requested that CMS solicit public comments
on APC assignments for the newly implemented CPT codes that go into
effect January 1 and, when necessary, revise their APC assignments and
implement the changes in the next quarterly OPPS update to promote
payment accuracy.
Response: For new HCPCS codes with an interim final APC and/or
status indicator designation in a final rule, we are only able to
finalize their assignments in another OPPS final rule in order to allow
for the necessary public notice and comment period and to allow for CMS
to respond to such comments. Therefore, we only assign HCPCS codes
permanently for the year through the annual regulatory process. Because
we are not able to revise APC and/or status indicator assignments for
the newly implemented HCPCS codes in CY 2010 that are assigned an
interim final status in this CY 2010 OPPS/ASC final rule with comment
period outside of the rulemaking process, the next available
opportunity to update an APC or status indicator for these codes is in
the CY 2011 OPPS update. These HCPCS codes retain their interim final
APC and status indicator assignments for all of CY 2010. Therefore,
only in the CY 2011 OPPS/ASC final rule with comment period will we be
able to finalize the APC and/or status indicator assignments of the new
CY 2010 HCPCS codes and respond to all public comments received on
their interim designations.
After consideration of the public comment we received, we are
finalizing our proposal, without modification, to provide interim final
status indicators and APC assignments and payment rates, if applicable,
for all CPT codes newly implemented in January 2010 and all HCPCS codes
newly implemented in October 2009 or January 2010 in Addendum B to this
final rule with comment period. The interim final OPPS treatment of
these codes is open to public comment in the CY 2010 OPPS/ASC final
rule with comment period and will be finalized in the CY 2011 OPPS/ASC
final rule with comment period.
B. OPPS Changes--Variations Within APCs
1. Background
Section 1833(t)(2)(A) of the Act requires the Secretary to develop
a classification system for covered outpatient department services.
Section 1833(t)(2)(B) of the Act provides that the Secretary may
establish groups of covered outpatient department services within this
classification system, so that services classified within each group
are comparable clinically and with respect to the use of resources (and
so that an implantable item is classified to the group that includes
the service to which the item relates). In accordance with these
provisions, we developed a grouping classification system, referred to
as APCs, as set forth in Sec. 419.31 of the regulations. We use Level
I and Level II HCPCS codes and descriptors to identify and group the
services within each APC. The APCs are organized such that each group
is homogeneous both clinically and in terms of resource use. Using this
classification system, we have
[[Page 60436]]
established distinct groups of similar services, as well as medical
visits. We also have developed separate APC groups for certain medical
devices, drugs, biologicals, therapeutic radiopharmaceuticals, and
brachytherapy devices.
We have packaged into payment for each procedure or service within
an APC group the costs associated with those items or services that are
directly related to and supportive of performing the main independent
procedures or furnishing the services. Therefore, we do not make
separate payment for these packaged items or services. For example,
packaged items and services include: (1) Use of an operating,
treatment, or procedure room; (2) use of a recovery room; (3)
observation services; (4) anesthesia; (5) medical/surgical supplies;
(6) pharmaceuticals (other than those for which separate payment may be
allowed under the provisions discussed in section V.3. of this final
rule with comment period); (7) incidental services such as
venipuncture; and (8) guidance services, image processing services,
intraoperative services, imaging supervision and interpretation
services, diagnostic radiopharmaceuticals, and contrast media. Further
discussion of packaged services is included in section II.A.4. of this
final rule with comment period.
In CY 2008 (72 FR 66650), we implemented composite APCs to provide
a single payment for groups of services that are typically performed
together during a single clinical encounter and that result in the
provision of a complete service. Under our CY 2010 OPPS policy, we
provide composite APC payment for certain extended assessment and
management services, low dose rate (LDR) prostate brachytherapy,
cardiac electrophysiologic evaluation and ablation, mental health
services, and multiple imaging services. Further discussion of
composite APCs is included in section II.A.2.e. of this final rule with
comment period.
Under the OPPS, we generally pay for hospital outpatient services
on a rate-per-service basis, where the service may be reported with one
or more HCPCS codes. Payment varies according to the APC group to which
the independent service or combination of services is assigned. Each
APC weight represents the hospital median cost of the services included
in that APC relative to the hospital median cost of the services
included in APC 0606 (Level 3 Hospital Clinic Visits). The APC weights
are scaled to APC 0606 because it is the middle level clinic visit APC
(that is, where the Level 3 clinic visit CPT code of five levels of
clinic visits is assigned), and because middle level clinic visits are
among the most frequently furnished services in the hospital outpatient
setting.
Section 1833(t)(9)(A) of the Act requires the Secretary to review
not less often than annually and revise the groups, relative payment
weights, and the wage and other adjustments under the OPPS to take into
account changes in medical practice, changes in technology, the
addition of new services, new cost data, and other relevant information
and factors. Section 1833(t)(9)(A) of the Act, as amended by section
201(h) of the BBRA, also requires the Secretary to consult with an
outside panel of experts to review (and advise the Secretary
concerning) the clinical integrity of the APC groups and the relative
payment weights (the APC Panel recommendations for specific services
for the CY 2010 OPPS and our responses to them are discussed in the
relevant specific sections throughout this final rule with comment
period).
Finally, section 1833(t)(2) of the Act provides that, subject to
certain exceptions, the items and services within an APC group cannot
be considered comparable with respect to the use of resources if the
highest median cost (or mean cost as elected by the Secretary) for an
item or service in the group is more than 2 times greater than the
lowest median cost (or mean cost, if so elected) for an item or service
within the same group (referred to as the ``2 times rule''). We use the
median cost of the item or service in implementing this provision. In
performing this analysis, we examine data from the significant services
assigned to an APC, specifically those HCPCS codes with a single claim
frequency of greater than 1,000 or a frequency of greater than 99 and a
percentage of all single claims that is equal to or greater than 2
percent. Because, as a matter of policy, HCPCS codes that are unlisted
procedures, not otherwise classified, or not otherwise specified codes
are assigned to the lowest level APC that is appropriate to the
clinical nature of the service (69 FR 65724 through 65725), we do not
consider the costs of these services in assessing APCs for 2 times
violations. Section 1833(t)(2) of the Act authorizes the Secretary to
make exceptions to the 2 times rule in unusual cases, such as low-
volume items and services (but the Secretary may not make such an
exception in the case of a drug or biological that has been designated
as an orphan drug under section 526 of the Federal Food, Drug, and
Cosmetic Act).
2. Application of the 2 Times Rule
In accordance with section 1833(t)(2) of the Act and Sec. 419.31
of the regulations, we annually review the items and services within an
APC group to determine, with respect to comparability of the use of
resources, if the median cost of the highest cost item or service
within an APC group is more than 2 times greater than the median of the
lowest cost item or service within that same group. In the CY 2010
OPPS/ASC proposed rule (74 FR 35303), we proposed to make exceptions to
this limit on the variation of costs within each APC group in unusual
cases, such as low-volume items and services for CY 2010.
During the APC Panel's February 2009 meeting, we presented median
cost and utilization data for services furnished during the period of
January 1, 2008 through September 30, 2008, because we had concerns or
the public had raised concerns regarding their APC assignments, status
indicator assignments, or payment rates. In addition to the assignment
of specific services to APCs that we discussed with the APC Panel, we
also identified APCs with 2 times violations that were not specifically
discussed with the APC Panel but for which we proposed changes to their
HCPCS codes' APC assignments in Addendum B to the CY 2010 OPPS/ASC
proposed rule. In these cases, to eliminate a 2 times violation or to
improve clinical and resource homogeneity, we proposed to reassign the
codes to APCs that contain services that are similar with regard to
both their clinical and resource characteristics. We also proposed to
rename existing APCs or create new clinical APCs to complement proposed
HCPCS code reassignments. In many cases, the proposed HCPCS code
reassignments and associated APC reconfigurations for CY 2010 included
in the proposed rule were related to changes in median costs of
services that were observed in the CY 2008 claims data newly available
for CY 2010 ratesetting. In addition, we proposed changes to the status
indicators for some codes that were not specifically and separately
discussed in the proposed rule. In these cases, we proposed to change
the status indicators for some codes because we believed that another
status indicator would more accurately describe their payment status
from an OPPS perspective based on the policies that we proposed for CY
2010.
Addendum B to the CY 2010 OPPS/ASC proposed rule identified, with
comment indicator ``CH,'' those HCPCS codes for which we proposed a
change to the APC assignment or status
[[Page 60437]]
indicator that were initially assigned in the April 2009 Addendum B
update (Transmittal 1702, Change Request 6416, dated March 13, 2009).
Comment: One commenter generally supported CMS' adherence to the 2
times rule to ensure appropriate payment for OPPS services and to
provide incentives for patients to be treated in the most suitable
clinical setting. In particular, the commenter supported the proposed
reassignments of the following CPT codes: CPT code 20103 (Exploration
of penetrating wound (separate procedure); extremity) from APC 0136
(Level IV Skin Repair) to APC 0007 (Level II Incision & Drainage); and
CPT code 29888 (Arthroscopically aided anterior cruciate ligament
repair/augmentation or reconstruction) and CPT code 29889
(Arthroscopically aided posterior cruciate ligament repair/augmentation
or reconstruction) from APC 0042 (Level II Arthroscopy) to APC 0052
(Level IV Musculoskeletal Procedures Except Hand and Foot).
Response: We appreciate the commenter's support for the 2 times
rule in general and for the proposed APC reassignments of CPT codes
20103, 29888, and 29889 in particular. We agree with the commenter that
the 2 times rule is an important mechanism for ensuring appropriate
payment for OPPS services. Based on the CY 2008 claims and cost report
data available for this final rule with comment period, we also agree
with the commenter that we should adopt the proposed reassignments of
CPT codes 20103, 29888, and 29889 in order to improve clinical and
resource homogeneity.
Therefore, after consideration of the public comment we received,
we are finalizing, without modification, our CY 2010 proposals to
reassign CPT code 20103 to APC 0007, with a final CY 2010 APC median
cost of approximately $843 and CPT codes 29888 and 29889 to APC 0052,
with a final CY 2010 APC median cost of approximately $5,921.
3. Exceptions to the 2 Times Rule
As discussed earlier, we may make exceptions to the 2 times limit
on the variation of costs within each APC group in unusual cases such
as low-volume items and services. We stated in the CY 2010 OPPS/ASC
proposed rule (74 FR 35303) that we took into account the APC changes
that we proposed for CY 2010 based on the APC Panel recommendations,
the other proposed changes to status indicators and APC assignments as
identified in Addendum B to the proposed rule, and the use of CY 2008
claims data available for the proposed rule to calculate the median
costs of procedures classified in the APCs. We then reviewed all of the
APCs to determine which APCs would not satisfy the 2 times rule and to
determine which APCs should be proposed as exceptions to the 2 times
rule for CY 2010. We used the following criteria to decide whether to
propose exceptions to the 2 times rule for affected APCs:
Resource homogeneity;
Clinical homogeneity;
Hospital outpatient setting;
Frequency of service (volume); and
Opportunity for upcoding and code fragments.
For a detailed discussion of these criteria, we refer readers to
the April 7, 2000 OPPS final rule with comment period (65 FR 18457).
Table 17 of the CY 2010 OPPS/ASC proposed rule (74 FR 35303) listed
14 APCs that we proposed to exempt from the 2 times rule for CY 2010
based on the criteria cited above. For cases in which a recommendation
by the APC Panel appeared to result in or allow a violation of the 2
times rule, we generally accepted the APC Panel's recommendation
because those recommendations were based on explicit consideration of
resource use, clinical homogeneity, hospital specialization, and the
quality of the CY 2008 claims data used to determine the APC payment
rates that we proposed for CY 2010. The median costs for hospital
outpatient services for these and all other APCs that were used in the
development of the CY 2010 OPPS/ASC proposed rule and this final rule
with comment period can be found on the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/01_overview.asp.
For the CY 2010 OPPS/ASC proposed rule, we based the listed
exceptions to the 2 times rule on claims data for dates of service
between January 1, 2008, and December 31, 2008, that were processed
before January 1, 2009. For this final rule with comment period, we
used claims data for dates of service between January 1, 2008, and
December 31, 2008, that were processed on or before June 30, 2008, and
updated CCRs, if available. Thus, after responding to all of the public
comments on the CY 2010 OPPS/ASC proposed rule and making changes to
APC assignments based on those comments, we analyzed the CY 2008 claims
data used for this final rule with comment period to identify the APCs
with 2 times violations. Based on the final CY 2008 claims data, we
found that there are 15 APCs with 2 times rule violations, a cumulative
increase of 1 APC from the proposed rule. We applied the criteria as
described earlier to identify the APCs that are exceptions to the 2
times rule for CY 2010, and identified 4 additional APCs that meet the
criteria for exception to the 2 times rule for this final rule with
comment period: APC 0057 (Bunion Procedures); APC 0060 (Manipulation
Therapy); APC 0341 (Skin Tests); and APC 0409 (Red Blood Cell Tests).
These APC exceptions are listed in Table 22 below. We also determined
that there are 3 APCs that no longer violate the 2 times rule: APC 0237
(Level II Posterior Segment Eye Procedures); APC 0325 (Group
Psychotherapy); and APC 0436 (Level I Drug Administration). We have not
included in this count those APCs where a 2 times violation is not a
relevant concept, such as APC 0375 (Ancillary Outpatient Services when
Patient Expires), with an APC median cost set based on multiple
procedure claims, so that we have identified only final APCs, including
those with criteria-based median costs, such as device-dependent APCs,
with 2 times violations.
Comment: One commenter requested that CMS not exempt any imaging
and radiation therapy APCs from the 2 times rule. According to the
commenter, violations of the 2 times rule should demonstrate to CMS
that a particular APC is incorrectly constructed. The commenter
recommended that, rather than exempting these APCs from the 2 times
rule, CMS review the configurations of the APCs and make any necessary
revisions.
Response: We do not agree with the commenter that we should not
exempt any imaging and radiation therapy APCs from the 2 times rule. As
stated earlier in this section, we may make exceptions to the 2 times
limit on the variation of costs within each APC group in unusual cases
such as low-volume items and services. In the CY 2010 OPPS/ASC proposed
rule (74 FR 35303), we proposed to exempt one imaging APC and one
radiation therapy APC from the 2 times rule, specifically APC 0128
(Echocardiogram with Contrast) and APC 0664 (Level I Proton Beam
Radiation Therapy), respectively. As discussed in greater detail in
section II.A.2.d.(4) of this final rule with comment period, we believe
that the median costs of the echocardiography procedures assigned to
APC 0128 do not warrant assignment of any of those procedures to a new
clinical APC. APC 0664 includes CPT code 77520 (Proton treatment
delivery; simple, without compensation), with a median cost of
approximately $396 (based on 243 single claims of 251 total claims),
and CPT code 77522 (Proton treatment delivery; simple, with
compensation),
[[Page 60438]]
with a median cost of approximately $934 (based on 11,012 single claims
of 12,252 total claims). We continue to believe that the resources and
clinical characteristics of the low-volume procedure described by CPT
code 77520 are sufficiently similar to the procedure described by CPT
code 77522 to warrant continued assignment of both CPT codes to APC
0664. Therefore, we are finalizing our proposal to exempt APC 0128 and
APC 0664 from the 2 times rule for CY 2010. Consistent with our
standard policy, we will continue to review, on an annual basis, the
APC assignments for all OPPS services to ensure appropriate placement.
We also received a number of specific public comments regarding
some of the procedures assigned to APCs that we proposed to exempt from
the 2 times rule for CY 2010. Discussions of those public comments are
included elsewhere in this final rule with comment period in the
specific sections related to the types of procedures that were the
subjects of the comments.
After consideration of the public comments we received and our
review of the CY 2008 costs from claims available for this final rule
with comment period, we are exempting 15 APCs from the 2 times rule for
CY 2010, as described previously in this section. Our final list of 15
APCs exempted from the 2 times rule is displayed in Table 22 below.
Table 22--Final APC Exceptions to the 2 Times Rule for CY 2010
----------------------------------------------------------------------------------------------------------------
Final CY 2010 APC Final CY 2010 APC Title
----------------------------------------------------------------------------------------------------------------
0057................................... Bunion Procedures.
0060................................... Manipulation Therapy.
0080................................... Diagnostic Cardiac Catheterization.
0105................................... Repair/Revision/Removal of Pacemakers, AICDs, or Vascular Devices.
0128................................... Echocardiogram with Contrast.
0141................................... Level I Upper GI Procedures.
0142................................... Small Intestine Endoscopy.
0245................................... Level I Cataract Procedures without IOL Insert.
0303................................... Treatment Device Construction.
0341................................... Skin Tests.
0381................................... Single Allergy Tests.
0409................................... Red Blood Cell Tests.
0432................................... Health and Behavior Services.
0604................................... Level 1 Hospital Clinic Visits.
0664................................... Level I Proton Beam Radiation Therapy.
----------------------------------------------------------------------------------------------------------------
C. New Technology APCs
1. Background
In the November 30, 2001 final rule (66 FR 59903), we finalized
changes to the time period a service was eligible for payment under a
New Technology APC. Beginning in CY 2002, we retain services within New
Technology APC groups until we gather sufficient claims data to enable
us to assign the service to a clinically appropriate APC. This policy
allows us to move a service from a New Technology APC in less than 2
years if sufficient data are available. It also allows us to retain a
service in a New Technology APC for more than 2 years if sufficient
data upon which to base a decision for reassignment have not been
collected.
We note that the cost bands for New Technology APCs range from $0
to $50 in increments of $10, from $50 to $100 in increments of $50,
from $100 through $2,000 in increments of $100, and from $2,000 through
$10,000 in increments of $500. These cost bands identify the APCs to
which new technology procedures and services with estimated service
costs that fall within those cost bands are assigned under the OPPS.
Payment for each APC is made at the mid-point of the APC's assigned
cost band. For example, payment for New Technology APC 1507 (New
Technology--Level VII ($500-$600)) is made at $550. Currently, there
are 82 New Technology APCs, ranging from the lowest cost band assigned
to APC 1491 (New Technology--Level IA ($0-$10)) through the highest
cost band assigned to APC 1574 (New Technology--Level XXXVII ($9,500-
$10,000). In CY 2004 (68 FR 63416), we last restructured the New
Technology APCs to make the cost intervals more consistent across
payment levels and refined the cost bands for these APCs to retain two
parallel sets of New Technology APCs, one set with a status indicator
of ``S'' (Significant Procedures, Not Discounted when Multiple. Paid
under OPPS; separate APC payment) and the other set with a status
indicator of ``T'' (Significant Procedure, Multiple Reduction Applies.
Paid under OPPS; separate APC payment). These current New Technology
APC configurations allow us to price new technology services more
appropriately and consistently.
2. Movement of Procedures From New Technology APCs to Clinical APCs
As we explained in the November 30, 2001 final rule (66 FR 59902),
we generally keep a procedure in the New Technology APC to which it is
initially assigned until we have collected sufficient data to enable us
to move the procedure to a clinically appropriate APC. However, in
cases where we find that our original New Technology APC assignment was
based on inaccurate or inadequate information (although it was the best
information available at the time), or where the New Technology APCs
are restructured, we may, based on more recent resource utilization
information (including claims data) or the availability of refined New
Technology APC cost bands, reassign the procedure or service to a
different New Technology APC that most appropriately reflects its cost.
Consistent with our current policy, in the CY 2010 OPPS/ASC
proposed rule (74 FR 35304), for CY 2010, we proposed to retain
services within New Technology APC groups until we gather sufficient
claims data to enable us to assign the service to a clinically
appropriate APC. The flexibility associated with this policy allows us
to move a service from a New Technology APC in less than 2 years if
sufficient data are available. It also allows us to retain a service in
a New Technology APC for more than 2 years if sufficient
[[Page 60439]]
hospital claims data upon which to base a decision for reassignment
have not been collected.
Table 18 of the proposed rule (74 FR 35304) listed the HCPCS code
and its associated status indicator that we proposed to reassign from a
New Technology APC to a clinically appropriate APC for CY 2010. Based
on the CY 2008 OPPS claims data available for the proposed rule, we
believe we had sufficient claims data to propose reassignment of CPT
code 0182T to a clinically appropriate APC. Specifically, we proposed
to reassign this electronic brachytherapy service from APC 1519 (New
Technology--Level IXX ($1,700-$1,800)) to APC 0313 (Brachytherapy),
where other brachytherapy services also reside. Based on hospital
claims data for CPT code 0182T, its hospital resource costs are similar
to those of other services assigned to APC 0313.
The proposed CY 2010 APC reassignment of CPT code 0182T was
discussed with the APC Panel at its August 2009 meeting. One public
presenter indicated that CPT code 0182T describes both single-fraction
and multiple-fraction electronic brachytherapy, and that most of the
claims on which CMS based its CY 2010 proposal were from hospitals
reporting multi-fraction electronic brachytherapy. The presenter
believed that the hospital resources required for these two types of
brachytherapy were significantly different from one another. The
presenter also stated that, unlike the conventional brachytherapy
procedures that are assigned to APC 0313 and for which the associated
brachytherapy sources are all paid separately under the OPPS, payment
for the brachytherapy source associated with CPT code 0182T is packaged
into the procedure payment. The APC Panel noted that the problem of
distinguishing single-fraction from multiple-fraction electronic
brachytherapy is a coding issue that would not be resolved by
additional claims data because the two types of procedures are reported
with the same CPT code. After discussion of the median cost of CPT code
0182T observed in claims data and the potential contribution of the
brachytherapy source cost to the overall procedure cost, the APC Panel
made no recommendation on the CY 2010 APC assignment for CPT code
0182T.
Comment: Several commenters disagreed with the CMS proposal to
reassign CPT code 0182T to APC 0313 for CY 2010. Commenters responding
regarding both single-fraction and multiple-fraction electronic
brachytherapy procedures reported with CPT code 0182T asserted that the
proposed payment of approximately $747 does not cover the full costs of
providing these services. They indicated that the current payment rate
of $1,750 that is associated with APC 1519, where CPT code 0182T is
assigned, includes the cost of the electronic brachytherapy source,
whereas the payment rate for APC 0313 does not. Several commenters
noted that the claims data used in determining the reassignment for CPT
code 0182T are very limited and pointed out that the claims data for
this service came from only a few hospitals that were early adopters of
the multiple-source electronic brachytherapy technology. They argued
that data from these hospitals represented pre-commercial clinical site
data and that, therefore, these hospitals had received equipment and
sources at reduced cost. One commenter suggested that CMS should
develop coding that would distinguish between single-fraction and
multiple-fraction electronic brachytherapy procedures in order to pay
appropriately for each type of service because the current single
payment for both technologies provides a financial incentive for the
use of multiple-fraction electronic brachytherapy. Most commenters
urged CMS to continue to assign CPT code 0182T to APC 1519 for at least
another year to enable CMS to gather sufficient claims data from more
hospitals in order to appropriately reassign CPT code 0182T to a
clinical APC based on the clinical and resource costs of the procedure.
Response: CPT code 0182T was initially assigned to New Technology
APC 1519 with a payment rate of $1,750 when the code was implemented in
July 2007, and it has been assigned to that same APC through CY 2009.
For CY 2010, we proposed to reassign CPT code 0182T from New Technology
APC 1519 to APC 0313, which had a proposed payment rate of
approximately $747 and a proposed median cost of approximately $753
(and now has a final rule median cost of $770). Analysis of hospital
claims data from CY 2007 and CY 2008 revealed that the procedure
described by CPT code 0182T is not commonly performed on Medicare
patients. For CY 2008, claims data show 223 total claims with a median
cost of about $506 for this procedure. For CY 2007, claims data (6
months due to implementation of the code in July 2007) show only 21
total claims with a median cost of about $495. Therefore, we believe
that the hospital resources required for CPT code 0182T are consistent
with the costs of other services assigned to APC 0313 and payment for
CPT code 0182T would be appropriately made through that clinical APC.
We are not creating a new Level II HCPCS code for single-fraction
electronic brachytherapy at this time because we believe that the two
forms of electronic brachytherapy, whether provided in a single-
fraction or multiple-fraction regimen, depending on the technology, are
both described by CPT code 0182T, which is appropriately assigned to a
single APC. We note that the payment is per-fraction according to the
code descriptor for CPT code 0182T, and that would include a single-
fraction treatment as well. While we recognize that CPT code 0182T
describes both single- and multiple-fraction electronic brachytherapy,
we commonly pay for different technologies under the OPPS that are
reported in a single CPT code and we expect the hospital claims data to
reflect the resources required for all of the different technologies
reported under the one code. To the extent that one technology is
predominantly used by hospitals, then the costs of that technology will
have a greater effect on the procedure's median cost, but we do not
believe payment through such groupings inappropriately encourages the
use of certain technologies, such as the provision of multiple-fraction
electronic brachytherapy in the case of CPT code 0182T. Our standard
OPPS ratesetting methodology provides a single payment based on
historical hospital costs that reflect utilization patterns of the
various technologies, consistent with prospective payment for groups of
similar services in order to encourage hospital efficiencies. The
hospital cost information for services always reflects the discounts
available to hospitals in the claims year, such as the commenters
indicate was the case for multiple-fraction electronic brachytherapy in
CY 2008, that may not be available in the payment year for those
services, and those discounts may vary from year to year for different
HOPD services. Nevertheless, we rely on the relativity of median costs
as reflected in claims data to be appropriate. Payment based on a
measure of central tendency is a principle of any prospective payment
system like the OPPS. In some individual cases payment exceeds the
average cost and in other cases payment is less than the average cost.
On balance, however, payment should approximate the relative cost of
the average case, recognizing that, as a prospective payment system,
the OPPS is a system of averages. In the case of CPT code 0182T, we
believe that its assignment to
[[Page 60440]]
APC 0313 for CY 2010 is fully consistent with our standard ratesetting
methodology that provides appropriate incentives for efficiency.
As of January 2010, CPT code 0182T will have been assigned to New
Technology APC 1519 for 2\1/2\ years. While we have relatively few
claims data from CY 2007 and CY 2008 for electronic brachytherapy, a
commenter on a prior rule has indicated that this service may only be
used to treat a small number of patients (72 FR 66691). To the extent
that more hospitals furnish electronic brachytherapy in future years
and that hospital costs from commercialization of the technology
change, we expect to see those costs reflected in our claims data for
those future years, which we will annually review for electronic
brachytherapy, just as we do for all OPPS services. Moreover, while we
acknowledge that, in the case of conventional brachytherapy procedures
where distinct radioactive sources are implanted, the statute requires
separate payment of the associated radioactive brachytherapy source so
that APC 0313 only pays for the application of those sources, we have
no reason to believe that reported hospital costs for CPT code 0182T do
not include the cost of the source. As we stated in the CY 2007 OPPS/
ASC final rule with comment period (71 FR 68113), we do not consider
specific devices, beams of radiation, or equipment that do not
constitute separate sources that utilize radioactive isotopes to
deliver radiation to be brachytherapy sources for separate payment, as
such items do not meet the statutory requirements provided in section
1833(t)(2)(H) of the Act. Electronic brachytherapy, described by CPT
code 0182T, utilizes such devices, beams of radiation, or equipment to
generate the radiation for the treatment, rather than distinct
radioactive sources. Therefore, in CY 2008, hospitals would have
included the costs of the devices or equipment that are necessary to
generate the radiation in their charges for the electronic
brachytherapy procedures, in contrast to the conventional brachytherapy
procedures also assigned to APC 0313 where the sources would have been
separately reported and paid. Therefore, just as in the case of other
OPPS services, our ratesetting methodology relies upon hospitals'
consideration of all costs associated with furnishing services,
including the costs of those items and services for which payment is
packaged, in setting hospital charges for separately payable procedures
such as electronic brachytherapy. Although the hospital median costs
for other HCPCS codes assigned to APC 0313 do not include the cost of
radioactive brachytherapy sources that are separately paid, we believe
the hospital cost of CPT code 0182T includes the cost of the devices or
equipment used to generate the radiation for the treatment. This
difference in packaging source payment between conventional and
electronic brachytherapy procedures alone does not lead us to conclude
that these procedures do not share sufficient cost and clinical
similarity to be assigned to the same clinical APC. The overall
hospital costs for conventional and electronic brachytherapy
procedures, including the associated packaged costs, that are paid
through the procedure codes for electronic and conventional
brachytherapy are comparable and the procedures are clinically similar
so we believe that their assignment to the same APC is appropriate,
regardless of the differences in their packaged costs.
Therefore, we continue to believe that APC 0313 is an appropriate
APC for assignment of CPT code 0182T based on our consideration of the
clinical characteristics of electronic brachytherapy and hospital costs
from claims data. Maintaining CPT code 0182T in APC 0313 for another
year would pay at a rate that is three times the cost of this service
as reflected in the hospital outpatient claims data, and we do not
believe continued payment at $1,750 is appropriate. To the extent that
hospitals' costs change over time if the procedure is more broadly
furnished, consistent with our current policy to annually assess the
appropriateness of the APC assignments for all services under the
hospital OPPS, we will continue to monitor our claims data for CPT code
0182T in the future.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to assign CPT code 0182T
to APC 0313, which has a final CY 2010 APC median cost of approximately
$770. Table 23 below lists the HCPCS code and its associated status
indicator for CY 2010.
Table 23.--CY 2010 Reassignment of a New Technology Procedure to a Clinical APC
----------------------------------------------------------------------------------------------------------------
CY 2009 Final CY Final CY
CY 2010 HCPCS code Short descriptor CY 2009 SI APC 2010 SI 2010 APC
----------------------------------------------------------------------------------------------------------------
0182T............................... Hdr elect brachytherapy..... S 1519 S 0313
----------------------------------------------------------------------------------------------------------------
D. OPPS APC-Specific Policies
In this section, we discuss HCPCS codes and their proposed status
indicators and APC reassignments for which we provided explicit
discussion in section III.D. of the CY 2010 OPPS/ASC proposed rule or
for which we received public comments on their proposed CY 2010 OPPS
treatment. Certain HCPCS codes are discussed in other sections of this
final rule with comment period, as appropriate to the items or services
they describe. The final CY 2010 OPPS/ASC treatment of all other HCPCS
not explicitly discussed in this final rule with comment period is
displayed in Addendum B to this final rule with comment period.
1. Cardiovascular Services
a. Cardiovascular Telemetry (APC 0209)
For CY 2010, we proposed to continue to assign CPT code 93229
(Wearable mobile cardiovascular telemetry with electrocardiographic
recording, concurrent computerized real time data analysis and greater
than 24 hours of accessible ECG data storage (retrievable with query)
with ECG-triggered and patient-selected events transmitted to a remote
attended surveillance center for up to 30 days; technical support for
connection and patient instructions for use, attended surveillance,
analysis and physician prescribed transmission of daily and emergent
data reports) to APC 0209 (Level II Extended EEG, Sleep, and
Cardiovascular Studies), with a proposed payment rate of approximately
$774. Because CPT code 93229 was a new code for CY 2009, in the CY 2009
OPPS/ASC final rule with comment period, we finalized an interim final
APC assignment for this code of APC 0209, with a payment rate of
approximately $754.
Comment: Some commenters recommended that CMS assign status
indicator ``A'' (Services furnished to a hospital outpatient that are
paid under a fee schedule or payment system other
[[Page 60441]]
than OPPS) to CPT code 93229 in order to make this service nonpayable
under the OPPS for CY 2010. The commenters argued that there are
currently no hospitals that can provide the type of constant monitoring
the service described by CPT code 93229 requires. For this reason,
according to the commenters, any claims submitted for CPT code 93229 by
hospitals are incorrectly coded. The commenters stated that, if CMS
chose not to adopt their recommendation and instead chose to continue
recognizing CPT code 93229 as payable under the OPPS, CMS should
reconsider the proposed assignment of the service to APC 0209.
According to the commenters, the service described by CPT code 93229 is
not similar clinically or in terms of resource utilization to the other
procedures assigned to APC 0209, in particular, the polysomnography
procedures described by CPT codes 95810 (Polysomnography; sleep staging
with 4 or more additional parameters of sleep, attended by a
technologist) and 95811 (Polysomnography; sleep staging with 4 or more
additional parameters of sleep, with initiation of continuous positive
airway pressure therapy or bilevel ventilation, attended by a
technologist), which are the most commonly reported procedures in APC
0209 with the highest number of single claims contributing to the APC's
median cost. The commenters urged CMS to assign CPT code 93229 to New
Technology APC 1513 (New Technology--Level XIII ($1,100-$1,200)) with a
payment rate of $1,150, or New Technology APC 1514 (New Technology--
Level XIV ($1,200-$1,300)) with a payment rate of $1,250. The
commenters argued that, if any hospitals were to provide the remote
cardiac monitoring service described by CPT code 93229, the proposed
payment rate for APC 0209 would be less than hospitals' costs for
providing this service.
Response: We do not agree with the commenters that we should assign
status indicator ``A'' to CPT code 93229 in order to make the service
nonpayable under the OPPS for CY 2010. For each new calendar year, we
typically recognize for OPPS payment purposes new HCPCS codes
describing services that could be covered by Medicare when provided to
hospital outpatients, regardless of whether those services are actually
being provided by hospitals at the time the OPPS/ASC final rule with
comment period for the upcoming year is issued. We believe that CPT
code 93229 describes a diagnostic study that could be provided to
Medicare beneficiaries in the hospital outpatient setting and,
therefore, could be covered by Medicare. We also do not agree that the
service described by CPT code 93229 is not similar clinically and in
terms of resource utilization to the other procedures assigned to APC
0209 for CY 2010. For example, similar to the remote cardiac monitoring
service described by CPT code 93229, the polysomnography procedures
described by CPT codes 95810 and 95811 involve continuous and
simultaneous monitoring and recording of various physiological and
pathophysiological parameters, with attendance by a technologist.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to assign CPT
code 93229 to APC 0209, with a final CY 2010 APC median cost of
approximately $764.
b. Implantable Loop Recorder Monitoring (APC 0689)
For CY 2010, we proposed to reassign CPT code 93299 (Interrogation
device evaluation(s), (remote) up to 30 days; implantable
cardiovascular monitor system or implantable loop recorder system,
remote data acquisition(s), receipt of transmissions and technician
review, technical support and distribution of results) to APC 0689
(Level II Electronic Analysis of Devices), with a proposed payment rate
of approximately $40. In CY 2009, this CPT code was assigned to APC
0209 (Level II Extended EEG, Sleep, and Cardiovascular Studies), with a
payment rate of approximately $754.
Comment: One commenter supported the proposed reassignment of CPT
code 93299 to APC 0689 for CY 2010. According to the commenter, the
procedure described by CPT code 93299 is similar clinically and in
terms of resource utilization to other procedures assigned to APC 0689.
Response: We appreciate the commenter's support of our proposal to
reassign CPT code 93299 to APC 0689 for CY 2010. We agree that the
procedure described by CPT code 93299 is similar clinically and in
terms of resource utilization to other procedures assigned to APC 0689.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to reassign CPT
code 93299 to APC 0689, which has a final CY 2010 APC median cost of
approximately $38.
c. Transluminal Balloon Angioplasty (APC 0279)
For CY 2010, we proposed to reassign CPT code 75978 (Transluminal
balloon angioplasty, venous (eg, subclavian stenosis), radiological
supervision and interpretation) from APC 0083 (Coronary or Non-Coronary
Angioplasty and Percutaneous Valvuloplasty) to APC 0279 (Level II
Angiography and Venography), with a proposed payment rate of
approximately $2,000.
Comment: Some commenters disagreed with the proposed APC
reassignment of CPT code 75978. The commenters noted that CPT code
75978 is a therapeutic interventional procedure that is not similar to
the other diagnostic procedures assigned to APC 0279. The commenters
requested that CMS continue to assign CPT code 75978 to APC 0083 where
they believe the service is most appropriately placed based on
considerations of clinical coherence and resource costs.
Response: The proposed CY 2010 median cost for APC 0083 of
approximately $3,380 is significantly higher than the proposed CY 2010
median cost of CPT code 75978 of approximately $2,597. Given the
difference in median costs, we do not believe that we should continue
to assign this procedure to APC 0083. After further analysis and review
by CMS medical advisors, we believe that CPT code 75978 would be most
appropriately assigned to APC 0093 (Vascular Reconstruction/Fistula
Repair without Device) for CY 2010 because it is a therapeutic
procedure performed on veins, similar to other therapeutic blood vessel
procedures that are currently assigned to APC 0093. Further, the CY
2010 final median cost of CPT code 75978 of approximately $2,597 is
very similar to the CY 2010 final median cost of APC 0093 of
approximately $2,378.
After consideration of the public comments we received, we are
modifying our proposed CY 2010 reassignment of CPT code 75978 from APC
0083 to APC 0279. In this final rule with comment period, for CY 2010,
we are reassigning CPT code 75978 from APC 0083 to APC 0093, which has
a final CY 2010 APC median cost of approximately $2,378.
2. Gastrointestinal Services
a. Change of Gastrostomy Tube (APC 0676)
For CY 2010, we proposed to reassign CPT code 43760 (Change of
gastrostomy tube, percutaneous, without imaging or endoscopic guidance)
from APC 0121 (Level I Tube or Catheter Changes or Repositioning) to
APC 0676
[[Page 60442]]
(Thrombolysis and Other Device Revisions), with a proposed CY 2010
payment rate of approximately $160.
Comment: Some commenters disagreed with the proposed APC
reassignment and requested that CMS continue to assign CPT code 43760
to APC 0121 because they believe the gastrostomy tube change procedure
shares significant clinical and resource characteristics with other
procedures assigned to APC 0121.
Response: Prior to CY 2008, OPPS payment for CPT code 43760
captured both the procedure and the imaging or endoscopic guidance, if
used, that was associated with percutaneously changing a gastrostomy
tube because its descriptor read, ``Change of gastrostomy tube,'' and
the OPPS packages payment for all guidance into payment for the
associated procedures. However, effective January 1, 2008, the CPT
Editorial Panel revised the code descriptor by adding the words
``without imaging or endoscopic guidance'' to further clarify that the
code should be reported for tube change procedures that do not require
imaging or endoscopic guidance. The CPT Editorial Panel further
determined that gastrostomy tube placement requiring fluoroscopic or
endoscopic guidance should be reported with either CPT code 49450
(Replacement of gastrostomy or cecostomy (or other colonic) tube,
percutaneous, under fluoroscopic guidance including contrast
injection(s), image documentation and report) or CPT code 43246 (Upper
gastrointestinal endoscopy including esophagus, stomach, and either the
duodenum and/or jejunum as appropriate; with directed placement of
percutaneous gastrostomy tube). Based on the median cost from CY 2008
claims data that reflects the new service reported under CPT code
43760, we believe a reassignment of the CPT code for CY 2010 is
necessary.
We disagree with the commenters that CPT code 43760 would be
appropriately assigned to APC 0121, which has a median cost of
approximately $426 for CY 2010. We note that the median cost for CPT
code 43760 from CY 2007, when the code represented services provided
with and without guidance, was higher at approximately $216, compared
with the CY 2008 median cost of the revised procedure code. Claims data
from CY 2008 reveal that we have 21,178 single claims (out of 38,246
total claims) for CPT code 43760, with a lower median cost of
approximately $160. The median cost for CPT code 43760 closely aligns
with the median cost of approximately $160 for APC 0676. We note that
the procedure for gastrostomy tube placement using fluoroscopic
guidance, specifically CPT code 49450, is assigned to APC 0121, and the
procedure for gastrostomy tube placement using endoscopic guidance,
specifically CPT code 43246, is assigned to APC 0141 (Level I Upper GI
Procedures). We believe that both of these other procedures are
appropriately assigned to APCs 0121 and 0141, respectively, based on
considerations of clinical and resource homogeneity. As expected, their
CPT code-specific median costs that include the cost of fluoroscopy or
endoscopic guidance are significantly higher than the median cost of
CPT code 43760, which is provided without guidance.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to reassign CPT
code 43760 from APC 0121 to APC 0676, which has a final CY 2010 APC
median cost of approximately $160.
b. Laparoscopic Liver Cryoablation (APC 0131)
For CY 2010, we proposed to continue to assign CPT code 47371
(Laparoscopy, surgical, ablation of one or more liver tumor(s);
cryosurgical) to APC 0131 (Level II Laparoscopy), with a proposed
payment rate of approximately $3,181.
Comment: One commenter requested that CMS reassign CPT code 47371
from APC 0131 to APC 0174 (Level IV Laparoscopy), which had a proposed
payment rate of approximately $7,766, to better reflect the actual
costs of the procedure. The commenter stated that CPT code 47371 is
neither similar in resource costs nor clinical characteristics to the
other procedures assigned to APC 0131, and that the four single claims
for procedure available for ratesetting are not reflective of the costs
of the procedure. In addition, the commenter indicated that most of the
procedures assigned to APC 0131 describe abdominal biopsy or repair
procedures, in contrast to CPT code 47371, which describes cryosurgical
ablation of a liver tumor. The commenter noted that there are other
similar laparoscopic liver tumor ablation procedures already assigned
to APC 0174.
Response: We agree with the commenter's argument that CPT code
47371 would be more appropriately assigned to APC 0174, where other
laparoscopic liver and renal ablation procedures are assigned. Although
we have few CY 2008 claims for CPT code 47371, our claims data show a
higher median cost of approximately $4,229 for CPT code 47371 based on
four single claims out of seven total claims, compared to the APC
median cost of approximately $3,128 for APC 0131.
We also note that since CPT code 47371 was made effective in CY
2002, the procedure for the code is rarely performed on Medicare
beneficiaries in the HOPD based on analysis of our hospital outpatient
claims data. Based upon OPPS claims submitted from CY 2002 through CY
2008, the median cost for this code has varied widely, perhaps due to
the small volume of claims annually. Specifically, the historical
median cost for CPT code 47371 has ranged from $1,850 based on two
single claims to $6,839 based on one single claim. Although this
procedure is not commonly performed on Medicare beneficiaries in the
HOPD, because we believe CPT code 47371 is similar in clinical
characteristics and resource costs to the other procedures currently
assigned to APC 0174, we agree with the commenter's recommendation.
After consideration of the public comment we received, we are
modifying our CY 2010 proposal and assigning CPT code 47371 to APC
0174, which has a final CY 2010 APC median cost of approximately
$7,342.
c. Cholangioscopy (APC 0151)
The CPT Editorial Panel created a new add-on code for
cholangioscopy, CPT code 43273 (Endoscopic cannulation of papilla with
direct visualization of common bile duct(s) and/or pancreatic ducts
(List separately in addition to code(s) for primary procedure),
effective January 1, 2009. We assigned CPT code 43273 to APC 0151
(Endoscopic Retrograde Cholangio-Pancreatography (ERCP)) on an interim
final basis in the CY 2009 OPPS/ASC final rule with comment period (73
FR 69030), and the CPT code was flagged with comment indicator ``NI''
to indicate that its OPPS treatment was open to comment on that final
rule with comment period. For CY 2010, we proposed to continue the
assignment of CPT code 43273 to APC 0151, with a proposed payment rate
of approximately $1,527.
At the August 2009 APC Panel meeting, the APC Panel heard a public
presentation recommending that CPT code 43273 be reassigned to APC 0152
(Level I Percutaneous Abdominal and Biliary Procedures). However, the
APC Panel recommended that CPT code 43273 continue to be assigned to
APC 0151.
Comment: One commenter on the CY 2009 OPPS/ASC final rule with
comment period and again on the CY 2010 OPPS/ASC proposed rule
recommended that CPT code 43273 be reassigned to APC 0152 and that CMS
[[Page 60443]]
rename APCs 0151 and 0152 to accommodate the reassignment. The
commenter provided cost information for CPT code 43273 in a New
Technology APC application previously filed with CMS, estimating that
the cost of the cholangioscopy procedure is approximately $2,958.
Because the procedure is always performed with an ERCP procedure, the
commenter estimated that the combined cost of ERCP and cholangioscopy
is approximately $4,484 by adding the CY 2008 median cost of APC 0151
to the estimated cost of the cholangioscopy procedure. The commenter
pointed out that, because all ERCP CPT codes, which are assigned to APC
0151, have a status indicator of ``T'' (Significant Procedure, Multiple
Reduction Applies), under CMS' proposal, CPT code 43273 would be paid
at 50 percent of the CY 2010 proposed payment rate for APC 0151, or
$757, a rate that is approximately $2,200 less than the reported cost
of $2,958 for the cholangioscopy procedure alone. The commenter further
estimated the cost of disposable devices alone for cholangioscopy in
combination with ERCP to be approximately $2,064. The commenter argued
that the proposed CY 2010 payment hospitals would receive for the two
procedures of approximately $2,271 would barely cover the device costs
of $2,064, and not the additional procedure costs. The commenter
maintained that if CMS reassigned CPT code 43273 to APC 0152, payment
for the combination of the two procedures would be approximately
$2,821, partially closing the gap between OPPS payment and the
commenter's estimated combined cost of the two procedures of $4,484.
The commenter explained that cholangioscopy is a complex, resource-
intensive procedure requiring additional physician training, which adds
45 minutes to the ERCP procedure, for a total of approximately 112
minutes for the two procedures. The commenter also asserted that the
clinical intensity of cholangioscopy is closer to the non-draining
percutaneous procedures assigned to APC 0152 than to the ERCP
procedures assigned to APC 0151. Further, the commenter explained that
the primary clinical difference between non-draining percutaneous
procedures and CPT code 43273 is the method of access to the biliary
and pancreatic area, noting that a small incision is required for the
percutaneous procedures and the use of an additional endoscope for
cholangioscopy.
The commenter also recommended that APC 0151 be renamed ``Level I
Hepatobiliary Procedures'' and APC 0152 be renamed ``Level II
Hepatobiliary Procedures,'' and that lower complexity hepatobiliary
procedures be assigned to APC 0151 and higher complexity hepatobiliary
procedures, including percutaneous procedures and cholangioscopy, be
assigned to APC 0152. The commenter believed that renaming and
reconfiguring APCs 0151 and 0152 would improve the clinical homogeneity
of the APCs and appropriately account for differences in the resource
costs of biliary procedures. The commenter argued that CMS has
previously renamed existing APCs, created multilevel APCs for specific
clinical areas, and configured APCs to incorporate surgical procedures
that include a variety of access types.
Response: Because CPT code 43273 was new for CY 2009, we do not yet
have cost information for the procedure based upon hospital claims for
CY 2010 ratesetting. According to our established policy, a New
Technology APC applicant's cost estimate is only one source of
information we consider in determining the cost of a new service for
purposes of its initial APC assignment under the OPPS (66 FR 59900; 73
FR 68614). We generally assign new CPT codes to an APC based on input
from a variety of sources, including, but not limited to, review of the
resource costs and clinical similarity of the service to existing
procedures; input from CMS medical advisors; information from
interested specialty societies; and review of all other information
available to us. We note that, while CPT code 43273 is new for CY 2009,
cholangioscopy in association with ERCP procedures has been performed,
using a variety of technologies, for many years. We expect that its
costs have already been incorporated into the OPPS, either packaged
into payment for the associated ERCP procedures or under an unlisted
CPT procedure code.
We continue to believe that APC 0151 is an appropriate APC
assignment for CPT code 43273 for CY 2010, based on consideration of
the procedure's clinical and resource characteristics. CPT code 43273,
which is an add-on code to ERCP procedures, clinically resembles the
ERCP procedures that also are assigned to APC 0151 because they all use
an endoscope to examine various components of the hepatobiliary system.
While cholangioscopy extends ERCP procedures to visualize the common
bile duct(s) and/or pancreatic duct(s) through use of an additional
endoscope, many of the other ERCP procedures assigned to APC 0151 also
have additional procedures associated with them that require the use of
other devices or equipment as well. We do not agree with the commenter
that percutaneous biliary procedures that require incisions and, in
some cases drainage tubes, are more clinically similar to
cholangioscopy than ERCP procedures that also examine the hepatobiliary
system with an endoscope.
Furthermore, we understand that there are a variety of technologies
that can be used to perform cholangioscopy with variable resource
costs. Therefore, we do not believe that the commenter's estimate based
on one type of new cholangioscopy technology is necessarily an
appropriate representation of the cost of the procedure described by
CPT code 43273 to hospitals. We believe that the cost of cholangioscopy
is similar to the cost of ERCP procedures that require similar
procedure time and devices, and that CPT code 43273 is appropriately
assigned to APC 0151 along with these ERCP procedures. Moreover, we
believe that applying the multiple procedure discount to payment for
cholangioscopy as a result of its status indicator ``T'' and its
routine performance with ERCP procedures that also are assigned status
indicator ``T'' is appropriate because cholangioscopy is performed
directly after ERCP and much of the preparatory procedure work is
performed during the ERCP.
Finally, because we are not reassigning CPT code 43273 to APC 0152,
no renaming of APCs 0151 and 0152 is warranted because we are
maintaining the endoscopic and percutaneous biliary procedures in
separate APCs.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to maintain the
assignment of CPT code 43273 to APC 0151, which has a final CY 2010 APC
median cost of approximately $1,510.
d. Laparoscopic Hernia Repair (APC 0131)
For CY 2010, we proposed to reassign the following six laparoscopic
hernia repair CPT codes that were new for CY 2009 from APC 0130 (Level
I Laparoscopy), with a proposed payment rate of approximately $2,538,
to APC 0131 (Level II Laparoscopy), with a proposed payment rate of
approximately $3,181: CPT code 49652 (Laparoscopy, surgical, repair,
ventral, umbilical, spigelian or epigastric hernia (includes mesh
insertion, when performed); reducible); CPT code 49653 (Laparoscopy,
surgical, repair, ventral, umbilical, spigelian or epigastric hernia
(includes mesh insertion, when performed); incarcerated or
[[Page 60444]]
strangulated); CPT code 49654 (Laparoscopy, surgical, repair,
incisional hernia (includes mesh insertion, when performed);
reducible); CPT code 49655 (Laparoscopy, surgical, repair, incisional
hernia (includes mesh insertion, when performed); incarcerated or
strangulated); CPT code 49656 (Laparoscopy, surgical, repair, recurrent
incisional hernia (includes mesh insertion, when performed);
reducible); and CPT code 49657 (Laparoscopy, surgical, repair,
recurrent incisional hernia (includes mesh insertion, when performed);
incarcerated or strangulated).
Comment: One commenter indicated that the resource costs associated
with the six laparoscopic hernia repair CPT codes are significantly
greater than the proposed payment rate of approximately $3,181 for APC
0131 and suggested that the procedures in APC 0132 (Level III
Laparoscopy) are more similar to the six laparoscopic hernia repair
codes because they have similar resource costs. The commenter requested
that CMS review the clinical characteristics and resource costs
associated with the six CPT codes and consider reassigning these codes
to APC 0132, which had a CY 2010 proposed payment rate of approximately
$4,903. In addition, the commenter provided an analysis of CY 2008
claims data for cases reported under the unlisted CPT code that would
previously have been reported for these procedures (CPT code 49659
(Unlisted laparoscopy procedure, hernioplasty, herniorrhaphy,
herniotomy)), combined with the ICD-9 diagnoses codes specific to
hernia of the abdominal cavity. Because these codes were new for CY
2009, they were assigned comment indicator ``NI'' in the CY 2009 OPPS/
ASC final rule with comment period to indicate that they were subject
to comment. For the CY 2009 OPPS/ASC final rule with comment period,
the same commenter submitted a similar comment and data analysis of CY
2007 OPPS claims. The commenter found 3,456 claims that met the same
case criteria in the analysis, with a median cost of approximately
$4,261. The commenter believed that this cost from historical hospital
claims data represented the hospital cost of procedures that would be
reported with one of the laparoscopic hernia repair CPT codes in CY
2010.
Response: We have no hospital claims data for CPT codes 49652
through 49657 because these CPT codes were new for CY 2009. However, we
agree with the commenter that procedures described by these CPT codes
were likely commonly furnished in the HOPD in CY 2008 and reported
under CPT code 49659. Taking into consideration the commenter's
analyses of CY 2007 and CY 2008 claims and performing a detailed
clinical review, we agree with the commenter that the resource costs
for the six laparoscopic hernia repair CPT codes, specifically CPT
codes 49652 through 49657, more closely align with other services
assigned to APC 0132. In addition, from a clinical perspective, we also
believe that APC 0132 is an appropriate APC assignment for these codes
because APC 0132 most accurately recognizes the complexity of the
laparoscopic hernia repair codes.
After consideration of the public comments we received, we are
modifying our CY 2010 proposals and reassigning CPT codes 49652, 49653,
49654, 49655, 49656, and 49657 from APC 0130 to APC 0132, which has a
final CY 2010 APC median cost of approximately $4,873.
3. Genitourinary Services
a. Percutaneous Renal Cryoablation (APC 0423)
For CY 2010, we proposed to continue to assign CPT code 50593
(Ablation, renal tumor(s), unilateral, percutaneous, cryotherapy) to
APC 0423 (Level II Percutaneous Abdominal and Biliary Procedures), with
a proposed payment rate of approximately $3,329. This CPT code was new
in CY 2008. However, the same service was previously described by CPT
code 0135T (Ablation renal tumor(s), unilateral, percutaneous,
cryotherapy). We note that, for CY 2007, based upon the APC Panel's
recommendation made at its March 2006 meeting, we reassigned CPT code
50593 (then CPT code 0135T) from APC 0163 (Level IV Cystourethroscopy
and other Genitourinary Procedures) to APC 0423, effective January 1,
2007.
Comment: One commenter expressed concern that the proposed payment
rate of approximately $3,329 for CPT code 50593 is inadequate because
the payment does not accurately account for the costs incurred by
hospitals in performing this procedure. The commenter argued that the
low proposed payment rate for CPT code 50593 is attributable to claims
data that do not accurately capture the full costs of CPT code 50593
because almost half of the single claims do not contain the HCPCS code
and associated charge for the required device, specifically HCPCS code
C2618 (Probe, cryoablation). The commenter requested that CMS designate
CPT code 50593 as a device-dependent procedure, which would require
hospitals to submit claims with the appropriate device HCPCS code,
assign the procedure to its own APC, and set the payment rate for that
APC based on claims for CPT code 50593 reported with HCPCS code C2618.
The commenter's analysis concluded that the median cost on which
payment for CPT code 50593 would be based if these recommendations were
adopted would be approximately $5,469, resulting in more accurate
payment for the procedure and continued Medicare beneficiary access to
percutaneous renal cryoablation in the HOPD.
Response: We believe that CPT code 50593 is appropriately assigned
to APC 0423 based on clinical and resource considerations when compared
to other procedures also proposed for assignment to APC 0423 for CY
2010. As we stated in the CY 2007 OPPS final rule with comment period
(71 FR 68049 through 68050), the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66709), and the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68611), we initially revised the APC assignment
for the percutaneous renal cryoablation procedure from APC 0163 to APC
0423 in CY 2007 based on the APC Panel's recommendation to reassign the
procedure to APC 0423. The median costs of the four HCPCS codes
assigned to APC 0423 for CY 2010 range from approximately $3,159 to
$4,670, well within the 2 times rule for the OPPS payment groups. Even
if we were to calculate the median cost for CPT code 50593 using only
claims that also contain HCPCS code C2618, estimated by the commenter
to be approximately $5,469 using proposed rule data, the grouping of
these procedures in the same APC would not violate the 2 times rule.
Further, we note that all four of these procedures are relatively low
volume, with fewer than 1,100 total claims each for CY 2008 and fewer
than 700 single claims each for ratesetting. We believe that grouping
these clinically similar, low volume procedures for the percutaneous
ablation of renal, liver, or pulmonary tumors in the same payment group
helps to promote payment stability for these low volume services.
We also do not agree that CPT code 50593 should be designated as a
device-dependent procedure and assigned to its own separate APC. We
have only 226 single claims (out of 513 total claims) for CPT code
50593 from CY 2008 and, as such, the procedure has the second lowest
frequency of the four procedures assigned to APC 0423. We believe this
relatively low volume procedure should be assigned to a payment group
with similar services, as we have proposed, in order to promote payment
stability and encourage hospital efficiency. In addition, we do not
identify individual
[[Page 60445]]
HCPCS codes as device-dependent HCPCS codes under the OPPS. Rather, we
first consider the clinical and resource characteristics of a procedure
and determine the most appropriate APC assignment. When we determine
that we should assign a procedure to an APC that is device-dependent,
based on whether that APC has been historically identified under the
OPPS as having very high device costs, we then consider the
implementation of device edits, as appropriate. We note that the
identification of device-dependent APCs was particularly important in
the early years of the OPPS when separate pass-through payment for many
implantable devices expired. At that time, a variety of methodologies
to package the costs of those devices into procedural APCs was utilized
over several years to ensure appropriate incorporation of the device
costs into the procedure payments. At this point in time, hospitals
have significantly more experience reporting HCPCS codes for packaged
and separately payable items and services under the OPPS and the
payment groups are more mature. We believe our standard ratesetting
methodology typically results in appropriate payment rates for new
procedures that utilize devices, as well as those that do not use high
cost devices. In recent years, we have not encountered circumstances
whereby we have had to establish new device-dependent APCs because we
were not able to accommodate the clinical and resource characteristics
of a procedure by assigning it to an existing APC (whether device-
dependent or non-device-dependent), and the procedure described by CPT
code 50593 is no exception.
While all of the procedures assigned to APC 0423 require the use of
implantable devices, for many of the procedures, there are no Level II
HCPCS codes that describe all of the technologies that may be used in
the procedures. Therefore, it would not be possible for us to develop
procedure-to-device edits for all of the CPT codes assigned to APC
0423. Under the OPPS, there are many other procedures that require the
use of implantable devices that, because they are assigned to OPPS APCs
that are not device-dependent, do not have procedure-to-device edits
applied, even if those claims processing edits would be feasible. We
believe that our payments for procedures that utilize high cost devices
are appropriate for those services, even when those services are
grouped with other procedures that either do not require the use of
implantable devices or that utilize devices that are not described by
specific Level II HCPCS codes.
When reporting CPT code 50593, we expect hospitals to also report
the device HCPCS code C2618, which is associated with this procedure.
We also remind hospitals that they must report all of the HCPCS codes
that appropriately describe the items used to provide services,
regardless of whether the HCPCS codes are packaged or paid separately.
If hospitals use more than one probe in performing CPT code 50593, we
expect hospitals to report this information on the claim and adjust
their charges accordingly. Hospitals should report the number of
cryoablation probes used to perform CPT code 50593 as the units of
HCPCS code C2618 which describes these devices, with their charges for
the probes. Since CY 2005, we have required hospitals to report device
HCPCS codes for all devices used in procedures if there are appropriate
HCPCS codes available. In this way, we can be confident that hospitals
have included charges on their claims for costly devices used in
procedures when they submit claims for those procedures.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to continue to
assign CPT code 50593 to APC 0423, which has a final CY 2010 APC median
cost of approximately $3,430.
b. Hemodialysis (APC 0170)
Currently, APC 0170 (Dialysis) contains two HCPCS codes: CPT code
90935 (Hemodialysis procedure with single physician evaluation) and
HCPCS code G0257 (Unscheduled or emergency dialysis treatment for an
ESRD patient in an HOPD that is not certified as an ESRD facility).
Hospital outpatient and emergency departments sometimes must furnish
hemodialysis to patients who do not have ESRD and, in these cases, they
would report CPT code 90935 for the service. Under the Medicare ESRD
benefit, to be covered by Medicare, routine dialysis required by a
Medicare ESRD beneficiary must be furnished in a certified ESRD
facility. Most HOPDs and emergency departments are not certified by
Medicare to furnish routine dialysis to Medicare ESRD patients and,
therefore, are not paid under the ESRD benefit. However, there are a
limited number of specific cases in which Medicare pays under the OPPS
for an ESRD patient to receive unscheduled dialysis in an outpatient
department of a hospital that does not have an ESRD-certified facility.
These provisions were established in the CY 2003 OPPS final rule with
comment period (67 FR 66803 through 66805). Specifically, Medicare pays
hospitals under the OPPS for dialysis for ESRD patients under the
following limited circumstances as specified in the Medicare Claims
Processing Manual, Pub. 100-04, Chapter 4, Section 200.2:
Dialysis is performed following or in connection with a
dialysis-related procedure such as a vascular access procedure or a
blood transfusion;
Dialysis is performed following treatment for an unrelated
medical emergency; or
Emergency dialysis is performed for ESRD patients who
would otherwise have to be admitted as inpatients in order for the
hospital to receive payment.
When these criteria are met, the hospital reports HCPCS code G0257,
which we proposed to assign to APC 0170 for CY 2010, with a proposed
payment of approximately $442.
Comment: One commenter, who recognized that Medicare pays under the
OPPS for hemodialysis for ESRD patients under very specific, limited
circumstances, asked whether hospitals are permitted to bill and be
paid under the OPPS for routine hemodialysis for ESRD patients who are
unable to arrange for routine hemodialysis at a Medicare-certified ESRD
facility.
Response: As the commenter noted, Medicare pays under OPPS for
dialysis for a beneficiary with ESRD only under the exceptional
circumstances specified in the Medicare Claims Processing Manual, Pub.
100-04, Chapter 4, Section 200.2 that are listed above. Routine
treatments in hospitals that do not have an ESRD facility are not
payable under the OPPS. A hospital that would like to provide routine
hemodialysis to ESRD patients should contact the State survey and
certification agency to pursue ESRD certification of an outpatient
dialysis unit.
After consideration of the public comment we received, we continue
to believe that our policy governing the payment of dialysis services
in HOPDs and emergency departments is appropriate. We are not making
any change to this policy for CY 2010. The final CY 2010 median cost of
APC 0170 for hemodialysis is approximately $456.
c. Radiofrequency Remodeling of Bladder Neck (APC 0165)
For CY 2010, we proposed to continue to assign Category III CPT
code 0193T (Transurethral, radiofrequency micro-remodeling of the
female bladder neck and proximal urethra for stress urinary
incontinence) to APC 0165 (Level IV Urinary and Anal Procedures) with a
[[Page 60446]]
proposed payment rate of approximately $1,353. This CPT code was new
for CY 2009 and was assigned to APC 0165 on an interim final basis in
the CY 2009 OPPS/ASC final rule with comment period.
At the August 2009 APC Panel meeting, a presenter requested that
the APC Panel recommend that CMS reassign CPT code 0193T to either APC
0202 (Level VII Female Reproductive Procedures) or APC 0168 (Level II
Urethral Procedures) for CY 2010 based on resource intensity and
therapeutic benefit. The presenter claimed that the device cost
associated with CPT code 0193T is comparable to the single-use devices
that are used with certain procedures assigned to APC 0202,
specifically those procedures described by CPT codes 58356 (Endometrial
cryoablation with ultrasonic guidance, including endometrial curettage,
when performed); 58565 (Hysteroscopy, surgical; with bilateral
fallopian tube cannulation to induce occlusion by placement of
permanent implants); and 57288 (Sling operation for stress incontinence
(e.g., fascia or synthetic)). The presenter indicated that, unlike
procedures assigned to APC 0202 that require costly medical devices,
the costs of single-use medical devices for procedures assigned to APC
0165 are very minimal. After a discussion, the APC Panel recommended
that CMS maintain the APC assignment of CPT code 0193T to APC 0165, as
proposed, for CY 2010.
Comment: Some commenters disagreed with CMS' proposal to continue
to assign CPT code 0193T to APC 0165. The commenters believed that the
proposed payment for the procedure would not pay appropriately for the
costs incurred by hospitals to perform the procedure, especially
because the procedure utilizes a costly, single-use, disposable medical
device. The commenters argued that APC 0202, which had a proposed CY
2010 proposed payment rate of approximately $2,991, contains procedures
that are very similar to CPT code 0193T. Specifically, the commenters
indicated that CPT code 0193T is similar in clinical characteristics
and resource costs to CPT codes 58356, 58565, and 57288. The commenters
added that the probe used in the procedure reported with CPT code 0193T
costs $1,095 and, overall, the total procedure cost that includes the
cost of the probe is approximately $2,473, which is comparable to the
proposed CY 2010 payment rate for APC 0202.
Another commenter was concerned that, at the August 2009 APC Panel
meeting, the APC Panel members may have been confused about the
surgical nature of CPT code 0193T. Specifically, the commenter believed
that the APC Panel concluded that all of the procedures assigned to APC
0202 are surgical in nature, whereas the procedure described by CPT
code 0193T is not, which resulted in the APC Panel's recommendation to
continue to assign this code to APC 0165. The commenter clarified that
CPT code 0193T is similar to surgical CPT codes 58565 and 58356, which
are both assigned to APC 0202 based on their resource use and clinical
characteristics. The commenter further noted that, although CPT code
0193T may be performed in the physician's office, in the Medicare
population, this procedure is more likely to be performed in the
hospital outpatient setting because of medical conditions and
comorbidities experienced by Medicare patients.
Response: As a new Category III CPT code for CY 2009, we do not yet
have hospital claims data for the procedure. Category III CPT codes are
temporary codes that describe emerging technology, procedures, and
services, and they are created by the AMA to allow for data collection
for new services or procedures. Under the OPPS, we generally assign a
payment rate to a new Category III CPT code based on input from a
variety of sources, including but not limited to, review of resource
costs and clinical homogeneity of the service to existing procedures,
information from specialty societies, input from CMS medical advisors,
and other information available to us. Based on our review of the
clinical characteristics of CPT code 0193T, as well as the other
procedures assigned to APC 0165 and APC 0202 that was recommended by
the commenters, and the APC Panel discussion and recommendation
regarding the procedure, we continue to believe that APC 0165 is the
most appropriate APC assignment for CPT code 0193T for CY 2010. We
understand that CPT code 0193T is a minimally invasive procedure for
female stress urinary incontinence that requires a relative brief time
in the procedure room. We do not agree with the commenters that the
procedures assigned to APC 0202 that involve fallopian tube
cannulation, endometrial ablation, or implantation of a sling for
stress urinary incontinence are sufficiently similar to the procedure
described by CPT code 0193T based on procedure duration, device
utilization, use of guidance, or other characteristics to warrant
reassignment of CPT code 0193T to APC 0202 based on considerations of
clinical homogeneity. Rather, we believe that assignment to APC 0165
will appropriately account for the device and procedure costs of CPT
code 0193T.
After consideration of the public comments we received and the APC
Panel recommendation from the August 2009 meeting, we are finalizing
our CY 2010 proposal, without modification, to continue to assign CPT
code 0193T to APC 0165, which has a final CY 2010 APC median cost of
approximately $1,337.
d. Change of Bladder Tube (APC 0121)
For CY 2010, we proposed to reassign CPT code 51710 (Change of
cystostomy tube; complicated) from APC 0427 (Level II Tube or Catheter
Changes or Repositioning) to APC 0121 (Level I Tube or Catheter Changes
or Repositioning), with a proposed CY 2010 payment rate of
approximately $428.
Comment: One commenter supported the proposed APC reassignment of
CPT code 51710 from APC 0427 to APC 0121.
Response: We appreciate the commenter's support. Hospital
outpatient claims data revealed that we have approximately 267 single
claims (out of 431 total claims) for CPT code 51710, with a final CY
2010 median cost of approximately $446. The final CY 2010 median cost
for CPT code 51710 closely aligns with the final CY 2010 median cost of
approximately $426 for APC 0121. We believe that CPT code 51710 is
appropriately reassigned to APC 0121 based on clinical and resource
considerations.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to reassign CPT
code 51710 from APC 0427 to APC 0121, which has a final CY 2010 APC
median cost of approximately $426.
4. Nervous System Services
a. Pain-Related Procedures (APCs 0203, 0204, 0206, 0207, 0221, 0224,
and 0388)
We proposed to set the CY 2010 payment rates for APCs 0203 (Level
IV Nerve Injections), 0204 (Level I Nerve Injections), 0206 (Level II
Nerve Injections), 0207 (Level III Nerve Injections), 0221 (Level II
Nerve Procedures), 0224 (Implantation of Catheter/Reservoir/Shunt) and
0388 (Discography) based on the median costs determined under the OPPS
standard ratesetting. Among the CPT codes included in these APCs are:
62350 (Implantation, revision, or repositioning of tunneled intrathecal
or epidural catheter for long-term medication
[[Page 60447]]
administration via an external pump or implantable reservoir/infusion
pump; with laminectomy); 62355 (Removal of previously implanted
intrathecal or epidural catheter); 62365 (Removal of subcutaneous
reservoir or pump, previously implanted for intrathecal or epidural
infusion); 64472 (Injection, anesthetic agent and/or steroid,
paravertebral facet joint or facet joint nerve; cervical or thoracic,
each additional level (list separately in addition to code for primary
procedure)); 64476 (Injection, anesthetic agent and/or steroid,
paravertebral facet joint or facet joint nerve; lumbar or sacral, each
additional level (list separately in addition to code for primary
procedure)); 64480 (Injection, anesthetic agent and/or steroid,
transforminal epidural; cervical or thoracic, each additional level
(list separately in addition to code for primary procedure)); 64623,
(Destruction by neurolytic agent, paravertebral facet joint nerve;
lumbar or sacral, each additional level, (list separately in addition
to code for primary procedure)); 64627 (Destruction by neurolytic
agent, paravertebral facet joint nerve; cervical or thoracic, each
additional level, (list separately in addition to code for primary
procedure)); 72285 (Discography, cervical or thoracic, radiological
supervision and interpretation); and 72295 (Discography, lumbar,
radiological supervision and interpretation).
Comment: One commenter objected to the proposed CY 2010 payment
rates for CPT codes 64472, 64476, 64480, 64623, and 64627, which the
commenter believed have declined 28 percent to 48 percent since CY
2007. The commenter also objected to the proposed CY 2010 increase in
payments for CPT codes 72285 and 72295 on the basis that their proposed
payment rates are unreasonable because they are not procedures. The
commenter added that CPT codes 62290 (Injection procedure for
discography, each level, lumbar) and 62291 (Injection procedure for
discography, each level, cervical or thoracic) are the related
procedures, which are paid at an unreasonably low rate.
Response: OPPS payment rates fluctuate based on a variety of
factors, including, but not limited to, changes in the mix of hospitals
billing the services, differential changes in hospital charges and
costs for the services, and changes in the volumes of services
reported. Therefore, the median costs on which the OPPS payment rates
are based vary from one year to another. We note that the median costs
of all of the APCs to which CPT codes 64472, 64476, 64480, 64623, and
64627 are assigned increased between CY 2009 and CY 2010. For CPT codes
64472 and 64480, the median cost of APC 0206 to which they are assigned
increased from approximately $236 in CY 2009 to approximately $249 in
CY 2010. In the case of CPT codes 64476 and 64627, the median cost of
APC 0204 to which they are assigned increased from approximately $161
in CY 2009 to approximately $171 in CY 2010. Lastly, for CPT code
64623, the median cost of APC 0207 to which the code is assigned
increased from approximately $463 in CY 2009 to approximately $481 in
CY 2010.
CPT codes 72285 and 72295, both of which are assigned to APC 0388,
are ``T'' packaged codes and, as such, are paid separately only if
there is no separately paid surgical procedure with a status indicator
of ``T'' on the same claim. When there is a separate payment made for
these codes, the payment is not only payment for the code itself but
also includes payment for all services reported on the claim that are
always packaged (that is, those with a status indicator of ``N''). The
median cost of APC 0388 to which CPT codes 72285 and 72295 are assigned
for payment when separate payment can be made increased from
approximately $1,470 in CY 2009 to approximately $1,727 in CY 2010,
reflecting the cost of all conditionally and unconditionally packaged
services on the claim. Payment for CPT codes 62290 and 62291 is always
packaged into payment for the independent, separately paid procedures
with which these codes are reported because we believe that these codes
are ancillary and supportive to other major separately paid procedures
and that they are furnished only as an ancillary and dependent part of
an independent separately paid procedure.
Comment: One commenter disagreed with the proposed CY 2010 payment
rates for CPT codes 62355, 62350, 62363 (we note that this code did not
exist in CY 2008 and does not exist in CY 2009; the commenter did not
provide a description of the procedure that would enable us to identify
the code and respond to the comment), and 62365. The commenter believed
that access to these services is very limited as a result of payment
reductions for these procedures.
Response: The final median costs for the APCs to which CPT codes
62350 and 62365 are assigned for CY 2010 increased from CY 2009 to CY
2010, while the final median cost for APC 0203 to which CPT code 62355
is assigned declined over that same time period. Specifically, CPT code
62350 is assigned to APC 0224, which has a CY 2009 median cost of
approximately $2,715 and a final CY 2010 median cost of approximately
$2,740. Similarly, CPT code 62365 is assigned to APC 0221, which has a
CY 2009 median cost of approximately $2,322 and a final CY 2010 median
cost of approximately $2,490. In contrast, CPT code 62355 is assigned
to APC 0203, which has a CY 2009 median cost of approximately $928 that
declined to approximately $885 in CY 2010. The increased median costs
of APCs 0221 and 0224 do not create barriers to care for these
procedures. Moreover, we do not believe that the modest reduction in
median cost for APC 0203 would cause hospitals to cease to furnish the
service.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposals, without modification, to pay for CPT
codes 62350, 62355, 62365, 64472, 64476, 64480, 64623, 64627, 72285,
and 72295 through APCs 0203, 0204, 0206, 0207, 0221, 0224, and 0388.
The final CY 2010 median costs of the relevant APCs are displayed in
Table 24 below. For comparative purposes, we also are showing in the
table the median costs on which the CY 2009 OPPS payments are based.
Table 24--Median Costs for Selected APCs for Pain-Related Procedures Mentioned by Commenters
----------------------------------------------------------------------------------------------------------------
Proposed CY Final CY
CY 2009 2010 2010
APC APC title approximate approximate approximate
median cost median cost median cost
----------------------------------------------------------------------------------------------------------------
0203.................................. Level IV Nerve Injections..... $929 $1,066 $885
0204.................................. Level I Nerve Injections...... 161 181 171
0206.................................. Level IV Nerve Injections..... 236 254 249
0207.................................. Level III Nerve Injections.... 463 504 481
[[Page 60448]]
0221.................................. Level II Nerve Procedures..... 2,322 2,521 2,490
0224.................................. Implantation of Catheter/ 2,715 2,769 2,740
Reservoir/Shunt.
0388.................................. Discography................... 1,470 1,769 1,727
----------------------------------------------------------------------------------------------------------------
b. Magnetoencephalography (APCs 0065 and 0067)
Three CPT codes describe magnetoencephalography services: 95965
(Magnetoencephalography (MEG), recording and analysis; for spontaneous
brain magnetic activity (e.g. epileptic cerebral cortex localization));
95966 (Magnetoencephalography (MEG), recording and analysis; for
spontaneous brain magnetic activity (e.g. epileptic cerebral cortex
localization) for evoked magnetic fields, single modality (e.g.
sensory, motor, language or visual cortex localization)); and 95967
(Magnetoencephalography (MEG), recording and analysis; for spontaneous
brain magnetic activity (e.g. epileptic cerebral cortex localization),
for evoked magnetic fields, each additional modality (e.g. sensory,
motor language, or visual cortex localization (List separately in
addition to code for primary procedure)). These CPT codes were
originally assigned to New Technology APCs but, beginning in CY 2006
and for every year thereafter, these codes have been assigned to
clinical APCs on the basis of the clinical and resource characteristics
of the services. For CY 2010, we proposed to continue to assign CPT
code 95965 to APC 0067 (Level III Stereotactic Radiosurgery, MRgFUS and
MEG) with a proposed payment rate of approximately $3,507, and we
proposed to continue to assign CPT codes 95966 and 96967 to APC 0065
(Level II Stereotactic Radiosurgery, MRgFUS and MEG), with a proposed
payment rate of approximately $894.
Comment: Several commenters requested that CMS restore the payment
rates for CPT codes 95965, 95966, and 95967 to the levels at which they
were paid under New Technology APCs in CY 2005 of $5,250, $1,450, and
$950, respectively. They believed the payment rates for CYs 2006, 2007,
2008, and 2009 and the proposed rate for CY 2010 were based on median
cost calculations that understated the full costs of the services. The
commenters asked CMS to create a cost center on the Medicare cost
report that would be used solely to house hospitals' costs of MEG and
indicated that the NUBC had approved a request for a dedicated revenue
code for the reporting of charges for MEG. The commenters argued that
if CMS would create a cost center for the costs of MEG from which a
specific CCR could be developed for application to MEG charges, the
resulting median cost would be a more accurate reflection of the cost
of MEG and would, therefore, result in more appropriate payment. One
commenter submitted eight claims for MEG, stating that its Medicare
contractor had approved use of a subscript for a specific cost center
on the cost report to house the costs of MEG. The commenter asked if
these claims were used in ratesetting, provided the CCR the commenter
calculated using the costs and charges for MEG that would be reported
on the cost report line that contained only MEG costs, and asked if CMS
calculated the costs of these claims using the specific CCR for MEG
services.
Response: We assign new services to New Technology APCs only until
we believe that we have sufficient historical hospital claims data
reflecting hospital costs to reassign them to appropriate clinical
APCs. We initially assigned MEG services to New Technology APCs based
on the information available to us at the time about the expected
hospital costs. For CY 2006, we believed that we had sufficient claims
data to enable us to make informed decisions regarding the proper
clinical APCs for assignment of MEG services. We note that the volumes
of claims for MEG services have remained stable since we moved them to
clinical APCs in CY 2006. We have no reason to believe that the costs
that we have derived from our standard cost estimation process for the
CY 2010 OPPS fail to appropriately reflect the relative costs of MEG
services in relation to the costs of other services paid under the
OPPS, nor do we have reason to believe that payment at the rates under
which these services were paid under the New Technology APCs in CY 2005
are justified.
With regard to whether individual claims that were submitted by one
commenter were used to set the median costs on which the CY 2010 MEG
payment rates are based, we note that the claims we use to set the
payment rates under the OPPS are available for purchase and a provider
that wishes to see if particular claims were used can attain the claims
file and perform any analysis they choose. We are not able to create
provider-specific revenue code-to-cost center crosswalks that would use
unique cost report subscripts that hospitals choose to create for
particular services. In the case of a hospital reporting MEG costs on a
subscripted line 54.01, the costs would be included as costs in cost
center 5400 (the cost center to which 54.01 is a subscripted line), the
standard cost center for electroencephalography. In accordance with our
standard revenue code-to-cost center crosswalk, we would apply the CCR
for this cost center to the charges reported under revenue code 0740
(EEG (Electroencephalogram); General Classification)) if there is no
CCR available for nonstandard cost center 3280 (EKG and EEG).
We recognize that the NUBC created a new revenue code for MEG on
August 11, 2009, to be effective for services reported on or after
April 1, 2010, if a hospital chooses to use it. We anticipate that we
will propose to use claims for services furnished in CY 2010 to
calculate OPPS payment rates for CY 2012. Therefore, for the CY 2012
OPPS, we expect that we will propose to determine the primary,
secondary and tertiary (if any) CCRs to be applied to the new revenue
code as part of our standard ratesetting process for the CY 2012 OPPS.
With regard to requests for a dedicated cost center for MEG services,
the revised draft hospital cost report Form CMS-2552-10 went on public
display through the Federal Register (74 FR 31738), with a comment
period that ended on August 31, 2009. We will consider whether creation
of such a cost center is appropriate in our review of all public
comments on the proposed revisions to the cost report.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposals, without modification, to continue to
[[Page 60449]]
assign CPT code 95965 to APC 0067, with a final CY 2010 median cost of
approximately $3,539, and to continue to assign CPT codes 95966 and
96967 to APC 0065, with a final CY 2010 median cost of approximately
$954.
5. Ocular Services
a. Insertion of Anterior Segment Aqueous Drainage Device (APC 0234)
The CPT Editorial Panel created Category III CPT code 0191T
(Insertion of anterior segment aqueous drainage device, without
extraocular reservoir; internal approach), effective on July 1, 2008.
We assigned CPT code 0191T to APC 0234 (Level III Anterior Segment Eye
Procedures), effective July 1, 2008, and maintained this APC assignment
for CY 2009. For CY 2010, we proposed to continue the assignment of CPT
code 0191T to APC 0234, with a proposed payment rate of approximately
$1,639.
Comment: One commenter asserted that the assignment of CPT code
0191T to APC 0234 for CY 2010 would not provide sufficient payment to
hospitals and ASCs to cover the cost of the procedure and, therefore,
is inappropriate. The commenter indicated that the manufacturer of the
device system inserted in the procedure reported by CPT code 0191T
currently has an Investigational Device Exemption (IDE) from the FDA
and has filed a premarket approval (PMA) application with the FDA with
the expectation that the device will be available for use in the United
States as early as the first quarter of CY 2010. The commenter noted
that the CY 2010 proposed median cost of CPT code 0191T of
approximately $2,380, based on only three single claims, was much
higher than the CY 2010 proposed median cost of APC 0234 of
approximately $1,639 and the CY 2010 proposed ASC payment of
approximately $962. The commenter explained that the relatively low
number of Medicare hospital outpatient claims for CPT code 0191T
resulted from the limited use of the procedure in IDE studies and its
predominant performance in ASCs in association with cataract surgery.
The commenter also noted that none of the other procedures assigned to
APC 0234 involve the placement of an implantable device, while CPT code
0191T requires the insertion of a device that costs about $2,500.
Response: CPT code 0191T is a new CPT code with very few Medicare
claims from CY 2008, possibly because this procedure has been limited
to IDE studies, as noted by the commenter. Furthermore, because this
CPT code was effective on July 1, 2008, CY 2008 claims reflect only 6
months of hospital data, rather than a full year. We note that there
are a number of other surgical eye procedures to treat glaucoma that
are also assigned to APC 0234 for CY 2010. Moreover, the final CY 2010
median cost of CPT code 0191T based on a small number of CY 2008 claims
is approximately $1,962, close to the final CY 2010 median cost of APC
0234 of approximately $1,630. Therefore, based on considerations of
clinical and resource homogeneity, we continue to believe that APC 0234
is the most appropriate APC assignment for CPT code 0191T for CY 2010.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to continue to
assign CPT code 0191T to APC 0234, with a final CY 2010 APC median cost
of approximately $1,630.
b. Backbench Preparation of Corneal Allograft
For CY 2010, we proposed to continue to assign CPT code 65757
(Backbench preparation of corneal endothelial allograft prior to
transplantation) status indicator ``N'' (Items and Services Packaged
into APC Rates). In the CY 2009 OPPS/ASC final rule with comment period
(73 FR 69076), we assigned CPT code 65757 status indicator ``N'' and
flagged the code with comment indicator ``NI'' to indicate that, as a
new CPT code for CY 2009, its interim final CY 2009 OPPS treatment was
subject to comment on that final rule with comment period.
Comment: One commenter requested that CMS pay separately for CPT
code 65757 under the OPPS through an APC. According to the commenter,
this service represents the preparation process for corneal
transplants. The commenter argued that because this service is time-
consuming and requires specialized skills and equipment, CPT code 65757
should not be packaged under the OPPS but, instead, should be paid
separately.
Response: We packaged CPT code 65757 because we consider it to be
an intraoperative service that is ancillary and supportive to another
service that is paid separately under the OPPS, specifically the
corneal transplant. Our general packaging policies for certain
categories of services are discussed in section II.A.4. of this final
rule with comment period. Although OPPS payment for CPT code 65757 is
packaged, we will consider its costs in setting the payment rates for
the associated surgical procedures under the OPPS, according to the
standard OPPS cost estimation methodology that is discussed in section
II.A.2. of this final rule with comment period.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to continue to
assign CPT code 65757 status indicator ``N.''
6. Orthopedic and Musculoskeletal Services
a. Arthroscopic Procedures (APCs 0041 and 0042)
For CY 2010, we proposed to continue the assignment of various
arthroscopy procedures to APCs 0041 (Level I Arthroscopy) and APC 0042
(Level II Arthroscopy), with proposed payment rates of approximately
$2,014 and $3,279, respectively.
Comment: One commenter expressed concern about the variety of
procedures assigned to APC 0041, whose HCPCS code-specific median costs
ranged from $50 to $22,000, and to APC 0042, whose HCPCS code-specific
median costs ranged from $143 to $20,000. In particular, the commenter
indicated that the current designation of only two APCs for the more
than 60 distinct arthroscopic procedures assigned to these APCs does
not appropriately reflect the unique clinical and resource
characteristics associated with arthroscopic procedures that are
provided to Medicare beneficiaries. The commenter urged CMS to create
several new APCs to ensure clinical homogeneity and similar resource
utilization for the arthroscopy procedures assigned to them and
provided recommended APC configurations.
To pay appropriately for arthroscopic procedures under the OPPS,
the commenter recommended that CMS restructure the arthroscopy
procedures into 11 new APCs based on the following three clinical
categories: (1) Diagnostic arthroscopies; (2) lower extremity versus
upper extremity arthroscopies; and (3) arthroscopies with implants. The
commenter further recommended specific payment rates associated with
each of the 11 recommended APCs, ranging from $1,400 to $5,400.
According to the commenter, the recommended clinical distinctions
parallel the distinctions CMS has created for other classes of
procedures, including other orthopedic procedures, and would more
accurately reflect the clinical characteristics and resource
utilization of the services provided.
Alternatively, the commenter provided, in the event a
reconfiguration of APCs 0041 and 0042 is not possible at this time, two
more limited
[[Page 60450]]
suggestions: Finalize the proposal to reassign CPT codes 29888
(Arthroscopically aided anterior cruciate ligament repair/augmentation
or reconstruction) and 29889 (Arthroscopically aided posterior cruciate
ligament repair/augmentation or reconstruction) from APC 0042 to APC
0052 (Level IV Musculoskeletal Procedures Except Hand and Foot) and
reassign CPT code 29892 (Arthroscopically aided repair of large
osteochondritis dissecans lesion, talar dome fracture, or tibial
plafond fracture, with or without internal fixation (includes
arthroscopy)) from APC 0042 to APC 0052.
Response: We believe the existing clinical APCs 0041 and 0042
sufficiently account for the different clinical and resource
characteristics of the procedures assigned to them. To reduce the size
of the APC payment groups and establish new APC payment groups to pay
more precisely would be inconsistent with our overall strategy to
encourage hospitals to use resources more efficiently by increasing the
size of the payment bundles. Moreover, many of the services that are
assigned to APCs 0041 and 0042 are low volume services, with even fewer
single claims available for ratesetting. Including low volume services
in APCs with clinically similar higher volume services and similar
median costs generates more stability in the payment rates that are set
for these low volume services.
For APC 0041, based on significant services with a total claim
frequency of greater than 1,000 or a frequency of greater than 99 and
percentage of single claims equal to or greater than 2 percent, CY 2008
hospital outpatient claims data showed that the median cost of the
lowest cost service is approximately $1,463 and the median cost of the
highest cost service is approximately $2,086. Likewise, for APC 0042,
claims data showed that the median cost of the lowest cost significant
procedure is approximately $2,730 and the median cost of the highest
cost significant procedure is approximately $4,592. Based on the CY
2008 claims data, there is no 2 times violation in either APC 0041 or
APC 0042. Therefore, we see no reason for a reconfiguration into many
more APCs in light of our interest in promoting hospital efficiency, as
discussed earlier.
With respect to the reassignment of CPT code 29892 from APC 0042 to
APC 0052 as recommended by the commenter, we agree that this
reassignment would be appropriate for CY 2010. While we have very few
claims for this procedure upon which to accurately estimate its cost,
we reviewed the clinical characteristics associated with CPT code 29892
and agree that, based on the complexity of this procedure, it would be
more appropriately assigned to APC 0052 based on its clinical
characteristics and expected resource utilization. Furthermore, we
appreciate the commenter's support for our proposed reassignment of CPT
codes 29888 and 29889 from APC 0042 to APC 0052 for CY 2010.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposals to reassign CPT codes 29888 and 29889
from APC 0042 to APC 0052, with a final CY 2010 APC median cost of
approximately $5,921. In addition, we are also finalizing the
reassignment of CPT code 29892 from APC 0042 to APC 0052 for CY 2010.
We are making no other changes to the proposed configurations of APC
0041 and 0042 for CY 2010. The final CY 2010 APC median cost for APC
0041 is approximately $1,998 and approximately $3,261 for APC 0042.
b. Knee Arthroscopy (APCs 0041 and 0042)
For CY 2010, we proposed to continue to assign CPT codes 29882
(Arthroscopy, knee, surgical; with meniscus repair (medial or lateral))
and 29883 (Arthroscopy, knee, surgical; with meniscus repair (medial
and lateral)) to APC 0041 (Level I Arthroscopy), with a proposed
payment rate of approximately $2,014. In addition, we proposed to
continue to assign CPT code 29867 (Arthroscopy, knee, surgical;
osteochondral allograft (eg, mosaicplasty)) to APC 0042 (Level II
Arthroscopy), with a proposed payment rate of approximately $3,279.
Comment: One commenter recommended that CMS reassign CPT code 29882
and 29883 from APC 0041 to APC 0042 because of their similarity to
procedures assigned to APC 0042. The commenter also requested that CMS
reassign CPT code 29867 from APC 0042 to APC 0052 (Level IV
Musculoskeletal Procedures Except Hand and Foot), with a proposed
payment rate of approximately $5,889. The commenter believed that CPT
code 29867 is clinically comparable to the other procedures assigned to
APC 0052.
Response: We reviewed the clinical and resource characteristics of
CPT codes 29882 and 29883 and continue to believe these CPT codes are
appropriately assigned to APC 0041 for CY 2010. Analysis of CY 2008
claims data showed that the median cost for CPT code 29882, based on
165 single claims (out of 334 total claims), is approximately $2,224
and for CPT code 29883, based on 116 claims (out of 182 total claims),
is approximately $2,075. These median costs are consistent with the
final CY 2010 median cost of APC 0041, which is approximately $1,998.
Furthermore, these procedures are clinically similar to the majority of
other knee arthroscopy procedures that are also assigned to APC 0041.
In addition, we do not agree with the commenter's assertion that
CPT code 29867 is similar to the other procedures in APC 0052. Our
claims data show that CPT code 29867 has a median cost of approximately
$3,652, which is significantly lower than the median cost of
approximately $5,921 for APC 0052, but close to the median cost of
approximately $3,261 for APC 0042, where we proposed to assign the code
for CY 2010. Furthermore, the knee arthroscopy procedure described by
CPT code 29867 is not clinically similar to other procedures assigned
to APC 0052, which are generally not performed arthoscopically.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposals, without modification, to continue to
assign CPT codes 29882 and 29883 to APC 0041, which has a final CY 2010
APC median cost of approximately $1,998, and to continue to assign CPT
code 29867 to APC 0042, which has a final CY 2010 APC median cost of
approximately $3,261.
c. Shoulder Arthroscopy (APC 0042)
For CY 2010, we proposed to continue to assign CPT codes 29806
(Arthroscopy, shoulder, surgical; capsulorrhaphy) and 29807
(Arthroscopy, shoulder, surgical; repair of slap lesion) to APC 0042
(Level II Arthroscopy), with a proposed payment rate of approximately
$3,279.
Comment: One commenter recommended that CMS reassign CPT codes
29806 and 29807 to APC 0052 (Level IV Musculoskeletal Procedures Except
Hand and Foot), which had a proposed payment rate of approximately
$5,889. The commenter believed that these procedures are clinically
similar to the other procedures in APC 0052.
Response: We continue to believe that CPT codes 29806 and 29807 are
appropriately assigned to APC 0042 based on clinical and resource
considerations. We note that most other shoulder arthroscopy procedures
that are similar to CPT codes 29806 and 29807 are assigned to APC 0042,
while most procedures assigned to APC 0052 are bone procedures that are
not performed arthroscopically. Analysis of our claims data revealed
that the median cost of CPT code 29806, based
[[Page 60451]]
on 161 single claims (out of 759 total claims), is approximately
$4,003, which is significantly lower than the median cost of
approximately $5,921 for APC 0052. Likewise, our claims data showed
that the median cost of CPT code 29807, based on 199 single claims (out
of 3,802 total claims), is approximately $4,202, which is also
significantly lower than the median cost for APC 0052. The CPT code-
specific median costs of these two procedure codes fall within the
range of median costs (approximately $2,730 to $4,592) of significant
procedures that are also assigned to APC 0042 for CY 2010. Therefore,
we believe that CPT codes 29806 and 29807 are most similar clinically
and with respect to resource costs to other procedures assigned to APC
0042.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to continue to
assign CPT codes 29806 and 29807 to APC 0042, which has a final CY 2010
APC median cost of approximately $3,261.
d. Fasciotomy Procedures (APC 0049)
For CY 2010, we proposed to continue to assign the following seven
CPT codes for fasciotomy procedures to APC 0049 (Level I
Musculoskeletal Procedures Except Hand and Foot): CPT code 25020
(Decompression fasciotomy, forearm and/or wrist, flexor or extensor
compartment; without debridement of nonviable muscle and/or nerve); CPT
code 27496 (Decompression fasciotomy, thigh and/or knee, one
compartment (flexor or extensor or adductor)); CPT code 27498
(Decompression fasciotomy, thigh and/or knee, multiple compartments);
CPT code 27499 (Decompression fasciotomy, thigh and/or knee, multiple
compartments; with debridement of nonviable muscle and/or nerve); CPT
code 27892 (Decompression fasciotomy, leg; anterior and/or lateral
compartments only, with debridement of nonviable muscle and/or nerve);
CPT code 27893 ('Decompression fasciotomy, leg; posterior
compartment(s) only, with debridement of nonviable muscle and/or
nerve); and CPT code 27894 (Decompression fasciotomy, leg; anterior
and/or lateral, and posterior compartment(s), with debridement of
nonviable muscle and/or nerve). The CY 2010 proposed payment rate for
APC 0049 was approximately $1,490.
Comment: One commenter recommended that CMS reassign CPT codes
25020, 27496, 27498, 27599, 27892, 27893, and 27894 from APC 0049 to
APC 0050 (Level II Musculoskeletal Procedures Except Hand and Foot)
based on their clinical and resource similarity to the other fasciotomy
procedures proposed for assignment to APC 0050. Although the commenter
recommended assignment of CPT code 27599 (Unlisted procedure, femur or
knee) among its list of codes for assignment to APC 0050, we believe
that the commenter may have intended to reference CPT code 27499
instead. CPT code 27499 describes a decompression fasciotomy on the
thigh and/or knee and was proposed for assignment to APC 0049. CPT code
27599 was proposed for assignment to APC 0129 (Level I Closed Treatment
Fracture Finger/Toe/Trunk) and does not describe a fasciotomy
procedure.
Response: We reviewed the clinical characteristics associated with
each of the seven fasciotomy procedures, and based on our analysis, we
agree with the commenter's recommendation. We note that, while we have
no or very limited hospital claims data for these services that reflect
hospital costs, a number of other similar fasciotomy procedures are
already assigned to APC 0050. Based on further analysis, we believe
that CPT codes 25020, 27496, 27498, 27499, 27892, 27893, and 27894 are
sufficiently similar to those other fasciotomy procedures to warrant
reassignment to APC 0050.
After consideration of the public comment we received, for CY 2010,
we are reassigning CPT codes 25020, 27496, 27498, 27499, 27892, 27893,
and 27894 from APC 0049 to APC 0050, which has a final CY 2010 APC
median cost of approximately $2,122.
e. Fibula Repair (APC 0062)
For CY 2010, we proposed to continue to assign CPT code 27726
(Repair of fibula nonunion and/or malunion with internal fixation) to
APC 0062 (Level I Treatment Fracture/Dislocation), with a proposed
payment rate of approximately $1,735.
Comment: One commenter recommended that CMS reassign CPT code 27726
from APC 0062 to APC 0063 (Level II Treatment Fracture/Dislocation)
because the procedure is comparable in clinical and resource
characteristics to CPT code 27760 (Closed treatment of medial malleolus
fracture; without manipulation), which was proposed for assignment to
APC 0063, with a proposed payment rate of approximately $3,023. In
particular, the commenter argued that repair of a fibular nonunion is
similar clinically and with respect to resource costs to repair of a
tibial nonunion and, therefore, the two procedures should be assigned
to the same clinical APC. Although the commenter compared CPT code
27726 to CPT code 27760, we believe that the commenter may have
intended to reference CPT code 27720 (Repair of nonunion or malunion,
tibia; without graft, (eg, compression technique)), which describes a
repair of a tibial nonunion and was proposed for assignment to APC
0063, instead of CPT code 27760. CPT code 27760 describes a closed
treatment of an ankle fracture and was proposed for assignment to APC
0129 (Level I closed Treatment Fracture Finger/Toe/Trunk).
Response: We reviewed the clinical characteristics and resource use
associated with CPT code 27726, and based on our analysis, we agree
with the commenter's recommendation. For CY 2010, our claims data
showed a median cost of approximately $3,486 for CPT code 27726, based
on 59 single claims (of 121 total claims), which is significantly
higher than the median cost of approximately $1,726 for APC 0062.
Further, our claims data showed that the median cost of CPT code 27726
is similar to that of APC 0063, which has an APC median cost of
approximately $3,037. In addition, CPT code 27726 clinically resembles
CPT code 27720, which is also assigned to APC 0063.
After consideration of the public comment we received, for CY 2010,
we are modifying our CY 2010 proposal and reassigning CPT code 27726 to
APC 0063 for CY 2010, which has a final CY 2010 APC median cost of
approximately $3,037.
f. Forearm Orthopedic Procedures (APCs 0050, 0051, and 0052)
For CY 2010, we proposed to assign the 14 forearm fracture
procedures listed in Table 25 below to APC 0050 (Level II
Musculoskeletal Procedures Except Hand and Foot), APC 0051, (Level III
Musculoskeletal Procedures Except Hand and Foot), or APC 0052 (Level IV
Musculoskeletal Procedures Except Hand and Foot). The CY 2010 proposed
payment rate for APCs 0050 was approximately $2,135; for APC 0051,
approximately $3,156; and for APC 0052, approximately $5,889.
Comment: One commenter recommended that CMS reassign six forearm
fracture procedures to APC 0051. In particular, the commenter stated
that CPT codes 25350, 25355, 25360, 25370, 25390, and 25400 describe
forearm surgical procedures involving only one bone and the hospital
resource costs for the procedures are similar to those of procedures
assigned to APC 0051. In addition, the commenter suggested that CMS
reassign both CPT codes 24400 and 24410 to APC 0051 because these
procedures are similar in clinical
[[Page 60452]]
characteristics and resource costs to other procedures in APC 0051.
Further, the commenter recommended that CPT codes 25365, 25375, 25393,
25405, 25415, and 25420 be reassigned to APC 0052 based on
considerations of clinical and resource homogeneity.
Response: We reviewed the clinical characteristics and resource
costs associated with each surgical procedure discussed by the
commenter. Based on our analysis of hospital claims data and clinical
review, we agree with the commenter's recommendation that CPT codes
24400, 24410, 25350, 25355, 25360, 25370, 25390, and 25400 should be
assigned to APC 0051. We have very few hospital outpatient claims for
these procedures upon which to estimate their hospital costs. We note
that these procedures are all performed on only one forearm bone,
either the radius or the ulna, and we believe they share significant
clinical and resource characteristics with other procedures assigned to
APC 0051. Therefore, we are reassigning CPT codes 24400, 24410, 25350,
25360, and 25390 to APC 0051 for CY 2010. As we proposed, we are
continuing to assign CPT codes 25355, 25370, and 25400 to APC 0051 for
CY 2010.
With regard to the procedures that were recommended for
reassignment to APC 0052, we agree with the commenter's argument that
CPT codes 25405, 25415, and 25420 have similar resource costs to other
procedures already assigned to APC 0052. These procedures were assigned
to APC 0052 for CY 2009 and, as we proposed, for CY 2010, we are
continuing their assignment to APC 0052.
However, we do not agree with the commenter's recommendation to
reassign CPT codes 25365, 25375, and 25393 to APC 0052. We have very
few claims for these procedures from CY 2008, but we believe their
clinical and resource characteristics are sufficiently similar to other
procedures assigned to APC 0051 that they should all be assigned to APC
0051 for CY 2010. While we proposed to assign CPT codes 25375 and 25393
to APC 0051 for CY 2010, we proposed to assign CPT code 25365 to APC
0050. In this final rule with comment period, we are modifying the
assignment of CPT code 25365 to APC 0051, where it will reside along
with CPT codes 25375 and 25393.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposals, without modification, to continue to
assign CPT codes 25355, 25370, 25375, and 25393, and 25400 to APC 0051,
which has a final CY 2010 APC median cost of approximately $3,111, and
CPT codes 25405, 25415, and 25420 to APC 0052, which has a final CY
2010 APC median cost of approximately $5,921. We are modifying our CY
2010 proposals and assigning CPT codes 24400, 24410, 25350, 25360,
25365, and 25390 to APC 0051, which has a final CY 2010 APC median cost
of approximately $3,111. Table 25 below lists the final APC assignments
for the 14 forearm fracture procedures discussed in this section.
Table 25--CY 2010 APC Assignment for Certain Forearm Fracture Procedures
------------------------------------------------------------------------
Proposed
CY 2010 HCPCS code CY 2010 Long CY 2010 Final CY
descriptor APC 2010 APC
------------------------------------------------------------------------
24400....................... Osteotomy, humerus, 0050 0051
with or without
internal fixation.
24410....................... Multiple osteotomies 0050 0051
with realignment on
intramedullary rod,
humeral shaft
(sofield type
procedure).
25350....................... Osteotomy, radius; 0052 0051
distal third.
25355....................... Osteotomy, radius; 0051 0051
middle or proximal
third.
25360....................... Osteotomy; ulna..... 0050 0051
25365....................... Osteotomy; radius 0050 0051
and ulna.
25370....................... Multiple 0051 0051
osteotomies, with
realignment on
intramedullary rod
(sofield type
procedure); radius
or ulna.
25375....................... Multiple 0051 0051
osteotomies, with
realignment on
intramedullary rod
(sofield type
procedure); radius
and ulna.
25390....................... Osteoplasty, radius 0050 0051
or ulna; shortening.
25393....................... Osteoplasty, radius 0051 0051
and ulna;
lengthening with
autograft.
25400....................... Repair of nonunion 0051 0051
or malunion, radius
or ulna; without
graft (eg,
compression
technique.
25405....................... Repair of nonunion 0052 0052
or malunion, radius
or ulna; with
autograft (includes
obtaining graft).
25415....................... Repair of nonunion 0052 0052
or malunion, radius
and ulna; without
graft (eg,
compression
technique).
25420....................... Repair of nonunion 0052 0052
or malunion, radius
and ulna; with
autograft (includes
obtaining graft).
------------------------------------------------------------------------
g. Low Energy Extracorporeal Shock Wave Therapy (Low Energy ESWT)
For CY 2010, we proposed to continue to assign CPT code 0019T
(Extracorporeal shock wave involving musculoskeletal system, not
otherwise specified, low energy) status indicator ``A'' (Services
furnished to a hospital outpatient that are paid under a fee schedule
or payment system other than OPPS).
Comment: One commenter urged CMS to assign CPT code 0019T status
indicator ``T'' (Significant Procedure: Multiple Reduction Applies),
and to place the CPT code in an APC that pays appropriately. The
commenter indicated that high energy ESWT, specifically CPT code 0101T
(Extracorporeal shock wave involving musculoskeletal system, not
otherwise specified, high energy), is assigned to APC 0050 (Level II
Musculoskeletal Procedures Except Hand and Foot), with a proposed CY
2010 payment rate of approximately $2,135. The commenter argued that
both the low energy and high energy ESWT treat similar conditions and
both use Class III medical devices that are subject to the most
stringent FDA approval process that restricts the sale of the device to
by or on the order of a physician. Because of this similarity, the
commenter urged CMS to be consistent in its payment policy and
recommended that both CPT codes 0101T and 0019T be assigned the same
status indicator to specify their separate payment under the OPPS.
Response: We do not agree that low energy ESWT is similar to high
energy ESWT. High energy ESWT requires the
[[Page 60453]]
use of anesthesia during the procedure and usually involves only one
treatment session. Alternatively, low energy ESWT does not require
anesthesia and usually is furnished over several sessions. Because of
the complexity of high energy ESWT, we believe that it is appropriate
to pay for CPT code 0101T as a hospital outpatient service under the
OPPS through APC 0050. However, CPT code 0019T is assigned status
indicator ``A'' because it is designated as a ``sometimes therapy''
service to indicate that it is a therapy service when furnished by a
therapist. When performed in the HOPD, we believe CPT code 0019T would
be furnished as a therapy service paid under the MPFS and, therefore,
the service is appropriately assigned status indicator ``A'' for
hospital outpatient payment purposes. Regulation of the device by the
FDA as a Class III medical device for sale by or on the order of a
physician and the need for special training to use the technology for
its approved use are not inconsistent with our considering CPT code
0019T to be a ``sometimes therapy'' service, that is, a therapy service
when furnished by a therapist.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to continue to
assign CPT code 0019T to status indicator ``A'' for CY 2010.
h. Insertion of Posterior Spinous Process Distraction Device (APC 0052)
For CY 2009 (73 FR 68620), we reassigned CPT codes 0171T (Insertion
of posterior spinous process distraction device (including necessary
removal of bone or ligament for insertion and imaging guidance),
lumbar, single level) and 0172T (Insertion of posterior spinous process
distraction device (including necessary removal of bone or ligament for
insertion and imaging guidance), lumbar, each additional level) from
APC 0050 (Level II Musculoskeletal Procedures Except Hand and Foot) to
APC 0052 (Level IV Musculoskeletal Procedures Except Hand and Foot).
For CY 2007 and CY 2008, the device implanted in procedures described
by CPT codes 0171T and 0172T, HCPCS code C1821 (Interspinous process
distraction device (implantable)), was assigned pass-through payment
status and, therefore, was paid separately at charges adjusted to cost.
The period of pass-through payment for HCPCS code C1821 expired after
December 31, 2008. According to our established methodology, the costs
of devices no longer eligible for pass-through payments are packaged
into the costs of the procedures with which the devices are reported in
the claims data used to set the payment rates for those procedures.
Therefore, the costs of the implanted device identified by HCPCS code
C1821 are packaged into the costs of CPT codes 0171T and 0172T
beginning in CY 2009.
At the February 2009 meeting, the APC Panel heard a public
presentation that recommended reassignment of CPT codes 0171T and 0172T
from APC 0052 to APC 0425 (Level II Arthroplasty or Implantation with
Prosthesis). The presenter believed that APC resource homogeneity would
be improved if CPT codes 0171T and 0172T were reassigned to APC 0425.
The presenter asserted, based on its analysis of CY 2007 claims data,
that the median cost of CPT code 0171T was significantly higher than
the median cost of APC 0052, while only slightly lower than the median
cost of APC 0425. The presenter indicated that, while the median cost
of APC 0052 was significantly higher than the median cost of device
HCPCS code C1821, device costs are only one element of the overall
procedure cost and other associated procedure costs are more than
$3,200. Regarding clinical homogeneity, the presenter stated that
kyphoplasty is the only spine procedure currently assigned to APC 0052
other than CPT codes 0171T and 0172T. The presenter also claimed that
36 percent of claims for CPT code 0171T are reported without HCPCS code
C1821, which identified a device that is always implanted in procedures
reported with CPT codes 0171T and 0172T. The presenter requested
reassignment of CPT codes 0171T and 0172T to APC 0425 because this APC
is a device-dependent APC, and CPT codes 0171T and 0172T would then be
subject to procedure-to-device claims processing edits.
The APC Panel recommended that CMS continue the assignment of CPT
codes 0171T and 0172T to APC 0052 for CY 2010, institute procedure-to-
device claims processing edits for HCPCS code C1821, and then
reevaluate the APC assignments of CPT codes 0171T and 0172T in one
year.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35305), we stated that
under our existing policy, we generally do not identify any individual
HCPCS codes as device-dependent codes under the OPPS. We create device
edits, when appropriate, for procedures assigned to device-dependent
APCs, where those APCs have been historically identified under the OPPS
as having very high device costs. We noted in the CY 2009 OPPS/ASC
final rule with comment period regarding APC 0052 (73 FR 68621) that we
typically do not implement procedure-to-device edits for an APC where
there are not device HCPCS codes for all possible devices that could be
used to perform a procedure that always requires a device, and the APC
is not designated as a device-dependent APC. APC 0052 is not a device-
dependent APC because a number of the procedures assigned to the APC do
not require the use of implantable devices. Furthermore, in some cases,
there may not be HCPCS codes that describe all devices that may be used
to perform the procedures in APC 0052.
We examined the CY 2008 claims data available for the CY 2010
proposed rule to determine the frequency of billing CPT code 0171T
(which is the main procedure code reported with HCPCS code C1821) with
and without device HCPCS code C1821. CPT code 0172T is an add-on code
to CPT code 0171T. We recognize that our single claims for CPT code
0172T may not be correctly coded claims and, therefore, our cost
estimation for CPT code 0172T may not be accurate. Our analysis showed
that the CY 2010 proposed rule median cost for CPT code 0171T was
approximately $7,717 based on over 800 single claims. The CY 2010
proposed rule claims data for CPT code 0171T revealed a median cost of
approximately $7,916 based on over 500 single claims with HCPCS code
C1821, and a median cost of approximately $7,387 based on approximately
300 single claims without HCPCS code C1821. Therefore, we concluded
that the median cost of claims for CPT code 0171T reported with HCPCS
code C1821 is similar to the median cost of claims for the procedure
reported without HCPCS code C1821. We stated in the CY 2010 OPPS/ASC
proposed rule (74 FR 35305) that we have no reason to believe that
those hospitals not reporting the device HCPCS code had failed to
consider the cost of the device in charging for the procedure.
Furthermore, claims for CPT code 0171T reported with HCPCS code C1821
accounted for about two-thirds of the single claims available for
ratesetting. For the CY 2010 OPPS/ASC proposed rule, we concluded that
the overall median cost of CPT code 0171T fell within an appropriate
range of HCPCS code-specific median costs for those services proposed
for CY 2010 assignment to APC 0052, which had a proposed APC median
cost of approximately $5,939 and no 2 times violation. Moreover, in the
CY 2010 OPPS/ASC proposed rule (74 FR 35305), we indicated that we do
not believe that procedure-to-device claims processing
[[Page 60454]]
edits are necessary to ensure accurate cost estimation for CPT code
0171T.
The CY 2010 OPPS/ASC proposed rule line-item median cost for HCPCS
code C1821 was approximately $4,625, while the CY 2010 OPPS/ASC
proposed rule median cost of APC 0052 was approximately $1,300 more
than this device cost. We stated in the proposed rule (74 FR 35305)
that previous estimates of procedure time presented to us at the time
of the device pass-through application for the interspinous process
distraction device described by HCPCS code C1821 were approximately 30
to 60 minutes of procedure time for the service currently described by
CPT code 0171T. This is reasonably comparable to the typical procedure
time for kyphoplasty described by CPT code 22523 (Percutaneous
vertebral augmentation, including cavity creation (fracture reduction
and bone biopsy included when performed) using mechanical device, one
vertebral body, unilateral or bilateral cannulation (eg, kyphoplasty);
thoracic) and CPT code 22524 (Percutaneous vertebral augmentation,
including cavity creation (fracture reduction and bone biopsy included
when performed) using mechanical device, one vertebral body, unilateral
or bilateral cannulation (eg, kyphoplasty); lumbar), which are also
assigned to APC 0052.
Because we reasoned that APC 0052 pays appropriately for the
procedure cost of CPT codes 0171T and 0172T, we proposed to maintain
the assignment of CPT codes 0171T and 0172T to APC 0052 for CY 2010 and
not to implement device edits for these procedures. We proposed to
accept one part of the APC Panel's recommendation regarding the
continued assignment of CPT codes 0171T and 0172T to APC 0052, but we
proposed to not accept the APC Panel's further recommendation to
institute procedure-to-device edits for these services for CY 2010. As
we do for all OPPS services, we stated that we would reevaluate the APC
assignments of CPT codes 0171T and 0172T when additional claims data
become available for CY 2011 ratesetting, in accordance with the final
part of the APC Panel's recommendation for these procedures (74 FR
35305).
Comment: Some commenters recommended that CMS reassign CPT codes
0171T and 0172T from APC 0052 to APC 0425 for CY 2010, arguing that the
resource costs associated with these procedures are more similar to the
resource costs of procedures assigned to APC 0425 than to procedures
assigned to APC 0052. One commenter noted, for example, that the median
cost for CPT code 0171T is approximately 30 percent higher than the
median cost for APC 0052, but only two percent lower than the median
cost for APC 0425. In response to CMS' observation in the CY 2010 OPPS/
ASC proposed rule that the proposed median cost of APC 0052 was
approximately $1,300 more than the line-item median cost for HCPCS code
C1821 of approximately $4,625, the commenter pointed out that device
costs are but one element of the overall procedure costs. The commenter
presented data to demonstrate that the service costs associated with
CPT code 0171T are greater than this $1,300 difference. The commenter
agreed that the 30 to 60 minute procedure time associated with CPT code
0171T that CMS noted in the proposed rule is reasonable, but argued
that intraservice time should not be used as a sole basis for judging
resource homogeneity because there is not a direct correlation between
intraservice time and hospital costs.
The commenters also disagreed with CMS' assertion that the
procedures described by CPT codes 0171T and 0172T are more similar
clinically to procedures assigned to APC 0052 than to procedures
assigned to APC 0425. One commenter argued that kyphoplasty is the only
spine procedure assigned to APC 0052, and that, like all of the other
procedures assigned to APC 0052, it does not involve the implantation
of a device. The commenter acknowledged that, while CMS' statement of
clinical similarity for APC 0052 is true to some extent, the procedure
described by CPT code 0171T is more similar to procedures assigned to
APC 0425 because it is orthopedic in nature and requires the use of a
device that is classified as a prosthesis by the FDA.
Moreover, the commenter claimed that there are relevant precedents
for reassignment of CPT codes 0171T and 0172T to APC 0425, such as CMS'
proposed reassignment of CPT code 27446 (Arthroplasty, knee, condyle
and plateau; medial OR lateral compartment) to APC 0425 for CY 2010.
The commenter also argued that reassigning CPT 0171T and 0172T to
device-dependent APC 0425, to which procedure-to-device edits apply,
would help ensure that only correctly coded claims are used in
ratesetting.
Response: We continue to believe that APC 0052 is an appropriate
APC assignment for CPT codes 0171T and 0172T based on consideration of
the procedures' clinical and resource characteristics. We do not agree
with the commenters that the resource costs of providing the procedures
described by CPT codes 0171T and 0172T are substantially different from
the resource costs of providing other procedures assigned to APC 0052
and that they should not be assigned to APC 0052, which has a final CY
2010 APC median cost of approximately $5,921. Based on the CY 2008
claims data reviewed for this final rule with comment period, the final
median costs of CPT codes 0171T and 0172T are approximately $7,522
(based on 939 single claims) and approximately $14,617 (based on 6
single claims), respectively. As we have noted previously (73 FR
68620), we recognize that our single claims for CPT code 0172T may not
be correctly coded and, therefore, our cost estimation for CPT code
0172T may not be accurate. CPT code 0171T has the highest median cost
of the significant procedures (defined as those procedures with a
frequency of greater than 1,000 single claims or a frequency of greater
than 99 and more than 2 percent of the single claims in the APC)
assigned to APC 0052, while the lowest cost significant procedure has a
median cost of approximately $5,072. Therefore, the configuration of
APC 0052 does not violate the 2 times rule. We continue to believe
that, based on resource considerations, assignment to APC 0052 would
provide appropriate payment for CPT codes 0171T and 0172T. We agree
with the commenters that we should consider factors such as line-item
median costs for devices and intraservice times as two data elements
among several when we evaluate the clinical and resource homogeneity of
APCs. In this case, we continue to believe that, as described in the
proposed rule, both the line-item median cost for HCPCS code C1821 and
the intraservice time for the procedure described by CPT code 0171T
support our assessment that this procedure is similar in terms of
resource utilization to other procedures assigned to APC 0052,
consistent with the fact there is no 2 times violation within this APC.
We continue to believe the posterior spinous process distraction
device procedures described by CPT codes 0171T and 0172T are clinically
similar to other procedures, such as the kyphoplasty procedures, that
are assigned to APC 0052. We disagree with the commenter that the
kyphoplasty procedures described by CPT codes 22523 and 22524 do not
involve the implantation of a device. Our definition of an implantable
device includes surgically inserted or implanted devices that may not
remain with the patient following the procedure, and thus may include
expensive devices used in kyphoplasty such as expanders and
[[Page 60455]]
other single-use disposal devices used to create a cavity in the
vertebral body. We note the code descriptor of kyphoplasty CPT code
22523 states, ``using mechanical device.'' Based on a kyphoplasty New
Technology APC application we received in CY 2004, the prices for these
implantable devices are approximately $3,000. Moreover, the kyphoplasty
procedures are clinical substitutes for vertebroplasty procedures, such
as the procedure described by CPT code 22520 (Percutaneous
vertebroplasty, one vertebral body, unilateral or bilateral injection;
thoracic) and are assigned to APC 0050 (Level II Musculoskeletal
Procedures Except Hand and Foot). CPT code 22520 has a CY 2010 final
rule median cost of approximately $2,181, which is nearly $3,800 less
than the final rule median cost of approximately $5,976 calculated for
the kyphoplasty procedure described by CPT code 22523. This
differential appears to be largely attributable to implantable device
costs in kyphoplasty procedures. Therefore, we continue to believe that
kyphoplasty and posterior spinous process distraction device procedures
are clinically similar in that they are spinal procedures involving
implantable devices. We note that there are no procedures involving the
spine assigned to APC 0425.
We do not agree with the commenter that our reassignment of the
knee arthroplasty procedure described by CPT code 27446 to APC 0425
serves as a precedent for the reassignment of CPT codes 0171T and 0172T
to APC 0425. As discussed in section II.A.2.d.(1) of this final rule
with comment period, we reassigned CPT code 27446 from APC 0681 (Knee
Arthroplasty) to APC 0425 for CY 2010 in order to consolidate APC 0425
with APC 0681, in which CPT code 27446 was the only code. As noted in
section II.A.2.d.(1) of this final rule with comment period, over the
past several years, the median cost for CPT code 27446 has fluctuated
due to a low volume of services being performed by a small number of
providers in the HOPD, and to a single provider performing the majority
of services. We believe that by reassigning CPT code 27446 to APC 0425
and deleting APC 0681, we can maintain greater stability from year to
year in the payment rate for CPT code 27446. Therefore, we do not
believe this is a similar situation to that of CPT codes 0171T and
0172T, as the commenter argued. Furthermore, we do not believe that
implantation of an interspinous process distraction device, a minimally
invasive procedure, is clinically comparable to a knee replacement
procedure that is performed on the majority of Medicare beneficiaries
on a hospital inpatient basis. We also do not agree that we should
reassign CPT codes 0171T and 0172T to APC 0425 in order to implement
device edits for these procedures. As we described in the proposed rule
(74 FR 35305), based upon analysis of CY 2010 proposed rule claims data
for CPT code 0171T, we have no reason to believe that the minority of
hospitals that do not bill HCPCS code C1821 along with CPT code 0171T
are not already considering the costs of the interspinous process
distraction device in charging for the procedure.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposals, without modification, to continue to
assign CPT codes 0171T and 0172T to APC 0052, which has a final CY 2010
APC median cost of approximately $5,921.
7. Radiation Therapy Services
a. Proton Beam Therapy (APCs 0664 and 0667)
For CY 2010, we proposed to continue to assign CPT codes 77520
(Proton treatment delivery; simple, without compensation) and 77522
(Proton treatment delivery; simple, with compensation) to APC 0664
(Level I Proton Beam Radiation Therapy), which had a proposed payment
rate of approximately $713. We also proposed to continue to assign CPT
codes 77523 (Proton treatment delivery; intermediate) and 77525 (Proton
treatment delivery; complex) to APC 0667 (Level II Proton Beam
Radiation Therapy), which had a proposed payment rate of approximately
$933.
Comment: Several commenters supported the proposed payment
increases for the proton beam treatment CPT codes. The commenters cited
a payment increase of 1.43 percent for CPT codes 77520 and 77522, and a
payment increase of 11.02 percent for CPT codes 77523 and 77525.
Response: We appreciate the commenters' support for our proposals.
The CY 2010 OPPS payment rates for CPT codes 77520, 77522, 77523, and
77525 are based on the APC median costs calculated from CY 2008
hospital claims data and the most current cost reports, according to
the standard OPPS ratesetting methodology. We are confident that the
observed costs in the claims data are representative of the costs of
the proton beam therapy services provided in CY 2008 because almost all
of the claims are single claims that can be used for ratesetting.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposals, without modification, to assign CPT
codes 77520 and 77522 to APC 0664, with a final CY 2010 APC median cost
of approximately $934, and CPT codes 77523 and 77525 to APC 0667, with
a final CY 2010 APC median cost of approximately $1,221.
b. Stereotactic Radiosurgery (SRS) Treatment Delivery Services (APCs
0065, 0066, 0067, and 0127)
For CY 2010, we proposed to continue to assign CPT code 77371
(Radiation treatment delivery, stereotactic radiosurgery (SRS),
complete course of treatment of cranial lesion(s) consisting of 1
session; multi-source Cobalt 60 based) to APC 0127 (Level IV
Stereotactic Radiosurgery, MRgFUS, and MEG), with a proposed payment
rate of approximately $7,714.
We also proposed to continue to recognize for separate payment in
CY 2010 four existing HCPCS G-codes that describe linear accelerator-
based SRS treatment delivery services. Specifically, we proposed the
following: to assign HCPCS code G0173 (Linear accelerator based
stereotactic radiosurgery, complete course of therapy in one session)
to APC 0067 (Level III Stereotactic Radiosurgery, MRgFUS, and MEG),
with a proposed payment rate of approximately $3,507; to assign HCPCS
code G0251 (Linear accelerator-based stereotactic radiosurgery,
delivery including collimator changes and custom plugging, fractionated
treatment, all lesions, per session, maximum five sessions per course
of treatment) to APC 0065 (Level I Stereotactic Radiosurgery, MRgFUS,
and MEG), with a proposed payment rate of approximately $894; to assign
HCPCS code G0339 (Image-guided robotic linear accelerator-based
stereotactic radiosurgery, complete course of therapy in one session or
first session of fractionated treatment) to APC 0067, with a proposed
payment rate of approximately $3,507; and to assign HCPCS code G0340
(Image-guided robotic linear accelerator-based stereotactic
radiosurgery, delivery including collimator changes and custom
plugging, fractionated treatment, all lesions, per session, second
through fifth sessions, maximum five sessions per course of treatment)
to APC 0066 (Level II Stereotactic Radiosurgery, MRgFUS, and MEG), with
a proposed payment rate of approximately $2,505.
Further, we proposed to continue to assign CPT codes 77372
(Radiation treatment delivery, stereotactic
[[Page 60456]]
radiosurgery (SRS) (complete course of treatment of cerebral lesion(s)
consisting of 1 session); linear accelerator based) and 77373
(Stereotactic body radiation therapy, treatment delivery, per fraction
to 1 or more lesions, including image guidance, entire course not to
exceed 5 fractions) status indicator ``B'' (Codes that are not
recognized by OPPS when submitted on an outpatient hospital Part B bill
type (12x and 13x)) under the OPPS, to indicate that these CPT codes
are not payable under the OPPS.
Comment: Several commenters expressed concern about their belief
that payment for HCPCS code G0173 and CPT code 77371 is based on the
utilization of specific SRS equipment. The commenters stated that no
clinical data exist to support the need for differential payment for
linear accelerator-based and Cobalt-60 SRS procedures. The commenters
further explained that current medical literature cites no difference
in clinical effectiveness for the systems associated with linear
accelerator-based and Cobalt-60 SRS procedures. One commenter provided
an extensive bibliography of relevant peer-reviewed articles supporting
this finding. The commenters recommended that CMS assign HCPCS code
G0173 and CPT code 77371 to the same APC so that payment for both
services would be the same. Specifically, the commenters suggested
capping the payment rate for CPT code 77371 at the payment rate for
HCPCS code G0173. One commenter added that, based on an internal
analysis of CY 2007 claims data using the CY 2009 OPPS payment rates
for CPT code 77371 and HCPCS code G0173, paying both procedures at the
payment rate for HCPCS code G0173 would lead to Medicare savings of at
least $272 million over 10 years and about $104 million over 5 years.
The commenters encouraged CMS to consider this payment methodology and,
thereby, pay for services appropriately regardless of the specific
equipment used to deliver SRS treatment, especially as Medicare moves
towards a value-based purchasing system.
Response: Analysis of our claims data shows that the median costs
for linear accelerator-based and Cobalt-60 SRS procedures vary
significantly. Since the creation of CPT code 77371, which was made
effective January 1, 2007, our claims data has shown a median cost of
more than approximately $7,000 for this procedure. Based on data
available for CY 2010 ratesetting, our claims data showed a median cost
of approximately $7,277 for CPT code 77371 that is derived from 483
single claims (of 4,142 total claims), which is significantly higher
than the median cost of approximately $2,877 for HCPCS code G0173 that
is based on 459 single claims (of 1,471 total claims). Likewise, for
claims submitted for CY 2007, the data year used for CY 2009
ratesetting, our claims data showed a median cost of approximately
$7,470 based on 518 single claims (of 4,208 total claims) for CPT code
77371, which is much higher than the median cost of approximately
$3,523 for HCPCS code G0173, based on 528 single claims (of 1,616 total
claims).
The OPPS is a prospective payment system, where APC payment rates
are based on the relative costs of services as reported to us by
hospitals according to the most recent claims and cost report data as
described in section II.A. of this final rule with comment period. The
2 times rule specifies that the median cost of the highest cost item or
service within a payment group may be no more than 2 times greater than
the median cost of the lowest cost item or service within the same
group. Based on application of the 2 times rule, we cannot assign HCPCS
code G0173 and CPT code 77371 to the same APC. In addition, because
hospitals continue to report very different costs for these services,
we believe it is appropriate to maintain the assignment of these two
codes to different payment groups for CY 2010. As a matter of payment
policy, the OPPS does not set payment rates for services based on
considerations of clinical effectiveness. Furthermore, in accordance
with the statute, we budget neutralize payments under the OPPS each
year in the annual update so that projected changes in spending for
certain services are redistributed to payment for other services.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposals, without modification, to continue to
assign CPT code 77371 to APC 0127, which has a final CY 2010 APC median
cost of approximately $7,277, and to continue to assign HCPCS code
G0173 to APC 0067, which has a final CY 2010 APC median cost of
approximately $3,539.
Comment: One commenter requested that CMS finalize the proposed APC
and status indicator assignments for HCPCS codes G0173, G0251, G0339,
G0340, 77372, and 77373 for CY 2010. The commenter also recommended
that CMS revise code descriptors of HCPCS code G0173, G0251, G0339, and
G0340 for SRS, to distinguish between non-gantry and gantry-based SRS
systems. Based on internal analysis, the commenter stated that, within
the past year, there has been an increase in the OPPS volume of
incorrectly coded claims. The commenter suggested specific code
descriptor changes for the four revised HCPCS G-codes, as well as
specific language changes to the SRS billing instructions in Chapter 4
of the Medicare Claims Processing Manual.
Response: These HCPCS G-codes for SRS have been in effect for
several years and, based on questions brought to our attention by
hospitals, we have no reason to believe that hospitals are confused
about the reporting of these codes. Further, we see resource
differences reflected in the median costs of the four HCPCS G-codes
that are reasonably consistent with our expectations for different
median costs for the services based on the current code descriptors. We
believe it would be confusing to hospitals if we were to revise the
code descriptors for HCPCS codes G0173, G0251, G0339, and G0340.
Moreover, such a change could lead to instability in our median costs
and inaccurate payments for some services. Therefore, we believe that
modifying the G-code descriptors is not necessary for us to continue to
provide appropriate payment for the services they describe. We also do
not believe changes to our current billing instructions for SRS
services in the Medicare Claims Processing Manual are necessary.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposals, without modification, to maintain the
existing code descriptors for HCPCS codes G0173, G0251, G0339, and
G0340 for linear accelerator-based SRS. In addition, we are finalizing
our proposals, without modification, to continue to assign CPT codes
77372 and 77373 to status indicator ``B'' under the OPPS, and to
continue to assign the four linear accelerator-based SRS HCPCS codes to
the same APCs for CY 2010 as CY 2009, specifically APCs 0065, 0066, and
0067, with final CY 2010 APC median costs of approximately $954,
$2,465, and $3,539, respectively. Table 26 displays the final APC
median costs for the SRS treatment delivery HCPCS codes and CPT code
77371.
[[Page 60457]]
Table 26--Final CY 2010 APC Assignments for All SRS Treatment Delivery Services
----------------------------------------------------------------------------------------------------------------
Final CY
2010
CY 2010 HCPCS code CY 2010 Short descriptor Final CY Final CY approximate
2010 SI 2010 APC APC median
cost
----------------------------------------------------------------------------------------------------------------
G0173.................................... Linear acc stereo radsur com.... S 0067 $3,539
G0251.................................... Linear acc based stero radio.... S 0065 954
G0339.................................... Robot lin-radsurg com, first.... S 0067 3,539
G0340.................................... Robt lin-radsurg fractx 2-5..... S 0066 2,465
77371.................................... SRS, multisource................ S 0127 7,277
----------------------------------------------------------------------------------------------------------------
c. Clinical Brachytherapy (APCs 0312 and 0651)
For CY 2010, we did not propose any change to the HCPCS codes for
assignment to APC 0312 (Radioelement Applications) or APC 0651 (Complex
Interstitial Radiation Source Application). The proposed CY 2010
payment rates for these APCs were approximately $298 and $808,
respectively.
Comment: Several commenters objected to the proposed reduction in
the payment rate for brachytherapy services assigned to APC 0312 from
approximately $421 in CY 2009 to approximately $298 in CY 2010, and the
proposed reduction in the payment rate for APC 0651 from approximately
$847 in CY 2009 to approximately $808 in CY 2010. The commenters
believed these reductions in payment rates are the result of reduced
numbers of single claims for the services assigned to the APCs, caused
by the trimming of lines for which no payment was made on the claim.
They objected to the use of only 2 percent of total claims or a 30
percent reduction in single claims for CPT code 77778 (Interstitial
radiation source application; complex) that is assigned to APC 0651,
and to the use of only 9 percent of total claims for CPT code 77776
(Interstitial radiation source application; simple) and 19 percent of
total claims for CPT code 77777 (Interstitial radiation source
application; intermediate) that are both assigned to APC 0312. The
commenters speculated that the problem could be associated with changes
to the bypass list, trimming of unpaid lines, or other general problems
with CMS' cost estimation methodology. They believed that, regardless
of the source of the problem, CMS must establish appropriate and stable
payment rates for these services to allow Medicare beneficiaries
consistent access to brachytherapy procedures.
Response: The median cost for APC 0312 for CY 2010, calculated
using final rule data, is approximately $300. Our review of final rule
claims data indicates that the reduction in median cost for APC 0312
from CY 2009 to CY 2010 appears to be caused by changes in the median
costs for the HCPCS codes assigned to the APC that drive the median
cost for the APC.
Table 27--Median Cost and Frequency Data for Services Assigned to APC 0312* in CY 2009 and CY 2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
CY 2009 CY 2009 CY 2009 CY 2010 CY 2010
approximate frequency percentages CY 2009 approximate CY 2010 percentages CY 2010
HCPCS code in APC 0312 Short descriptor median of single of single total median single of single total
cost claims claims claims cost claims claims claims
--------------------------------------------------------------------------------------------------------------------------------------------------------
77776............................. Apply interstit $119 23 6 149 $522 9 4 104
radiat simpl.
77762............................. Apply intrcav radiat 180 70 18 161 345 25 11 69
interm.
77763............................. Apply intrcav radiat 507 131 34 352 345 112 48 250
compl.
77777............................. Apply interstit 608 7 2 51 300 11 5 54
radiat inter.
77761............................. Apply intrcav radiat 681 158 41 247 85 78 33 124
simple.
---------------------------------------------------------------------------------------------------------------------
Totals........................ .................... ........... 389 41 960 ........... 235 39 601
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Data exclude claims for CPT code 77799, which were not used in setting the APC median cost.
Specifically, in CY 2009, CPT codes 77761 and 77763 dominated APC
0312 and the APC median cost was approximately $420. For CY 2010, CPT
codes 77761 and 77763 continue to dominate APC 0312 but their HCPCS-
specific median costs declined. Hence, the median cost for APC 0312
decreased to approximately $300. We do not believe that the exclusion
of the lines for which no payment was made was the controlling factor
in the decline of the APC median cost. We excluded 97 lines (including
one unlisted line that is not relevant) from the claims containing CPT
codes assigned to APC 0312 before we split the claims into single
claims. Therefore, it is not possible to know how many of the line-
items we trimmed were on claims that might have become single claims
that could be used for ratesetting purposes. The total frequency of
HCPCS codes reported on claims used for CY 2010 ratesetting declined to
601 from 960 (before the line-item trim). Therefore, a reduction in the
number of single claims that are available for calculation of the
median cost for the APC is to be expected because the universe of
claims assigned to APC 0312 declined by more than one third. However,
we note that the single claims used in the APC median calculation, as a
percent of the total frequency, was 41 percent in CY 2009 and declined
only minimally to 39 percent in CY 2010, notwithstanding the decrease
in total frequency from CY 2009 to CY 2010 and the trim of 96
[[Page 60458]]
relevant lines of the 601 total claims for the codes used to set the
APC median cost for APC 0312. We agree that the decline in the median
costs for CPT codes 77761 and 77763 is notable. However, we know that,
for CY 2007 (the year of the claims used for the CY 2009 OPPS), there
were no CPT codes for the insertion of the needles and catheters used
to apply brachytherapy sources interstitially to body areas other than
the prostate. We believe it is possible that the costs of the needles
and catheters may have been incorporated into the CY 2009 payment for
some of the CPT codes assigned to APC 0312.
For CY 2008, the AMA's CPT Editorial Panel created CPT code 20555
(Placement of needles or catheters into muscle and/or soft tissue for
subsequent interstitial radioelement application (at the time of or
subsequent to the procedure)), and payment has been made for that CPT
code through APC 0050 (Level II Musculoskeletal Procedures Except Hand
and Foot) in CY 2008 and CY 2009. In the updated claims data used for
this CY 2010 final rule with comment period, for services furnished in
CY 2008, CPT code 20555 has a total frequency of 67 and a single claim
frequency of 25. CPT code 20555 is assigned to APC 0050, which has a
final CY 2010 median cost of approximately $2,122. Because the needles
and catheters must be placed before services reported by certain CPT
codes assigned to APC 0312 can be performed, the hospital would receive
not only the payment for APC 0312, but would also be paid for the
placement of the needles and catheters or other devices, whether
reported under CPT code 20555 or another code for placement of needles
and catheters or other brachytherapy source delivery devices.
Therefore, although the payment rate for APC 0312 has declined between
CY 2009 and CY 2010, hospitals will commonly receive a separate payment
for the placement of the needles and catheters or other devices that,
when added to the payment for the application of the sources, will
provide a robust payment for the service in its entirety.
The final CY 2010 median cost of APC 0651 is approximately $885,
compared to the median cost of approximately $847 for CY 2009. We note
that most claims that report CPT code 77778 are for low dose rate
prostate brachytherapy that is paid through APC 8001 (LDR Prostate
Brachytherapy Composite) rather than through APC 0651. Therefore, the
total claim frequency for APC 0651 of 9,649 includes both the 7,742
claims that meet the criteria for payment through APC 8001 and the
1,907 claims that meet the criteria for payment through APC 0651. For
this final rule with comment period, we were able to use approximately
11 percent of the claims (206 of 1,907 total claims) that meet the
criteria for payment through APC 0651 in the calculation of the median
cost for APC 0651. Not only does the CY 2010 median cost for APC 0651
increase over the CY 2009 median cost, but when the separate payment
for the placement of brachytherapy insertion devices is made, the full
payment for the comprehensive service is substantial. For example, if
CPT code 20555 was reported for placement of needles and catheters, the
hospital would be paid for both one unit of APC 0651 (based on a CY
2010 median cost of approximately $885) and one unit of APC 0050 (based
on a CY 2010 median cost of approximately $2,122).
After consideration of the public comments we received, we are
finalizing our CY 2010 proposals, without modification, to calculate
the median costs for APCs 0312 and 0651 according to the standard OPPS
ratesetting methodology, applying the final bypass list and line-item
trim as discussed in sections II.A.1. and II.A.2. of this final rule
with comment period. The final CY 2010 median costs of APCs 0312 and
0651 are approximately $300 and $885, respectively. We believe that
when hospitals fully report the services required for brachytherapy
treatment, the combined OPPS payment for insertion of the source
application devices and application of the sources themselves provides
appropriate payment for the comprehensive service.
8. Other Services
a. Low Frequency, Non-Contact, Non-Thermal Ultrasound (APC 0013)
The CPT Editorial Panel created CPT code 0183T (Low frequency, non-
contact, non-thermal ultrasound, including topical application(s), when
performed, wound assessment, and instruction(s) for ongoing care, per
day), effective January 1, 2008. Under the OPPS, we assigned CPT code
0183T to APC 0015 (Level III Debridement & Destruction) for CY 2008 and
CY 2009. For CY 2009, APC 0015 has a payment rate of approximately
$100. Based upon our review of the first year of hospital claims data
for CPT 0183T, for CY 2010 we proposed to reassign CPT code 0183T to
APC 0013 (Level II Debridement & Destruction), with a proposed payment
rate of approximately $59.
Comment: Several commenters recommended that CMS continue to assign
CPT code 0183T to APC 0015. The commenters asserted that the proposed
payment for APC 0013 would not cover hospitals' costs for performing
the procedure. One commenter stated that the single-use kit for the
service costs $55. Another commenter reported that the majority of
hospitals with the highest utilization of CPT code 0183T either failed
to report or underreported the packaged supply costs associated with
CPT code 0183T. The commenter analyzed CMS' claims data according to
hospitals' reporting of ``packaged'' supplies with CPT code 0183T and
found that 52 percent of all single claims were from 5 hospitals, and
that 4 of these 5 hospitals, representing 39 percent of single claims
for CPT code 0183T used in ratesetting, reported $0 or an insignificant
(less than $5) packaged supply cost. Moreover, the commenter stated
that the analysis indicated that, overall, only one-third of the single
claims for CPT code 0183T included any packaged costs, although costly
supplies are required for hospitals to furnish the service. In
addition, the commenter reported that it surveyed hospitals that
provided the service and learned that those hospitals reported a median
procedure cost of approximately $153.
One commenter offered several reasons why hospitals might not
report packaged supply costs with CPT code 0183T, including the fact
that CPT code 0183T was a new CPT code in CY 2008, the year of claims
data for the CY 2010 OPPS rates; hospitals' historical failure to
consider supply costs in setting their procedure charges; the fact that
relatively low cost supplies are often overlooked when hospitals charge
for services; and the lack of a specific Level II HCPCS code to report
a charge for the applicator kit. The commenter estimated that 32,000
procedures were furnished to Medicare beneficiaries in the HOPD in CY
2008, yet there were far fewer CY 2008 OPPS claims for the service. The
commenter cited several examples of contractors providing instructions
to report other CPT codes, such as CPT code 97602 (Removal of
devitalized tissue from wound(s), non-selective debridement, without
anesthesia (eg wet-to-moist dressings, enzymatic, abrasion), including
topical application(s), wound assessment, and instruction(s) for
ongoing care, per session), when providing the low frequency, non-
contact, non-thermal ultrasound procedure. Another commenter argued
that APC 0015 is the most clinically appropriate APC for CPT
[[Page 60459]]
code 0183T, and stated that if the service were reassigned to APC 0013
as proposed, it would be the only wound healing procedure and the only
procedure requiring a single use disposable supply in APC 0013.
Response: We proposed to reassign CPT code 0183T to APC 0013 for CY
2010 based on clinical and resource considerations. The final CY 2010
median cost of CPT code 0183T is approximately $77, based on 9,335
single claims. The final CY 2010 median cost of APC 0013 is
approximately $59, and the final CY 2010 final cost of APC 0015 is
approximately $103. The final CY 2010 HCPCS code-specific median costs
of other significant services assigned to APC 0013 range from
approximately $46 to $82; therefore, the $77 final median cost of CPT
code 0183T for CY 2010 is well within that range. While CY 2008 is the
first year we have cost information from hospitals for the service, the
large number of single claims provides a robust estimate of the
service's cost based on claims from those hospitals that furnished the
service in CY 2008. While the commenters were concerned that many
claims did not include separate charges for the associated supplies, we
have found that it is common for hospitals to consider the cost of
necessary supplies when setting the procedure charge, rather than
reporting a separate line-item charge for the associated supplies. Many
supplies where payment is always packaged into procedure payments do
not have specific Level II HCPCS codes under which to report the
associated charges. Hospitals incorporate the charge for such supplies
in the procedure charge or provide a charge on a separate line under an
appropriate revenue code without a HCPCS code, and we package the costs
from these uncoded line-items into payment for the associated
procedure. Therefore, we have no reason to believe that our estimated
cost for CPT code 0183T from CY 2008 claims data does not include the
cost of the necessary supplies. The final CY 2010 median cost of CPT
code 0183T is closer to the final CY 2010 median cost of APC 0013 than
APC 0015. In fact, if we were to continue to assign CPT code 0183T to
APC 0015 for CY 2010, APC 0015 would violate the 2 times rule. That is,
if we maintained CPT code 0183T in APC 0015 for CY 2010 as requested by
the commenters, it would be the significant procedure with the lowest
median cost assigned to APC 0015. In turn, the median cost of
approximately $158 for the highest cost significant procedure, CPT code
11000 (Debridement of extensive eczematous or infected skin; up to 1 of
body surface), would be more than 2 times the median cost of CPT code
0183T, resulting in a 2 times violation in APC 0015. We note that the
APC Panel heard several public presentations that addressed the
proposed CY 2010 APC assignment of CPT code 0183T at the August 2009
meeting but made no recommendation regarding the CY 2010 assignment of
the code. In particular, the APC Panel did not make a recommendation to
us to maintain an APC configuration that would violate the 2 times rule
and require that we except APC 0015 from the 2 times rule for CY 2010.
We also believe that APC 0013 is an appropriate APC assignment for
CPT code 0183T based on clinical considerations. Other wound care
services with similar median costs are assigned to APC 0013 for CY
2010, specifically CPT codes 97602 and 97605 (Negative pressure wound
therapy (eg, vacuum assisted drainage collection), including topical
application(s), wound assessment, and instruction(s) for ongoing care,
per session; total wound(s) surface area less than 50 square
centimeters).
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to reassign CPT
0183T from APC 0015 to APC 0013, with a final CY 2010 APC median cost
of approximately $59.
b. Skin Repair (APCs 0134 and 0135)
For CY 2010, we proposed to continue to assign the CPT skin repair
codes for the application of Apligraf, Oasis, and Dermagraft skin
substitutes to the same procedural APCs for CY 2010 as their CY 2009
assignments. Specifically, we proposed to continue to assign the
Apligraf application CPT codes 15340 (Tissue cultured allogeneic skin
substitute; first 25 sq cm or less) and 15341 (Tissue cultured
allogeneic skin substitute; each additional 25 sq cm, or part thereof)
to APC 0134 (Level II Skin Repair), with a proposed payment rate of
approximately $214. Likewise, we proposed to continue to assign the
Dermagraft application CPT codes 15365 (Tissue cultured allogeneic
dermal substitute, face, scalp, eyelids, mouth, neck, ears, orbits,
genitalia, hands, feet, and/or multiple digits; first 100 sq cm or
less, or 1% of body area of infants and children) and 15366 (Tissue
cultured allogeneic dermal substitute, face, scalp, eyelids, mouth,
neck, ears, orbits, genitalia, hands, feet, and/or multiple digits;
each additional 100 sq cm, or each additional 1% of body area of
infants and children, or part thereof) to APC 0134. We proposed to
continue to assign the Oasis application CPT codes 15430 (Acellular
xenograft implant; first 100 sq cm or less, or 1% of body area of
infants and children) and 15431 (Acellular xenograft implant; each
additional 100 sq cm, or each additional 1% of body area of infants and
children, or part thereof) to APC 0135 (Level III Skin Repair), with a
proposed payment rate of approximately $297.
At the August 2009 meeting of the APC Panel, one public presenter
requested that the APC Panel recommend that CMS reassign CPT codes
15340 and 15341 from APC 0134 to APC 0135. The presenter stated that
the CY 2010 proposal to continue to assign both codes to APC 0134 would
create a financial incentive favoring Dermagraft application.
Specifically, the presenter explained that CPT instructions allow the
separate reporting of the CPT codes for site preparation when
Dermagraft is applied, while the CPT instructions for Apligraf
application codes specify that site preparation cannot be separately
reported. The presenter believed that this reporting difference and the
resulting expected differences in the associated application procedure
costs could be addressed by assigning the Apligraf application CPT
codes to a higher paying APC than the Dermagraft application codes,
instead of the same APC as CMS proposed for CY 2010. After discussion,
the APC Panel requested that CMS provide data at the next APC Panel
meeting on the frequency of primary and add-on CPT codes billed for
Apligraf, Oasis, and Dermagraft application in order to assess the
apparent variability in billing for the application of these products.
In addition, the APC Panel requested median cost data for site
preparation and debridement that may be separately reported in
preparation for application of Dermagraft.
Comment: Several commenters supported the CY 2010 proposal to
continue the CY 2009 APC assignments for the Apligraf, Dermagraft, and
Oasis application CPT codes. One commenter argued that reassignment of
the Apligraf application codes from APC 0134 to APC 0135 would create a
financial incentive for hospitals to choose Apligraf instead of other
products. Another commenter stated that the current APC assignments for
all three sets of skin repair codes are appropriate based on an
assessment of clinical homogeneity and resource costs.
Another commenter requested that CMS reassign the Apligraf
application CPT codes 15340 and 15341 from APC
[[Page 60460]]
0134 to APC 0135 because of their similarity, from clinical and
resource perspectives, to the Oasis application CPT codes 15430 and
15431 that are currently assigned to APC 0135. The commenter noted that
none of these procedures allow separate reporting and payment of site
preparation when performed. The commenter expressed concern that the
variable APC assignments for similar procedures would create an unlevel
playing field that would lead to financial incentives for hospitals to
use one product rather than the other, as opposed to the most
clinically appropriate product. Further, the commenter indicated that
site preparation and debridement procedures are not paid separately
when associated with Apligraf application, yet these site preparation
services are paid separately when reported with Dermagraft application
procedures that are assigned to the same APC as Apligraf application
procedures. The commenter also requested that CMS not reassign the
Oasis application CPT codes 15430 and 15431 from APC 0135 to APC 0134
because such a reassignment would inappropriately group skin repair
procedures that incorporate site preparation with those that allow
separate reporting and payment of that preparation.
Response: The current Apligraf, Oasis, and Dermagraft application
CPT codes were made effective January 1, 2006. In the CY 2006 OPPS
final rule with comment period (70 FR 68762), we assigned the Apligraf
application CPT codes 15340 and 15341 and the Dermagraft application
CPT codes 15365 and 15366 to the Level I Skin Repair APC (then
designated as APC 0024 with a payment rate of approximately $92). We
assigned the Oasis application CPT codes 15430 and 15431 to the Level
II Skin Repair APC (then designated as APC 0025 with a payment rate of
approximately $315) based on consideration of clinical and resource
homogeneity.
For CY 2007 (71 FR 68054 through 68056), we assigned the three sets
of skin repair CPT codes to the Level II Skin Repair APC (then
designated as APC 0025) in response to comments received from the
public regarding their clinical and expected resource similarity.
However, for CY 2008, because of a 2 times violation in two of the four
skin repair APCs that resulted from hospital claims data that were
first available for these codes, we reconfigured the APC assignments
for the Apligraf, Dermagraft, and Oasis application procedures. This
reconfiguration resulted in our again differentiating the APC
assignments for the Oasis application CPT codes from the APC
assignments for the Apligraf and Dermagraft application procedures,
similar to the initial CY 2006 APC configuration. We also renumbered
the Skin Repair APCs. We note that, for CY 2008, we made no change to
the APC assignments for the Apligraf and Dermagraft application CPT
codes, maintaining them in APC 0134, but we reassigned the Oasis
application codes to APC 0135.
We retained these configurations for CY 2009 and, for CY 2010, we
proposed to continue to assign these procedures to their CY 2009 APCs.
We also proposed to pay separately for the Apligraf, Dermagraft, and
Oasis products themselves in CY 2010. Analysis of our claims data for
the application procedures revealed that the hospital resource costs
associated with the Apligraf and Oasis application procedures are
different. The median cost of the Apligraf application CPT code 15340
is approximately $234, based on 13,551 single claims (of 17,534 total
claims), and approximately $186 for CPT code 15341, based on 1,789
single claims (of 4,424 total claims). For the Oasis application CPT
code 15430, the median cost is approximately $276 based on 12,807
single claims (of 14,723 total claims), and approximately $261 for CPT
code 15431 based on 150 single claims (of 293 total claims). These CPT
code-specific median costs are consistent with the APC 0134 and APC
0135 median costs of approximately $210 and $296, respectively, where
the different two sets of procedure codes are assigned.
The OPPS is a payment system that is based on the relativity of
costs of procedures as reported to us by hospitals. Hospital costs,
based on significant numbers of single claims, have been and continue
to be consistently higher for the Oasis application procedures than for
Apligraf or Dermagraft application procedures, despite the differences
in CPT reporting instructions for Apligraf and Oasis application
procedures in comparison with Dermagraft application procedures. We
also note that the coverage areas for the Apligraf application codes
are based on 25 square centimeter increments, whereas the Oasis and
Dermagraft application codes are based on 100 square centimeter
increments. While we are not sure of the contribution application of
different products to different size wounds may have on hospital costs,
we have no reason to believe that our high volume and consistent
hospital claims data for these services do not accurately represent the
costs of the procedures that have been reported in accordance with
their specific code descriptors since CY 2006.
Further, we do not agree that different APC assignments for similar
skin repair procedures would create an unlevel playing field that would
lead to financial incentives for hospitals to use one product rather
than the other, as opposed to the most clinically appropriate product.
Payments under the OPPS are based on the relative costs of services as
reported to us by hospitals in claims and cost report data. In part, we
assign services to APCs based on considerations of resource
homogeneity, and hospital resources are reflected in the costs reported
to us by hospitals. The skin repair CPT codes differ significantly from
one another in terms of the other services that are bundled into them
(such as site preparation) and in the coverage areas they describe. The
specific Apligraf, Dermagraft, and Oasis application procedures have
different median costs based on CY 2008 hospital claims that have led
us to continue to assign them to different APCs for CY 2010, and we do
not believe that appropriate payment for hospitals' costs for
procedures provides incentives for hospitals to use one product instead
of another. Instead, accurate payment based on the relative costs of
services is an important principle of the OPPS, specifically intended
to minimize any financial incentives for use of one product rather than
the other in the case of similar procedures. We agree with the
commenter that the choice of a patient's treatment should be based on
clinical considerations, not financial incentives due to OPPS payment
rates. We believe our final CY 2010 APC assignments for the Apligraf,
Dermagraft, and Oasis application CPT codes are fully consistent with
our interest in hospitals providing the most clinically appropriate
treatments in an efficient manner.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposals, without modification, to continue to
assign the Apligraf and Dermagraft application CPT codes to APC 0134,
which has a final CY 2010 APC median cost of approximately $210, and to
continue to assign the Oasis application CPY codes to APC 0135, which
has a final CY 2010 APC median cost of approximately $296. We note that
when hospitals are performing these procedures, they also would report
the Level II HCPCS codes that describe the biological products that are
used with the Apligraf, Dermagraft, and Oasis application CPT codes,
which are paid separately in CY 2010. Further, we are accepting the
August 2009
[[Page 60461]]
recommendation of the APC Panel and will provide information at the
winter 2010 APC Panel meeting on the frequency of primary and add-on
CPT codes billed for Apligraf, Oasis, and Dermagraft application
procedures, in addition to providing median cost data for site
preparation and debridement that may be separately reported in
preparation for application of Dermagraft.
c. Group Psychotherapy (APC 0325)
For CY 2010, we proposed to continue to assign CPT codes 90849
(Multiple-family group psychotherapy), 90853 (Group psychotherapy
(other than of a multiple-family group)), and 90857 (Interactive group
psychotherapy) to APC 0325 (Group Psychotherapy), with a proposed
payment rate of approximately $61, calculated according to the standard
OPPS ratesetting methodology. In CY 2009, these three CPT codes also
were the only codes assigned to APC 0325, with a payment rate of
approximately $65.
Comment: Several commenters expressed concern that the CY 2010
proposed payment rate for APC 0325 of approximately $61 is 21 percent
less than the CY 2006 payment rate for this APC, and 24 percent less
than the CY 2004 payment rate for this APC. The commenters stated that
the proposed payment rate would be insufficient to cover hospitals'
costs for providing group mental health services and, as a result,
would threaten beneficiary access to these services. Some commenters
recommended that CMS increase the final CY 2010 payment rate for APC
0325 by approximately 17 percent, which the commenters calculated is
the average increase from CY 2006 to CY 2010 for the other
psychotherapy APCs, specifically APC 0322 (Brief Individual
Psychotherapy), APC 0323 (Extended Individual Psychotherapy), and APC
0324 (Family Psychotherapy).
Response: As we have stated in the past regarding APC 0325 (72 FR
66739 and 73 FR 68627), we cannot speculate as to why the median cost
of group psychotherapy services has decreased significantly since CY
2004. We again note that we have robust claims data for the CPT codes
that map to APC 0325. Specifically, we were able to use more than 99
percent of the approximately 1.6 million claims submitted by hospitals
to report group psychotherapy services. We set the payment rates for
APC 0325 using our standard OPPS methodology based on relative costs
from hospital outpatient claims. We have no reason to believe that our
claims data, as reported by hospitals, do not accurately reflect the
hospital costs of group psychotherapy services. It would appear that
the relative cost of providing these mental health services, in
comparison with other HOPD services has decreased in recent years.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to calculate the
payment rate for APC 0325 by applying our standard OPPS ratesetting
methodology that relies on all single claims for all procedures
assigned to the APC. The final CY 2010 APC median cost of APC 0325 is
approximately $59.
d. Portable X-Ray Services
Consistent with applicable requirements, hospitals may bill and be
paid under the OPPS for diagnostic x-ray tests performed in locations
other than HOPDs, such as a skilled nursing facility (SNF), if the
patient is receiving the x-ray as a covered outpatient department
service and not in the course of a Medicare-covered SNF stay. The
charge for the x-ray (but not the transportation and set-up charges) is
billed on a hospital outpatient claim. Medicare does not pay under the
OPPS for transportation or set-up when the x-ray equipment is
transported to another location where the x-ray is taken.
Comment: One commenter objected to the assignment of status
indicator ``B'' (Codes that are not recognized by OPPS when submitted
on an outpatient hospital Part B bill type (12X or 13X)) to HCPCS codes
R0070 (Transportation of portable x-ray equipment and personnel to home
or nursing home, per trip to facility or location, one patient seen);
R0075 (Transportation of portable x-ray equipment and personnel to home
or nursing home, per trip to facility or location, more than one
patient seen); and Q0092 (Set up portable x-ray equipment) under the
OPPS when a hospital transports and sets up a portable x-ray machine in
a SNF or other nonhospital site of service to furnish an x-ray to a
patient who is not in the course of a SNF stay that is covered by
Medicare. The commenter indicated that to be paid for the
transportation and set-up of the portable x-ray, the hospital must
enroll as a supplier and bill the Medicare carrier or MAC on a HCFA
1500 claim for the transportation and set-up services, although the
hospital may bill the fiscal intermediary or MAC on a UB-04 claim for
the x-ray service itself. The commenter requested that CMS revise its
billing instructions so that the transportation and set-up charges for
portable x-ray services could be reported on the same claim as the
hospital's charge for the x-ray.
Response: In the case in which a patient receiving the portable x-
ray service is not in a Medicare-covered SNF stay but a hospital
furnishes the portable x-ray service in the SNF as a covered outpatient
department service consistent with all applicable requirements, the
HCPCS code and charge for the x-ray service (but not transportation and
set-up charges) are billed to the fiscal intermediary or MAC. Payment
is made under the OPPS for the x-ray service under such circumstances.
The transportation and set-up of the portable x-ray are also covered
services which are currently reported on the HCFA 1500 claim and are
carrier-priced. We assign status indicator ``B'' to HCPCS codes R0070,
R0075, and Q0092 because these services (transportation and set-up of
the portable x-ray) are not paid under the OPPS and are rejected by the
I/OCE if they are billed in an outpatient hospital bill type. We will
explore whether it is feasible to revise the billing instructions to
enable hospitals to bill for these transportation and set-up services
on the same claim on which they report the charge for the x-ray service
to which the transportation and set-up charges are ancillary. If we
determine that it would be feasible and desirable to propose this
change, we would propose to change the status indicators of these codes
accordingly.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposals, without modification, to continue to
assign the status indicator of ``B'' to HCPCS codes R0070, R0075, and
Q0092. We will explore the feasibility of alternatives for billing and
payment of these services that could reduce the hospital administrative
burden associated with billing for the services.
e. Home Sleep Study Tests (APC 0213)
For CY 2010, we proposed to continue to assign Level II HCPCS codes
G0398 (Home sleep study test (HST) with type II portable monitor,
unattended; minimum of 7 channels: EEG, EOG, EMG, ECG/heart rate,
airflow, respiratory effort and oxygen saturation), G0399 (Home sleep
test (HST) with type III portable monitor, unattended; minimum of 4
channels: 2 respiratory movement/airflow, 1 ECG/heart rate and 1 oxygen
saturation), and G0400 (Home sleep test (HST) with type IV portable
monitor, unattended; minimum of 3 channels) to APC 0213 (Level I
Extended EEG, Sleep, and Cardiovascular Studies), with a
[[Page 60462]]
proposed payment rate of approximately $160.
Comment: One commenter urged CMS to pay appropriately for Level II
HCPCS codes G0398, G0399, and G0400 to adequately cover the cost of
devices used in performing these procedures. Specifically, the
commenter stated that the acquisition costs for the devices used with
these procedures are significant and vary between $4,400 and $16,500.
The commenter argued that it was unreasonable for CMS to assign all
three HCPCS G-codes to the same APC because the devices used for the
procedures vary significantly in their costs and, therefore, payment at
the same rate for all three services would violate the 2 times rule.
The commenter urged CMS to review the proposed payment rates for HCPCS
G-codes G0398, G0399, and G0400.
Response: As we explained in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68602), we created these three HCPCS G-codes to
describe the various types of home sleep tests that Medicare determined
could be used to allow for coverage of continuous positive airway
pressure (CPAP) therapy based upon a diagnosis of obstructive sleep
apnea (OSA) according to a home sleep study. We further explained that
we decided to assign these HCPCS G-codes to an APC under the OPPS
because we believe these diagnostic services may be provided by HOPDs
to Medicare beneficiaries.
HCPCS codes G0398, G0399, and G0400 were made effective in March
2008. Analysis of our claims data from CY 2008 reveals that these
services are not commonly performed in the hospital outpatient setting
for Medicare beneficiaries. Our claims data show no single claims and
only three total claims for HCPCS code G0398. The median cost of HCPCS
code G0399 is approximately $236 based on 12 single claims (of 13 total
claims), and the median cost of HCPCS code G0400 is approximately $80
based on 11 single claims (of 12 total claims). We believe it would be
difficult to draw any conclusions about the resource differences among
these three services based upon such limited claims data from a single
year.
With regard to the commenter's concern about a violation of the 2
times rule, there is no 2 times violation in APC 0213 because none of
the sleep study HCPCS G-codes are significant procedures in the APC.
Generally, we review, on an annual basis, the items and services within
an APC group to determine, with respect to comparability of the use of
resources, if the median cost of the highest cost item or service
within an APC group is more than 2 times greater than the median cost
of the lowest cost item or service within that same group, thereby
assessing for 2 times rule violations. We make exceptions to the 2
times rule in unusual cases, such as low-volume items and services, and
we only consider significant procedures for purposes of the 2 times
assessment. We define significant procedures as those with a single
claim frequency of greater than 1,000 or those with a frequency of
greater than 99 and that constitute at least 2 percent of single claims
in the APC. For APC 0213, our CY 2008 hospital outpatient claims used
for CY 2010 ratesetting show that the median cost of the lowest cost
significant service is approximately $150 compared to approximately
$241 for the highest cost service. Based on our claims data, there is
no 2 times violation in APC 0213.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to continue to
assign HCPCS codes G0398, G0399, and G0400 to APC 0213, which has a
final CY 2010 APC median cost of approximately $161.
IV. OPPS Payment for Devices
A. Pass-Through Payments for Devices
1. Expiration of Transitional Pass-Through Payments for Certain Devices
Section 1833(t)(6)(B)(iii) of the Act requires that, under the
OPPS, a category of devices be eligible for transitional pass-through
payments for at least 2, but not more than 3, years. This pass-through
payment eligibility period begins with the first date on which
transitional pass-through payments may be made for any medical device
that is described by the category. We may establish a new device
category for pass-through payment in any quarter. Under our established
policy, we base the pass-through status expiration dates for the
category codes on the date on which a category is in effect. The date
on which a category is in effect is the first date on which pass-
through payment may be made for any medical device that is described by
such category. We propose and finalize the dates for expiration of
pass-through status for device categories as part of the OPPS annual
update.
We also have an established policy to package the costs of the
devices no longer eligible for pass-through payments into the costs of
the procedures with which the devices are reported in the claims data
used to set the payment rates (67 FR 66763). Brachytherapy sources,
which are now separately paid in accordance with section 1833(t)(2)(H)
of the Act, are an exception to this established policy.
There currently are no device categories eligible for pass-through
payment, and there are no categories for which we proposed expiration
of pass-through status. If we create new device categories for pass-
through payment status during the remainder of CY 2009 or during CY
2010, we will propose future expiration dates in accordance with the
statutory requirement that they be eligible for pass-through payments
for at least 2, but not more than 3, years from the date on which pass-
through payment for any medical device described by the category may
first be made.
2. Provisions for Reducing Transitional Pass-Through Payments To Offset
Costs Packaged Into APC Groups
a. Background
We have an established policy to estimate the portion of each APC
payment rate that could reasonably be attributed to the cost of the
associated devices that are eligible for pass-through payments (66 FR
59904). We deduct from the pass-through payments for identified device
categories eligible for pass-through payments an amount that reflects
the portion of the APC payment amount that we determine is associated
with the cost of the device, defined as the device APC offset amount,
as required by section 1833(t)(6)(D)(ii) of the Act. We have
consistently employed an established methodology to estimate the
portion of each APC payment rate that could reasonably be attributed to
the cost of an associated device eligible for pass-through payment,
using claims data from the period used for the most recent
recalibration of the APC rates (72 FR 66751 through 66752). We
establish and update the applicable device APC offset amounts for
eligible pass-through device categories through the transmittals that
implement the quarterly OPPS updates.
We currently have published a list of all procedural APCs with the
CY 2009 portions (both percentages and dollar amounts) of the APC
payment amounts that we determine are associated with the cost of
devices, on the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/01_overview.asp. The dollar amounts are used as
the device APC offset amounts. In addition, in accordance with our
established practice, the device APC offset amounts in a related APC
are used in order to evaluate whether the cost of a device in an
application for a new
[[Page 60463]]
device category for pass-through payment is not insignificant in
relation to the APC payment amount for the service related to the
category of devices, as specified in our regulations at Sec.
419.66(d).
b. Final Policy
In the CY 2010 OPPS/ASC proposed rule (74 FR 35306), for CY 2010,
we proposed to continue our established policies for calculating and
setting the device APC offset amounts for each device category eligible
for pass-through payment. We also proposed to continue to review each
new device category on a case-by-case basis to determine whether device
costs associated with the new category are already packaged into the
existing APC structure. If device costs packaged into the existing APC
structure are associated with the new category, we proposed to deduct
the device APC offset amount from the pass-through payment for the
device category. As stated earlier, these device APC offset amounts
also would be used in order to evaluate whether the cost of a device in
an application for a new device category for pass-through payment is
not insignificant in relation to the APC payment amount for the service
related to the category of devices (Sec. 419.66(d)).
In section V.A.4. of the CY 2010 OPPS/ASC proposed rule (74 FR
35311 through 35314), we proposed to specify that, beginning in CY
2010, the pass-through evaluation process and pass-through payment
methodology for implantable biologicals, that are surgically inserted
or implanted (through a surgical incision or a natural orifice) and
that are newly approved for pass-through status beginning on or after
January 1, 2010, would be the device pass-through process and payment
methodology only. As a result of that proposal, we then proposed that,
beginning in CY 2010, we would include implantable biologicals in our
calculation of the device APC offset amounts. As of CY 2009, the costs
of implantable biologicals not eligible for pass-through payment are
packaged into the costs of the procedures in which they are implanted
because nonpass-through implantable biologicals are not separately
paid. We proposed to calculate and set any device APC offset amount for
a new device pass-through category that includes a newly eligible
implantable biological beginning in CY 2010 using the same methodology
we have historically used to calculate and set device APC offset
amounts for device categories eligible for pass-through payment (72 FR
66751 through 66752), with one modification. Because implantable
biologicals would be considered devices rather than drugs for purposes
of pass-through evaluation and payment under this proposal for CY 2010,
the device APC offset amounts would include the costs of implantable
biologicals for the first time. We also proposed to utilize these
revised device APC offset amounts to evaluate whether the cost of an
implantable biological in an application for a new device category for
pass-through payment is not insignificant in relation to the APC
payment amount for the service related to the category of devices.
Further, we proposed to no longer use the ``policy-packaged'' drug APC
offset amounts for evaluating the cost significance of implantable
biological pass-through applications under review and for setting the
APC offset amounts that would apply to pass-through payment for those
implantable biologicals, effective for new pass-through status
determinations beginning in CY 2010. In addition, we proposed to
update, on the CMS Web site at http://www.cms.hhs.gov/HospitalOutpatientPPS, the list of all procedural APCs with the final
CY 2010 portions of the APC payment amounts that we determine are
associated with the cost of devices so that this information is
available for use by the public in developing potential CY 2010 device
pass-through payment applications and by CMS in reviewing those
applications.
Comment: One commenter noted that a significant consequence of
paying for new implantable biologicals under the device pass-through
payment methodology would be that the payment for the implantable
biological would be reduced by the estimated cost of any predecessor
devices included in the APC payment rate. The commenter believed that
it is reasonable for CMS to reduce the payment for the pass-through
implantable biological when the biological is used in lieu of a
predecessor device whose cost is already incorporated into payment for
the associated procedure. However, the commenter also stated that if
the hospital implanted the predecessor device during the procedure in
addition to the pass-through implantable biological, a reduction in the
pass-through payment for the implantable biological by the predecessor
device cost should not be taken.
Response: Concerning the commenter's request that we not take a
reduction (that is, device APC offset) when both a predecessor device
and an implantable biological that is on pass-through status are used
in a procedure in the case of medical necessity, we note that our
standard policy when establishing a new device category for pass-
through payment is to determine whether device costs associated with
the new category are already packaged into the relevant existing
clinical APC. If device costs packaged into the existing clinical APC
are associated with the new pass-through device category and these
predecessor devices would generally not be used when a device described
by the new device category was implanted, we identify the device APC
offset that would be deducted from the pass-through payment amount each
time the new category is reported with the related clinical APC. We
make determinations about the applicability of a device APC offset
based on our overall clinical understanding of the device category and
its associated procedures, rather than on a claim-by-claim basis for
each different scenario. In the rare case where an implantable
biological that is described by a device category with pass-through
status was used in addition to a predecessor device in the performance
of a procedure for which we had determined that a device APC offset was
applicable, we would still apply the device APC offset to the pass-
through payment for the implantable biological. With respect to a
prospective payment system such as the OPPS, in some individual cases,
payment exceeds the average cost; in other cases, payment is less than
the average cost of an individual case. On balance, however, payment
should approximate the relative cost of the average case, recognizing
that, as a prospective payment system, the OPPS is a system of
averages. We would not expect the scenario of implanting both a new
implantable biological and the predecessor device described by the
commenter to be common. If such a clinical scenario were common, we
would determine that no device APC offset would apply to the new device
category because the implantable biological was typically used in
addition to the predecessor device in performing the associated
procedure.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to reduce device
pass-through payments based on device costs already included in the
associated procedural APCs, when we determine that device costs
associated with the new category are already packaged into the existing
APC structure.
[[Page 60464]]
B. Adjustment to OPPS Payment for No Cost/Full Credit and Partial
Credit Devices
1. Background
In recent years, there have been several field actions on and
recalls of medical devices as a result of implantable device failures.
In many of these cases, the manufacturers have offered devices without
cost to the hospital or with credit for the device being replaced if
the patient required a more expensive device. In order to ensure that
payment rates for procedures involving devices reflect only the full
costs of those devices, our standard ratesetting methodology for
device-dependent APCs uses only claims that contain the correct device
code for the procedure, do not contain token charges, and do not
contain the ``FB'' modifier signifying that the device was furnished
without cost or with a full credit. As discussed in section
II.A.2.d.(1) of the CY 2010 OPPS/ASC proposed rule (74 FR 35267) and
this final rule with comment period, we are further refining our
standard ratesetting methodology for device-dependent APCs for CY 2010
by also excluding claims with the ``FC'' modifier signifying that the
device was furnished with partial credit.
To ensure equitable payment when the hospital receives a device
without cost or with full credit, in CY 2007 we implemented a policy to
reduce the payment for specified device-dependent APCs by the estimated
portion of the APC payment attributable to device costs (that is, the
device offset) when the hospital receives a specified device at no cost
or with full credit (71 FR 68071 through 68077). Hospitals are
instructed to report no cost/full credit cases using the ``FB''
modifier on the line with the procedure code in which the no cost/full
credit device is used. In cases in which the device is furnished
without cost or with full credit, the hospital is instructed to report
a token device charge of less than $1.01. In cases in which the device
being inserted is an upgrade (either of the same type of device or to a
different type of device) with a full credit for the device being
replaced, the hospital is instructed to report as the device charge the
difference between its usual charge for the device being implanted and
its usual charge for the device for which it received full credit. In
CY 2008, we expanded this payment adjustment policy to include cases in
which hospitals receive partial credit of 50 percent or more of the
cost of a specified device. Hospitals are instructed to append the
``FC'' modifier to the procedure code that reports the service provided
to furnish the device when they receive a partial credit of 50 percent
or more of the cost of the new device. We reduce the OPPS payment for
the implantation procedure by 100 percent of the device offset for no
cost/full credit cases when both a specified device code is present on
the claim and the procedure code maps to a specified APC. Payment for
the implantation procedure is reduced by 50 percent of the device
offset for partial credit cases when both a specified device code is
present on the claim and the procedure code maps to a specified APC.
Beneficiary copayment is based on the reduced payment amount when
either the ``FB'' or the ``FC'' modifier is billed and the procedure
and device codes appear on the lists of procedures and devices to which
this policy applies. We refer readers to the CY 2008 OPPS/ASC final
rule with comment period for more background information on the ``FB''
and ``FC'' payment adjustment policies (72 FR 66743 through 66749).
2. APCs and Devices Subject to the Adjustment Policy
In the CY 2010 OPPS/ASC proposed rule (74 FR 35307), we proposed
for CY 2010 to continue the policy of reducing OPPS payment for
specified APCs by 100 percent of the device offset amount when a
hospital furnishes a specified device without cost or with a full
credit and by 50 percent of the device offset amount when the hospital
receives partial credit in the amount of 50 percent or more of the cost
for the specified device. Because the APC payments for the related
services are specifically constructed to ensure that the full cost of
the device is included in the payment, we stated in the CY 2010 OPPS/
ASC proposed rule (74 FR 35307) that we continue to believe it is
appropriate to reduce the APC payment in cases in which the hospital
receives a device without cost, with full credit, or with partial
credit, in order to provide equitable payment in these cases. (We refer
readers to section II.A.2.d.(1) of this final rule with comment period
for a description of our standard ratesetting methodology for device-
dependent APCs.) Moreover, the payment for these devices comprises a
large part of the APC payment on which the beneficiary copayment is
based, and we continue to believe it is equitable that the beneficiary
cost sharing reflects the reduced costs in these cases.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35307), we also
proposed to continue using the three criteria established in the CY
2007 OPPS/ASC final rule with comment period for determining the APCs
to which this policy applies (71 FR 68072 through 68077). Specifically,
(1) all procedures assigned to the selected APCs must involve
implantable devices that would be reported if device insertion
procedures were performed; (2) the required devices must be surgically
inserted or implanted devices that remain in the patient's body after
the conclusion of the procedure (at least temporarily); and (3) the
device offset amount must be significant, which, for purposes of this
policy, is defined as exceeding 40 percent of the APC cost. We proposed
to continue to restrict the devices to which the APC payment adjustment
would apply to a specific set of costly devices to ensure that the
adjustment would not be triggered by the implantation of an inexpensive
device whose cost would not constitute a significant proportion of the
total payment rate for an APC. We stated in the CY 2010 OPPS/ASC
proposed rule (74 FR 35307) that we continue to believe these criteria
are appropriate because free devices and device credits are likely to
be associated with particular cases only when the device must be
reported on the claim and is of a type that is implanted and remains in
the body when the beneficiary leaves the hospital. We believe that the
reduction in payment is appropriate only when the cost of the device is
a significant part of the total cost of the APC into which the device
cost is packaged, and that the 40-percent threshold is a reasonable
definition of a significant cost.
As indicated in the CY 2010 OPPS/ASC proposed rule (74 FR 35307),
we examined the offset amounts calculated from the CY 2010 proposed
rule data and the clinical characteristics of APCs to determine whether
the APCs to which the no cost/full credit and partial credit device
adjustment policy applies in CY 2009 continue to meet the criteria for
CY 2010, and to determine whether other APCs to which the policy does
not apply in CY 2009 would meet the criteria for CY 2010. Based on the
CY 2008 claims data available for the CY 2010 proposed rule, we did not
propose any changes to the APCs and devices to which this policy
applies. Table 19 of the CY 2010 OPPS/ASC proposed rule (74 FR 35307
through 35308) listed the proposed APCs to which the payment adjustment
policy for no cost/full credit and partial credit devices would apply
in CY 2010 and displayed the proposed payment adjustment percentages
for both no cost/full credit and partial credit circumstances. Table 20
of the CY 2010 OPPS/ASC proposed rule (74 FR
[[Page 60465]]
35308) listed the proposed devices to which this policy would apply in
CY 2010. We stated in the CY 2010 OPPS/ASC proposed rule (74 FR 35307)
that we would update the lists of APCs and devices to which the no
cost/full credit and partial credit device adjustment policy would
apply in CY 2010, consistent with the three selection criteria
discussed earlier in this section and based on the final CY 2008 claims
data available for this CY 2010 OPPS/ASC final rule with comment
period.
We did not receive any public comments on our CY 2010 proposal to
continue the policy of reducing OPPS payment for specified APCs by 100
percent of the device offset amount when a hospital furnishes a
specified device without cost or with a full credit and by 50 percent
of the device offset amount when the hospital receives partial credit
in the amount of 50 percent or more of the cost for the specified
device. We also did not receive any public comments on our CY 2010
proposal to continue using the three criteria established in the CY
2007 OPPS/ASC final rule with comment period for determining the APCs
to which this policy applies (71 FR 68072 through 68077). Therefore, we
are finalizing our CY 2010 proposals, without modification, to continue
the established no cost/full credit and partial credit device
adjustment policy. For CY 2010, OPPS payments for implantation
procedures to which the ``FB'' modifier is appended are reduced by 100
percent of the device offset for no cost/full credit cases when both a
device code listed in Table 29, below, is present on the claim and the
procedure code maps to an APC listed in Table 28 below. OPPS payments
for implantation procedures to which the ``FC'' modifier is appended
are reduced by 50 percent of the device offset when both a device code
listed in Table 29 is present on the claim and the procedure code maps
to an APC listed in Table 28. Beneficiary copayment is based on the
reduced amount when either the ``FB'' or ``FC'' modifier is billed and
the procedure and device codes appear on the lists of procedures and
devices to which this policy applies.
We are adding device HCPCS code L8680 (Implantable neurostimulator
electrode, each) to the list of devices in Table 29 because we are
changing the status indicator for this code from ``B'' (Codes that are
not recognized by OPPS when submitted on an outpatient hospital Part B
bill type (12x and13x)) to ``N'' (Items and Services Packaged into APC
Rates) for CY 2010, as reflected in Addendum B to this final rule with
comment period. We are recognizing HCPCS code L8680 for payment
purposes under the OPPS because it appropriately describes
neurostimulator electrodes, and we typically try to recognize all valid
HCPCS codes that hospitals may use to report items and services
provided to hospital outpatients that are packaged or otherwise payable
under the OPPS. This change in status indicator for HCPCS code L8680
for CY 2010 does not require hospitals to change their current billing
practices in any way, but it does provide them with the flexibility to
use this code if they choose to do so.
Table 28--APCs to Which the No Cost/Full Credit and Partial Credit Device Adjustment Policy Will Apply
----------------------------------------------------------------------------------------------------------------
Final CY
2010 device Final CY
offset 2010 device
Final CY 2010 APC CY 2010 APC title percentage offset
for no cost/ percentage
full for partial
credit case credit case
----------------------------------------------------------------------------------------------------------------
0039.......................................... Level I Implantation of 85 43
Neurostimulator Generator.
0040.......................................... Percutaneous Implantation of 58 29
Neurostimulator Electrodes.
0061.......................................... Laminectomy, Laparoscopy, or Incision 64 32
for Implantation of Neurostimulator
Electrodes.
0089.......................................... Insertion/Replacement of Permanent 72 36
Pacemaker and Electrodes.
0090.......................................... Insertion/Replacement of Pacemaker 74 37
Pulse Generator.
0106.......................................... Insertion/Replacement of Pacemaker 44 22
Leads and/or Electrodes.
0107.......................................... Insertion of Cardioverter- 89 44
Defibrillator.
0108.......................................... Insertion/Replacement/Repair of 88 44
Cardioverter-Defibrillator Leads.
0225.......................................... Implantation of Neurostimulator 73 37
Electrodes, Cranial Nerve.
0227.......................................... Implantation of Drug Infusion Device.. 83 41
0259.......................................... Level VII ENT Procedures.............. 85 42
0315.......................................... Level II Implantation of 88 44
Neurostimulator Generator.
0385.......................................... Level I Prosthetic Urological 59 30
Procedures.
0386.......................................... Level II Prosthetic Urological 71 35
Procedures.
0418.......................................... Insertion of Left Ventricular Pacing 81 41
Elect..
0425.......................................... Level II Arthroplasty or Implantation 58 29
with Prosthesis.
0648.......................................... Level IV Breast Surgery............... 48 24
0654.......................................... Insertion/Replacement of a permanent 75 37
dual chamber pacemaker.
0655.......................................... Insertion/Replacement/Conversion of a 75 37
permanent dual chamber pacemaker.
0680.......................................... Insertion of Patient Activated Event 73 36
Recorders.
----------------------------------------------------------------------------------------------------------------
[[Page 60466]]
Table 29--Devices to Which the No Cost/Full Credit and Partial Credit
Device Adjustment Policy Will Apply
------------------------------------------------------------------------
CY 2010 device HCPCS code CY 2010 short descriptor
------------------------------------------------------------------------
C1721.................................. AICD, dual chamber.
C1722.................................. AICD, single chamber.
C1728.................................. Cath, brachytx seed adm.
C1764.................................. Event recorder, cardiac.
C1767.................................. Generator, neurostim, imp.
C1771.................................. Rep dev, urinary, w/sling.
C1772.................................. Infusion pump, programmable.
C1776.................................. Joint device (implantable).
C1777.................................. Lead, AICD, endo single coil.
C1778.................................. Lead, neurostimulator.
C1779.................................. Lead, pmkr, transvenous VDD.
C1785.................................. Pmkr, dual, rate-resp.
C1786.................................. Pmkr, single, rate-resp.
C1789.................................. Prosthesis, breast, imp.
C1813.................................. Prosthesis, penile, inflatab.
C1815.................................. Pros, urinary sph, imp.
C1820.................................. Generator, neuro rechg bat sys.
C1881.................................. Dialysis access system.
C1882.................................. AICD, other than sing/dual.
C1891.................................. Infusion pump, non-prog, perm.
C1895.................................. Lead, AICD, endo dual coil.
C1896.................................. Lead, AICD, non sing/dual.
C1897.................................. Lead, neurostim, test kit.
C1898.................................. Lead, pmkr, other than trans.
C1899.................................. Lead, pmkr/AICD combination.
C1900.................................. Lead coronary venous.
C2619.................................. Pmkr, dual, non rate-resp.
C2620.................................. Pmkr, single, non rate-resp.
C2621.................................. Pmkr, other than sing/dual.
C2622.................................. Prosthesis, penile, non-inf.
C2626.................................. Infusion pump, non-prog, temp.
C2631.................................. Rep dev, urinary, w/o sling.
L8600.................................. Implant breast silicone/eq.
L8614.................................. Cochlear device/system.
L8680.................................. Implt neurostim elctr each.
L8685.................................. Implt nrostm pls gen sng rec.
L8686.................................. Implt nrostm pls gen sng non.
L8687.................................. Implt nrostm pls gen dua rec.
L8688.................................. Implt nrostm pls gen dua non.
L8690.................................. Aud osseo dev, int/ext comp.
------------------------------------------------------------------------
V. OPPS Payment Changes for Drugs, Biologicals, and
Radiopharmaceuticals
A. OPPS Transitional Pass-Through Payment for Additional Costs of
Drugs, Biologicals, and Radiopharmaceuticals
1. Background
Section 1833(t)(6) of the Act provides for temporary additional
payments or ``transitional pass-through payments'' for certain drugs
and biological agents. As enacted by the Medicare, Medicaid, and SCHIP
Balanced Budget Refinement Act (BBRA) of 1999 (Pub. L. 106-113), this
provision requires the Secretary to make additional payments to
hospitals for current orphan drugs, as designated under section 526 of
the Federal Food, Drug, and Cosmetic Act (Pub. L. 107-186); current
drugs and biological agents and brachytherapy sources used for the
treatment of cancer; and current radiopharmaceutical drugs and
biological products. For those drugs and biological agents referred to
as ``current,'' the transitional pass-through payment began on the
first date the hospital OPPS was implemented.
Transitional pass-through payments also are provided for certain
``new'' drugs and biological agents that were not being paid for as an
HOPD service as of December 31, 1996, and whose cost is ``not
insignificant'' in relation to the OPPS payments for the procedures or
services associated with the new drug or biological. For pass-through
payment purposes, radiopharmaceuticals are included as ``drugs.'' Under
the statute, transitional pass-through payments for a drug or
biological described in section 1833(t)(6)(C)(i)(II) of the Act can be
made for at least 2 years but not more than 3 years after the product's
first payment as a hospital outpatient service under Part B. The pass-
through payment eligibility period is discussed in detail in section
V.A.5. of this final rule with comment period. CY 2010 pass-through
drugs and biologicals and their designated APCs are assigned status
indicator ``G'' in Addenda A and B to this final rule with comment
period.
Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through
payment amount, in the case of a drug or biological, is the amount by
which the amount determined under section 1842(o) of the Act (or, if
the drug or biological is covered under a competitive acquisition
contract under section 1847B of the Act, an amount determined by the
Secretary to be equal to the average price for the drug or biological
for all competitive acquisition areas and the year established under
such section as calculated and adjusted by the Secretary) for the drug
or biological exceeds the portion of the otherwise applicable Medicare
OPD fee schedule that the Secretary determines is associated with the
drug or biological. This methodology for determining the pass-through
payment amount is set forth in Sec. 419.64 of the regulations, which
specifies that the pass-through payment equals the amount determined
under section 1842(o) of the Act minus the portion of the APC payment
that CMS determines is associated with the drug or biological. Section
1847A of the Act establishes the use of the average sales price (ASP)
methodology as the basis for payment for drugs and biologicals
described in section 1842(o)(1)(C) of the Act that are furnished on or
after January 1, 2005. The ASP methodology, as applied under the OPPS,
uses several sources of data as a basis for payment, including the ASP,
wholesale acquisition cost (WAC), and average wholesale price (AWP). In
this final rule with comment period, the term ``ASP methodology'' and
``ASP-based'' are inclusive of all data sources and methodologies
described therein. Additional information on the ASP methodology can be
found on the CMS Web site at: http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice.
As noted above, section 1833(t)(6)(D)(i) of the Act also states
that if a drug or biological is covered under a competitive acquisition
contract under section 1847B of the Act, the payment rate is equal to
the average price for the drug or biological for all competitive
acquisition areas and the year established as calculated and adjusted
by the Secretary. Section 1847B of the Act establishes the payment
methodology for Medicare Part B drugs and biologicals under the
competitive acquisition program (CAP). The Part B drug CAP was
implemented on July 1, 2006, and included approximately 190 of the most
common Part B drugs provided in the physician's office setting. As we
noted in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68633), the Part B drug CAP program was suspended beginning in CY 2009
(Medicare Learning Network (MLN) Matters Special Edition 0833,
available via the Web site: http://www.medicare.gov). Therefore, there
is no effective Part B drug CAP rate for pass-through drugs and
biologicals as of January 1, 2009. As we indicated in the CY 2010 OPPS/
ASC proposed rule (74 FR 35309), if the program is reinstituted during
CY 2010 and Part B drug CAP rates become available, we would again use
the Part B drug CAP rate for pass-through drugs and biologicals if they
are a part of the Part B drug CAP program. Otherwise, we would continue
to use the rate that would be paid in the physician's office setting
for drugs and biologicals with pass-through status. We note that the CY
2010 MPFS proposed rule (74 FR 33623 through 33633) included proposed
changes to the operation of the Part B drug CAP program, including a
proposed change in the frequency of CAP drug pricing updates. A
discussion of the final CAP policies is available in the CY 2010 MPFS
final rule with comment period.
For CYs 2005, 2006, and 2007, we estimated the OPPS pass-through
[[Page 60467]]
payment amount for drugs and biologicals to be zero based on our
interpretation that the ``otherwise applicable Medicare OPD fee
schedule'' amount was equivalent to the amount to be paid for pass-
through drugs and biologicals under section 1842(o) of the Act (or
section 1847B of the Act, if the drug or biological is covered under a
competitive acquisition contract). We concluded for those years that
the resulting difference between these two rates would be zero. For CYs
2008 and 2009, we estimated the OPPS pass-through payment amount for
drugs and biologicals to be $6.6 million and $23.3 million,
respectively. Our final OPPS pass-through payment estimate for drugs
and biologicals in CY 2010 is $35.5 million, which is discussed in
section VI.B. of this final rule with comment period.
The pass-through application and review process for drugs and
biologicals is explained on the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/04_passthrough_payment.asp.
2. Drugs and Biologicals With Expiring Pass-Through Status in CY 2009
In the CY 2010 OPPS/ASC proposed rule (74 FR 35309), we proposed
that the pass-through status of 6 drugs and biologicals would expire on
December 31, 2009, as listed in Table 21 of the proposed rule (74 FR
35309 through 35310). These items were approved for pass-through status
on or before January 1, 2008 and, therefore, all of these drugs and
biologicals will have received OPPS pass-through payment for at least 2
years and no more than 3 years by December 31, 2009.
Two of the products with proposed expiring pass-through status for
CY 2010 are biologicals that are solely surgically implanted according
to their Food and Drug Administration approved indications. As
discussed in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68634), we package payment for those implantable biologicals that have
expiring pass-through status into payment for the associated surgical
procedure. In the CY 2010 OPPS/ASC proposed rule, we proposed to
package payment for two products described by HCPCS codes C9354
(Acellular pericardial tissue matrix of non-human origin (Veritas), per
square centimeter) and C9355 (Collagen nerve cuff (NeuroMatrix), per
0.5 centimeter length).
To date, for other nonpass-through biologicals paid under the OPPS
that may sometimes be used as implantable devices, we have instructed
hospitals, via Transmittal 1336, Change Request 5718, dated September
14, 2007, to not separately bill for the HCPCS codes for the products
when using these items as implantable devices (including as a scaffold
or an alternative to human or nonhuman connective tissue or mesh used
in a graft) during surgical procedures. In such cases, we consider
payment for the biological used as an implantable device in a specific
clinical case to be included in payment for the surgical procedure.
As we established in the CY 2003 OPPS final rule with comment
period (67 FR 66763), when the pass-through payment period for an
implantable device ends, it is standard OPPS policy to package payment
for the implantable device into payment for its associated surgical
procedure. We consider nonpass-through implantable devices to be
integral and supportive items and services for which packaged payment
is most appropriate. According to our regulations at Sec. 419.2(b), as
a prospective payment system, the OPPS establishes a national payment
rate that includes operating and capital-related costs that are
directly related and integral to performing a procedure or furnishing a
service on an outpatient basis including, but not limited to,
implantable prosthetics, implantable durable medical equipment, and
medical and surgical supplies. Therefore, when the period of
nonbiological device pass-through payment ends, we package the costs of
the devices no longer eligible for pass-through payment into the costs
of the procedures with which the devices were reported in the claims
data used to set the payment rates for the upcoming calendar year. As
described in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68634), we believed that this policy to package payment for implantable
devices that are integral to the performance of separately paid
procedures should also apply to payment for implantable biologicals
without pass-through status, when those biologicals function as
implantable devices. As stated above, implantable biologicals may be
used in place of other implantable nonbiological devices whose costs
are already accounted for in the associated procedural APC payments for
surgical procedures. If we were to provide separate payment for these
implantable biologicals without pass-through status, we would
potentially be providing duplicate device payment, both through the
packaged nonbiological device cost included in the surgical procedure's
payment and separate biological payment. We indicated in the CY 2009
OPPS/ASC final rule with comment period (73 FR 68634) that we saw no
basis for treating implantable biological and nonbiological devices
without pass-through status differently for OPPS payment purposes
because both are integral to and supportive of the separately paid
surgical procedures in which either may be used.
With the exception of those groups of drugs and biologicals that
are always packaged when they do not have pass-through status,
specifically diagnostic radiopharmaceuticals, contrast agents, and
implantable biologicals, our standard methodology of providing payment
for drugs and biologicals with expiring pass-through status in an
upcoming calendar year is to determine the product's estimated per day
cost and compare it with the OPPS drug packaging threshold for that
calendar year (which is $65 for CY 2010), as discussed further in
section V.B.2. of this final rule with comment period. If the drug's or
biological's estimated per day cost is less than or equal to the
applicable OPPS drug packaging threshold, we would package payment for
the drug or biological into the payment for the associated procedure in
the upcoming calendar year. If the estimated per day cost of the drug
or biological is greater than the OPPS drug packaging threshold, we
would provide separate payment at the applicable relative ASP-based
payment amount (which is at ASP+4 percent for CY 2010, as discussed
further in section V.B.3. of this final rule with comment period).
Section V.B.2.d. of this final rule with comment period discusses the
packaging of all nonpass-through contrast agents, diagnostic
radiopharmaceuticals, and implantable biologicals.
We did not receive any public comments on our proposal to expire
certain drugs and biologicals from pass-through status, effective
December 31, 2009. Therefore, we are finalizing our proposal, without
modification, to expire the pass-through status of the six drugs and
biologicals listed in Table 30 below, effective December 31, 2009.
[[Page 60468]]
Table 30--Drugs and Biologicals for Which Pass-Through Status Expires December 31, 2009
----------------------------------------------------------------------------------------------------------------
Final CY Final CY
CY 2009 HCPCS code CY 2010 HCPCS code CY 2010 long descriptor 2010 SI 2010 APC
----------------------------------------------------------------------------------------------------------------
C9354............................... C9354................. Acellular pericardial N N/A
tissue matrix of non-human
origin (Veritas), per
square centimeter.
C9355............................... C9355................. Collagen nerve cuff N N/A
(NeuroMatrix), per 0.5
centimeter length.
J1300............................... J1300................. Injection, eculizumab, 10 K 9236
mg.
J3488............................... J3488................. Injection, zoledronic acid K 0951
(Reclast), 1 mg.
J9261............................... J9261................. Injection, nelarabine, 50 K 0825
mg.
J9330............................... J9330................. Injection, temsirolimus, 1 K 1168
mg.
----------------------------------------------------------------------------------------------------------------
3. Drugs, Biologicals, and Radiopharmaceuticals With New or Continuing
Pass-Through Status in CY 2010
In the CY 2010 OPPS/ASC proposed rule (74 FR 35310), we proposed to
continue pass-through status in CY 2010 for 31 drugs and biologicals.
These items, which were approved for pass-through status between April
1, 2008 and July 1, 2009, were listed in Table 22 of the proposed rule
(74 FR 35310 through 35311). None of these products will have received
OPPS pass-through payment for at least 2 years and no more than 3 years
by December 31, 2009. The APCs and HCPCS codes for these drugs and
biologicals were assigned status indicator ``G'' in Addenda A and B to
the proposed rule.
Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
payment for pass-through drugs and biologicals (the pass-through
payment amount) as the difference between the amount authorized under
section 1842(o) of the Act (or, if the drug or biological is covered
under a CAP under section 1847B of the Act, an amount determined by the
Secretary equal to the average price for the drug or biological for all
competitive acquisition areas and the year established under such
section as calculated and adjusted by the Secretary) and the portion of
the otherwise applicable OPD fee schedule that the Secretary determines
is associated with the drug or biological. Payment for drugs and
biologicals with pass-through status under the OPPS is currently made
at the physician's office payment rate of ASP+6 percent. We believe it
is consistent with the statute to continue to provide payment for drugs
and biologicals with pass-through status at a rate of ASP+6 percent in
CY 2010, the amount that drugs and biologicals receive under section
1842(o) of the Act. Thus, for CY 2010, we proposed to pay for pass-
through drugs and biologicals at ASP+6 percent, equivalent to the rate
these drugs and biologicals would receive in the physician's office
setting in CY 2010. The difference between ASP+4 percent that we
proposed to pay for nonpass-through separately payable drugs under the
CY 2010 OPPS and ASP+6 percent, therefore, would be the CY 2010 pass-
through payment amount for these drugs and biologicals. In the case of
pass-through contrast agents, diagnostic radiopharmaceuticals, and
implantable biologicals, their pass-through payment amount would be
equal to ASP+6 percent because, if not on pass-through status, payment
for these products would be packaged into the associated procedures.
As discussed in more detail in section V.B.2.d. of this final rule
with comment period, over the last 2 years, we implemented a policy
whereby payment for all nonpass-through diagnostic
radiopharmaceuticals, contrast agents, and implantable biologicals is
packaged into payment for the associated procedure, and we proposed to
continue the packaging of these items, regardless of their per day
cost, in CY 2010. As stated earlier, pass-through payment is the
difference between the amount authorized under section 1842(o) of the
Act (or, if the drug or biological is covered under a CAP under section
1847B of the Act, an amount determined by the Secretary equal to the
average price for the drug or biological for all competitive
acquisition areas and the year established under such section as
calculated and adjusted by the Secretary) and the portion of the
otherwise applicable OPD fee schedule that the Secretary determines is
associated with the drug or biological. Because payment for a drug that
is either a diagnostic radiopharmaceutical or a contrast agent
(identified as a ``policy-packaged'' drug, first described in the CY
2009 OPPS/ASC final rule with comment period (73 FR 68639)) or for an
implantable biological (which we proposed to consider to be a device
for all payment purposes beginning in CY 2010 as discussed in sections
V.A.4. and V.B.2.d. of the CY 2010 OPPS/ASC proposed rule (74 FR 35311
through 35314 and 74 FR 35323 through 35324) and this final rule with
comment period) would otherwise be packaged if the product did not have
pass-through status, we believe the otherwise applicable OPPS payment
amount would be equal to the ``policy-packaged'' drug or device APC
offset amount for the associated clinical APC in which the drug or
biological is utilized. The calculation of the ``policy-packaged'' drug
and device APC offset amounts are described in more detail in sections
V.A.6.b. and IV.A.2. of this final rule with comment period,
respectively. It follows that the copayment for the nonpass-through
payment portion (the otherwise applicable fee schedule amount that we
would also offset from payment for the drug or biological if a payment
offset applies) of the total OPPS payment for those drugs and
biologicals would, therefore, be accounted for in the copayment for the
associated clinical APC in which the drug or biological is used.
According to section 1833(t)(8)(E) of the Act, the amount of copayment
associated with pass-through items is equal to the amount of copayment
that would be applicable if the pass-through adjustment was not
applied. Therefore, beginning in CY 2010, we proposed to set the
associated copayment amount for pass-through diagnostic
radiopharmaceuticals, contrast agents, and implantable biologicals that
would otherwise be packaged if the item did not have pass-through
status to zero. The separate OPPS payment to a hospital for the pass-
through diagnostic radiopharmaceutical, contrast agent, or implantable
biological, after taking into account any applicable payment offset for
the item due to the device or ``policy-packaged'' APC offset policy, is
the item's pass-through payment, which is not subject to a copayment
according to the statute. Therefore, we did not publish a copayment
amount for these items in Addendum A and B to the proposed rule.
[[Page 60469]]
We also proposed to update pass-through payment rates on a
quarterly basis on the CMS Web site during CY 2010 if later quarter ASP
submissions (or more recent WAC or AWP information, as applicable)
indicate that adjustments to the payment rates for these pass-through
drugs or biologicals are necessary. If the Part B drug CAP is
reinstated during CY 2010, and a drug or biological that has been
granted pass-through status for CY 2010 becomes covered under the Part
B drug CAP, we proposed to provide pass-through payment at the Part B
drug CAP rate and to make the appropriate adjustments to the payment
rates for these drugs and biologicals on a quarterly basis as
appropriate.
As is our standard methodology, we annually review new permanent
HCPCS codes and delete temporary HCPCS C-codes if an alternate
permanent HCPCS code is available for purposes of OPPS billing and
payment. For our CY 2010 review, we have determined that HCPCS code
J2796 (Injection, romiplostim, 10 micrograms) describes the product
reported under HCPCS code C9245 (Injection, romiplostim, 10 mcg); HCPCS
code A9581 (Injection, gadoxetate disodium, 1 ml) describes the product
reported under HCPCS code C9246 (Injection, gadoxetate disodium, per
ml); HCPCS code A9582 (Iodine I-123 iobenguane, diagnostic, per study
dose, up to 15 millicuries) describes the product reported under HCPCS
code C9247 (Iobenguane, I-123, diagnostic, per study dose, up to 10
millicuries); HCPCS code J0718 (Injection, certolizumab pegol, 1 mg)
describes the product reported under HCPCS code C9249 (Injection,
certolizumab pegol, 1 mg); HCPCS code J0598 (Injection, C1 esterase
inhibitor (human), 10 units) describes the product reported under HCPCS
code C9251 (Injection, C1 esterase inhibitor (human), 10 units); HCPCS
code J2562 (Injection, plerixafor, 1 mg) describes the product reported
under HCPCS code C9252 (Injection, plerixafor, 1 mg); and HCPCS code
J9328 (Injection, temozolomide, 1 mg) describes the product reported
under HCPCS code C9253 (Injection, temozolomide, 1 mg). These new CY
2010 HCPCS codes are included in Table 31 below.
Comment: Several commenters supported CMS' proposal to provide
payment at ASP+6 percent for drugs, biologicals, contrast agents, and
radiopharmaceuticals that are granted pass-through status. Further, the
commenters approved of the proposal to use the ASP methodology that
would provide payment based on WAC if ASP information is not available,
and payment at 95 percent of AWP if WAC information is not available.
Some commenters requested that CMS provide an additional payment for
radiopharmaceuticals that are granted pass-through status because
radiopharmaceuticals typically have higher overhead and pharmacy
handling costs associated with their preparation than the overhead
costs of other drugs and biologicals.
Response: As discussed above, the statutorily mandated pass-through
payment equals the amount determined under section 1842(o) of the Act
minus the portion of the APC payment that CMS determines is associated
with the drug or biological. Therefore, the pass-through payment is
determined by subtracting the otherwise applicable payment amount under
the OPPS (determined to be ASP+4 percent for CY 2010) from the amount
determined under section 1842(o) (ASP+6 percent).
For CY 2010, consistent with our CY 2009 policy for diagnostic
radiopharmaceuticals, we proposed to provide payment for both
diagnostic and therapeutic radiopharmaceuticals with pass-through
status based on the ASP methodology. As stated above, the ASP
methodology, as applied under the OPPS, uses several sources of data as
a basis for payment, including the ASP, WAC if ASP is unavailable, and
AWP if ASP and WAC are unavailable. For purposes of pass-through
payment, we consider radiopharmaceuticals to be drugs under the OPPS
and, therefore, if a diagnostic or therapeutic radiopharmaceutical
receives pass-through status during CY 2010, we proposed to follow the
standard ASP methodology to determine its pass-through payment rate
under the OPPS. We have routinely provided a single payment for drugs,
biologicals, and radiopharmaceuticals under the OPPS to account for the
acquisition and pharmacy overhead costs, including compounding costs.
We continue to believe that a single payment is appropriate for
diagnostic radiopharmaceuticals with pass-through status in CY 2009,
and that the payment rate of ASP+6 (or payment based on the ASP
methodology) is appropriate to provide payment for both the
radiopharmaceutical acquisition cost and any associated nuclear
medicine handling and compounding costs. We refer readers to section
V.B.5.b. of this final rule with comment period for further discussion
of payment for radiopharmaceuticals based on ASP information submitted
by manufacturers.
Comment: Several commenters expressed concern that a pass-through
payment period of possibly only 2 years discourages new product
development, especially for radiopharmaceutical products. One commenter
recommended providing pass-through payment for approved
radiopharmaceuticals for a full 3-year time period to allow hospitals
time to incorporate new products into their chargemasters and billing
practices.
Response: The pass-through statute specifically allows for pass-
through payment of drugs and biologicals to be made for at least 2
years, but no more than 3 years. We believe this period of payment
facilitates dissemination of these new products into clinical practice
and collection of hospital claims data reflective of their costs for
future OPPS ratesetting. Our longstanding practice has been to provide
pass-through payment for a period of 2 to 3 years, with expiration of
pass-through status proposed and finalized through the annual
rulemaking process. Each year when proposing to expire the pass-through
status of certain drugs and biologicals, we examine our claims data for
these products and we have generally seen no evidence that hospitals
have not fully incorporated these items into their chargemasters based
on the utilization and costs observed in our claims data. As discussed
further in section V.A.5. of this final rule with comment period, we
are making no operational changes to the drug and biological pass-
through program for CY 2010 and plan to continue to expire pass-through
status on an annual basis through rulemaking. Under this existing
operational policy, which was generally supported by the commenters,
because we begin pass-through payment on a quarterly basis that depends
on when applications are submitted to us for consideration and we
expire pass-through status only on an annual basis, there is no way to
ensure that all pass-through drugs and biologicals receive pass-through
payment for a full 3 years, while also providing pass-through payment
for no more than 3 years as the statute requires. Therefore, we will
continue to provide drug and biological pass-through payment for at
least 2 years, but no more than 3 years, as required by the statute. We
continue to receive numerous pass-through applications for drugs and
biologicals for consideration each quarter, and we have no evidence
that our current pass-through payment policies discourage new product
development.
There is currently one diagnostic radiopharmaceutical, HCPCS code
C9247 (Iodine I-123 iobenguane, diagnostic, per study dose, up to 15
[[Page 60470]]
millicuries), that has been granted pass-through status at the time of
this final rule with comment period. We proposed to continue pass-
through status for this diagnostic radiopharmaceutical as it would not
have received at least 2 but not more than 3 years of pass-through
payment by December 31, 2009. This is consistent with the OPPS
provision that provides for at least 2 but not more than 3 years of
pass-through payment for drugs and biologicals that are approved for
pass-through payments.
We provide an opportunity through the annual OPPS/ASC rulemaking
cycle for public comment on those drugs and biologicals that are
proposed for expiration of pass-through payment at the end of the next
calendar year. We have often received public comments related to our
proposed expiration of pass-through status for particular drugs and
biologicals, and we expect to continue to receive public comments
regarding the proposed expiration of pass-through status for drugs and
biologicals in the future. In this manner, we would address specific
concerns about the pass-through payment period for individual drugs and
biologicals in the future, including radiopharmaceuticals.
Comment: A few commenters supported the CY 2010 proposal to set the
associated copayment amounts for pass-through diagnostic
radiopharmaceuticals, contrast agents, and implantable biologicals that
would otherwise be packaged if the product did not have pass-through
status to zero. The commenters noted increased beneficiary savings by
setting the copayment amount to zero.
Response: We appreciate the commenters' support. As discussed in
the CY 2010 OPPS/ASC proposed rule (74 FR 35311), we believe that for
drugs and biologicals that are ``policy-packaged,'' the copayment for
the nonpass-through payment portion of the total OPPS payment for this
subset of drugs and biologicals is accounted for in the copayment for
the associated clinical APC in which the drug or biological is used.
According to section 1833(t)(8)(E) of the Act, the amount of copayment
associated with pass-through items is equal to the amount of copayment
that would be applicable if the pass-through adjustment was not
applied. Therefore, it is our belief that the amount should be zero for
drugs and biologicals that are ``policy-packaged,'' including
diagnostic radiopharmaceuticals.
We did not receive any public comments on our proposal to update
pass-through payment rates on a quarterly basis during CY 2010 if later
quarter ASP submissions (or more recent WAC or AWP information, as
applicable) indicate that adjustments to the payment rates for these
pass-through drugs and biologicals are necessary.
After consideration of the public comments we received, we are
finalizing our CY 2010 pass-through payment proposals, without
modification. Specifically, we will provide pass-through payment in CY
2010 for those drugs, biologicals and radiopharmaceuticals listed in
Table 31 below. Pass-through payment for drugs, biologicals, and
radiopharmaceuticals granted pass-through status will be made at the
payment rate indicated in section 1842(o) of the Act, that is, ASP+6
percent. If ASP data are not available, pass-through payment will be
based on the OPPS ASP methodology--that is, payment at WAC+6 percent if
ASP data are not available and payment at 95 percent of the pass-
through radiopharmaceutical's most recent AWP if WAC information is not
available. We will update pass-through payment rates on a quarterly
basis during CY 2010 if later ASP submissions (or more recent WAC or
AWP information, as applicable) indicate that adjustments to the
payment rates for pass-through drugs and biologicals are necessary. We
will set the associated copayment amount for pass-through diagnostic
radiopharmaceuticals, contrast agents, and implantable biologicals that
would otherwise be packaged if the item did not have pass-through
status to zero. Finally, if a drug or biological that has been granted
pass-through status for CY 2010 becomes covered under the Part B drug
CAP if the program is reinstituted, we will provide payment for Part B
drugs that are granted pass-through status and are covered under the
Part B drug CAP at the Part B drug CAP rate.
The drugs and biologicals that are continuing pass-through status
for CY 2010 or that have been granted pass-through status as of January
2010 are displayed in Table 31 below.
Table 31--Drugs and Biologicals With Pass-Through Status in CY 2010
----------------------------------------------------------------------------------------------------------------
Final CY Final CY
CY 2009 HCPCS code CY 2010 HCPCS code CY 2010 long descriptor 2010 SI 2010 APC
----------------------------------------------------------------------------------------------------------------
C9245............................... J2796................. Injection, romiplostim, 10 G 9245
micrograms.
C9246............................... A9581................. Injection, gadoxetate G 9246
disodium, 1 ml.
C9247............................... A9582................. Iodine I-123 iobenguane, G 9247
diagnostic, per study
dose, up to 15 millicuries.
A9583................. Injection, gadofosveset G 1299
trisodium, 1 ml.
C9248............................... C9248................. Injection, clevidipien G 9248
butyrate, 1 mg.
C9249............................... J0718................. Injection, certolizumab G 9249
pegol, 1 mg.
C9250............................... C9250................. Human plasma fibrin G 9250
sealant, vapor-heated,
solvent-detergent
(Artiss), 2ml.
C9251............................... J0598................. Injection, C1 esterase G 9251
inhibitor (human), 10
units.
C9252............................... J2562................. Injection, plerixafor, 1 mg G 9252
C9253............................... J9328................. Injection, temozolomide, 1 G 9253
mg.
C9255................. Injection, paliperidone G 1300
palmitate, 1 mg.
C9256................. Injection, dexamethasone G 9256
intravitreal implant, 0.1
mg.
C9356............................... C9356................. Tendon, porous matrix of G 9356
cross-linked collagen and
glycosaminoglycan matrix
(TenoGlide Tendon
Protector Sheet), per
square centimeter.
C9358............................... C9358................. Dermal substitute, native, G 9358
non-denatured collagen,
fetal bovine origin
(SurgiMend Collagen
Matrix), per 0.5 square
centimeters.
C9359............................... C9359................. Porous purified collagen G 9359
matrix bone void filler
(Integra Mozaik
Osteoconductive Scaffold
Putty, Integra OS
Osteoconductive Scaffold
Putty), per 0.5 cc.
[[Page 60471]]
C9360............................... C9360................. Dermal substitute, native, G 9360
non-denatured collagen,
neonatal bovine origin
(SurgiMend Collagen
Matrix), per 0.5 square
centimeters.
C9361............................... C9361................. Collagen matrix nerve wrap G 9361
(NeuroMend Collagen Nerve
Wrap), per 0.5 centimeter
length.
C9362............................... C9362................. Porous purified collagen G 9362
matrix bone void filler
(Integra Mozaik
Osteoconductive Scaffold
Strip), per 0.5 cc.
C9363............................... C9363................. Skin substitute, Integra G 9363
Meshed Bilayer Wound
Matrix, per square
centimeter.
C9364............................... C9364................. Porcine implant, Permacol, G 9364
per square centimeter.
J0641............................... J0641................. Injection, levoleucovorin G 1236
calcium, 0.5 mg.
J1267............................... J1267................. Injection, doripenem, 10 mg G 9241
J1453............................... J1453................. Injection, fosaprepitant, 1 G 9242
mg.
J1459............................... J1459................. Injection, immune globulin G 1214
(privigen), intravenous,
non-lyophilized (e.g.
liquid), 500 mg.
J1571............................... J1571................. Injection, hepatitis b G 0946
immune globulin (hepagam
b), intramuscular, 0.5 ml.
J1573............................... J1573................. Injection, hepatitis B G 1138
immune globulin (Hepagam
B), intravenous, 0.5ml.
J1680................. Injection, human fibrinogen G 1290
concentrate, 100 mg.
J1953............................... J1953................. Injection, levetiracetam, G 9238
10 mg.
J2785............................... J2785................. Injection, regadenoson, 0.1 G 9244
mg.
J8705............................... J8705................. Topotecan, oral, 0.25 mg... G 1238
J9033............................... J9033................. Injection, bendamustine G 9243
hcl, 1 mg.
J9155................. Injection, degarelix, 1 mg. G 1296
J9207............................... J9207................. Injection, ixabepilone, 1 G 9240
mg.
J9225............................... J9225................. Histrelin implant (vantas), G 1711
50 mg.
J9226............................... J9226................. Histrelin implant G 1142
(supprelin la), 50 mg.
Q0138................. Injection, ferumoxytol, for G 1297
treatment of iron
deficiency anemia, 1 mg
(non-esrd use).
Q4114............................... Q4114................. Dermal substitute, G 1251
granulated cross-linked
collagen and
glycosaminoglycan matrix
(Flowable Wound Matrix), 1
cc.
----------------------------------------------------------------------------------------------------------------
4. Pass-Through Payment for Implantable Biologicals
a. Background
Section 1833(t)(6)(A)(iv) of the Act authorizes transitional pass-
through payments for new medical devices, drugs, and biologicals, for
those items where payment was not being made as a hospital outpatient
service under Part B as of December 31, 1996, and whose cost is not
insignificant in relation to the OPD fee schedule amount payable for
the service (or group of services) involved. These pass-through
payments are in addition to the usual APC payments for services in
which the product is used. Coding and payment for drugs and biologicals
with pass-through status are generally provided on a product-specific
basis for a period of no less than 2 and no more than 3 years from the
date pass-through payment is first made as discussed in section V.A.5.
of this final rule with comment period, while coding and payment for
devices with pass-through status are provided for categories of devices
that may describe numerous products. The Act specifies that the
duration of transitional pass-through payments for devices must be no
less than 2 and no more than 3 years from the first date on which
payment is made for any medical device that is described by the
category. Therefore, we utilize separate pass-through application and
evaluation processes and criteria for drugs and biologicals and device
categories because the statutory provisions are not the same for all
items that may receive pass-through payment. These processes and the
applicable evaluation criteria are available on the CMS Web site at:
http://www.cms.hhs.gov/HospitalOutpatientPPS/04_passthrough_payment.asp#TopOfPage. The regulations that govern pass-through payment
for drugs and biologicals are found in Sec. 419.64 and those
applicable to pass-through device categories are found in Sec. 419.66.
Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through
payment amount, in the case of a drug or biological, is the amount by
which the amount determined under section 1842(o) of the Act (or, if
the drug or biological is covered under a competitive acquisition
contract under section 1847B of the Act, an amount determined by the
Secretary equal to the average price for the drug or biological for all
competitive acquisition areas and the year established under such
section as calculated and adjusted by the Secretary) for the drug or
biological exceeds the portion of the otherwise applicable Medicare OPD
fee schedule that the Secretary determines is associated with the drug
or biological. For the drugs and biologicals that would have otherwise
been paid under the Part B drug CAP, because the Part B drug CAP has
been suspended beginning January 1, 2009, pass-through payment for
these drugs and biologicals is currently made at the physician's office
payment rate of ASP+6 percent. In the case of diagnostic
radiopharmaceuticals, where all products without pass-through status
are packaged into payment for nuclear medicine procedures, the pass-
through payment is reduced by an amount that reflects the diagnostic
radiopharmaceutical portion of the APC payment amount for the
associated nuclear medicine procedure (the ``policy-packaged'' drug APC
offset) that we determine is associated with the cost of predecessor
diagnostic radiopharmaceuticals. In the CY 2010 OPPS/ASC proposed rule
(74 FR 35318),
[[Page 60472]]
we proposed a similar payment offset policy for contrast agents
beginning in CY 2010, as discussed in section V.A.6.c. of the proposed
rule, and we are finalizing this policy for CY 2010, as discussed in
section V.A.6.c. of this final rule with comment period. Pass-through
payment for a category of devices is made at the hospital's charge for
the device, adjusted to cost by application of the hospital's CCR. If
applicable, the device payment is reduced by an amount that reflects
the portion of the APC payment amount for the associated surgical
procedure that we determine is associated with the cost of the device,
called the device APC offset and discussed further in section IV.A.2.
of the proposed rule (74 FR 35306) and this final rule with comment
period.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68633
through 68636), we finalized a policy to package payment for
implantable biologicals without pass-through status that are surgically
inserted or implanted (through a surgical incision or a natural
orifice) into payment for the associated surgical procedure. Prior to
our implementation of this policy for nonpass-through implantable
biologicals, we adopted in the CY 2003 OPPS final rule with comment
period (67 FR 66763) the current OPPS policy that packages payment for
an implantable device into the associated surgical procedures when its
pass-through payment period ends because payment for all implantable
devices without pass-through status under the OPPS is packaged. We
consider nonpass-through implantable devices to be integral and
supportive items for which packaged payment is most appropriate. As we
stated in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68634), we believe this policy to package payment for implantable
devices that are integral to the performance of procedures paid
separately through an APC payment should also apply to payment for
implantable biologicals without pass-through status, when those
biologicals function as implantable devices. Implantable biologicals
may be used in place of other implantable nonbiological devices whose
costs are already accounted for in the associated procedural APC
payments for surgical procedures. We reasoned that if we were to
provide separate payment for nonpass-through implantable biologicals,
we would potentially be providing duplicate device payment, both
through the packaged nonbiological device cost included in the surgical
procedure's payment and the separate biological payment.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR
68634), we stated our belief that the three implantable biologicals
with expiring pass-through status for CY 2009 differ from other
biologicals paid under the OPPS in that they specifically always
function as surgically implanted devices. We noted that both
implantable nonbiological devices under the OPPS and the three
biologicals with expiring pass-through status in CY 2009 are surgically
inserted or implanted (including through a surgical incision or a
natural orifice). These three biologicals are approved by the FDA as
devices, and they are solely surgically implanted according to their
FDA-approved indications. Furthermore, in some cases, these implantable
biologicals can substitute for implantable nonbiological devices (such
as for synthetic nerve conduits or synthetic mesh used in tendon
repair).
For other nonpass-through biologicals paid under the OPPS that may
sometimes be used as implantable devices, we have instructed hospitals,
beginning via Transmittal 1336, Change Request 5718, dated September
14, 2007, to not separately bill the HCPCS codes for the products when
using these items as implantable devices (including as a scaffold or an
alternative to human or nonhuman connective tissue or mesh used in a
graft) during surgical procedures. In such cases, we consider payment
for the biological used as an implantable device in a specific clinical
case to be included in payment for the surgical procedure. We stated
that hospitals may include the charge for the biological in their
charge for the procedure, report the charge on an uncoded revenue
center line, or report the charge under a device HCPCS code, if one
exists, so that the biological costs may be considered in future
ratesetting for the associated surgical procedures.
Several commenters who responded to the CY 2009 OPPS/ASC proposed
rule supported CMS' proposal to package payment for implantable
biologicals without pass-through status into payment for the associated
surgical procedure (73 FR 68635). One commenter also recommended that
CMS treat biologicals that are always surgically implanted or inserted
and have FDA device approval as devices for purposes of pass-through
payment, rather than as drugs. The commenter observed that this would
allow all implantable devices, biological and otherwise, to be subject
to a single pass-through payment policy. The commenter concluded that
this policy change would provide consistency in billing and payment for
these products functioning as implantable devices during their pass-
through payment period, as well as after the expiration of pass-through
status.
We finalized in the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68635) our proposal to package payment for any nonpass-through
biological that is surgically inserted or implanted (through a surgical
incision or a natural orifice) into the payment for the associated
surgical procedure, just as we package payment for all nonpass-through,
implantable, nonbiological devices. As a result of this final policy,
the three implantable biologicals with expiring pass-through status in
CY 2009 were packaged and assigned status indicator ``N'' as of January
1, 2009. In addition, any new biologicals without pass-through status
that are surgically inserted or implanted (through a surgical incision
or a natural orifice) are also packaged beginning in CY 2009. Hospitals
continue to report the HCPCS codes that describe biologicals that are
always used as implantable devices on their claims, and we package the
costs of those biologicals into the associated procedures, according to
the standard OPPS ratesetting methodology that is described in section
II.A.2. of the CY 2010 OPPS/ASC proposed rule (74 FR 35254 through
35267) and this final rule with comment period. Moreover, for nonpass-
through biologicals that may sometimes be used as implantable devices,
we continue to instruct hospitals to not bill separately for the HCPCS
codes for the products when used as implantable devices. This reporting
ensures that the costs of these products that may be, but are not
always, used as implanted biologicals are appropriately packaged into
payment for the associated implantation procedures when the products
are used as implantable devices.
b. Policy for CY 2010
Some implantable biologicals are described by device category codes
for expired pass-through categories, including HCPCS code C1781 (Mesh
(implantable)), HCPCS code C1762 (Connective tissue, human), and HCPCS
code C1763 (Connective tissue, non-human). All implantable devices
described by the latter two categories are biologicals, while HCPCS
code C1781 describes both implantable biological and nonbiological
devices. Historically, these category codes included biological
products that we approved for pass-through payment under the device
pass-through process, initially when we paid for pass-through
[[Page 60473]]
devices on a brand-specific basis from CY 2000 through March 31, 2001,
and later through the device categories described by HCPCS codes C1781,
C1762, and C1763, which were developed effective April 1, 2001.
We believe that it is most appropriate for a product to be eligible
for a single period of OPPS pass-through payment, rather than a period
of device pass-through payment and a period of drug or biological pass-
through payment. The limited timeframe for transitional pass-through
payment ensures that new devices, drugs, and biologicals may receive
special payment consideration under the OPPS for the first few years
after their initial use, in order to allow sufficient time for their
cost information to be reflected in hospital claims data and,
therefore, to be available for OPPS ratesetting. After the pass-through
payment period ends, like other existing services, we have cost
information regarding these new products provided to us by hospitals
from claims and cost report data. We then utilize that information when
packaging the costs of the items (all devices, diagnostic
radiopharmaceuticals, contrast agents, and implantable biologicals, and
other drugs with an estimated per day cost equal to or less than the
annual drug packaging threshold) or paying separately for the products
(drugs except contrast agents and diagnostic radiopharmaceuticals and
also nonimplantable biologicals with estimated per day costs above the
annual drug packaging threshold). Further, although implantable
biologicals with pass-through status may substitute for nonpass-through
implantable devices whose costs are packaged into procedural APC
payments, our existing APC offset policies for the costs of predecessor
items packaged into APC payment for the associated services do not
apply to pass-through payment for biologicals. We note that the APC
offset amount that would be most applicable to implantable biologicals,
if we determine that an offset applies for a given APC, would be the
device APC offset amount, based on their similarity of function to the
implantable devices whose costs have been included in establishing the
procedural APC payment, not the ``policy-packaged'' or ``threshold-
packaged'' drug APC offset amounts that one would expect to apply to
pass-through drugs and biologicals. Similarly, when we currently
evaluate a pass-through implantable biological application for the cost
significance of the product, our methodology utilizes the ``policy-
packaged'' APC offset amount to assess the candidate implantable
biological, not the device APC offset amount that would be more
reflective of the costs of predecessor devices related to the candidate
implantable biological, such as those of device category HCPCS codes
C1781, C1762, and C1763.
Many implantable biologicals, such as the three biologicals that
expired from pass-through status after CY 2008, have FDA approval as
devices. A number of other implantable biologicals with FDA approval as
devices also have been approved for OPPS pass-through payment over the
past several years, based on their product-specific pass-through
applications as biologicals, not devices. Moreover, outside of the
period of pass-through payment, the costs of implantable biologicals,
like the costs of implantable devices, are now packaged into the cost
of the procedure in which they are used. Implantable biologicals may be
used in place of other implantable nonbiological devices whose costs
are already accounted for in the associated procedural APC payments.
Payment is made for nonpass-through implantable biologicals, like for
devices, through the APC payment for the associated surgical procedure.
In view of these considerations, in the CY 2010 OPPS/ASC proposed
rule (74 FR 35313), we proposed that the pass-through evaluation
process and pass-through payment methodology for implantable
biologicals that are surgically inserted or implanted (through a
surgical incision or a natural orifice) and that are newly approved for
pass-through status beginning on or after January 1, 2010, be the
device pass-through process and payment methodology only. Given the
shared payment methodologies for implantable biological and
nonbiological devices during their nonpass-through payment periods, as
well as their overlapping and sometimes identical clinical uses and
their similar regulation by the FDA as devices, we believe that the
most consistent pass-through payment policy for these different types
of items that are surgically inserted or implanted and that may
sometimes substitute for one another is to evaluate all such devices,
both biological and nonbiological, only under the device pass-through
process. As a result, implantable biologicals would no longer be
eligible to submit biological pass-through applications and to receive
biological pass-through payment at ASP+6 percent. While we understand
that implantable biologicals have characteristics that result in their
meeting the definitions of both devices and biologicals, we believe
that implantable biologicals are most similar to devices because of
their required surgical insertion or implantation and that it would be
appropriate to only evaluate them as devices because they share
significant clinical similarity with implantable nonbiological devices.
We refer readers to the CMS Web site specified previously in this
section to view the device pass-through application requirements and
review criteria that would apply to the evaluation of all implantable
biologicals for pass-through status when their pass-through payment
would begin on or after January 1, 2010.
However, those implantable biologicals that are surgically inserted
or implanted (through a surgical incision or natural orifice) and that
are receiving pass-through payment as biologicals prior to January 1,
2010, would continue to be considered pass-through biologicals for the
duration of their period of pass-through payment. These products have
already been evaluated for pass-through status based on their
applications as biologicals and have been approved for pass-through
status based on the established criteria for biological pass-through
payment. We believe it would be most appropriate for them to complete
their 2- to 3-year period of pass-through payment as biologicals in
accordance with the pass-through payment policies that were applicable
at the time their pass-through status was initially approved.
We note that, in conducting our pass-through review of implantable
biologicals as devices beginning with CY 2010 pass-through payment, we
would apply the portions of APC payment amounts associated with devices
(that is, the device APC offset amounts) to assess the cost
significance of the candidate implantable biologicals, as we do for
other devices. The CY 2009 device APC offset amounts are posted on the
CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/04_passthrough_payment.asp. The result of evaluating all implantable
biological items only for device pass-through payment is that payment
for implantable biologicals eligible for pass-through payment beginning
on or after January 1, 2010, would be based on hospital charges
adjusted to cost, rather than the ASP methodology that is applicable to
pass-through drugs and biologicals. Treating implantable biologicals as
devices for evaluation of pass-through payment eligibility and payment
would result in their consistent treatment with respect to coding and
payment during their pass-through and nonpass-through periods of
[[Page 60474]]
payment. This proposed policy would allow us to appropriately offset
the pass-through payment for an implantable biological using the device
APC offset amounts, which would incorporate the costs of predecessor
devices (both biological and nonbiological) that are similar to the
implantable biological item with pass-through status. Finally, this
proposed policy would ensure that each implantable biological is
eligible for OPPS pass-through payment for only one 2- to 3-year time
period (as a device only, not as a biological), so that once OPPS
claims data incorporate cost information for the implantable
biological, the product would not be again eligible for OPPS pass-
through payment in the future.
Further, because we proposed that the pass-through evaluation
process for CY 2010 pass-through status approvals and pass-through
payment methodology for implantable biologicals that are surgically
inserted or implanted (through a surgical incision or a natural
orifice) beginning in CY 2010 be the device pass-through process and
payment methodology only, we also proposed to revise our regulations at
Sec. Sec. 419.64 and 419.66 to conform to this new policy.
Specifically, we proposed to amend Sec. 419.64 by adding a new
paragraph (a)(4)(iii) and language under a new paragraph (c)(3) to
exclude implantable biologicals from consideration for drug and
biological pass-through payment. Furthermore, under proposed new
paragraph (a)(4)(iv) of Sec. 419.64, we proposed to specify the
continued inclusion of implantable biologicals for which pass-through
payment as a biological is made on or before December 31, 2009, as
eligible for biological pass-through payment, consistent with our
proposal to allow these products to complete their period of pass-
through payment as biologicals.
Moreover, in light of our CY 2010 proposal that implantable
biological applications for pass-through status beginning on or after
January 1, 2010, would be considered only for device pass-through
evaluation and payment, we stated in the proposed rule (74 FR 35314)
that we believe it would also be appropriate to clarify the current
example in Sec. 419.66(b)(4)(iii) of the regulations regarding the
exclusion of materials, for example, biological or synthetic materials,
that may be used to replace human skin from device pass-through payment
eligibility. While, by definition, implantable biologicals that are
surgically implanted or inserted would not be biological materials that
replace human skin, we proposed to more precisely state this in the
regulations. Therefore, we proposed to revise Sec. 419.66(b)(4)(iii),
which currently states that a device is not a material that may be used
to replace human skin and provides an example of such a material as ``a
biological or synthetic material.'' We proposed to revise Sec.
419.66(b)(4)(iii) to specify that the biological materials be a
``biological skin replacement material'' rather than a ``biological''
and the synthetic materials be a ``synthetic skin replacement
material'' rather than a ``synthetic material'' because we do not
believe this example should refer to biologicals or synthetic materials
that are used for purposes other than as a skin replacement material,
given that the regulatory provision in Sec. 419.66(b)(4)(iii) applies
only to a material that may be used to replace human skin.
Comment: A few commenters requested that CMS continue to pay for
all pass-through biologicals under the ASP methodology for drugs and
nonimplantable biologicals, and not pay for new implantable biologicals
eligible for pass-through payment based on charges adjusted to cost.
One commenter believed that the ASP methodology is well understood by
hospitals and Medicare contractors and asserted that some new
implantable biologicals under development will cost several thousand
dollars per procedure. Therefore, the commenter stated, many hospitals
will be reluctant to mark up charges for these new implantable
biologicals, thereby resulting in charge compression and an
underestimate of the costs of biologicals. Furthermore, the commenter
claimed that continued payment for pass-through implantable biologicals
based on the ASP methodology would ensure consistent payment for new
biologicals rather than variable payment based on hospitals' charging
practices.
Response: Under our CY 2010 proposal to evaluate and pay for
implantable biologicals under the device pass-through methodology, we
would use the charges adjusted to cost payment methodology and apply a
reduction to payment (that is, the device APC offset) for implantable
biologicals eligible for pass-through payment beginning on or after
January 1, 2010. Regarding the commenters' request that we continue the
ASP payment methodology for pass-through implantable biologicals, we do
not agree that payment under this methodology would be appropriate.
Payment based on ASP for pass-through implantable biologicals would not
provide the similar OPPS payment treatment of biological and
nonbiological implantable devices that is our goal for new devices.
Given the shared payment methodologies for implantable biological and
nonbiological devices during their nonpass-through payment periods, as
well as their overlapping and sometimes identical clinical uses and
their generally similar regulation by the FDA as devices, we believe
that the most consistent pass-through payment policy for these
different types of items that are surgically inserted or implanted and
that may sometimes substitute for one another is to evaluate and pay
for all such devices, both biological and nonbiological, only under the
device pass-through process and payment methodology. As we stated in
the CY 2010 OPPS/ASC proposed rule (74 FR 35313), we believe that
implantable biologicals are most similar to devices because of their
required surgical insertion or implantation and that it would be
appropriate to only evaluate them as devices because they share
significant clinical similarity with implantable nonbiological devices.
We note that we will continue pass-through payment under the ASP
methodology for any implantable biological for which pass-through
payment as a biological begins on or before December 31, 2009.
Comment: A few commenters supported the proposal to treat
implantable biologicals and implanted devices the same regarding the
pass-through eligibility criteria and payment methodology. Some
commenters stated that payment for both implantable biological and
nonbiological devices should be made on the same basis for items with
both pass-through and nonpass-through status. One commenter asserted
that the proposed treatment of implantable biologicals is consistent
with CMS' policy to package the costs of implantable devices and would
reinforce previous CMS instructions regarding the billing of
biologicals when used as implanted devices. Furthermore, another
commenter also agreed with CMS' policy that separately payable HCPCS
codes not be reported when biologicals that are sometimes implanted are
surgically inserted during a procedure. The commenter urged CMS to
continue educating providers about when HCPCS codes that describe
biologicals that are sometimes implanted should be reported, including
publishing a list of procedures with which the HCPCS codes for
implantable biologicals would not typically be reported. The commenter
encouraged CMS to publish ``reverse'' device-to-procedure edits for
such procedures.
Response: We appreciate the commenters' support for our proposal.
We agree that payment for both implantable biological and
[[Page 60475]]
nonbiological devices that may be substitutes for one another should be
made on the same basis for items with both pass-through and nonpass-
through status, that is, based on charges adjusted to cost while on
pass-through status and packaged when not on pass-through status.
Concerning the suggestion to publish a list of procedure codes with
which the HCPCS codes for biologicals that are implanted would not
typically be reported, we believe that creating and maintaining such a
list would not be feasible because implantable biologicals may be used
in a wide variety of surgical procedures. Moreover, creating and
maintaining device-to-procedure edits for implantable biologicals also
would not be feasible, given the broad array of surgical procedures in
which such biologicals may be implanted.
Comment: One commenter requested that CMS delay the CY 2010
proposal to include implantable biologicals in the calculation of the
device APC offset amounts. The commenter also recommended that CMS
grandfather all implantable biological applications submitted under the
drug and biological pass-through application process prior to the
September 1, 2009 application filing deadline. The commenter noted that
implantable biological applications submitted prior to September 1,
2009, could have received biological pass-through status if CMS had not
proposed and finalized the policy to treat them as devices for pass-
through purposes, beginning in CY 2010.
The commenter explained that two implantable biological products
that are competitors to the product manufactured by the commenter
currently have pass-through status as biologicals, and their pass-
through status is proposed to continue for CY 2010. The commenter
believed that treating implantable biologicals differently based on the
date of their pass-through application would result in a competitive
disadvantage for the product manufactured by the commenter.
Response: The commenter recommended delaying the packaging of
implantable biologicals in calculating the device offset. As a
practical matter, the packaging of nonpass-through implantable
biologicals was proposed and finalized for CY 2009 (73 FR 68635) and
was implemented beginning in CY 2009. Given our proposal to treat
implantable biologicals as devices for pass-through purposes beginning
in CY 2010 and our longstanding device APC offset policy for pass-
through devices, we believe it is appropriate to consider the costs of
implantable biologicals that are packaged in establishing the device
APC offset amounts under a policy that considers implantable
biologicals to be devices for pass-through evaluation and payment
purposes. We rely on the device APC offset amounts to account for the
costs of all predecessor devices to a new device category when those
predecessor devices are implanted in procedures assigned to an APC to
which procedures associated with the new device category would be
assigned, and the predecessor devices may now include implantable
biologicals.
Concerning the commenter's request to grandfather all implantable
biological applications submitted under the drug and biological pass-
through application process prior to the September 1, 2009 application
filing deadline, we believe it is important to adopt a consistent
implantable biological pass-through policy for a full calendar year to
provide appropriate payment under a single payment policy for that year
and allow consistent use of our CY 2010 claims data for ratesetting in
the future. The earliest an application filed for the September 1
deadline (applications are received and processed on a continual basis)
could be considered for pass-through status is January 1 of the
following year, in this case, CY 2010, as we have established and
posted on the CMS Web site for pass-through applications at: http://www.cms.hhs.gov/HospitalOutpatientPPS/04_passthrough_payment.asp#TopOfPage. We do not believe it would be appropriate to
implement pass-through evaluation and payment of implantable
biologicals as devices later than the quarter beginning January 1,
2010. In order to meet the timeframes required by our claims processing
systems, applications for drug and biological pass-through status
received by the September 1, 2009 deadline for January 2010 payment
have been evaluated based on the policy established in this final rule
with comment period to evaluate implantable biologicals for device
pass-through payment. We also note that when adopting any significant
policy change under the OPPS with a specific effective date, we
recognize that similar products or services may be treated differently
because of the timing of their FDA approval, pass-through application
submission, or other characteristics. Nevertheless, the rulemaking
process provides significant opportunity for public notice and comment
prior to such policy changes in order to ensure that we give full
consideration to all issues and information related to proposals of new
policy.
Comment: Several commenters recommended that both implantable and
nonimplantable biologicals approved by the FDA under a biologics
license application (BLA) be evaluated for pass-through payment status
under the drug pass-through evaluation process, and indicated their
belief that Congress intended biologicals approved under BLAs to be
paid under the specific OPPS statutory provisions that apply to
specified covered outpatient drugs (SCODs), including the pass-through
provisions. One commenter agreed that CMS should have similar payment
methodologies for biological, nonbiological, and composite devices for
fairness and consistency and recommended that CMS implement the
proposed policy based on FDA approval status, specifically treating as
devices for pass-through purposes only those implantable biologicals
approved by the FDA as devices. The commenter claimed that CMS
determined that several implantable devices that are currently treated
as drugs or biologicals must be paid based on their product-specific
ASP submissions because the requirement for combining drugs for the
purpose of ASP is that the reference materials report them as clinical
equivalents. The commenter reasoned that devices do not have
equivalents identified in reference materials; therefore, those devices
paid as drugs must always receive separate payment. The commenter also
requested that CMS clarify when it will treat an implantable device as
a biological for ASP payment.
One commenter suggested that CMS not use the device pass-through
process for evaluating drugs or biologicals that are implanted using a
device as merely a delivery vehicle, simply because the drug is
administered through a device. The commenter recommended that CMS base
its pass-through payment decision on the identity of the component that
exerts the therapeutic effect of the combined product, either the
biological component or the delivery vehicle, and provided as an
example the practice of FDA's Office of Combination Products to assess
combination products in development and assign their FDA regulation
based on which component exerts the therapeutic effect claimed by the
manufacturer. The commenter believed that there are clinical problems
with using implantation to define whether a biological should be
treated as a device because, for some drugs, implantation may always be
the clinically superior route of administration. Another commenter
claimed that some implantable biologicals meet the Act's definition of
a biological under section 1861(t)(1) of
[[Page 60476]]
the Act even though they are approved by the FDA as devices.
Response: We proposed to evaluate implantable biologicals that
function as and are substitutes for implantable devices, regardless of
their category of FDA approval, as devices for OPPS payment purposes.
We do not believe it is necessary to make our OPPS payment policies
regarding implantable biologicals dependent on categories of FDA
approval, the intent of which is to ensure the safety and effectiveness
of medical products.
We do not agree with the commenters who asserted that Congress
intended biologicals approved under BLAs to be paid under the specific
OPPS statutory provisions that apply to SCODs, including the pass-
through provisions. Moreover, Congress did not specify that we must pay
for implantable biologicals as biologicals rather than devices, if they
also meet our criteria for payment as a device. We believe that
implantable biologicals meet the definitions of a device and a
biological and that, for payment purposes, it is appropriate for us to
consider implantable biologicals as implantable devices in all cases,
not as biologicals. For example, beginning in CY 2009, we package the
costs of implantable biologicals into the costs of the procedures in
which they are used, as we do for implantable devices. Therefore, we do
not believe that we must pay for implantable biologicals under our OPPS
biological payment methodologies, rather than our device payment
methodologies. Furthermore, because we consider implantable biologicals
to be devices for payment purposes, any interpretation that a
biological is unique in the context of the ASP payment methodology for
biologicals would not apply. Thus, we disagree with the commenter's
conclusion that implantable biologicals treated as devices must receive
separate payment because devices do not have equivalents in reference
materials, a concept applicable only to the requirements for combining
biologicals for payment under the ASP methodology, because we consider
these implantable biologicals to be devices under the OPPS, to which
packaged payment outside of the pass-through payment period applies.
It is not our intention to consider biologicals under the device
pass-through evaluation process and payment methodology when these
products are merely administered through the implantation of a delivery
system for the biological. Each implantable biological pass-through
application for a combination product would be initially evaluated in
such a case to determine if the biological or device is the key
therapeutic or diagnostic component, after which we would then
determine whether to evaluate the item under the device or drug and
biological pass-through process. If the key component of the candidate
pass-through product is the biological and that biological is only
implanted because it is administered through an implanted delivery
system for the biological (that is, the biological itself is not
functioning as an implantable device), we would evaluate the product
under the drug and biological pass-through process. Conversely, if the
key component of the candidate pass-through product is the biological
and that biological is functioning as an implantable device or the key
component of the product is the implantable delivery system for the
biological, we would evaluate the product under the device pass-through
process.
As we stated in the CY 2010 OPPS/ASC proposed rule (74 FR 35313)
and this final rule with comment period, while we understand that
implantable biologicals have characteristics that result in their
meeting the definitions of both devices and biologicals, we believe
that biologicals are most similar to devices because of their required
surgical insertion or implantation and that it would be appropriate to
only evaluate them as devices because they share significant clinical
similarity with implantable nonbiological devices. We do not believe
that those implantable biologicals that meet the Act's definition of
biological under section 1861(t)(1) necessarily must be evaluated and
paid for under the OPPS drug and biological pass-through payment
methodology, when they also meet the definition of a device for
purposes of pass-through evaluation and payment.
Comment: One commenter requested that CMS clarify certain points
regarding the proposal to evaluate and pay for implantable biologicals
with pass-through status similarly to pass-through devices. The
commenter requested that CMS designate that the types of biologicals
that would be affected by the proposal would be connective tissue
replacements that function as devices. The commenter also requested
that CMS clarify that the proposed changes would apply to pass-through
implantable biologicals and not to implantable drugs, and that CMS
recognize that it would be inappropriate to treat implantable drugs as
devices for pass-through purposes in the future.
Response: Our CY 2010 proposal was not limited to implantable
biological connective tissue replacements, but instead it applies to
all implantable biologicals. For example, in the proposed rule (74 FR
35313), we cited expired device category HCPCS code C1781 (Mesh
(implantable)) as describing implantable biologicals as well as
implantable nonbiological devices, yet mesh need not necessarily
function as a connective tissue replacement. We did not propose to
treat implantable drugs as devices and, therefore, would not treat
implantable drugs as devices for pass-through payment program purposes
in CY 2010.
Comment: One commenter suggested that implantable biologicals
should not be treated as devices, and observed that stakeholders have
not had adequate time to consider the long-term implications of the CMS
proposal. The commenter recommended that CMS not finalize the proposal
at this time and hold a public meeting regarding the proposal.
Response: We believe that all stakeholders have had sufficient time
to consider this proposal through the routine notice and comment
rulemaking process. We received numerous public comments on our CY 2010
proposal and, while we are always open to meeting with stakeholders who
would like to share their views with us, we do not believe a public
meeting on this issue is needed.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, that the pass-
through evaluation process and payment methodology for implantable
biologicals that are surgically inserted or implanted (through a
surgical incision or a natural orifice) and that are newly approved for
pass-through status beginning on or after January 1, 2010, be the
device pass-through process and payment methodology only. However,
those implantable biologicals that are surgically inserted or implanted
(through a surgical incision or natural orifice) and that are receiving
pass-through payment as biologicals prior to January 1, 2010, would
continue to be considered pass-through biologicals for the duration of
their period of pass-through payment. As proposed, in conducting our
pass-through review of implantable biologicals as devices beginning
with CY 2010 pass-through payment, we will apply the portions of APC
payment amounts associated with devices (that is, the device APC offset
amounts) to assess the cost significance of the candidate implantable
biologicals, as we do for other devices. Furthermore, we are finalizing
our proposal to revise our regulations at Sec. Sec. 419.64 and 419.66
to conform to this new policy.
[[Page 60477]]
Specifically, we are finalizing our proposal to amend Sec. 419.64
by adding a new paragraph (a)(4)(iii) to exclude implantable
biologicals from consideration for drug and biological pass-through
payment. However, we note that, as discussed in section V.A.5. of this
final rule with comment period, we are not finalizing our proposed
addition of a new paragraph (c)(3) to Sec. 419.64 and, therefore, we
are not adopting our related proposed change to proposed paragraph
(c)(3) that would have excluded implantable biologicals from
consideration for drug and biological pass-through payment.
Furthermore, we are adopting our proposed new paragraph (a)(4)(iv) of
Sec. 419.64, which specifies the continued inclusion of implantable
biologicals for which pass-through payment as a biological is made on
or before December 31, 2009, as eligible for biological pass-through
payment. Finally, we are adopting our proposal stated above that
clarifies the current example in Sec. 419.66(b)(4)(iii) of the
regulations regarding the exclusion of materials, for example,
biological or synthetic materials, that may be used to replace human
skin from device pass-through payment eligibility.
5. Definition of Pass-Through Payment Eligibility Period for New Drugs
and Biologicals
Section 1833(t)(6) of the Act provides for transitional pass-
through payments for medical devices, drugs, and biologicals. Section
1833(t)(6)(A) of the Act generally describes two groups of services--
``current'' and ``new''--that are eligible for pass-through payments,
depending, in part, on when they were first paid. One of the criteria
for ``new'' drugs and biologicals to receive pass-through payments
under section 1833(t)(6)(A)(iv)(I) of the Act is that payment for the
item as an outpatient hospital service under Part B was not being made
as of December 31, 1996. For those ``new'' drugs and biologicals,
section 1833(t)(6)(C)(i)(II) of the Act specifies that there is a 2- to
3-year limitation on the pass-through period that begins on the first
date on which payment is made under Part B for the drug or biological
as an outpatient hospital service.
Section 419.64 of the regulations codifies the transitional pass-
through payment provisions for drugs and biologicals. Section 419.64(a)
describes the drugs and biologicals that are eligible for pass-through
payments, essentially capturing the distinction between ``new'' and
``current'' services. Section 419.64(c)(2) provides that the pass-
through payment eligibility period for drugs and biologicals that fall
into the ``new'' category begins on the date that CMS makes its first
pass-through payment for the drug or biological.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35314), we noted that
it had come to our attention that our pass-through payment eligibility
period for ``new'' drugs and biologicals in Sec. 419.64(c)(2) of the
regulations might not most accurately reflect the statutory
requirements of section 1833(t)(6)(C)(i)(II) of the Act. While our
regulations indicate that the pass-through payment eligibility period
for ``new'' drugs and biologicals begins on the first date on which
pass-through payment is made for the item, section 1833(t)(6)(C)(i)(II)
of the Act specifies that the pass-through period of 2 to 3 years for
``new'' drugs and biologicals begins on the first date on which payment
is made under Part B for the drug or biological as an outpatient
hospital service. In order to better reflect the statutory requirement
for the pass-through period for a ``new'' drug or biological, in the CY
2010 OPPS/ASC proposed rule (74 FR 35314), we proposed to revise
paragraph (c)(2) of Sec. 419.64 and add a new paragraph (c)(3) to
Sec. 419.64.
In order to conform the regulations to the statutory provisions, we
proposed to change the start date of the pass-through payment
eligibility period for a drug or biological from the first date on
which pass-through payment is made to the date on which payment is
first made for a drug or biological as an outpatient hospital service
under Part B. Under this proposal, we needed to identify a first date
of payment for a drug or biological as an outpatient hospital service
under Part B. (Under our current policy, we had not established a start
date for the eligibility period distinct from the beginning of pass-
through payment because our current policy is to begin the pass-through
payment eligibility period at the same time as we begin pass-through
payment for the drug or biological.)
Due to the 2-year delay in the availability of claims data, under
our CY 2010 proposal, we would not be able to identify an exact date of
first payment for a drug or biological as an outpatient hospital
service under Part B in order to determine the start date of the pass-
through payment eligibility period until years after an application for
pass-through payment for a ``new'' drug or biological has been
submitted. At that later point in time, the pass-through payment
eligibility period may be close to expiring, and the result of relying
upon our claims data to evaluate an item for its eligibility for pass-
through status could result in a very short period of pass-through
payment for the new drug or biological. Consequently, in the proposed
rule, we stated our belief that it would be desirable to identify an
appropriate and timely proxy for the date of first payment for the drug
or biological as an outpatient hospital service under Part B. We
proposed the date of first sale for a drug or biological in the United
States following FDA approval as an appropriate proxy, as explained
below, for the date on which the pass-through payment eligibility
period would begin. We also noted that, in light of our CY 2010
proposal to treat implantable biologicals as medical devices for
purposes of pass-through eligibility and payment under section
1833(t)(6) of the Act, described in section V.A.4. of the proposed rule
(74 FR 35311 through 35314), these proposed revisions to the pass-
through payment eligibility period for a drug or biological approved
for pass-through payment beginning on or after January 1, 2010, would
not apply to implantable biologicals, but rather only to nonimplantable
biologicals.
We explained that the date of first sale of the drug or
nonimplantable biological in the United States following FDA approval
was an appropriate proxy for the first date of payment for the drug or
nonimplantable biological as an outpatient hospital service under Part
B for several reasons, including our expectation that Medicare
beneficiaries would be among the first to use these drugs and
nonimplantable biologicals. In addition, we currently rely on the date
of first sale of a drug or biological in the United States following
FDA approval under the ASP methodology and in the existing OPPS pass-
through payment eligibility determination. We stated that we did not
believe that there is a more accurate and readily available proxy for
the first date of payment for a drug or biological under Part B as an
outpatient hospital service than the date of first sale of the drug or
nonimplantable biological in the United States following FDA approval
and that it was an accepted and available indicator of initial payment
for the Medicare program.
For these reasons, we proposed that the date of first sale of a
drug or nonimplantable biological in the United States following FDA
approval would be the start date of the pass-through payment
eligibility period for drugs or nonimplantable biologicals approved for
pass-through payment beginning on or after January 1, 2010. We
specified that our current policy--that the pass-through payment
eligibility period of 2 to 3 years begins on the first date that
[[Page 60478]]
pass-through payment is made for the drug or biological--would apply
only to drugs and biologicals approved for and receiving pass-through
payment on or before December 31, 2009.
We currently implement new approvals of pass-through status for
drugs and biologicals on a quarterly basis, and under our proposal for
CY 2010, we stated that we would continue to implement these new
approvals on a quarterly basis. We describe our quarterly process for
reviewing and approving applications for drugs and biologicals to
receive pass-through payment on the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/04_passthrough_payment.asp.
Interested parties may submit a complete application at any time. We
typically review and make pass-through status approval decisions about
complete applications for initiation of pass-through payment within 4
months of their submission and implement new pass-through status
approvals on a quarterly basis through the next available OPPS
quarterly update. The CMS Web site provides a timeline showing the
relationship between the date of submission of a complete application
and the earliest date of pass-through payment that would result from
approval of pass-through status for the drug or biological.
Under our current policy, the pass-through payment eligibility
period and period of pass-through payment are the same. However, the
pass-through payment eligibility period and the period of pass-through
payment would not have been identical under our proposed policy. For
our proposed policy, we identified both the pass-through payment
eligibility period, as well as the period during which pass-through
payment would be made, including the respective start and expiration
dates of the pass-through payment eligibility period and the period of
pass-through payment. We stated that the period of pass-through payment
would coincide with the time period during which the drug or biological
is designated as having pass-through status. (We note that being within
the pass-through payment eligibility period alone does not qualify a
``new'' drug or biological for pass-through payment; the drug or
biological must also meet the other requirements for pass-through
payment, including a CMS determination that the cost of a drug or
biological is not insignificant.) Under our proposal, the pass-through
payment eligibility period would run for at least 2 years but no more
than 3 years. We proposed to modify Sec. 419.64 accordingly by adding
new paragraph (c)(3) to state: ``For a drug or nonimplantable
biological described in paragraph (a)(4) of this section and approved
for pass-through payment beginning on or after January 1, 2010--[the
pass-through payment eligibility period begins on] the date of the
first sale of the drug or nonimplantable biological in the United
States after FDA approval.'' Next, we proposed that pass-through
payment itself would start on the first day of the calendar quarter
following the calendar quarter during which the completed application
was approved. We proposed to reflect this in regulation text, in
proposed new Sec. 419.64(c)(3), as follows. ``Pass-through payment for
the drug or nonimplantable biological begins on the first day of the
hospital outpatient prospective payment system update following the
update period during which the drug or nonimplantable biological was
approved for pass-through status.'' We noted that this start date for
the period of pass-through payment would be specified in a letter to
the applicant conveying pass-through status approval for the new drug
or biological and would be the first day of the calendar quarter
following the calendar quarter during which a complete pass-through
application is approved by CMS for pass-through status.
Because the proposed revised definition of the pass-through payment
eligibility period could have resulted in the eligibility period
beginning well before application is made for pass-through payment for
the drug or nonimplantable biological and could have resulted in a
shorter period of pass-through payment for some drugs and biologicals
than would be the case under our current policy, we also proposed to
expire pass-through status for ``new'' drugs and biologicals on a
quarterly basis. This proposal to expire the pass-through status of
drugs and nonimplantable biologicals on a quarterly basis was a
departure from our current policy for expiring the pass-through status
of drugs and biologicals. Presently, we expire the pass-through status
of drugs and biologicals at the end of the calendar year preceding the
year of the applicable annual OPPS update. Because our current pass-
through payment eligibility period policy effectively aligns the start
of pass-through payment with the beginning of the 2- to 3-year pass-
through payment eligibility period, expiration of pass-through status
on a calendar year basis affords those drugs and biologicals at least 2
but not more than 3 years of pass-through payment.
In addition to proposing to expire the pass-through status of
``new'' drugs and nonimplantable biologicals described by proposed new
Sec. 419.64(c)(3) on a quarterly basis, we also proposed to continue
our established policy of determining whether a drug or biological
would receive separate payment or packaged payment, after the
expiration of the period of pass-through payment, on a calendar year
basis through the annual OPPS rulemaking process as described in
section V.B.2. of the proposed rule (74 FR 35319 through 35321) and
this final rule with comment period. Therefore, after the expiration of
pass-through status of a ``new'' drug or biological in a given year's
calendar quarter, we proposed to continue to make separate payment
through the end of that calendar year for those drugs and
nonimplantable biologicals that would be subject to the drug packaging
threshold when they did not have pass-through status at the applicable
OPPS payment rate for separately payable drugs and biologicals without
pass-through status for that year, proposed to be ASP + 4 percent for
CY 2010. (This proposal would exclude contrast agents and diagnostic
radiopharmaceuticals for CY 2010, which would always be packaged when
not on pass-through status.)
Comment: Several commenters disagreed with CMS' proposal to change
the pass-through payment eligibility period policy for new drugs and
nonimplantable biologicals in CY 2010. Most of the commenters expressed
concerns about separating the pass-through payment eligibility period
from the period of pass-through payment, noting that delays that may
occur between the date of the first sale of a drug in the United States
and the date on which payment is first made under Part B would
inevitably and inappropriately reduce the period of pass-through
payment for new drugs. The commenters cited several examples, including
a manufacturer's delay in submitting a pass-through application after
receiving FDA approval, the length of CMS' pass-through review and
approval process, delays in claim submissions and challenges associated
with hospital billing for new services, and lags due to the resale
process of a drug from a manufacturer to a wholesaler before the drug
is available to the beneficiary. In addition, many commenters argued
that non-Medicare beneficiaries, as opposed to Medicare beneficiaries,
may be the first to receive a drug or biological, making the date of a
drug's first sale in the United States
[[Page 60479]]
after FDA approval irrelevant to the Medicare population.
One commenter acknowledged CMS' need to align the pass-through
payment eligibility period policy with the statutory provisions.
However, the commenter disagreed with CMS' proposal to use the date of
the first sale in the United States following FDA approval as a proxy
for the date on which payment is made under Part B. The commenter
suggested that, considering all of the potential delays between the
date of the first sale in the United States after FDA approval and the
first date of payment under Part B as an outpatient hospital service,
the date of the first sale in the United States after FDA approval is
not a sufficiently precise proxy. The commenter suggested that CMS
continue to use the current pass-through payment policy as a proxy for
the first date on which payment is made under Part B, specifically the
date that CMS first makes pass-through payment for a drug or
biological, because it is the most accurate proxy. The commenter
reasoned that establishing the date that CMS first makes pass-through
payment for a drug or biological as a proxy for the first date on which
payment is made under Part B as an outpatient hospital service is
appropriate because the date of first pass-through payment would never
predate the first payment under Part B as an outpatient hospital
service, nor would it likely be made later than the date of first OPPS
payment by an appreciable period of time. The commenter noted that, in
general, manufacturers have an incentive to submit pass-through
applications as quickly as possible and will do whatever they can to
minimize any lag time between the date of first outpatient hospital
payment and the availability of pass-through payments because pass-
through status facilitates the product's introduction into the hospital
outpatient setting.
Response: The commenter who urges us to adopt a different proxy
than the one we proposed for the date of first payment under part B as
an outpatient hospital service makes some very persuasive and
compelling points. We have considered the merits and advantages of
adopting the commenter's suggested proxy rather than the one we
proposed, and we find that we agree with the commenter that the most
appropriate policy is one that establishes the date that CMS makes its
first pass-through payment for a drug or biological as the proxy for
the first date on which payment is made under Part B as an outpatient
hospital service. We believe that the date on which pass-through
payment is first made for a drug or nonimplantable biological is a more
accurate proxy for the date on which payment is first made under Part B
as an outpatient hospital service for several reasons. First, we agree
with the commenter's points concerning the significant delays that may
occur between the date of first sale of a drug or nonimplantable
biological in the United States after FDA approval and the first date
on which outpatient hospital payment is made under Part B. Such delays
may result from numerous transactions in the drug distribution chain,
initial use for non-Medicare patients with later diffusion to treatment
of Medicare patients, delays in claims submission for new products
without specific HCPCS codes, and established timeframes for Medicare
processing payment of claims. All of these lags between the date of
first sale and the date of first payment under Part B as an outpatient
hospital service are cumulative and potentially significant. Therefore,
adoption of the proposed proxy could, in some cases, lead to the start
of the pass-through payment eligibility period substantially earlier
than the start of the period of pass-through payment, thereby resulting
in a reduction in the period of pass-through payment.
Second, we believe that utilizing the commenter's recommended proxy
would eliminate the potential for delays between the proxy and the
actual first date of payment under Part B as an outpatient hospital
service, since the date of first pass-through payment would never
predate the first payment under Part B as an outpatient hospital
service. Although the first date of payment under Part B as an
outpatient hospital service potentially could predate the date of first
pass-through payment, it is also true that manufacturers have a
significant incentive to submit pass-through applications as quickly as
possible to minimize any lag between the date of first payment under
the OPPS and the availability of pass-through payment. Pass-through
payment can facilitate the availability of a product-specific HCPCS
code for reporting its use and additional pass-through payment for the
drug may allow beneficiaries access to the new drug in the HOPD.
Therefore, in the rare circumstance that the date of first pass-through
payment under the OPPS lags behind the first payment for the product
under Part B as an outpatient hospital service, the delay is likely to
be minimal. As a result, adopting this alternative date as a proxy
would be unlikely to extend the pass-through payment eligibility period
beyond 2 to 3 years from the date of first payment under Part B as an
outpatient hospital service as specified in the statute.
In addition, utilizing the date of first pass-through payment under
the OPPS as a proxy for the date payment is first made for a product
under Part B as an outpatient hospital service would afford drugs and
nonimplantable biologicals at least a full 2 years of pass-through
payment, whereas the proposed proxy might not have allowed for a full 2
years of pass-through payment in every case. Finally, using the date of
first pass-through payment under the OPPS as the proxy for the date of
first payment under Part B as an outpatient hospital service would not
present an administrative burden to CMS or the public nor would it
disrupt or change CMS' current operational practices. This
administratively simple proxy would result in a continuation of the
same smoothly functioning operational practices that CMS currently
utilizes in determining pass-through payment for drugs and biologicals.
Therefore, we are finalizing the date on which CMS makes its first
pass-through payment as the proxy for the first date on which payment
is made under Part B as an outpatient hospital service.
We note that, in the CY 2010 OPPS/ASC proposed rule (74 FR 35315
through 35317), we outlined CMS' pass-through payment policies for
approving and expiring pass-through payment status for drugs and
nonimplantable biologicals under the OPPS. In adopting the date on
which CMS makes its first pass-through payment as a proxy for the first
date on which payment is made under Part B as an outpatient hospital
service and, therefore, as the start date for pass-through payment
eligibility, we are not changing our current practices concerning
application, approval, payment, and expiration of pass-through status
for drugs and nonimplantable biologicals. In this regard, we will
continue to accept applications as is currently described on the CMS
Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/04_passthrough_payment.asp. We will continue to begin pass-through
payment on a quarterly basis through the next available OPPS quarterly
update after the approval of a product's pass-through status. In
addition, we will continue to expire pass-through status for drugs and
nonimplantable biologicals on an annual basis through notice and
comment rulemaking. Furthermore, our policy regarding the determination
of packaging status after the pass-through status ends for a drug or
biological, as discussed in section V.B.2. of this final
[[Page 60480]]
rule with comment period, remains the same. For those drugs with
expiring pass-through status that are always packaged when they do not
have pass-through status (``policy-packaged''), specifically diagnostic
radiopharmaceuticals and contrast agents for CY 2010, we will package
payment for these drugs once their pass-through status has expired. We
discuss this policy in detail in section V.B.2.d. of this final rule
with comment period.
Comment: One commenter argued that CMS' proposed proxy of the date
of the first sale of a drug or biological in the United States
following FDA approval was contradictory to section
1833(t)(6)(C)(i)(II) of the Act because that section references section
1833(t)(6)(A)(iv) of the Act, which defines a ``new'' drug or
biological eligible for pass-through payment as being new after
December 31, 1996, and as meeting the cost significance criteria. The
commenter argued that a drug cannot be considered a pass-through drug
until cost significance has been determined and that CMS would not
determine cost significance until it qualifies a drug for pass-through
status. Based on this assessment, the commenter argued that CMS should
begin the pass-through payment period on the date CMS begins to treat
the product as a pass-through drug, the first date of the pass-through
payment period.
Response: We continue to believe that section 1833(t)(6)(C)(i)(II)
of the Act requires the start date of the pass-through payment
eligibility period for a drug or nonimplantable biological to begin on
the date on which payment is first made for a drug or biological as an
outpatient hospital service under Part B. As noted in the previous
response, however, we are convinced by a commenter to adopt as the
proxy for this date, the date on which CMS makes its first pass-through
payment for the drug or nonimplantable biological.
Comment: Several commenters recommended that CMS continue to end
pass-through status for drugs and nonimplantable biologicals on an
annual basis, instead of ending pass-through status on a quarterly
basis as CMS proposed. In the context of the specific proposal for the
pass-through payment eligibility period, another commenter agreed with
CMS' proposal to end pass-through status on a quarterly basis. Several
other commenters argued that, because the proposal creates a delay
between the beginning of the pass-through payment eligibility period
and the period of pass-through payment, drugs and nonimplantable
biologicals that are approved for pass-through status should be given
pass-through payment for the extent of the full 3-year pass-through
eligibility period.
Response: Because we are adopting the date of first pass-through
payment as the start of the pass-through payment eligibility period in
this final rule with comment period, we will not change, as we
proposed, the current operation of our drug and biological pass-through
program. As is our current practice, we will continue to expire pass-
through status for drugs and biologicals on an annual basis through
notice and comment rulemaking. For example, if CMS receives a complete
application for pass-through status for a drug on August 1, 2009, and
approves the application for pass-through status for the January 1,
2010 OPPS quarterly update, the pass-through payment eligibility period
would start on January 1, 2010. The pass-through payment period would
extend for 2 but not more than 3 years, as is mandated by the statute,
and we would propose to expire pass-through status for the drug on
December 31, 2011 in the CY 2012 OPPS/ASC rulemaking process for
January 1, 2012.
After consideration of the public comments we received, we are
modifying our CY 2010 proposal and adopting the date of first pass-
through payment for the drug or nonimplantable biological as the proxy
for the first date on which payment for the product is made under Part
B as an outpatient hospital service. Therefore, the 2- to 3-year pass-
through payment eligibility period will start on the date of first
pass-through payment and, consistent with our current policy, the pass-
through payment eligibility period and the period of pass-through
payment coincide. Finally, we will continue to expire the pass-through
status of drugs and nonimplantable biologicals annually through the
notice and comment rulemaking process.
Because our final policy reflects our current practice for
implementing the pass-through eligibility and payment periods defined
in section 1833(t)(6)(C)(i)(II) of the Act, we are not making any
changes to Sec. 419.64(c)(2), and we are not adding proposed new Sec.
419.64(c)(3) to our regulations.
6. Provisions for Reducing Transitional Pass-Through Payments for
Diagnostic Radiopharmaceuticals and Contrast Agents To Offset Costs
Packaged Into APC Groups
a. Background
Prior to CY 2008, diagnostic radiopharmaceuticals and contrast
agents were paid separately under the OPPS if their mean per day costs
were greater than the applicable year's drug packaging threshold. In CY
2008 (72 FR 66768), we began a policy of packaging payment for all
nonpass-through diagnostic radiopharmaceuticals and contrast agents as
ancillary and supportive items and services into their associated
nuclear medicine procedures. Therefore, beginning in CY 2008, nonpass-
through diagnostic radiopharmaceuticals and contrast agents were not
subject to the annual OPPS drug packaging threshold to determine their
packaged or separately payable payment status, and instead all nonpass-
through diagnostic radiopharmaceuticals and contrast agents were
packaged as a matter of policy. In the CY 2010 OPPS/ASC proposed rule
(74 FR 35323), we proposed to continue to package payment for all
nonpass-through diagnostic radiopharmaceuticals and contrast agents for
CY 2010 as discussed in section V.B.2.d. of the proposed rule (74 FR
35323 through 35324).
b. Payment Offset Policy for Diagnostic Radiopharmaceuticals
As previously noted, radiopharmaceuticals are considered to be
drugs for OPPS pass-through payment purposes. As described above,
section 1833(t)(6)(D)(i) of the Act specifies that the transitional
pass-through payment amount for pass-through drugs and biologicals is
the difference between the amount paid under section 1842(o) (or the
Part B drug CAP rate) and the otherwise applicable OPD fee schedule
amount. There is currently one radiopharmaceutical with pass-through
status under the OPPS, HCPCS code C9247 (Iobenguane, I-123, diagnostic,
per study dose, up to 10 millicuries). HCPCS code C9247 was granted
pass-through status beginning April 1, 2009 and will continue on pass-
through status in CY 2010 under permanent HCPCS code A9582 (Iodine I-
123 iobenguane, diagnostic, per study dose, up to 15 millicuries). We
currently apply the established radiopharmaceutical payment offset
policy to pass-through payment for this product. As described earlier
in section V.A.3. of this final rule with comment period, new pass-
through diagnostic radiopharmaceuticals will be paid at ASP+6 percent,
while those without ASP information will be paid at WAC+6 percent or,
if WAC is not available, payment will be based on 95 percent of the
product's most recently published AWP.
As a payment offset is necessary in order to provide an appropriate
[[Page 60481]]
transitional pass-through payment, we deduct from the payment for pass-
through radiopharmaceuticals an amount that reflects the portion of the
APC payment associated with predecessor radiopharmaceuticals in order
to ensure no duplicate radiopharmaceutical payment is made. In CY 2009,
we established a policy to estimate the portion of each APC payment
rate that could reasonably be attributed to the cost of predecessor
diagnostic radiopharmaceuticals when considering a new diagnostic
radiopharmaceutical for pass-through payment (73 FR 68638 through
68641). Specifically, we utilize the ``policy-packaged'' drug offset
fraction for APCs containing nuclear medicine procedures, calculated as
1 minus (the cost from single procedure claims in the APC after
removing the cost for ``policy-packaged'' drugs divided by the cost
from single procedure claims in the APC). We have previously defined
``policy-packaged'' drugs and biologicals as nonpass-through diagnostic
radiopharmaceuticals, contrast agents, and implantable biologicals (73
FR 68639). In the CY 2010 OPPS/ASC proposed rule (74 FR 35323), we
proposed for CY 2010 to redefine ``policy-packaged'' drugs as only
nonpass-through diagnostic radiopharmaceuticals and contrast agents, as
a result of the CY 2010 proposals discussed in sections V.A.4. and
V.B.2.d. of the proposed rule (74 FR 35311 through 35314 and 74 FR
35323 through 35324) that would treat nonpass-through implantable
biologicals that are surgically inserted or implanted (through a
surgical incision or a natural orifice) and implantable biologicals
that are surgically inserted or implanted (through a surgical incision
or a natural orifice) with newly approved pass-through status beginning
in CY 2010 or later as devices, rather than drugs. To determine the
actual APC offset amount for pass-through diagnostic
radiopharmaceuticals that takes into consideration the otherwise
applicable OPPS payment amount, we multiply the ``policy-packaged''
drug offset fraction by the APC payment amount for the nuclear medicine
procedure with which the pass-through diagnostic radiopharmaceutical is
used and, accordingly, reduce the separate OPPS payment for the pass-
through diagnostic radiopharmaceutical by this amount.
We will continue to post annually on the CMS Web site at http://www.cms.hhs.gov/HospitalOutpatientPPS, a file that contains the APC
offset amounts that would be used for that year for purposes of both
evaluating cost significance for candidate pass-through device
categories and drugs and biologicals, including diagnostic
radiopharmaceuticals, and establishing any appropriate APC offset
amounts. Specifically, the file will continue to provide, for every
OPPS clinical APC, the amounts and percentages of APC payment
associated with packaged implantable devices, ``policy-packaged''
drugs, and ``threshold-packaged'' drugs and biologicals.
Table 23 of the proposed rule (74 FR 35318) displayed the proposed
APCs to which nuclear medicine procedures would be assigned in CY 2010
and for which we expected that an APC offset could be applicable in the
case of new diagnostic radiopharmaceuticals with pass-through status.
Comment: A few commenters supported the continuation of the pass-
through diagnostic radiopharmaceutical offset policy for CY 2010.
Response: We continue to believe that a diagnostic
radiopharmaceutical offset policy is necessary in order to ensure that
duplicate payment is not made for diagnostic radiopharmaceuticals with
pass-through status. We believe it is appropriate to remove the
radiopharmaceutical payment amount that is already packaged into the
payment for the associated nuclear medicine procedure when we provide
pass-through payment for a diagnostic radiopharmaceutical with pass-
through status.
Therefore, after consideration of the public comments we received,
we are finalizing our CY 2010 proposal, without modification, to apply
the diagnostic radiopharmaceutical offset policy to payment for pass-
through diagnostic radiopharmaceuticals, as described above. Table 32
below displays the APCs to which nuclear medicine procedures are
assigned in CY 2010 and for which we expect that an APC offset could be
applicable in the case of diagnostic radiopharmaceuticals with pass-
through status.
Table 32--APCs to Which Nuclear Medicine Procedures Are Assigned for CY 2010
----------------------------------------------------------------------------------------------------------------
CY 2010 APC CY 2010 APC title
----------------------------------------------------------------------------------------------------------------
0307....................................... Myocardial Positron Emission Tomography (PET) imaging.
0308....................................... Non-Myocardial Positron Emission Tomography (PET) imaging.
0377....................................... Level II Cardiac Imaging.
0378....................................... Level II Pulmonary Imaging.
0389....................................... Level I Non-imaging Nuclear Medicine.
0390....................................... Level I Endocrine Imaging.
0391....................................... Level II Endocrine Imaging.
0392....................................... Level II Non-imaging Nuclear Medicine.
0393....................................... Hematologic Processing & Studies.
0394....................................... Hepatobiliary Imaging.
0395....................................... GI Tract Imaging.
0396....................................... Bone Imaging.
0397....................................... Vascular Imaging.
0398....................................... Level I Cardiac Imaging.
0400....................................... Hematopoietic Imaging.
0401....................................... Level I Pulmonary Imaging.
0402....................................... Level II Nervous System Imaging.
0403....................................... Level I Nervous System Imaging.
0404....................................... Renal and Genitourinary Studies.
0406....................................... Level I Tumor/Infection Imaging.
0408....................................... Level III Tumor/Infection Imaging.
0414....................................... Level II Tumor/Infection Imaging.
----------------------------------------------------------------------------------------------------------------
[[Page 60482]]
c. Payment Offset Policy for Contrast Agents
As described above, section 1833(t)(6)(D)(i) of the Act specifies
that the transitional pass-through payment amount for pass-through
drugs and biologicals is the difference between the amount paid under
section 1842(o) (or the Part B drug CAP rate) and the otherwise
applicable OPD fee schedule amount. There is currently one contrast
agent with pass-through status under the OPPS, HCPCS code C9246
(Injection, gadoxetate disodium, per ml). HCPCS code C9246 was granted
pass-through status beginning January 1, 2009, and will continue with
pass-through status in CY 2010 under HCPCS code A9581 (Injection,
gadoxetate disodium, 1 ml). As described earlier in section V.A.3. of
this final rule with comment period, new pass-through contrast agents
will be paid at ASP+6 percent, while those without ASP information
would be paid at WAC+6 percent or, if WAC is not available, payment
would be based on 95 percent of the product's most recently published
AWP.
As discussed in the CY 2010 OPPS/ASC proposed rule (74 FR 35318),
we believe that a payment offset, similar to the offset currently in
place for pass-through devices and diagnostic radiopharmaceuticals, is
necessary in order to provide an appropriate transitional pass-through
payment for contrast agents because all of these items are packaged
when they do not have pass-through status. In accordance with our
standard offset methodology, in the CY 2010 OPPS/ASC proposed rule (74
FR 35318), we proposed to deduct from the payment for pass-through
contrast agents an amount that reflects the portion of the APC payment
associated with predecessor contrast agents in order to ensure no
duplicate contrast agent payment is made.
In CY 2009, we established a policy to estimate the portion of each
APC payment rate that could reasonably be attributed to the cost of
predecessor diagnostic radiopharmaceuticals when considering a new
diagnostic radiopharmaceutical for pass-through payment (73 FR 68638
through 68641). For CY 2010, we proposed to apply this same policy to
contrast agents. Specifically, we proposed to utilize the ``policy-
packaged'' drug offset fraction for clinical APCs calculated as 1 minus
(the cost from single procedure claims in the APC after removing the
cost for ``policy-packaged'' drugs divided by the cost from single
procedure claims in the APC). As discussed above, while we have
previously defined the ``policy-packaged'' drugs and biologicals as
nonpass-through diagnostic radiopharmaceuticals, contrast agents, and
implantable biologicals (73 FR 68639), we proposed for CY 2010 to
redefine ``policy-packaged'' drugs as only nonpass-through diagnostic
radiopharmaceuticals and contrast agents, as a result of the CY 2010
proposal discussed in sections V.A.4. and V.B.2.d. of the proposed rule
(74 FR 35311 through 35314 and 74 FR 35323 through 35324) that would
treat all implantable biologicals as devices, rather than drugs. To
determine the actual APC offset amount for pass-through contrast agents
that takes into consideration the otherwise applicable OPPS payment
amount, we proposed to multiply the ``policy-packaged'' drug offset
fraction by the APC payment amount for the procedure with which the
pass-through contrast agent is used and, accordingly, reduce the
separate OPPS payment for the pass-through contrast agent by this
amount.
We proposed to continue to post annually on the CMS Web site at
http://www.cms.hhs.gov/HospitalOutpatientPPS, a file that contains the
APC offset amounts that would be used for that year for purposes of
both evaluating cost significance for candidate pass-through device
categories and drugs and biologicals, including contrast agents, and
establishing any appropriate APC offset amounts. Specifically, the file
will continue to provide, for every OPPS clinical APC, the amounts and
percentages of APC payment associated with packaged implantable
devices, ``policy-packaged'' drugs, and ``threshold-packaged'' drugs
and biologicals.
Comment: One commenter objected to the proposed offset policy for
contrast agents, stating that an offset for new contrast agents granted
pass-through status, combined with the packaging policy for all
nonpass-through contrast agents, would discourage hospitals from
providing contrast agents for financial reasons. The commenter argued
that an offset policy is not necessary to avoid duplicate payment for
pass-through contrast agents as the majority of older contrast agents
have costs that are well below the $65 OPPS drug packaging threshold
and more expensive contrast agents would be eligible for pass-through
status. Finally, the commenter believed that CMS does not have the
appropriate contrast agent data available in order to calculate an
offset amount for these products. Another commenter objected to CMS'
proposed offset methodology for contrast agents and urged CMS to
specify the APCs that would be subject to an offset. Further, the
commenter requested that CMS implement a contrast offset methodology
that would be more similar to the offset methodology currently in place
for pass-through devices and diagnostic radiopharmaceuticals.
Response: We have consistently implemented an offset policy for
products receiving pass-through payment that would otherwise receive
significant packaged payment if not for their pass-through status. An
offset methodology ensures that we do not pay twice, first through a
packaged payment included in the associated procedure payment and
second through an individual separate payment, for the item with pass-
through status. The potential for duplicate payment is higher for items
such as contrast agents, diagnostic radiopharmaceuticals, and devices
where the pass-through item typically substitutes for items that are
otherwise always packaged. Furthermore, the potential magnitude of
duplicate payment also is higher for these items because they are
always packaged when they do not have pass-through status.
As discussed above, this offset policy appropriately provides for
pass-through payment for the new product that represents the difference
between the physician's office payment amount and the otherwise
applicable OPD fee schedule amount, in the case of packaged contrast
agents the ``policy-packaged'' drug APC offset amount, as specified by
the statute. We note that the proposed contrast agent offset policy is
virtually identical to the offset methodology currently in place for
pass-through devices and diagnostic radiopharmaceuticals, consistent
with the recommendation by one commenter that we adopt a similar policy
for contrast agents. We believe that this methodology would pay
appropriately for the cost of pass-through contrast agents and that
hospitals should have no payment concerns when determining which
contrast agent would be most clinically appropriate and efficient for a
particular patient's study. Therefore, we do not believe that the
application of a contrast agent offset methodology would discourage
hospitals from using pass-through contrast agents insofar as providers
determine they are necessary in the care of the patient.
As discussed above, we proposed to deduct from the payment for
pass-through contrast agents an amount that reflects the portion of the
APC payment associated with predecessor contrast agents in order to
ensure no duplicate contrast agent payment is made. As
[[Page 60483]]
discussed above, we identified the ``policy-packaged'' drug APC offset
amount as applicable to our offset policy because we have identified
contrast agents as ``policy- packaged'' drugs in our claims data. To
the extent that hospitals reported the HCPCS code for contrast agents
when those drugs were administered during procedures, the contrast
agent costs are included in our calculation of the ``policy-packaged''
drug APC offset amounts, and we believe that we have sufficient
information regarding the costs of predecessor contrast agents to apply
the resulting offset amounts to payment for pass-through contrast
agents. To the extent hospitals did not report the use of contrast
agents under specific HCPCS codes in CY 2008, we could not fully total
the cost of contrast for a given imaging APC and we would underestimate
an accurate ``policy-packaged'' drug APC offset amount. This unknown
but potential bias would generally result in higher overall pass-
through payment for a new contrast agent so any limitations of our
current data on contrast agents for purposes of the offset would not
inappropriately reduce pass-through payment for a new contrast agent.
We disagree with the commenter that an offset is unnecessary to
avoid duplicate payment for contrast material. All nonpass-through
contrast agents, regardless of their per day costs, are packaged into
payments for the associated procedures. Therefore, OPPS payment for
imaging and other procedures that currently utilize contrast agents
already includes packaged payment for the necessary contrast agent. The
observation that most contrast agents have per day costs below the $65
threshold does not obviate the need for an offset policy for contrast
agents with pass-through status. First, while the CY 2010 drug
packaging threshold is low, $65 as the per day cost, this cost may
constitute a sizable percentage of a procedural APC's median cost.
Paying the full procedural APC amount plus the pass-through contrast
agent payment of ASP+6 for an imaging scan with high volume could
result in significant overpayment of the new contrast agent.
Furthermore, a few contrast agents have per day costs above the $65
drug packaging threshold, so that the amount of contrast agent cost
represented in the ``policy-packaged'' drug amount of an APC median
cost could be fairly substantial. Finally, unlike ``threshold-
packaged'' drugs that are packaged based on the relationship of their
per day cost to the $65 drug packaging threshold, where the packaged
drug cost in a procedural APC may or may not represent predecessor drug
costs and where multiple drugs may be administered in a single session
paid under one procedural APC, contrast agents typically substitute for
one another and hospitals rarely administer multiple contrast agents in
the same session. Pass-through contrast agents are paid separately and
are billed with procedures that already have costs of predecessor
contrast agents packaged into the procedural APC payment, so duplicate
contrast agent payment would result in the absence of an offset
methodology.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35318), we proposed to
utilize the ``policy-packaged'' drug offset fraction for procedural
APCs calculated as 1 minus (the cost from single procedure claims in
the APC after removing the cost for ``policy-packaged'' drugs divided
by the cost from single procedure claims in the APC). To determine the
actual APC offset amount for pass-through contrast agents that takes
into consideration the otherwise applicable OPPS payment amount, we
proposed to multiply the ``policy-packaged'' drug offset fraction by
the APC payment amount for the procedure with which the pass-through
contrast agent is used and, accordingly, reduce the separate OPPS
payment for the pass-through contrast agent by this amount.
In response to the commenters' concerns regarding our proposed
methodology and request that we specify the APCs subject to the
contrast agent offset policy, we reviewed the methodology and
specifically examined the amount of contrast agent offsets associated
with procedural APCs to determine which APCs, other than nuclear
medicine APCs that contained the costs of diagnostic
radiopharmaceuticals, included a significant ``policy-packaged'' drug
amount in the APC payment. First, we excluded all APCs to which nuclear
medicine procedures were assigned for CY 2010 from the APCs that would
be subject to a contrast agent offset policy, reasoning that the
``policy-packaged'' drug costs associated with these APCs were for
diagnostic radiopharmaceuticals. From a clinical perspective, there is
very little overlap in the procedures that use contrast agents or
diagnostic radiopharmaceuticals. Next, we reviewed the per day costs
for all contrast agents with CY 2008 claims data and compared their
aggregate, average per day cost to the ``policy-packaged'' drug amounts
listed in the CY 2010 proposed rule APC offset file that was posted on
the CMS Web site in association with the CY 2010 OPPS/ASC proposed
rule. When examining those APCs with ``policy-packaged'' drug amounts
equal to or less than the 25th percentile of per day contrast agent
cost (approximately $22), we found that the majority of APCs with a
``policy- packaged'' drug offset amount other than zero but less than
$20 (our $22 estimate rounded to the nearest $5 increment) were
generally APCs that were not likely to include procedures requiring
significant use of contrast agents. We selected the 25th percentile of
per day contrast agent cost to identify the majority of APCs with
significant contrast agent cost because we believe that the 25th
percentile is an appropriate threshold for representing significant
contrast agent cost as it captures the lower bound of significant
variation around the per day contrast agent cost. The interquartile
range, the 25th to 75th percentile, is a typical descriptive statistic
used to describe the variation in the center of a distribution.
Further, the dollar value of the 25th percentile, $22 was sufficiently
high that we believed it would be worth establishing and implementing
offset logic in our claims processing Pricer module. This allowed us to
establish a meaningful threshold cost for application of a contrast
agent offset policy that would identify APCs in which there is
significant packaged contrast agent cost. Unlike the case of diagnostic
radiopharmaceuticals, which are always administered during a limited
number of nuclear medicine procedures so we are able to identify all
APCs to which nuclear medicine procedures are assigned as those for
which the diagnostic radiopharmaceutical offset policy would apply,
contrast agents are utilized much more widely among procedures assigned
to many OPPS APCs.
The APCs that we identified as below the threshold of $20 included
APC 0384 (GI Procedures with Stents) and APC 0427 (Level II Tube or
Catheter Changes or Repositioning). As we would not expect contrast
agents to generally be used in the procedures assigned to these APCs,
we believe that implementing a threshold that would exclude these APCs
from a contrast agent offset policy would be appropriate for
administrative simplification of claims processing, while continuing to
ensure no duplicate payment is made for pass-through contrast agents.
Therefore, we have identified the APCs that would be subject to the
contrast offset policy in CY 2010, within the scope of the criteria
discussed above.
After consideration of the public comments we received, we are
[[Page 60484]]
finalizing a pass through contrast agent offset policy for CY 2010,
with modification to specify the procedural APCs to which offsets for
pass-through contrast agents would apply. Procedural APCs for which we
expect a contrast agent offset could be applicable in the case of a
pass-through contrast agent have been identified as any procedural APC
with a ``policy-packaged'' drug amount greater than $20 that is not a
nuclear medicine APC identified in Table 32 above, and these APCs are
displayed in Table 33. For CY 2010, when a contrast agent with pass-
through status is billed with any procedural APC listed in Table 33, a
specific offset based on the procedural APC will be applied to payment
for the contrast agent to ensure that duplicate payment is not made for
the contrast agent.
Table 33--APCs to Which a Contrast Agent Offset May Be Applicable for CY 2010
----------------------------------------------------------------------------------------------------------------
CY 2010 APC CY 2010 APC title
----------------------------------------------------------------------------------------------------------------
0080................................. Diagnostic Cardiac Catheterization.
0082................................. Coronary or Non-Coronary Atherectomy.
0083................................. Coronary or Non-Coronary Angioplasty and Percutaneous Valvuloplasty.
0093................................. Vascular Reconstruction/Fistula Repair without Device.
0104................................. Transcatheter Placement of Intracoronary Stents.
0128................................. Echocardiogram with Contrast.
0152................................. Level I Percutaneous Abdominal and Biliary Procedures.
0229................................. Transcatheter Placement of Intravascular Shunts.
0278................................. Diagnostic Urography.
0279................................. Level II Angiography and Venography.
0280................................. Level III Angiography and Venography.
0283................................. Computed Tomography with Contrast.
0284................................. Magnetic Resonance Imaging and Magnetic Resonance Angiography with
Contrast.
0333................................. Computed Tomography without Contrast followed by Contrast.
0337................................. Magnetic Resonance Imaging and Magnetic Resonance Angiography without
Contrast followed by Contrast.
0375................................. Ancillary Outpatient Services When Patient Expires.
0383................................. Cardiac Computed Tomographic Imaging.
0388................................. Discography.
0418................................. Insertion of Left Ventricular Pacing Elect.
0442................................. Dosimetric Drug Administration.
0653................................. Vascular Reconstruction/Fistula Repair with Device.
0656................................. Transcatheter Placement of Intracoronary Drug-Eluting Stents.
0662................................. CT Angiography.
0668................................. Level I Angiography and Venography.
8006................................. CT and CTA with Contrast Composite.
8008................................. MRI and MRA with Contrast Composite.
----------------------------------------------------------------------------------------------------------------
B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
Without Pass-Through Status
1. Background
Under the CY 2009 OPPS, we currently pay for drugs, biologicals,
and radiopharmaceuticals that do not have pass-through status in one of
two ways: packaged payment into the payment for the associated service;
or separate payment (individual APCs). We explained in the April 7,
2000 OPPS final rule with comment period (65 FR 18450) that we
generally package the cost of drugs and radiopharmaceuticals into the
APC payment rate for the procedure or treatment with which the products
are usually furnished. Hospitals do not receive separate payment for
packaged items and supplies, and hospitals may not bill beneficiaries
separately for any packaged items and supplies whose costs are
recognized and paid within the national OPPS payment rate for the
associated procedure or service. (Transmittal A-01-133, issued on
November 20, 2001, explains in greater detail the rules regarding
separate payment for packaged services.)
Packaging costs into a single aggregate payment for a service,
procedure, or episode-of-care is a fundamental principle that
distinguishes a prospective payment system from a fee schedule. In
general, packaging the costs of items and services into the payment for
the primary procedure or service with which they are associated
encourages hospital efficiencies and also enables hospitals to manage
their resources with maximum flexibility.
Section 1833(t)(16)(B) of the Act, as added by section 621(a)(2) of
Public Law 108-173, set the threshold for establishing separate APCs
for drugs and biologicals at $50 per administration for CYs 2005 and
2006. Therefore, for CYs 2005 and 2006, we paid separately for drugs,
biologicals, and radiopharmaceuticals whose per day cost exceeded $50
and packaged the costs of drugs, biologicals, and radiopharmaceuticals
whose per day cost was equal to or less than $50 into the procedures
with which they were billed. For CY 2007, the packaging threshold for
drugs, biologicals, and radiopharmaceuticals that were not new and did
not have pass-through status was established at $55. For CYs 2008 and
2009, the packaging threshold for drugs, biologicals, and
radiopharmaceuticals that were not new and do not have pass-through
status was established at $60. The methodology used to establish the
$55 threshold for CY 2007, the $60 threshold for CYs 2008 and 2009, and
our approach for CY 2010 are discussed in more detail in section
[[Page 60485]]
V.B.2.b. of this final rule with comment period.
2. Criteria for Packaging Payment for Drugs, Biologicals, and
Radiopharmaceuticals
a. Background
As indicated in section V.B.1. of this final rule with comment
period, in accordance with section 1833(t)(16)(B) of the Act, the
threshold for establishing separate APCs for payment of drugs and
biologicals was set to $50 per administration during CYs 2005 and 2006.
In CY 2007, we used the fourth quarter moving average Producer Price
Index (PPI) levels for prescription preparations to trend the $50
threshold forward from the third quarter of CY 2005 (when the Pub. L.
108-173 mandated threshold became effective) to the third quarter of CY
2007. We then rounded the resulting dollar amount to the nearest $5
increment in order to determine the CY 2007 threshold amount of $55.
Using the same methodology as that used in CY 2007 (which is discussed
in more detail in the CY 2007 OPPS/ASC final rule with comment period
(71 FR 68085 through 68086)), we set the packaging threshold for
establishing separate APCs for drugs and biologicals at $60 for CYs
2008 and 2009.
Following the CY 2007 methodology, for the CY 2010 OPPS/ASC
proposed rule we used updated fourth quarter moving average PPI levels
to trend the $50 threshold forward from the third quarter of CY 2005 to
the third quarter of CY 2009 and again rounded the resulting dollar
amount ($65.07) to the nearest $5 increment, which yielded a figure of
$65. In performing this calculation, we used the most up-to-date
forecasted, quarterly PPI estimates from CMS' Office of the Actuary
(OACT). As actual inflation for past quarters replaced forecasted
amounts, the PPI estimates for prior quarters have been revised
(compared with those used in the CY 2007 OPPS/ASC final rule with
comment period) and were incorporated into our calculation. Based on
the calculations described above, we proposed a packaging threshold for
CY 2010 of $65. (For a more detailed discussion of the OPPS drug
packaging threshold and the use of the PPI for prescription drugs, we
refer readers to the CY 2007 OPPS/ASC final rule with comment period
(71 FR 68085 through 68086).)
b. Cost Threshold for Packaging of Payment for HCPCS Codes that
Describe Certain Drugs, Nonimplantable Biologicals, and Therapeutic
Radiopharmaceuticals (``Threshold-Packaged Drugs'')
To determine their proposed CY 2010 packaging status, for the CY
2010 OPPS/ASC proposed rule we calculated the per day cost of all drugs
on a HCPCS code-specific basis (with the exception of those drugs and
biologicals with multiple HCPCS codes that include different dosages as
described in section V.B.2.c. of the CY 2010 OPPS/ASC proposed rule (74
FR 35321) and excluding diagnostic radiopharmaceuticals, contrast
agents, and implantable biologicals that we proposed to continue to
package in CY 2010 as discussed in section V.B.2.d. of the CY 2010
OPPS/ASC proposed rule (74 FR 35323 through 35324) and this final rule
with comment period), nonimplantable biologicals, and therapeutic
radiopharmaceuticals (collectively called ``threshold-packaged'' drugs)
that had a HCPCS code in CY 2008 and were paid (via packaged or
separate payment) under the OPPS, using CY 2008 claims data processed
before January 1, 2009. In order to calculate the per day costs for
drugs, nonimplantable biologicals, and therapeutic radiopharmaceuticals
to determine their proposed packaging status in CY 2010, we used the
methodology that was described in detail in the CY 2006 OPPS proposed
rule (70 FR 42723 through 42724) and finalized in the CY 2006 OPPS
final rule with comment period (70 FR 68636 through 70 FR 68638).
To calculate the CY 2010 proposed rule per day costs, we used an
estimated payment rate for each drug and nonimplantable biological
HCPCS code of ASP+4 percent (which was the payment rate we proposed for
separately payable drugs and nonimplantable biologicals in CY 2010, as
discussed in more detail in section V.B.3.b. of the CY 2010 OPPS/ASC
proposed rule (74 FR 35324 through 35326)). We used the manufacturer
submitted ASP data from the fourth quarter of CY 2008 (data that were
used for payment purposes in the physician's office setting, effective
April 1, 2009) to determine the proposed rule per day cost.
As is our standard methodology, for CY 2010, we proposed to use
payment rates based on the ASP data from the fourth quarter of CY 2008
for budget neutrality estimates, packaging determinations, impact
analyses, and completion of Addenda A and B to the proposed rule
because these were the most recent data available for use at the time
of development of the proposed rule. These data were also the basis for
drug payments in the physician's office setting, effective April 1,
2009. For items that did not have an ASP-based payment rate, such as
therapeutic radiopharmaceuticals, we used their mean unit cost derived
from the CY 2008 hospital claims data to determine their proposed per
day cost. We packaged items with a per day cost less than or equal to
$65 and identified items with a per day cost greater than $65 as
separately payable. Consistent with our past practice, we crosswalked
historical OPPS claims data from the CY 2008 HCPCS codes that were
reported to the CY 2009 HCPCS codes that we displayed in Addendum B to
the proposed rule for payment in CY 2010.
Comment: Several commenters supported CMS' proposal to increase the
packaging threshold to $65 for CY 2010. However, the majority of
commenters objected to the proposed increase to the OPPS packaging
threshold.
A few commenters recommended that CMS consider either eliminating
the drug packaging threshold and providing separate payment for all
drugs with HCPCS codes or freezing the packaging threshold at $60 for
CY 2010. Some commenters objected to the use of a packaging threshold
under the OPPS when one is not used for physician's office payment and
believed that eliminating the drug packaging threshold would allow for
parity in drug payment between the HOPD setting and the physician's
office setting. These commenters expressed concern that the packaging
threshold may impede beneficiary access to lower-cost packaged drugs in
the HOPD setting. In addition, some commenters believed that
eliminating the packaging threshold and paying separately for all drugs
in the HOPD setting would allow a more accurate calculation of the
separately payable payment amount for drugs (otherwise referred to as
the ASP+X percent amount). Other commenters stated that CMS should not
increase the drug packaging threshold because other changes in the drug
payment ratesetting methodology were proposed. These commenters
requested that CMS only change one aspect of the drug payment
methodology at a time to allow for greater understanding of the impact
of proposed changes to drug payment.
Response: As fully discussed in the CY 2008 OPPS/ASC final rule
with comment period (72 FR 66757 through 66758) and the CY 2009 OPPS/
ASC final rule with comment period (73 FR 68643), we continue to
believe that unpackaging payment for all drugs,
[[Page 60486]]
biologicals, and radiopharmaceuticals is inconsistent with the concept
of a prospective payment system and that such a change could create an
additional reporting burden for hospitals. The OPPS and the MPFS that
applies to physician's office services are fundamentally different
payment systems with essential differences in their payment policies
and structures. Specifically, the OPPS is a prospective payment system,
based on the concept of payment for groups of services that share
clinical and resource characteristics. Payment is made under the OPPS
according to prospectively established payment rates that are related
to the relative costs of hospital resources for services. The MPFS is a
fee schedule based on the relative value of each individual component
of a service. Consistent with the MPFS approach, separate payment is
made for each drug provided in the physician's office, but the OPPS
packages payment for certain drugs into the associated procedure
payments for the APC group. Given the fundamental differences between
the MPFS payment mechanism and the OPPS payment mechanism, differences
in the degrees of packaged payment and separate payment between these
two systems are only to be expected. In general, we do not believe that
our packaging methodology under the OPPS results in limited beneficiary
access to drugs because packaging is a fundamental component of a
prospective payment system that accounts for the cost of certain items
and services in larger payment bundles, recognizing that some clinical
cases may be more costly and others less costly but that, on average,
OPPS payment is appropriate for the services provided.
We note that, in CYs 2005 and 2006, the statutorily mandated drug
packaging threshold was set at $50, and we continue to believe that it
is appropriate to continue a modest drug packaging threshold for the CY
2010 OPPS for the reasons set forth below. As stated in the CY 2007
OPPS/ASC final rule with comment period (71 FR 68086), we believe that
packaging certain items is a fundamental component of a prospective
payment system, that packaging these items does not lead to beneficiary
access issues and does not create a problematic site of service
differential, that the packaging threshold is reasonable based on the
initial establishment in law of a $50 threshold for the CY 2005 OPPS,
that updating the $50 threshold is consistent with industry and
government practices, and that the PPI for prescription preparations is
an appropriate mechanism to gauge Part B drug inflation. Therefore,
because of our continued belief that packaging is a fundamental
component of a prospective payment system that contributes to important
flexibility and efficiency in the delivery of high quality hospital
outpatient services, we are not adopting the commenters'
recommendations to pay separately for all drugs, biologicals, and
radiopharmaceuticals for CY 2010 or to eliminate or to freeze the
packaging threshold at $60.
Finally, we believe that our continued application of the
methodology initially adopted in CY 2007 to update the drug packaging
threshold does not inhibit our ability to propose additional changes to
the nonpass-through drug payment methodology under the OPPS. We note
that for the past several years, we have made a number of proposals to
revise our drug payment methodology, while continuing to implement our
established methodology for annually updating the drug packaging
threshold. While we have not finalized any of these previous proposals,
we have consistently applied the methodology described above to update
the drug packaging threshold while examining a variety of alternatives
for determining payment for separately payable drugs without pass-
through status.
Comment: One commenter to the CY 2009 OPPS/ASC final rule with
comment period noted that HCPCS code J3300 (Injection, triamcinolone
acetonide, preservative free, 1 mg) should not be packaged as
established in the final rule with comment period because the per day
cost of this drug is over the CY 2009 OPPS drug packaging threshold of
$60 per day.
Response: While the payment for HCPCS code J3300 was adopted on an
interim final basis as packaged for CY 2009 (status indicator ``N''),
upon receipt of this public comment we reviewed our calculation and
released a correction notice changing the status indicator to ``K'' for
CY 2009 (74 FR 4343). In addition, we discussed this status indicator
change in the April 2009 OPPS quarterly update CR (Transmittal 1702, CR
6416, dated March 13, 2009).
Comment: One commenter stated that HCPCS code J3473 (Injection,
hyaluronidase, recombinant, 1 USP unit) was incorrectly assigned status
indicator ``N'' in the CY 2010 OPPS/ASC proposed rule. The commenter
argued that coding errors resulted in hospital claims data indicating
that per day costs of HCPCS code J3473 is below the drug packaging
threshold for CY 2010. The commenter explained that a variety of HCPCS
codes and various dosage descriptors for similar products contributed
to hospital coding errors, and that the product described by HCPCS code
J3473 is only sold in a single use vial of 150 units, with an ASP that
exceeds the CY 2010 packaging threshold. The commenter noted that this
concern had been raised with the CMS HCPCS Workgroup but a request for
a new HCPCS code descriptor was denied.
Response: HCPCS code J3473 expired from pass-through status on
December 31, 2008, and was paid separately in CY 2009 because the
estimated per day cost, using updated final rule claims data from CY
2007, showed that the per day cost of this drug exceeded the CY 2009
drug packaging threshold. For CY 2010, we proposed to package HCPCS
code J3473 as the estimated per day cost did not exceed the proposed CY
2010 drug packaging threshold. The OPPS relies on hospital claims data
in order to determine payment rates. For drugs and biologicals, we rely
upon hospital claims data, in part, to determine the estimated per day
cost we use in our annual packaging determination. In addition, the
concern about discrepancies between HCPCS code descriptors for similar
products is under the purview of the CMS HCPCS Workgroup, the sole
creator and maintainer of HCPCS codes and their descriptors. We remind
hospitals through each OPPS quarterly update CR that when billing for
drugs, biologicals, and radiopharmaceuticals, they should make certain
that the reported units of service of the reported HCPCS code are
consistent with the quantity of the drug, biological, or
radiopharmaceutical that was used in the care of the patient.
Therefore, we expect that the data that we receive on hospital claims
accurately reflect the services that were provided to the beneficiary.
As is our standard methodology, we used updated claims data and ASP
rates to make final packaging determinations for CY 2010. For HCPCS
code J3473, our CY 2008 claims data showed approximately 2,100 days and
226,800 units from 37 providers. While this drug was not commonly used
in CY 2008, we have no reason to believe that the estimated per day
cost of HCPCS code J3473 of approximately $57, based on our methodology
described above as applied to claims from a modest number of providers,
is not reflective of the per day cost to hospitals for furnishing the
drug. Therefore, we have determined that the per day cost of HCPCS code
J3473 does not exceed the $65 packaging threshold for drugs and
[[Page 60487]]
biologicals and payment for HCPCS code J3473 is packaged in CY 2010.
For purposes of this final rule with comment period, we again
followed the CY 2007 methodology for CY 2010 and used updated fourth
quarter moving average PPI levels to trend the $50 threshold forward
from the third quarter of CY 2005 to the third quarter of CY 2010 and
again rounded the resulting dollar amount ($66.55) to the nearest $5
increment, which yielded a figure of $65. In performing this
calculation, we used the most up-to-date forecasted, quarterly PPI
estimates from CMS' OACT.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to continue use
of the established methodology for annually updating the OPPS packaging
threshold for drugs and biologicals by the PPI for prescription drugs.
The final CY 2010 drug packaging threshold is $65, calculated according
to the threshold update methodology that we have applied since CY 2007.
In CY 2005 (69 FR 65779 through 65780), we implemented a policy
that exempted the oral and injectable forms of 5-HT3 antiemetic
products from our packaging policy, providing separate payment for
these drugs regardless of their estimated per day costs through CY
2009. There are currently seven Level II HCPCS codes for 5[dash]HT3
antiemetics that describe four different drugs, specifically dolasetron
mesylate, granisetron hydrochloride, ondansetron hydrochloride, and
palonosetron hydrochloride. Each of these drugs, except palonosetron
hydrochloride, is available in both injectable and oral forms, so seven
HCPCS codes are available to describe the four drugs in all of their
forms. As of 2008, both ondansetron hydrochloride and granisetron
hydrochloride were available in generic versions. We have now paid
separately for all 5[dash]HT3 antiemetics for 5 years under a policy
that exempts these products from the drug packaging methodology. While
we continue to believe that use of these antiemetics is an integral
part of an anticancer treatment regimen and that OPPS claims data
demonstrate their increasingly common hospital outpatient utilization,
in the CY 2010 OPPS/ASC proposed rule (74 FR 35320), we indicated that
we no longer believe that a specific exemption to our standard drug
payment methodology is necessary for CY 2010 to ensure access to the
most appropriate antiemetic product for Medicare beneficiaries.
We analyzed historical hospital outpatient claims data for the
seven 5[dash]HT3 antiemetic products that have been subject to this
packaging exemption, and we found that HCPCS code J2405 (Injection,
ondansetron hydrochloride, per 1 mg) was the dominant product used in
the hospital outpatient setting both before and after the adoption of
our 5[dash]HT3 packaging exemption in CY 2005. Prior to this packaging
exemption, payment for HCPCS code J2405 was packaged in CY 2004. HCPCS
code J2405 was modestly costly relative to the other 5[dash]HT3
antiemetics in CY 2004, but its per day cost still fell below the
applicable packaging threshold of $50. Since CY 2005, the injectable
form of ondansetron hydrochloride has experienced a significant change
in its pricing structure as generic versions of the drug have become
available, including a steady decline in its estimated per day cost.
Notwithstanding this change in price, we have observed continued growth
in its OPPS utilization. For CY 2008, HCPCS code J2405 was the least
costly of the seven 5[dash]HT3 antiemetics, with an estimated per day
cost of only approximately $1 in CY 2008 (based on July 2008 ASP
information), yet we observed that it constituted 88 percent of all
treatment days of 5[dash]HT3 antiemetics in the CY 2008 OPPS claims
data. Using April 2009 ASP information for the CY 2010 proposed rule,
we estimated a per day cost of only approximately $1 for HCPCS code
J2405. For the five modestly priced 5[dash]HT3 antiemetics, we
estimated CY 2010 per day costs between approximately $7 and $50, while
we estimated a per day cost for the most costly 5[dash]HT3 antiemetic,
J2469 (Injection, palonosetron hcl, 25 mcg), of $174 per day. In light
of an anticipated relatively constant pricing structure for these drugs
in CY 2010, combined with our experience that prescribing patterns for
these 5[dash]HT3 antiemetics are not very sensitive to changes in
price, we did not believe that continuing to exempt these drugs from
our standard OPPS drug packaging methodology was appropriate for CY
2010. Therefore, for CY 2010, because we proposed to no longer exempt
the 5[dash]HT3 antiemetic products from our standard packaging
methodology, we proposed to package payment for all of the 5[dash]HT3
antiemetics except palonosetron hydrochloride, consistent with their
estimated per day costs from CY 2008 claims data.
At the August 2009 meeting of the APC Panel, the APC Panel
recommended that when CMS changes the dollar amount of the drug
packaging threshold and determines that some drugs within a single
therapeutic class fall on either side of the packaging threshold, CMS
consider packaging all of the drugs within that class on the basis of
feedback from providers, the APC Panel, and stakeholders. Our response
to this recommendation is included in our response to comments below.
Comment: The majority of commenters opposed the proposal to no
longer continue to exempt the oral and injectable forms of 5-HT3
antiemetics from packaging, thereby packaging all but one 5-HT3
antiemetic. Many commenters requested that CMS continue to exempt all
5-HT3 antiemetics from the packaging methodology in order to preserve
access to these products. The commenters expressed concern that
hospitals may choose to only provide the separately payable antiemetic
instead of the antiemetic that is most beneficial for the beneficiary.
One commenter requested that CMS not finalize the CY 2010 proposal to
apply the packaging threshold to 5-HT3 antiemetics until more
information is available on the impact of packaging these products and
to avoid unintended consequences, such as changes in prescribing
practices, which may result from this policy.
However, several commenters expressed support for the proposed
payment for 5-HT3 antiemetic products in the HOPD for CY 2010. These
commenters stated that the majority of the products would be packaged
under the proposal, and that would lead to reduced beneficiary
copayments. The commenters offered their support due to the
availability of lower-cost generic versions of some of the products and
CMS' data analysis. The commenters also noted that the single product
that would be paid separately under the proposal, HCPCS code J2469
(Injection, palonosetron hcl, 25 mcg), has unique properties that
indicate separate payment would be appropriate.
Response: We continue to believe that use of these antiemetics is
an integral part of an anticancer treatment regimen and that OPPS
claims data demonstrate their increasingly common hospital outpatient
utilization. As discussed above, our analysis for the CY 2010 OPPS/ASC
proposed rule (74 FR 35320 through 35321) found that the most
frequently used 5-HT3 antiemetic constituted 88 percent of all
treatment days, and had an estimated per day cost of approximately $1
in CY 2008. The per day costs of other 5-HT3 antiemetics with per day
costs below the CY 2010 drug packaging threshold of $65 (as discussed
above) ranged from $8 to $51 per day. The single 5-HT3 antiemetic with
a per day cost that exceeded the
[[Page 60488]]
CY 2010 drug packaging threshold is HCPCS code J2469.
As stated in the proposed rule (74 FR 35320), we no longer believe
that a specific exemption to our standard drug payment methodology is
necessary for CY 2010 to ensure access to the most appropriate
antiemetic product for Medicare beneficiaries. We believe that our
analysis, along with the historical stability in prescribing patterns
and the availability of generic alternatives for several of these
products, allows us to discontinue our policy of specifically exempting
these products from the OPPS drug packaging threshold.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to apply the CY
2010 drug packaging threshold to all 5-HT3 antiemetics. We expect that
packaging will encourage hospitals to use the most cost-efficient 5-HT3
antiemetic that is clinically appropriate. We also anticipate that
hospitals will continue to provide care that is aligned with the best
interests of the patient. We do not believe that our CY 2010 policy to
apply the drug packaging threshold to 5-HT3 antiemetics will limit
beneficiaries' ability to receive clinically appropriate drugs and
biologicals. The final CY 2010 OPPS status indicators for 5-HT3
antiemetics are listed in Table 34 below.
Table 34--Final CY 2010 Status Indicators for 5-HT3 Antiemetics
----------------------------------------------------------------------------------------------------------------
CY 2010 HCPCS code CY 2010 long descriptor CY 2010 SI
----------------------------------------------------------------------------------------------------------------
J1260...................................... Injection, dolasetron mesylate, 10 mg.................. N
J1626...................................... Injection, granisetron hydrochloride, 100 mcg.......... N
J2405...................................... Injection, ondansetron hydrochloride, per 1 mg......... N
J2469...................................... Injection, palonosetron hcl, 25 mcg.................... K
Q0166...................................... Granisetron HCL, 1 mg, oral, FDA approved prescription N
antiemetic, for use as a complete therapeutic
substitute for an IV antiemetic at the time of
chemotherapy treatment, not to exceed a 24-hour dosage
regimen
Q0179...................................... Ondansetron HCL 8 mg, oral, FDA approved prescription N
antiemetic, for use as a complete therapeutic
substitute for an IV antiemetic at the time of
chemotherapy treatment, not to exceed a 48-hour dosage
regimen
Q0180...................................... Dolasetron mesylate, 100 mg, oral, FDA approved N
prescription antiemetic, for use as a complete
therapeutic substitute for an IV antiemetic at the
time of chemotherapy treatment, not to exceed a 24-
hour dosage regimen
----------------------------------------------------------------------------------------------------------------
Comment: One commenter suggested that CMS institute a packaging
threshold exemption for antineoplastic agents and other anticancer
therapeutic agents. The commenter believed that anticancer agents, as a
class, are not appropriate for packaging because of the toxicity, side
effects, interactions with other drugs, and level of patient
specificity associated with these therapies. The commenter requested
that CMS not apply the drug packaging threshold for anticancer agents
and any product that is typically used in chemotherapy supportive care
regimens. Instead, the commenter requested that CMS provide separate
payment for all of these products in CY 2009.
In addition, several commenters requested that CMS apply the same
principle to other groups of drugs in order to equalize payment
methodologies across drugs in the same clinical category. One commenter
suggested that CMS institute a similar policy for anticoagulant
therapies provided in the HOPD. The commenter noted that in the group
of anticoagulant therapies, the majority are packaged while one drug is
paid separately. The commenter was concerned that these different
payment methodologies provide hospitals an incentive to use the
separately payable drug, although the commenter noted that treatments
are not interchangeable and that benefits vary by patient.
Response: As we discussed in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66757) and the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68643), as we continue to explore the possibility
of additional encounter-based or episode-based payment in future years,
we may consider additional options for packaging drug payment in the
future. For example, a higher drug packaging threshold could eliminate
existing disparities in payment methodologies for other drug groups and
provide similar methods of payment across items in a group.
Nevertheless, as discussed in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68643), while we may be interested in alternative
threshold methodologies for future ratesetting purposes, we realize
that there are existing situations where drugs in a particular category
vary in their payment treatment under the OPPS, with some drugs
packaged and others separately paid.
We continue to believe the challenges associated with categorizing
drugs to assess them for differences in their OPPS payment
methodologies are significant, and we are not convinced that ensuring
the same payment treatment for all drugs in any particular drug
category is essential at this time. Therefore, we do not believe that
it would be appropriate at this time to take any additional steps to
ensure that all drugs in a specific category, including anticoagulants
and antineoplastic agents, are all separately paid (or, alternatively,
all packaged), as requested by some commenters.
While some commenters requested that we seek feedback from
interested stakeholders when the packaging threshold creates a payment
methodology disparity between drugs within a single therapeutic class,
we note that we provide an opportunity through the annual OPPS/ASC
rulemaking cycle for public comment on the proposed packaging status of
drugs and biologicals for the next calendar year. Further, we regularly
accept meeting requests from interested providers and stakeholders on a
variety of issues, and we address APC Panel recommendations in our
annual proposed and final rules. We have often received public comments
related to our proposed packaging status for particular drugs and
biologicals, and we expect to continue to receive public comments
regarding the proposed packaging status for drugs and biologicals in
the future. In this manner, we would address specific concerns about
the proposed packaging status for individual drugs and biologicals in
the future, including those within a single therapeutic class where
some drugs may be proposed to be packaged while others are proposed to
be separately payable. While we have not defined classes of drugs that
may or
[[Page 60489]]
may not be affected by the packaging threshold, we are accepting the
APC Panel recommendation to continue to seek feedback on the proposed
packaging status of all drugs under the OPPS through the annual
rulemaking process. However, implicit in the APC Panel's recommendation
is that we consider packaging all drugs within a therapeutic class and,
as described above, we have not defined classes of drugs for
consideration in the context of proposed changes to the annual drug
packaging threshold.
In summary, after consideration of the public comments we received,
we are finalizing our proposed CY 2010 treatment of 5-HT3 antiemetics
as follows. We are finalizing, without modification, our proposal to
apply the drug packaging methodology to all 5-HT3 antiemetics for CY
2010. In addition, we are not providing any exceptions to the standard
drug packaging methodology for any class of drugs, including
anticoagulants and anticancer therapies, for CY 2010. Finally, we are
accepting the APC Panel recommendation to continue to consider feedback
from providers, the APC Panel, and stakeholders when finalizing the
packaging status of drugs and biologicals.
Having specified our standard drug packaging methodology for all
drugs and biologicals makes no exceptions for different drugs and
biologicals in the same therapeutic class for CY 2010, we must adopt
final packaging determinations for CY 2010 for each drug and biological
for this final rule with comment period. Our policy during previous
cycles of the OPPS has been to use updated ASP and claims data to make
final determinations of the packaging status of HCPCS codes for drugs,
nonimplantable biologicals, and therapeutic radiopharmaceuticals for
the final rule with comment period. We note that it is also our policy
to make an annual packaging determination for a HCPCS code only when we
develop the OPPS/ASC final rule for the update year. Only HCPCS codes
that are identified as separately payable in the final rule with
comment period are subject to quarterly updates. For our calculation of
per day costs of HCPCS codes for drugs and nonimplantable biologicals
in the CY 2010 OPPS/ASC final rule with comment period, we proposed to
use ASP data from the first quarter of CY 2009, which is the basis for
calculating payment rates for drugs and biologicals in the physician's
office setting using the ASP methodology, effective July 1, 2009, along
with updated hospital claims data from CY 2008. We note that we also
used these data for budget neutrality estimates and impact analyses for
this CY 2010 OPPS/ASC final rule with comment period. Payment rates for
HCPCS codes for separately payable drugs and nonimplantable biologicals
included in Addenda A and B to this final rule with comment period are
based on ASP data from the second quarter of CY 2009, which are the
basis for calculating payment rates for drugs and biologicals in the
physician's office setting using the ASP methodology, effective October
1, 2009. These rates would then be updated in the January 2010 OPPS
update, based on the most recent ASP data to be used for physician's
office and OPPS payment as of January 1, 2010. For items that do not
currently have an ASP-based payment rate, we recalculated their mean
unit cost from all of the CY 2008 claims data and updated cost report
information available for the CY 2010 final rule with comment period to
determine their final per day cost.
Consequently, the packaging status of some HCPCS codes for drugs,
nonimplantable biologicals, and therapeutic radiopharmaceuticals in
this CY 2010 OPPS/ASC final rule with comment period using the updated
data may be different from the same drug HCPCS code's packaging status
determined based on the data used for the proposed rule. Under such
circumstances, in the CY 2010 OPPS/ASC proposed rule (74 FR 35320), we
proposed to continue the established policies initially adopted for the
CY 2005 OPPS (69 FR 65780) in order to more equitably pay for those
drugs whose median cost fluctuates relative to the CY 2010 OPPS drug
packaging threshold and the drug's payment status (packaged or
separately payable) in CY 2009. Specifically, we proposed for CY 2010
to apply the following policies to these HCPCS codes for drugs,
nonimplantable biologicals, and therapeutic radiopharmaceuticals whose
relationship to the $65 drug packaging threshold changes based on the
final updated data:
HCPCS codes for drugs and nonimplantable biologicals that
were paid separately in CY 2009 and that were proposed for separate
payment in CY 2010, and then have per day costs equal to or less than
$65, based on the updated ASPs and hospital claims data used for the CY
2010 final rule with comment period, would continue to receive separate
payment in CY 2010.
HCPCS codes for drugs and nonimplantable biologicals that
were packaged in CY 2009 and that were proposed for separate payment in
CY 2010, and then have per day costs equal to or less than $65, based
on the updated ASPs and hospital claims data used for the CY 2010 final
rule with comment period, would remain packaged in CY 2010.
HCPCS codes for drugs and nonimplantable biologicals for
which we proposed packaged payment in CY 2010 but then have per day
costs greater than $65, based on the updated ASPs and hospital claims
data used for the CY 2010 final rule with comment period, would receive
separate payment in CY 2010.
We did not receive any public comments on our proposal to apply the
established policies initially adopted for the CY 2005 OPPS (69 FR
65780) in order to more equitably pay for those drugs whose median cost
fluctuates relative to the CY 2010 OPPS drug packaging threshold and
the drug's payment status (packaged or separately payable) in CY 2009.
Therefore, we are finalizing our proposal, without modification, for CY
2010.
We note that HCPCS codes J1652 (Injection, fondaparinux sodium, 0.5
mg), J2430(Injection, pamidronate disodium, per 30 mg); J7191 (Factor
viii (antihemophilic factor (porcine)), per i.u.), J9165 (Injection,
diethylstilbestrol diphosphate, 250 mg), and J9209 (Injection, mesna,
200 mg) were all paid separately in CY 2009 and were proposed for
separate payment in CY 2010 but had final per day costs of less than
the $65 drug packaging threshold, based on the updated ASPs and the CY
2008 hospital claims data available for this CY 2010 final rule with
comment period. Therefore, HCPCS codes J1652, J2430, J7191, J9165 and
J9209 will continue to be paid separately in CY 2010 according to the
established methodology set forth above.
In addition, we proposed to provide separate payment for HCPCS
codes J2670 (Injection, tolazoline HCL, up to 25 mg) and J3320
(Injection, spectinomycin dihydrochloride, up to 2 gm) in CY 2010,
although their payment was packaged in CY 2009. Using updated ASPs and
the CY 2008 hospital claims data available for this final rule with
comment period, HCPCS codes J2670 and J3320 now have per day costs less
than $65. In accordance with our established policy for such cases, for
CY 2010 we will package payment for HCPCS codes J2670 and J3320.
Finally, we proposed to package HCPCS code Q2004 (Irrigation
solution for treatment of bladder calculi, for example renacidin, per
500 ml) for CY 2010. Using updated ASPs and the CY 2008 hospital claims
data available for this final rule with comment period, HCPCS code
Q2004 now has a per day
[[Page 60490]]
cost greater than $65. In accordance with our established policy for
such cases, for CY 2010 we will pay for HCPCS code Q2004 separately.
c. Packaging Determination for HCPCS Codes That Describe the Same Drug
or Biological But Different Dosages
In the CY 2008 OPPS/ASC final rule with comment period (72 FR
66776), we began recognizing, for OPPS payment purposes, multiple HCPCS
codes reporting different dosages for the same covered Part B drugs or
biologicals in order to reduce hospitals' administrative burden by
permitting them to report all HCPCS codes for drugs and biologicals. In
general, prior to CY 2008, the OPPS recognized for payment only the
HCPCS code that described the lowest dosage of a drug or biological. We
extended this recognition to multiple HCPCS codes for several other
drugs under the CY 2009 OPPS (73 FR 68665). During CYs 2008 and 2009,
we applied a policy that assigned the status indicator of the
previously recognized HCPCS code to the associated newly recognized
code(s), reflecting the new code(s)' packaged or separately payable
status. In the CY 2008 OPPS/ASC final rule with comment period (72 FR
66775), we explained that once claims data were available for these
previously unrecognized HCPCS codes, we would determine the packaging
status and resulting status indicator for each HCPCS code according to
the general, established HCPCS code-specific methodology for
determining a code's packaging status for a given update year. However,
we also stated that we planned to closely follow our claims data to
ensure that our annual packaging determinations for the different HCPCS
codes describing the same drug or biological did not create
inappropriate payment incentives for hospitals to report certain HCPCS
codes instead of others.
CY 2008 is the first year of claims data for the HCPCS codes
describing different dosages of the same drug or biological that were
newly recognized in CY 2008. Applying our standard HCPCS code-specific
packaging determination methodology as described in the CY 2010 OPPS/
ASC proposed rule (74 FR 35321 through 35323), we found that our CY
2008 claims data would result in several different packaging
determinations for different codes describing the same drug or
biological. Furthermore, our claims data included few units and days
for a number of these newly recognized HCPCS codes, resulting in our
concern that these data reflected claims from only a small number of
hospitals, even though the drug or biological itself may be reported by
many other hospitals under the most common HCPCS code. We were
concerned about proposing different packaging determinations for
multiple HCPCS codes for the same drug or biological driven by
different costs associated with the varying dosages of the same drug or
biological and a small number of claims for the less common dosages
that are not representative of the costs of all hospitals billing for
the drug or biological. This is especially true when the general policy
of the current CMS HCPCS Workgroup is to establish a single HCPCS code
for a drug or biological, with a dosage that would allow accurate
reporting of a patient dose for all anticipated clinical uses of the
drug or biological.
Based on these findings from our first available claims data for
the newly recognized HCPCS codes, in the CY 2010 OPPS/ASC proposed rule
(74 FR 35321 through 35323) we explained that we believe that adopting
our standard HCPCS code-specific packaging determinations for these
codes could lead to payment incentives for hospitals to report certain
HCPCS codes instead of others, particularly because we do not currently
require hospitals to report all drug and biological HCPCS codes under
the OPPS in consideration of our previous policy that generally
recognized only the lowest dosage HCPCS code for a drug or biological
for OPPS payment. Therefore, for CY 2010 we proposed to make packaging
determinations on a drug-specific basis, rather than a HCPCS code-
specific basis, for those HCPCS codes that describe the same drug or
biological but different dosages. To identify all HCPCS codes for drugs
and biologicals to which this proposed policy would apply, we first
included the drugs and biologicals with multiple HCPCS codes that we
newly recognized for payment in CY 2008 and CY 2009. We then reviewed
all of the remaining drug and biological HCPCS codes to identify other
drugs and biologicals for which longstanding OPPS policy recognized for
payment multiple HCPCS codes for different dosages of the same drug or
biological, so that our CY 2010 proposal would apply to the packaging
determinations for these drugs and biologicals and their associated
HCPCS codes. All of the drug and biological HCPCS codes that we
proposed to be subject to this drug-specific packaging determination
methodology were listed in Table 24 of the proposed rule (74 FR 35321
through 35323).
In order to propose a packaging determination that is consistent
across all HCPCS codes that describe different dosages of the same drug
or biological, we aggregated both our CY 2008 claims data and our
pricing information at ASP+4 percent across all of the HCPCS codes that
describe each distinct drug or biological in order to determine the
mean units per day of the drug or biological in terms of the HCPCS code
with the lowest dosage descriptor. We then multiplied the weighted
average ASP+4 percent payment amount across all dosage levels of a
specific drug or biological by the estimated units per day for all
HCPCS codes that describe each drug or biological from our claims data
to determine the estimated per day cost of each drug or biological at
less than or equal to $65 (whereupon all HCPCS codes for the same drug
or biological would be packaged) or greater than $65 (whereupon all
HCPCS codes for the same drug or biological would be separately
payable). The proposed packaging status of each drug and biological
HCPCS code to which this methodology would apply was displayed in Table
24 of the proposed rule (74 FR 35321 through 35323).
Comment: Several commenters supported the proposal to make
packaging determinations on a drug-specific basis rather than a HCPCS
code-specific basis for drugs with multiple HCPCS codes describing
different dosages.
Response: We continue to believe that adopting the standard HCPCS
code-specific packaging determinations for these codes could lead to
payment incentives for hospitals to report certain HCPCS codes for
drugs instead of others. Making packaging determinations on a drug-
specific basis eliminates these incentives and allows hospitals
flexibility in choosing to report all HCPCS codes for different dosages
of the same drug or only the lowest dosage HCPCS code.
Therefore, after consideration of the public comments we received,
we are finalizing our CY 2010 proposal, without modification, to make a
single packaging determination for a drug, rather than an individual
HCPCS code, when a drug has multiple HCPCS codes describing different
dosages. For CY 2010, we have aggregated both our CY 2008 claims data
and our pricing information at ASP+4 percent across all of the HCPCS
codes that describe each distinct drug or biological in order to
determine the mean units per day of the drug or biological in terms of
the HCPCS code with the lowest dosage descriptor. We then multiplied
the weighted average ASP+4 percent payment amount across all dosage
levels of a specific drug or biological by the estimated units per day
for all HCPCS codes that
[[Page 60491]]
describe each drug or biological from our claims data to determine the
estimated per day cost of each drug or biological at less than or equal
to $65 (whereupon all HCPCS codes for the same drug or biological would
be packaged) or greater than $65 (whereupon all HCPCS codes for the
same drug or biological would be separately payable). The final CY 2010
packaging status of each drug and biological HCPCS code to which this
methodology applies is displayed in Table 35 below.
We note that new HCPCS code Q2024 (Injection, bevacizumab, 0.25 mg)
was implemented effective in October 2009 and represents a different
dosage descriptor for the same drug described by HCPCS code J9035
(injection, bevacizumab, 10 mg). Further, HCPCS code Q2024 has been
replaced with HCPCS code C9257 (Injection, bevacizumab, 0.25 mg),
effective January 1, 2010. In accordance with our CY 2010 policy to
make a single packaging determination for a single drug, we are
applying the methodology described above to bevacizumab and are
assigning the applicable bevacizumab HCPCS codes the same packaging
status for CY 2010. HCPCS codes C9257 and J9035 are included in Table
35 below.
In addition, HCPCS codes J0530 (Injection, penicillin g benzathine
and penicillin g procaine, up to 600,000 units); J0540 (Injection,
penicillin g benzathine and penicillin g procaine, up to 1,200,000
units); and J0550 (Injection, penicillin g benzathine and penicillin g
procaine, up to 2,400,000 units), have been replaced with HCPCS code
J0559 (injection, penicillin G benzathine and penicillin G procaine,
2500 units) for CY 2010. While we had proposed to treat HCPCS codes
J0530, J0540 and J0550 as drugs with multiple HCPCS codes and multiple
dosage descriptors via the methodology finalized above, this is no
longer necessary as there is a single code for this product in CY 2010.
In order to make a packaging determination for new HCPCS code J0559, we
used updated hospital claims data from HCPCS codes J0530, J0540 and
J0550 and ASP pricing information to determine the estimated per day
cost for the drug as described above. Because the estimated per day
cost was less than our CY 2010 packaging threshold of $65, we assigned
status indicator ``N'' to HCPCS code J0559 for CY 2010. We note that
HCPCS codes J0530, J0540, and J0550 are not displayed in Table 35 below
because there is only a single HCPCS code for the drug in CY 2010.
Finally, HCPCS codes J7502 (Cyclosporine, oral, 100 mg) and J7515
(Cyclosporine, oral, 25 mg) were proposed to be packaged in CY 2010
based on the methodology discussed above for drugs with multiple HCPCS
codes with different dosage descriptors. As is our standard
methodology, we use updated final rule data and updated ASP rates for
purposes of this final rule with comment period to calculate per day
estimates for final packaging determinations. Using this updated data
and the multiple HCPCS code methodology discussed above, the per day
cost of the drug described by HCPCS codes J7502 and J7515 would exceed
the packaging threshold for CY 2010. Therefore, in accordance with the
policy that was finalized in section V.B.2.b. above for HCPCS codes for
drugs and nonimplantable biologicals for which we proposed packaged
payment in CY 2010 but then have per day costs greater than $65, based
on the updated ASPs and hospital claims data available for the CY 2010
final rule with comment period, HCPCS codes J7502 and J7515 are
separately payable in CY 2010.
BILLING CODE 4120-01-P
[[Page 60492]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.034
[[Page 60493]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.035
[[Page 60494]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.036
[[Page 60495]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.037
BILLING CODE 4120-01-C
d. Packaging of Payment for Diagnostic Radiopharmaceuticals, Contrast
Agents, and Implantable Biologicals (``Policy-Packaged'' Drugs and
Devices)
Prior to CY 2008, the methodology of calculating a product's
estimated per day cost and comparing it to the annual OPPS drug
packaging threshold was used to determine the packaging status of
drugs, biologicals, and radiopharmaceuticals under the OPPS (except for
our CYs 2005 through 2009 exemption for 5-HT3 antiemetics). However, as
established in the CY 2008 OPPS/ASC final rule with comment period (72
FR 66766 through 66768), we began packaging payment for all diagnostic
radiopharmaceuticals and contrast agents into the payment for the
associated procedure, regardless of their per day costs. In addition,
in CY 2009 we adopted a policy that packaged the payment for nonpass-
through implantable biologicals into payment for the associated
surgical procedure on the claim (73 FR 68633 through 68636). We refer
to diagnostic radiopharmaceuticals and contrast agents collectively as
``policy-packaged'' drugs and to implantable biologicals as devices
because we proposed to treat
[[Page 60496]]
implantable biologicals as devices for all OPPS payment purposes
beginning in CY 2010.
According to our regulations at Sec. 419.2(b), as a prospective
payment system, the OPPS establishes a national payment rate that
includes operating and capital-related costs that are directly related
and integral to performing a procedure or furnishing a service on an
outpatient basis including, but not limited to, implantable
prosthetics, implantable durable medical equipment, and medical and
surgical supplies. Packaging costs into a single aggregate payment for
a service, encounter, or episode-of-care is a fundamental principle
that distinguishes a prospective payment system from a fee schedule. In
general, packaging the costs of items and services into the payment for
the primary procedure or service with which they are associated
encourages hospital efficiencies and also enables hospitals to manage
their resources with maximum flexibility.
Prior to CY 2008, we noted that the proportion of drugs,
biologicals, and radiopharmaceuticals that were separately paid under
the OPPS had increased in recent years, a pattern that we also observed
for procedural services under the OPPS. Our final CY 2008 policy that
packaged payment for all nonpass-through diagnostic
radiopharmaceuticals and contrast agents, regardless of their per day
costs, contributed significantly to expanding the size of the OPPS
payment bundles and is consistent with the principles of a prospective
payment system.
We believe that packaging the payment for diagnostic
radiopharmaceuticals and contrast agents into the payment for their
associated procedures continues to be appropriate for CY 2010. As
discussed in more detail in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68645 through 68649), we presented several
reasons supporting our initial policy to package payment of diagnostic
radiopharmaceuticals and contrast agents into their associated
procedures on a claim. Specifically, we stated that we believed
packaging was appropriate because: (1) The statutory requirement that
we must pay separately for drugs and biologicals for which the per day
cost exceeds $50 under section 1833(t)(16)(B) of the Act has expired;
(2) we believe that diagnostic radiopharmaceuticals and contrast agents
function effectively as supplies that enable the provision of an
independent service; and (3) section 1833(t)(14)(A)(iii) of the Act
requires that payment for specified covered outpatient drugs (SCODs) be
set prospectively based on a measure of average hospital acquisition
cost. For these reasons, we believed that our proposal to continue to
treat diagnostic radiopharmaceuticals and contrast agents differently
from other SCODs was appropriate for CY 2010. Therefore, in the CY 2010
OPPS/ASC proposed rule (74 FR 35323), we proposed to continue packaging
payment for all contrast agents and diagnostic radiopharmaceuticals,
collectively referred to as ``policy-packaged'' drugs, regardless of
their per day costs, for CY 2010.
For more information on how we proposed to set CY 2010 payment
rates for nuclear medicine procedures in which diagnostic
radiopharmaceuticals are used and echocardiography services provided
with and without contrast agents, we refer readers to sections
II.A.2.d.(5) (74 FR 35276) and (4) (74 FR 35269), respectively, of the
proposed rule and this final rule with comment period.
In CY 2009 (73 FR 68634), we began packaging the payment for all
nonpass-through implantable biologicals into payment for the associated
surgical procedure. Because implantable biologicals may sometimes
substitute for nonbiological devices, we noted that if we were to
provide separate payment for implantable biologicals without pass-
through status, we would potentially be providing duplicate device
payment, both through the packaged nonbiological device cost already
included in the surgical procedure's payment and separate biological
payment. We concluded that we saw no basis for treating implantable
biological and nonbiological devices without pass-through status
differently for OPPS payment purposes because both are integral to and
supportive of the separately paid surgical procedures in which either
may be used. Therefore, in CY 2009, we adopted a final policy to
package payment for all nonpass-through implantable biologicals that
are surgically inserted or implanted (through a surgical incision or a
natural orifice), like our longstanding policy that packages payment
for all implantable nonbiological devices without pass-through status.
For CY 2010, we continue to believe that the policy to package
payment for implantable devices that are integral to the performance of
separately paid procedures should also apply to payment for all
implantable biologicals without pass-through status, when those
biologicals function as implantable devices. Therefore, in the CY 2010
OPPS/ASC proposed rule (74 FR 35323), we proposed to continue to
package payment for nonpass-through implantable biologicals that are
surgically inserted or implanted (through a surgical incision or a
natural orifice) into the body, referred to as devices, in CY 2010. In
accordance with this proposal, two of the products with expiring pass-
through status for CY 2010 are biologicals that are solely surgically
implanted according to their FDA-approved indications. These products
are described by HCPCS codes C9354 (Acellular pericardial tissue matrix
of non-human origin (Veritas), per square centimeter) and C9355
(Collagen nerve cuff (NeuroMatrix), per 0.5 centimeter length). Like
the three implantable biologicals with expiring pass-through status in
CY 2009 that were discussed in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68633 through 68634), we believe that the two
biologicals specified above with expiring pass-through status for CY
2010 differ from other biologicals paid under the OPPS in that they
specifically function as surgically implanted devices. As a result of
the proposed CY 2010 packaged payment methodology for all nonpass-
through implantable biologicals, we proposed to package payment for
HCPCS codes C9354 and C9355 and assign them status indicator ``N'' for
CY 2010. In addition, any new biologicals without pass-through status
that are surgically inserted or implanted (through a surgical incision
or a natural orifice) would be packaged in CY 2010. Moreover, for
nonpass-through biologicals that may sometimes be used as implantable
devices, we continue to instruct hospitals to not bill separately for
the HCPCS codes for the products when used as implantable devices. This
reporting ensures that the costs of these products that may be, but are
not always, used as implanted biologicals are appropriately packaged
into payment for the associated implantation procedures.
Comment: Several commenters objected to CMS' proposal to package
payment for all diagnostic radiopharmaceuticals and contrast agents in
CY 2010. A number of commenters stated that diagnostic
radiopharmaceuticals and contrast agents with per day costs over the
proposed OPPS drug packaging threshold are defined as SCODs and,
therefore, should be assigned separate APC payments. In particular, the
commenters questioned CMS' authority to classify groups of drugs, such
as diagnostic radiopharmaceuticals and contrast agents, and implement
packaging and payment policies that do
[[Page 60497]]
not reflect their status as SCODs. Some commenters stressed that
hospitals consider radiopharmaceuticals to be drugs, rather than
supplies, and that these products are not interchangeable for patients
receiving specific nuclear medicine scans. The commenters recommended
that diagnostic radiopharmaceuticals should be subject to the same per
day cost drug packaging threshold that applies to other drugs, in order
to determine whether their payment would be packaged or made
separately.
In addition, the commenters objected to the proposal to package
payment for diagnostic radiopharmaceuticals and contrast agents
because, as SCODs, the commenters believed these products were required
by statute to be paid at average acquisition cost. The commenters
explained that, when several different diagnostic radiopharmaceuticals
or contrast agents may be used for a particular procedure, the costs of
those diagnostic radiopharmaceuticals or contrast agents are averaged
together and added to the cost for the procedure in order to determine
the payment rate for the associated procedural APC. Therefore, the
commenters argued that the amount added to the procedure cost through
packaging, representing the cost of the diagnostic radiopharmaceutical
or contrast agent, did not reflect the average acquisition cost of any
one particular item but, rather, reflected the average cost of whatever
items may have been used with that particular procedure.
Finally, one commenter requested clarification on when CMS treats
an implantable device as a biological for payment purposes.
Response: As discussed in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66766), the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68645) and the CY 2010 OPPS/ASC proposed rule (74
FR 35323), we continue to believe diagnostic radiopharmaceuticals and
contrast agents are different from other drugs and biologicals for
several reasons. We note that the statutorily required OPPS drug
packaging threshold has expired, and we continue to believe that
diagnostic radiopharmaceuticals and contrast agents are always
ancillary and supportive to an independent service, rather than serving
themselves as the therapeutic modality. We packaged their payment in
CYs 2008 and 2009 as ancillary and supportive services in order to
provide incentives for greater efficiency and to provide hospitals with
additional flexibility in managing their resources. In order for
payment to be packaged, it is not necessary that all products be
interchangeable in every case, and we recognize that in some cases
hospitals may utilize higher cost products and in some cases lower cost
products, taking into consideration the clinical needs of the patient
and efficiency incentives. While we recognize this variability from
case to case, on average under a prospective payment system we expect
payment to pay appropriately for the services furnished. In the past,
we have classified different groups of drugs for specific payment
purposes, as evidenced by our CY 2005 through CY 2009 policy regarding
5-HT3 anti-emetics and their exemption from the drug packaging
threshold. We note that we treat diagnostic radiopharmaceuticals and
contrast agents as ``policy-packaged'' drugs because our policy is to
package payment for all of the products in the category.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR
68634), we also began packaging the payment for all nonpass-through
implantable biologicals into payment for the associated surgical
procedure because we consider these products to always be ancillary and
supportive to independent services, just like implantable nonbiological
devices that are always packaged. Therefore, we currently package
payment for nonpass-through implantable biologicals, also known as
devices, that are surgically inserted or implanted (through a surgical
incision or a natural orifice) into the body. As we stated in the CY
2010 OPPS/ASC proposed rule (74 FR 35324), we continue to believe that
payment should be packaged for nonpass-through implantable biologicals
for CY 2010.
Although our final CY 2009 policy that we are continuing for CY
2010, as discussed below, packages payment for all diagnostic
radiopharmaceuticals, contrast agents, and nonpass-through implantable
biologicals into the payment for their associated procedures, we are
continuing to provide payment for these items in CY 2010 based on a
proxy for average acquisition cost just as we did in CY 2009. We
continue to believe that the line-item estimated cost for a diagnostic
radiopharmaceutical, contrast agent, or nonpass-through implantable
biological in our claims data is a reasonable approximation of average
acquisition and preparation and handling costs for diagnostic
radiopharmaceuticals, contrast agents, and nonpass-through implantable
biologicals, respectively. As we discussed in the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68645), we believe that hospitals
have adapted to the CY 2006 coding changes for radiopharmaceuticals and
responded to our instructions to include charges for
radiopharmaceutical handling in their charges for the
radiopharmaceutical products. Further, because the standard OPPS
packaging methodology packages the total estimated cost of each
radiopharmaceutical, contrast agent, or nonimplantable biological on
each claim (including the full range of costs observed on the claims)
with the cost of associated procedures for ratesetting, this packaging
approach is consistent with considering the average cost for
radiopharmaceuticals, contrast agents, or nonpass-through implantable
biologicals, rather than the median cost. In addition, as we noted in
the CY 2009 OPPS/ASC final rule with comment period (73 FR 68646),
these drugs, biologicals, or radiopharmaceuticals for which we have not
established a separate APC and, therefore, for which payment would be
packaged rather than separately provided under the OPPS, could be
considered to not be SCODs. Similarly, drugs and biologicals with per
day costs of less than $65 in CY 2010 that are packaged and for which a
separate APC has not been established also would not be SCODs. This
reading is consistent with our final payment policy whereby we package
payment for diagnostic radiopharmaceuticals, contrast agents, and
nonpass-through implantable biologicals and provide payment for these
products through payment for their associated procedures.
Comment: Several commenters disagreed with the proposal to
distinguish between diagnostic and therapeutic radiopharmaceuticals for
payment purposes under the OPPS. The commenters noted that CMS'
identification of HCPCS codes A9542 (Indium In-111 ibritumomabituxetan,
diagnostic, per study dose, up to 5 millicuries) and A9544 (Iodine I-
131 tositumomab, diagnostic, per study dose) as diagnostic
radiopharmaceuticals was inappropriate because these
radiopharmaceuticals function as dosimetric radiopharmaceuticals, and
they both have higher than average costs associated with their
acquisition and significant compounding costs in comparison with other
nuclear medicine imaging agents. A few commenters explained that these
radiopharmaceutical products are used as part of a therapeutic regimen
and, therefore, should be considered therapeutic for OPPS payment
purposes.
[[Page 60498]]
Response: As discussed above, and in the CY 2008 OPPS/ASC final
rule with comment period (72 FR 66641), the CY 2009 OPPS/ASC final rule
with comment period (73 FR 68645) and the CY 2010 OPPS/ASC proposed
rule (74 FR 35323), we classified each radiopharmaceutical into one of
two groups according to whether its long descriptor contained the term
``diagnostic'' or ``therapeutic.'' HCPCS codes A9542 and A9544 both
contain the term ``diagnostic'' in their long code descriptors.
Therefore, according to our established methodology, we continue to
classify them as diagnostic for the purposes of CY 2010 OPPS payment.
While we understand that these items are provided in conjunction with
additional supplies, imaging tests, and therapeutic
radiopharmaceuticals for patients already diagnosed with cancer, we
continue to believe that the purpose of administering the products
described by HCPCS codes A9542 and A9544 is diagnostic in nature. As we
first stated in the CY 2008 OPPS/ASC final rule with comment period (72
FR 66641), we continue to believe that HCPCS codes A9542 and A9544 are
diagnostic radiopharmaceuticals. While they are not used to diagnose
disease, they are used to determine whether future therapeutic services
would be beneficial to the patient and to determine how to proceed with
therapy. While a group of associated services may be considered a
therapeutic regimen by some commenters, HCPCS codes A9542 and A9544 are
provided in conjunction with a series of nuclear medicine imaging
scans. Many nuclear medicine studies using diagnostic
radiopharmaceuticals are provided to patients who already have an
established diagnosis. We continue to consider HCPCS codes A9542 and
A9544 to be diagnostic because these items are provided for the purpose
of a diagnostic imaging procedure and are used to identify the proper
dose of the therapeutic agent to be provided at a later time.
Comment: Some commenters recommended using the ASP methodology to
package payment for nonpass-through diagnostic radiopharmaceuticals,
noting that it would be inconsistent for CMS to provide payment for
diagnostic radiopharmaceuticals that have pass-through status based on
the ASP methodology, and then, after the diagnostic
radiopharmaceutical's pass-through payment status expires, package the
costs included in historical hospital claims data, rather than using
the ASP methodology to pay for the product. The commenters believed
that the ASP methodology would be more reflective of actual diagnostic
radiopharmaceutical costs and would not be subject to the billing
inconsistencies that are present in hospital claims data. Therefore,
the commenters concluded that it would be illogical to transition from
an accurate methodology to estimate hospital costs (such as the ASP
methodology) to a less accurate methodology (based on hospital claims
data) once a product is packaged after its pass-through payment
expires.
Response: While we understand the commenters' request for the
continued use of ASP data for purposes of packaging costs after a
diagnostic radiopharmaceutical's pass-through payment period has ended,
based on their belief that ASP data are more accurate than hospital
claims data, we continue to believe that hospitals have the ability to
identify and set charges for any new diagnostic radiopharmaceutical
product accurately during its 2 to 3 year pass-through time period
while the product has the potential to be paid based on ASP. Packaging
hospital costs based on hospital claims data is how the costs of all
packaged items are factored into payment rates for associated
procedures under the OPPS. We believe that the costs reported on
claims, as determined by hospitals, are the most appropriate
representation of the costs of diagnostic radiopharmaceuticals that
should be packaged into payment for the associated nuclear medicine
procedures.
We recognize that radiopharmaceuticals are specialized products
that have unique costs associated with them. However, we believe that
the costs are reflected in the charges that hospitals set for them and
in the Medicare cost report where the full costs and charges associated
with the services are reported. Therefore, the packaged costs of
diagnostic radiopharmaceuticals are calculated like any other OPPS
costs and packaged into the cost of the nuclear medicine service to
which they are ancillary and supportive. This methodology is the basis
for the payment of nuclear medicine procedures in the same way that
other packaged costs contribute to the payment rates for the services
to which they are an integral part.
Comment: Some commenters believed that packaging payment for
diagnostic radiopharmaceuticals and nonpass-through implantable
biologicals would undermine the clinical and resource homogeneity in
the various procedural APCs, resulting in 2 times violations.
Response: As we stated in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68647), we agree that packaging the costs of
ancillary and supportive services into the cost of an independent
service can change the median cost for that service and could result in
2 times violations. However, we disagree that we should refrain from
packaging payment for ancillary and supportive items into the payment
for the service in which they are used in order to prevent the
occurrence of 2 times violations. Instead, we believe that we should
reconfigure APCs when necessary to resolve 2 times violations where
they occur. As we discussed in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68647), because we have traditionally paid for a
service package under the OPPS as represented by a HCPCS code for the
major procedure that is assigned to an APC group for payment, we assess
the applicability of the 2 times rule to services at the HCPCS code
level, not at a more specific level based on the individual diagnostic
radiopharmaceuticals or nonpass-through implantable biologicals that
may be utilized in a service reported with a single HCPCS code.
Furthermore, if the use of a very expensive diagnostic
radiopharmaceutical in a clinical scenario causes a specific procedure
to be much more expensive for the hospital than the APC payment, we
consider such a case to be the natural consequence of a prospective
payment system that anticipates that some cases will be more costly and
others less costly than the procedure payment. This same logic would
apply to situations in which a nonpass-through implantable biological
is implanted in a surgical procedure and results in an increase in a
procedure's cost to the hospital for an individual case. In addition,
very high cost cases could be eligible for outlier payment. As we note
elsewhere in this final rule with comment period, decisions about
packaging and bundling payment involve a balance between ensuring some
separate payment for individual services and establishing incentives
for efficiency through larger units of payment. In the case of
diagnostic radiopharmaceuticals and nonpass-through implantable
biologicals, these products are part of the OPPS payment package for
the procedures in which they are used. We refer readers to section
II.A.d.(5) of this final rule with comment period for a discussion of
payment for nuclear medicine procedures.
Comment: One commenter recommended that CMS provide separate
payment for all diagnostic radiopharmaceuticals with a median per
[[Page 60499]]
day cost greater than $200. The commenter believes that this
recommendation is most consistent with the APC Panel's recommendation
to CMS at the September 2007 APC Advisory Panel meeting.
Response: At the September 2007 APC Panel meeting, the APC Panel
recommended that CMS package radiopharmaceuticals with a median per day
cost of less than $200 but pay separately for radiopharmaceuticals with
a per day cost of $200 or more. In the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66638), we did not accept the APC Panel's
recommendation, citing an inability to determine an empirical basis for
paying separately for radiopharmaceuticals with a per day cost in
excess of $200. Instead, as proposed, for CY 2008 we finalized the
packaging of payment for all diagnostic radiopharmaceuticals. We
continue to believe that diagnostic radiopharmaceuticals are ancillary
and supportive to the nuclear medicine procedures in which they are
used and that their costs should be packaged into the primary
procedures with which they are associated. We do not believe it would
be appropriate to set a cost threshold for packaging diagnostic
radiopharmaceuticals because, regardless of their per day cost, they
are always supportive of an independent procedure that is the basis for
administration of the diagnostic radiopharmaceutical.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposals, without modification, to continue to
package payment for all nonpass-through diagnostic
radiopharmaceuticals, contrast agents, and implantable biologicals that
are surgically inserted or implanted into the body, regardless of their
per day costs. Given the inherent function of contrast agents and
diagnostic radiopharmaceuticals as ancillary and supportive to the
performance of an independent procedure and the similar functions of
implantable biological and nonbiological devices, we continue to view
the packaging of payment for contrast agents, diagnostic
radiopharmaceuticals, and implantable biologicals as a logical
expansion of packaging payment for drugs and biologicals. In addition,
as we initially established in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66768), we are finalizing our proposal to
continue to identify diagnostic radiopharmaceuticals specifically as
those Level II HCPCS codes that include the term ``diagnostic'' along
with a radiopharmaceutical in their long code descriptors, and
therapeutic radiopharmaceuticals as those Level II HCPCS codes that
include the terms ``therapeutic'' along with a radiopharmaceutical in
their long code descriptors. For more information on how we set CY 2010
payment rates for nuclear medicine procedures in which diagnostic
radiopharmaceuticals are used and echocardiography services provided
with and without contrast agents, we refer readers to section II.A.2.d
(5) and (4), respectively, of this final rule with comment period.
3. Payment for Drugs and Biologicals Without Pass-Through Status That
Are Not Packaged
a. Payment for Specified Covered Outpatient Drugs (SCODs) and Other
Separately Payable and Packaged Drugs and Biologicals
Section 1833(t)(14) of the Act defines certain separately payable
radiopharmaceuticals, drugs, and biologicals and mandates specific
payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a
``specified covered outpatient drug'' is a covered outpatient drug, as
defined in section 1927(k)(2) of the Act, for which a separate APC has
been established and that either is a radiopharmaceutical agent or is a
drug or biological for which payment was made on a pass-through basis
on or before December 31, 2002.
Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and
biologicals are designated as exceptions and are not included in the
definition of ``specified covered outpatient drugs,'' known as SCODs.
These exceptions are--
A drug or biological for which payment is first made on or
after January 1, 2003, under the transitional pass-through payment
provision in section 1833(t)(6) of the Act.
A drug or biological for which a temporary HCPCS code has
not been assigned.
During CYs 2004 and 2005, an orphan drug (as designated by
the Secretary).
Section 1833(t)(14)(A)(iii) of the Act requires that payment for
SCODs in CY 2006 and subsequent years be equal to the average
acquisition cost for the drug for that year as determined by the
Secretary, subject to any adjustment for overhead costs and taking into
account the hospital acquisition cost survey data collected by the
Government Accountability Office (GAO) in CYs 2004 and 2005. If
hospital acquisition cost data are not available, the law requires that
payment be equal to payment rates established under the methodology
described in section 1842(o), section 1847A, or section 1847B of the
Act, as calculated and adjusted by the Secretary as necessary.
Section 1833(t)(14)(E) of the Act provides for an adjustment in
OPPS payment rates for overhead and related expenses, such as pharmacy
services and handling costs. Section 1833(t)(14)(E)(i) of the Act
required MedPAC to study pharmacy overhead and to make recommendations
to the Secretary regarding whether, and if so how, a payment adjustment
should be made to compensate hospitals for them. Section
1833(t)(14)(E)(ii) of the Act authorizes the Secretary to adjust the
weights for ambulatory procedure classifications for SCODs to take into
account the findings of the MedPAC study.
In the CY 2006 OPPS proposed rule (70 FR 42728), we discussed the
June 2005 report by MedPAC regarding pharmacy overhead costs in HOPDs
and summarized the findings of that study:
Handling costs for drugs, biologicals, and
radiopharmaceuticals administered in the HOPD are not insignificant;
Little information is available about the magnitude of
pharmacy overhead costs;
Hospitals set charges for drugs, biologicals, and
radiopharmaceuticals at levels that reflect their respective handling
costs; and
Hospitals vary considerably in their likelihood of
providing services which utilize drugs, biologicals, or
radiopharmaceuticals with different handling costs.
As a result of these findings, MedPAC developed seven drug
categories for pharmacy and nuclear medicine handling costs based on
the estimated level of hospital resources used to prepare the products
(70 FR 42729). Associated with these categories were two
recommendations for accurate payment of pharmacy overhead under the
OPPS.
1. CMS should establish separate, budget neutral payments to cover
the costs hospitals incur for handling separately payable drugs,
biologicals, and radiopharmaceuticals.
2. CMS should define a set of handling fee APCs that group drugs,
biologicals, and radiopharmaceuticals based on attributes of the
products that affect handling costs; CMS should instruct hospitals to
submit charges for these APCs and base payment rates for the handling
fee APCs on submitted charges reduced to costs.
In response to the MedPAC findings, in the CY 2006 OPPS proposed
rule (70 FR 42729), we discussed our belief that, because of the varied
handling resources
[[Page 60500]]
required to prepare different forms of drugs, it would be impossible to
exclusively and appropriately assign a drug to a certain overhead
category that would apply to all hospital outpatient uses of the drug.
Therefore, our CY 2006 OPPS proposal included a proposal to establish
three distinct Level II HCPCS C-codes and three corresponding APCs for
drug handling categories to differentiate overhead costs for drugs and
biologicals (70 FR 42730). We also proposed: (1) To combine several
overhead categories recommended by MedPAC; (2) to establish three drug
handling categories, as we believed that larger groups would minimize
the number of drugs that may fit into more than one category and would
lessen any undesirable payment policy incentives to utilize particular
forms of drugs or specific preparation methods; (3) to collect hospital
charges for these HCPCS C-codes for 2 years; and (4) to ultimately base
payment for the corresponding drug handling APCs on CY 2006 claims data
available for the CY 2008 OPPS.
In the CY 2006 OPPS final rule with comment period (70 FR 68659
through 68665), we discussed the public comments we received on our
proposal regarding pharmacy overhead. The overwhelming majority of
commenters did not support our proposal and urged us not to finalize
this policy, as it would be administratively burdensome for hospitals
to establish charges for HCPCS codes for pharmacy overhead and to
report them. Therefore, we did not finalize this proposal for CY 2006.
Instead, we established payment for separately payable drugs and
biologicals at ASP+6 percent, which we calculated by comparing the
estimated aggregate cost of separately payable drugs and biologicals in
our claims data to the estimated aggregate ASP dollars for separately
payable drugs and biologicals, using the ASP as a proxy for average
acquisition cost (70 FR 68642). Hereinafter, we refer to this
methodology as our standard drug payment methodology. We concluded that
payment for drugs and biologicals and pharmacy overhead at a combined
ASP+6 percent rate would serve as the best proxy for the combined
acquisition and overhead costs of each of these products.
In the CY 2007 OPPS/ASC final rule with comment period (71 FR
68091), we finalized our proposed policy to provide a single payment of
ASP+6 percent for the hospital's acquisition cost for the drug or
biological and all associated pharmacy overhead and handling costs. The
ASP+6 percent rate that we finalized was higher than the equivalent
average ASP-based amount calculated from claims of ASP+4 percent
according to our standard drug payment methodology, but we adopted
payment at ASP+6 percent for stability while we continued to examine
the issue of the costs of pharmacy overhead in the HOPD.
In the CY 2008 OPPS/ASC proposed rule (72 FR 42735), in response to
ongoing discussions with interested parties, we proposed to continue
our methodology of providing a combined payment rate for drug and
biological acquisition and pharmacy overhead costs. We also proposed to
instruct hospitals to remove the pharmacy overhead charge for both
packaged and separately payable drugs and biologicals from the charge
for the drug or biological and report the pharmacy overhead charge on
an uncoded revenue code line on the claim. We believed that this would
provide us with an avenue for collecting pharmacy handling cost data
specific to drugs in order to package the overhead costs of these items
into the associated procedures, most likely drug administration
services. Similar to the public response to our CY 2006 pharmacy
overhead proposal, the overwhelming majority of commenters did not
support our CY 2008 proposal and urged us to not finalize this policy
(72 FR 66761). At its September 2007 meeting, the APC Panel recommended
that hospitals not be required to separately report charges for
pharmacy overhead and handling and that payment for overhead be
included as part of drug payment. The APC Panel also recommended that
CMS continue to evaluate alternative methods to standardize the capture
of pharmacy overhead costs in a manner that is simple to implement at
the organizational level (72 FR 66761). Because of concerns expressed
by the APC Panel and public commenters, we did not finalize the
proposal to instruct hospitals to separately report pharmacy overhead
charges for CY 2008. Instead, in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66763), we finalized a policy of providing
payment for separately payable drugs and biologicals and their pharmacy
overhead at ASP+5 percent as a transition from their CY 2007 payment of
ASP+6 percent to payment based on the equivalent average ASP-based
payment rate calculated from hospital claims according to our standard
drug payment methodology, which was ASP+3 percent for the CY 2008 OPPS/
ASC final rule with comment period. Hospitals continued to include
charges for pharmacy overhead costs in the line-item charges for the
associated drugs reported on claims.
For CY 2009, we proposed to pay separately payable drugs and
biologicals at ASP+4 percent, including both SCODs and other drugs
without CY 2009 OPPS pass-through status, based on our standard drug
payment methodology, and we also proposed to split the ``Drugs Charged
to Patients'' cost center into two cost centers: One for drugs with
high pharmacy overhead costs and one for drugs with low pharmacy
overhead costs (73 FR 41492). We noted that we expected that CCRs from
the proposed new cost centers would be available in 2 to 3 years to
refine OPPS drug cost estimates by accounting for differential hospital
markup practices for drugs with high and low overhead costs. After
consideration of the public comments received and the APC Panel
recommendations, we finalized a CY 2009 policy (73 FR 68659) to provide
payment for separately payable nonpass-through drugs and biologicals
based on costs calculated from hospital claims at a 1-year transitional
rate of ASP+4 percent, in the context of an equivalent average ASP-
based payment rate of ASP+2 percent calculated according to our
standard drug payment methodology from the final rule claims and cost
report data. We did not finalize our proposal to split the single
standard ``Drugs Charged to Patients'' cost center into two cost
centers largely due to concerns raised to us by hospitals about the
associated administrative burden. Instead, we indicated in the CY 2009
OPPS/ASC final rule with comment period (73 FR 68659) that we would
continue to explore other potential approaches to improve our drug cost
estimation methodology, thereby increasing payment accuracy for
separately payable drugs and biologicals.
In response to the CMS proposals for the CY 2008 and CY 2009 OPPS,
a group of pharmacy stakeholders (hereinafter referred to as the
pharmacy stakeholders), including some cancer hospitals, some
pharmaceutical manufacturers, and some hospital and professional
associations, commented that CMS should pay an acquisition cost of
ASP+6 percent for separately payable drugs, should substitute ASP+6
percent for the packaged cost of all packaged drugs and biologicals on
procedure claims, and should redistribute the difference between the
aggregate estimated packaged drug cost in claims and payment for all
drugs, including packaged drugs at ASP+6 percent, as separate pharmacy
overhead payments for separately payable drugs. They
[[Page 60501]]
indicated that this approach would preserve the aggregate drug cost
observed in the claims data, while significantly increasing payment
accuracy for individual drugs and procedures using packaged drugs.
Their suggested approach would provide a separate overhead payment for
each separately payable drug or biological at one of three different
levels, depending on the pharmacy stakeholders' assessment of the
complexity of pharmacy handling associated with each specific drug or
biological (73 FR 68651 through 68652). Each separately payable drug or
biological HCPCS code would be assigned to one of the three overhead
categories, and the separate pharmacy overhead payment applicable to
the category would be made when each of the separately payable drugs or
biologicals was paid.
At the February 2009 APC Panel meeting, the APC Panel recommended
that CMS pay for the acquisition cost of all separately payable drugs
at no less than ASP+6 percent. The APC Panel also recommended that CMS
package payment at ASP+6 percent on claims for all drugs that are not
separately payable and use the difference between these rates and CMS'
cost derived from charges to create a pool to provide more appropriate
payment for pharmacy service costs and that CMS pay for pharmacy
services costs using this pool, applying a tiered approach to payments
based on some objective criteria related to the pharmacy resources
required for groups of drugs. The APC Panel further recommended that,
if CMS does not implement the drug payment recommendations specified
above, CMS should exclude data from hospitals that participate in the
340B Federal drug pricing program from its ratesetting calculations for
drugs and CMS should pay 340B hospitals in the same manner as it pays
non-340B hospitals. Hospitals that participate in the 340B program are
generally hospitals that serve a disproportionate share of low-income
patients and receive disproportionate share payments under the IPPS.
These facilities may acquire outpatient drugs and biologicals at prices
that are substantially below ASP because the 340B program requires drug
manufacturers to provide outpatient drugs to eligible entities at a
reduced price and these reduced price sales are not included in the ASP
submissions of manufacturers to Medicare. Public presenters at the
February 2009 APC Panel meeting emphasized that the purpose of the 340B
Federal drug pricing program is to ensure access to drugs for low-
income patients by supplementing the higher cost of providing care to
low-income patients born by hospitals serving a disproportionate share
of these patients. The agenda, recommendations, and report from the
February 2009 APC Panel meeting are posted on the CMS Web site at:
http://www.cms.hhs.gov/FACA. We respond to these APC Panel
recommendations in our discussion of the proposed CY 2010 policy that
follows.
b. Payment Policy
Section 1833(t)(14)(A)(iii) of the Act, as described above,
continues to be applicable to determining payments for SCODs for CY
2010. This provision requires that payment for SCODs be equal to the
average acquisition cost for the drug for that year as determined by
the Secretary, subject to any adjustment for overhead costs and taking
into account the hospital acquisition cost survey data collected by the
GAO in CYs 2004 and 2005. If hospital acquisition cost data are not
available, the law requires that payment be equal to payment rates
established under the methodology described in section 1842(o), section
1847A, or section 1847B of the Act, as calculated and adjusted by the
Secretary as necessary. In addition, section 1833(t)(14)(E)(ii) of the
Act authorizes the Secretary to adjust APC weights to take into account
the 2005 MedPAC report relating to overhead and related expenses, such
as pharmacy services and handling costs. Since CY 2006, when we first
adopted our standard methodology of paying for separately payable drugs
and biologicals based on the equivalent average ASP-based payment rate
calculated from claims and cost report data, we have applied this
methodology to payment for all separately payable drugs and biologicals
without pass-through status, both SCODs and other drugs and biologicals
that do not meet the statutory definition of SCODs. We have seen no
reason to distinguish SCODs from these other separately payable drugs
and biologicals, and under our standard drug payment methodology, we
have used ASP data and costs estimated from charges on hospital claims
data as a proxy for the average hospital acquisition cost that the
statute requires for payment of SCODs and to provide payment for the
associated pharmacy overhead cost.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35332), we proposed to
redistribute between one-third and one-half of the difference between
the aggregate claims cost for coded packaged drugs and biologicals with
an ASP and ASP dollars for those products, which resulted in our
proposal to pay for the acquisition and pharmacy overhead costs of
separately payable drugs and biologicals that did not have pass-through
payment status at ASP+4 percent. Based on the rationale described in
the CY 2010 OPPS/ASC proposed rule (74 FR 35326 through 35333), we
believed that approximately $150 million of the estimated $395 million
total in pharmacy overhead cost included in our claims data for coded
packaged drugs and biologicals with an ASP above the aggregate ASP
dollars of these packaged products should be attributed to separately
payable drugs and biologicals to provide an adjustment for the pharmacy
overhead costs of these separately payable products. As a result, we
also proposed to reduce the cost of these packaged drugs and
biologicals that is included in the payment for procedural APCs to
offset the $150 million adjustment to payment for separately payable
drugs and biologicals. In addition, we proposed that any redistribution
of pharmacy overhead cost that may arise from CY 2010 final rule data
would occur only from coded packaged drugs and biologicals with an ASP
to separately payable drugs and biologicals, thereby maintaining the
estimated total cost of drugs and biologicals.
Using our CY 2010 proposed rule data, and applying our longstanding
methodology for calculating the total cost of separately payable drugs
and biologicals in our claims compared to the ASP dollars for the same
drugs and biologicals, without applying the proposed overhead cost
redistribution, we determined that the estimated aggregate cost of
separately payable drugs and biologicals (status indicators ``K'' and
``G''), including acquisition and pharmacy overhead costs, was
equivalent to ASP-2 percent. Therefore, under our standard drug payment
methodology, we would pay for separately payable drugs and biologicals
at ASP-2 percent for CY 2010, their equivalent average ASP-based
payment rate. We also determined that the estimated aggregate cost of
coded packaged drugs and biologicals with an ASP (status indicator
``N''), including acquisition and pharmacy overhead costs, was
equivalent to ASP+247 percent. We found that the estimated aggregate
cost for all coded drugs and biologicals (status indicators ``N,''
``K,'' and ``G), including acquisition and pharmacy overhead costs, was
equivalent to ASP+13 percent. For a detailed explanation of our
standard process for these calculations, we refer
[[Page 60502]]
readers to the CY 2006 OPPS proposed rule (70 FR 42725).
Table 36--Standard Drug Payment Methodology Using CY 2010 OPPS Proposed Rule Data: ASP+X Calculation
----------------------------------------------------------------------------------------------------------------
Total ASP Total cost of
dollars for drugs and
drugs and biologicals in Ratio of cost
biologicals in claims data to ASP ASP+X percent
claims data (in
(in millions)* millions)**
----------------------------------------------------------------------------------------------------------------
Coded Packaged Drugs and Biologicals with an ASP $160 $555 3.47 ASP+247
Separately Payable Drugs and Biologicals........ 2,589 2,539 0.98 ASP-2
All Coded Drugs and Biologicals................. 2,749 3,094 1.13 ASP+13
----------------------------------------------------------------------------------------------------------------
*Total April 2009 ASP dollars (ASP multiplied by drug or biological units in CY 2008 claims) for drugs and
biologicals with a HCPCS code and ASP information.
**Total cost in the CY 2008 claims data for drugs and biologicals with a HCPCS code and April 2009 ASP
information.
In the proposed rule, we recognized that there may be concern over
whether the actual full cost (acquisition and pharmacy overhead) of
separately payable drugs and biologicals could be 2 percent less than
ASP for these products (74 FR 35327), although we did not have ASP
information specifically for their sales to hospitals. Similarly, we
acknowledged that a full cost (acquisition and pharmacy overhead) of
ASP+247 percent for coded packaged drugs and biologicals with an ASP
seemed relatively high. When we subtracted the total ASP dollars for
packaged drugs and biologicals with a reported ASP amount in the CY
2008 claims data ($160 million), our proxy for their acquisition cost,
from the total cost of packaged drugs and biologicals in the same
claims ($555 million), we found that the difference, which we viewed as
the pharmacy overhead cost currently attributed to packaged drugs and
biologicals was $395 million. While we had no way of assessing whether
this current distribution of overhead cost to coded packaged drugs and
biologicals with an ASP was appropriate, we acknowledged that the
established method of converting billed charges to costs had the
potential to ``compress'' the calculated costs to some degree. Further,
we recognized that the attribution of pharmacy overhead costs to
packaged or separately payable drugs and biologicals through our
standard drug payment methodology of a combined payment for acquisition
and pharmacy overhead costs depends, in part, on the treatment of all
drugs and biologicals each year under our annual drug packaging
threshold. Changes to the packaging threshold may result in changes to
payment for the overhead cost of drugs and biologicals that do not
reflect actual changes in hospital pharmacy overhead cost for those
products. For these reasons, we believed that some portion, but not
all, of the $395 million in total overhead cost that is associated with
coded packaged drugs and biologicals with an ASP based on our standard
drug payment methodology should, at least for CY 2010, be attributed to
separately payable drugs and biologicals. Although we believed that for
CY 2010 it would be prudent to redistribute some pharmacy overhead cost
between coded packaged drugs and biologicals with an ASP at ASP+247
percent and separately payable drugs and biologicals at ASP-2 percent
that would result from our standard drug payment methodology, the
amount of overhead cost redistribution that would be appropriate
between the packaged and separately payable drugs and biologicals in a
payment system that is fundamentally based on averages was not fully
evident. Pharmacy overhead cost includes, but is not limited to, some
costs of indirect overhead that are shared by all hospital items and
services, such as administrative and general costs, capital costs,
staff benefits, and other facility costs. With regard to these indirect
overhead costs, the amount of indirect overhead cost that is
attributable to an inexpensive (typically packaged) drug is the same in
dollar value as the amount of indirect overhead cost that is
attributable to an extremely costly drug (typically separately
payable). Hence, the indirect overhead costs that are common to all
drugs and biologicals have no relationship to the cost of an individual
drug or biological, or to the complexity of the handling, preparation,
or storage of that individual drug or biological. Therefore, we
believed that the indirect overhead cost alone for an inexpensive drug
or biological could be far in excess of the ASP for that inexpensive
product.
Layered on these indirect overhead costs are the pharmacy overhead
direct costs of staff, supplies, and equipment that are directly
attributable only to the storage, handling, preparation, and
distribution of drugs and biologicals and which do vary, sometimes
considerably, depending upon the drug being furnished. As we describe
above, in its June 2005 Report to Congress, MedPAC found that drugs can
be categorized into seven different categories based on the handling
costs (that is, the direct costs) incurred (70 FR 42729). Similarly,
the pharmacy stakeholders, whose suggested approach the APC Panel
recommended that we accept for CY 2010, identified three categories of
pharmacy overhead complexity with variable costs, to which they
assigned individual drugs and biologicals for purposes of implementing
their recommended redistribution of the difference between aggregate
dollars for all drugs and biologicals at ASP+6 percent and aggregate
cost for all drugs and biologicals in the claims data as additional
pharmacy overhead payments.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35328), we
acknowledged that the observed combined payment for acquisition and
pharmacy overhead costs of ASP-2 percent for separately payable drugs
and biologicals may be too low and ASP+247 percent for coded packaged
drugs and biologicals with an ASP in the CY 2010 claims data may be too
high. However, we stated our belief that the pharmacy stakeholders'
recommendation to set packaged drug and biologicals dollars to ASP+6
percent was inappropriate given our understanding that an equal
allocation of indirect overhead costs among packaged and separately
payable drugs and biologicals would lead to a higher observed ASP+X
percent than ASP+6 percent for packaged drugs and biologicals. As
discussed above, the indirect overhead costs that are common to all
drugs and biologicals have no relationship to the cost of an individual
drug or biological, or to the complexity
[[Page 60503]]
of the handling, preparation, or storage of that individual drug or
biological. Therefore, we stated our belief that the indirect overhead
cost alone for an inexpensive drug or biological which would be
packaged could be far in excess of the ASP for that inexpensive
product. In contrast, we would expect that the indirect overhead cost
alone for an expensive drug or biological which would be separately
paid could be far less than the ASP for that expensive product.
Therefore, as discussed in the proposed rule, we believed that some
middle ground would represent the most accurate redistribution of
pharmacy overhead cost. We stated that the assumption that
approximately one-third to one-half of the total pharmacy overhead cost
currently associated with coded packaged drugs and biologicals with an
ASP was a function of both charge compression and our choice of an
annual drug packaging threshold offered a more appropriate allocation
of drug and biological cost to separately payable drugs and
biologicals. One-third of the $395 million of pharmacy overhead cost
associated with coded packaged drugs and biologicals with an ASP was
$132 million, whereas one-half was $198 million. Within the one-third
to one-half parameters, we proposed that reallocating $150 million in
drug and biological cost observed in the claims data from coded
packaged drugs and biologicals with an ASP to separately payable drugs
and biologicals for CY 2010 would more appropriately distribute
pharmacy overhead cost among packaged and separately payable drugs and
biologicals than either of the two other options, that is, paying for
separately payable drugs and biologicals at ASP-2 percent according to
our standard drug payment methodology or adopting the pharmacy
stakeholders' recommendation. We stated that if we attributed $150
million in additional cost to the payment for the drugs and biologicals
for which we proposed to pay separately for the CY 2010 OPPS, we
determined a payment rate for separately payable drugs and biologicals
of ASP+4 percent as displayed in Table 26 of the proposed rule (74 FR
35328) that is reprinted below as Table 37. Thus, we proposed a
pharmacy overhead adjustment for separately payable drugs and
biologicals in CY 2010 that would result in their payment at ASP+4
percent. We proposed to accomplish this adjustment by redistributing
one-third to one-half of the pharmacy overhead cost of coded packaged
drugs and biologicals with an ASP ($150 million), which represented a
reduction in cost of coded packaged drug and biologicals with an ASP in
the CY 2010 proposed rule claims data of 27 percent.
Table 37--CY 2010 Proposed Pharmacy Overhead Adjustment Payment Methodology for Separately Payable and Packaged
Drugs and Biologicals
----------------------------------------------------------------------------------------------------------------
Total cost of
Total ASP drugs and
dollars for biologicals in Ratio of cost
drugs and claims Data to ASP ASP+X percent
biologicals in After (column C/
claims data Adjustment (in column B)
(in millions)* millions)**
----------------------------------------------------------------------------------------------------------------
Coded Packaged Drugs and Biologicals with an ASP $160 $405 2.53 ASP+153
Separately Payable Drugs and Biologicals........ 2,589 2,689 1.04 ASP+4
All Coded Drugs and Biologicals................. 2,749 3,094 1.13 ASP+13
----------------------------------------------------------------------------------------------------------------
*Total April 2009 ASP dollars (ASP multiplied by drug or biological units in CY 2008 claims) for drugs and
biologicals with a HCPCS code and ASP information.
**Total cost in the CY 2008 claims data for drugs and biologicals with a HCPCS code and April 2009 ASP
information.
Comment: Many commenters agreed with CMS that it was unlikely that
the full cost (acquisition and pharmacy overhead) of separately payable
drugs and biologicals could be 2 percent less than ASP for these
products, and that the full cost (acquisition and pharmacy overhead) of
packaged drugs could be 247 percent of ASP.
Response: We continue to find that the results of our standard drug
payment methodology are unlikely to accurately reflect the full cost of
acquisition and pharmacy overhead for separately payable drugs and
biologicals and packaged drugs and biologicals due to hospital charging
practices and our use of an annual drug packaging threshold. Using our
CY 2010 final rule data, and applying our longstanding methodology for
calculating the total cost of separately payable drugs and biologicals
in our claims compared to the ASP dollars for the same drugs and
biologicals and without applying the proposed overhead cost
redistribution, we determined that the estimated aggregate cost of
separately payable drugs and biologicals (status indicators ``K'' and
``G''), including acquisition and pharmacy overhead costs, is
equivalent to ASP-3 percent (compared to ASP-2 percent as presented in
the proposed rule). Therefore, under our standard drug payment
methodology, we would pay for separately payable drugs and biologicals
at ASP-3 percent for CY 2010, their equivalent average ASP-based
payment rate. We also determined that the estimated aggregate cost of
coded packaged drugs and biologicals with an ASP (status indicator
``N''), including acquisition and pharmacy overhead costs, is
equivalent to ASP+259 percent (compared to ASP+247 percent as presented
in the proposed rule). We found that the estimated aggregate cost for
all coded drugs and biologicals (status indicators ``N,'' ``K,'' and
``G), including acquisition and pharmacy overhead costs, is equivalent
to ASP+11 percent (compared to ASP+13 percent as presented in the
proposed rule). These values are shown in Table 38 below.
[[Page 60504]]
Table 38--Proposed and Final Asp+X Values for All Coded Drugs and Biologicals With an ASP, Coded Packaged Drugs
and Biologicals With an ASP, and Separately Payable Drugs and Biologicals
----------------------------------------------------------------------------------------------------------------
ASP+X for all ASP+X for ASP+X for
coded drugs coded packaged separately
and drugs and payable drugs
biologicals biologicals and
with an ASP with an ASP biologicals
----------------------------------------------------------------------------------------------------------------
CY 2010 Proposed Rule*.......................................... ASP+13 ASP+247 ASP-2
CY 2010 Final Rule**............................................ ASP+11 ASP+258 ASP-3
----------------------------------------------------------------------------------------------------------------
*Based on CY 2010 proposed rule claims data and April 2009 ASPs.
**Based on CY 2010 final rule claims data and July 2009 ASPs.
Comment: Some commenters agreed with CMS' assertion that packaged
drugs and biologicals typically have an aggregate absolute pharmacy
overhead cost that exceeds the acquisition cost of the packaged drugs
and biologicals. One commenter claimed that ASP+6 percent would be
insufficient to accurately account for the acquisition and pharmacy
overhead costs of packaged drugs. In addition, a few commenters
recommended that CMS modify the pharmacy stakeholders' approach by
packaging the cost of drugs and biologicals at ASP plus 100 percent,
rather than the stakeholder's recommended amount of ASP+6 percent.
Response: We continue to be concerned with a methodology that would
package the cost of all packaged drugs and biologicals at ASP+6
percent. As stated in our proposal, we have no data specific to the
overhead costs of these drugs and biologicals and, therefore, we cannot
determine with any certainty an ASP+X value relating specifically to
their costs for acquisition and pharmacy overhead. While we appreciate
the recommendation of the commenters to package payment for the
acquisition and pharmacy overhead costs of inexpensive drugs below the
drug packaging threshold at ASP plus 100 percent, we cannot verify that
using ASP plus 100 percent would result in an accurate estimate of
acquisition and pharmacy overhead costs of packaged drugs and
biologicals.
Comment: One commenter noted that a key CMS assumption behind the
standard methodology for calculating the ASP+X percent payment rate,
and the redistribution methodology by implication, is that the average
overhead cost for drugs and biologicals ultimately must appear in the
revenue producing cost center 5600 ``Drugs Charged to Patients,'' along
with the acquisition cost of drugs and biologicals. The commenter
acknowledged that CMS' standard drug payment methodology relies on
appropriate allocation of pharmacy overhead cost in order to derive an
accurate payment amount for separately payable versus packaged drugs
and biologicals. The commenter specifically cited weak cost reporting
instructions for the ``Drugs Charged to Patients'' cost center and cost
center 1600 ``Pharmacy'' and questioned whether pharmacy overhead cost
adequately and appropriately appears in the ``Drugs Charged to
Patients'' cost center. Specifically, the commenter noted that costs
accumulated in the ``Drugs Charged to Patients'' cost center remain in
that cost center, but asserted that costs accumulated in the 1600
``Pharmacy'' cost center would be allocated across revenue producing
cost centers on the basis of costed requisitions. The commenter asked a
series of specific questions about how costs are accumulated in both
the ``Pharmacy'' and ``Drugs Charged to Patients'' cost centers,
including (1) what costs hospitals actually report in the ``Pharmacy''
cost center versus the ``Drugs Charged to Patients'' cost center; (2)
which revenue producing cost centers have costed requisitions that
would receive ``Pharmacy'' cost center overhead costs, that is, do
hospitals account for contrast agent costs under radiology revenue
producing cost centers; (3) how much of ``Pharmacy'' cost center
overhead costs is allocated to ``Drugs Charged to Patients;'' and (4)
when would hospitals not account for the cost of a drug in the ``Drugs
Charged to Patients'' cost center.
Response: We acknowledge that the CCR for the ``Drugs Charged to
Patients'' cost center reflects the average acquisition cost for drugs
and biologicals reported in that cost center, as well as the average
pharmacy overhead cost for those drugs and biologicals. In addition,
use of this CCR to estimate costs from charges on claims has the
potential to ``compress'' the pharmacy overhead costs for expensive
drugs and biologicals, where hospitals differentially distribute
pharmacy overhead among their charges for drugs and biologicals by
marking up the charges for expensive drugs and biologicals
proportionally less than inexpensive drugs and biologicals. We have
stated that combining this compression with a packaging threshold may
lead us to underestimate the pharmacy overhead costs of separately
payable drugs and biologicals and overestimate the overhead costs of
packaged drugs and biologicals.
At a minimum, the CCR for the cost center ``Drugs Charged to
Patients'' that CMS uses to estimate costs from charges for drugs and
biologicals in our claims data should consist of charges for all drugs
and biologicals separately charged to patients and the related costs
for those separately chargeable drugs and biologicals. A hospital would
not include the charge and cost for a drug or biological in the ``Drugs
Charged to Patients'' cost center if the hospital did not separately
charge the drug or biological to a patient. The identification of costs
for the ``Drugs Charged to Patients'' cost center can occur in several
ways.
First, we generally believe that the indirect costs that are common
to all drugs and biologicals, including administrative and general
costs, capital costs, staff benefits, and other facility costs, and the
more direct costs of handling, preparation, and storage are accumulated
as total pharmacy operation costs in cost center 1600 ``Pharmacy.''
Second, hospitals can choose to treat the acquisition cost of their
drugs and biologicals in several ways. Frequently, hospitals accumulate
and report the acquisition costs of drugs and biologicals (costed
requisitions) directly in the most appropriate revenue producing cost
center on Worksheet A of the cost report. We expect that, the majority
of the time, hospitals accrue the largest acquisition cost of drugs and
biologicals in the ``Drugs Charged to Patients'' cost center, which is
specific to these items. However, hospitals may also account for the
acquisition cost of unique drugs and biologicals, such as contrast
agents, in other revenue producing cost centers such as the radiology
cost centers, when the
[[Page 60505]]
contrast agents are not separately charged to the patient. Assignment
of acquisition cost to a different revenue producing cost center can
only occur if the drug or biological was not separately charged to a
patient. Although the commenter suggested that contrast agents may
appear in other cost centers, our claims data demonstrate a significant
volume of contrast agents reported under a pharmacy revenue code.
Therefore, we believe that hospitals largely are charging patients
specifically for contrast agents and accounting for these costs and
charges in the ``Drugs Charged to Patients'' cost center. The hospital
would then allocate the total overhead costs from the ``Pharmacy''
general services cost center to all revenue producing cost centers that
have costed requisitions for drugs and biologicals on Worksheet B-1. In
this circumstance, a large proportion of the total cost of the
``Pharmacy'' cost center would be allocated to the ``Drugs Charged to
Patients'' cost center, assuming a concentration of costed requisitions
for drugs and biologicals in the ``Drugs Charged to Patients'' cost
center. The total pharmacy cost being allocated is an aggregation that
commingles the overhead costs of a variety of drugs and biologicals.
The resulting CCR for the ``Drugs Charged to Patients'' cost center
should reflect both the average acquisition cost of drugs and
biologicals, including those that are expensive and inexpensive, in
that cost center and the average pharmacy overhead cost apportioned to
that cost center.
Hospitals also may include the acquisition cost of drugs and
biologicals directly in the ``Pharmacy'' general services cost center
and reclassify this cost to revenue producing cost centers, including
``Drugs Charged to Patients,'' before allocating the total cost of the
``Pharmacy'' cost center, which would have an effect similar to
directly reporting the cost of drugs in the revenue producing cost
centers on Worksheet A, as discussed above. In this situation, overhead
cost from the ``Pharmacy'' cost center would be allocated to each of
the revenue producing cost centers on the basis of costed requisitions.
Some hospitals include the acquisition cost of drugs and biologicals
directly in the ``Pharmacy'' cost center but do not reclassify this
cost to the appropriate revenue producing cost center on Worksheet A,
and instead allocate those costs on Worksheet B-1 together with the
overhead cost of the pharmacy using costed requisitions. Regardless of
which method described above that the provider uses, the resulting CCR
for the ``Drugs Charged to Patients'' cost center should reflect the
average acquisition cost for drugs and biologicals in that cost center
and the average pharmacy overhead apportioned to that cost center. Our
redistribution methodology acknowledges that relying on a single CCR
has the potential to ``compress'' overhead costs and that combining
this compression with a packaging threshold leads us to underestimate
the overhead costs of separately payable drugs and biologicals and
overestimate the overhead costs of packaged drugs and biologicals.
As we discussed in our proposal, we did not propose to redistribute
pharmacy overhead cost from packaged to separately payable drugs and
biologicals utilizing a methodology that would provide a separate
pharmacy overhead payment for each separately payable drug and
biological based on its pharmacy complexity. The OPPS is a prospective
payment system that provides payment for groups of services and we
believe that it is important, at a minimum, to maintain the current
size of the OPPS payment bundles, in order to encourage efficiency in
the hospital outpatient setting. As we stated in the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66613), we believe it is
important that the OPPS create incentives for hospitals to provide only
necessary, high quality care and to provide that care as efficiently as
possible. We have considered in recent years how we could increase
packaging under the OPPS in a manner that would create incentives for
efficiency while providing hospitals with flexibility to provide care
in the most appropriate way for each Medicare beneficiary. Hospitals
have repeatedly explained that they consider the acquisition and
pharmacy overhead costs of drugs in setting their charges for drugs,
and we have continued to provide a single payment for the acquisition
and pharmacy overhead costs of separately payable drugs and biologicals
under the OPPS consistent with this hospital charging practice. While
we have worked to develop, and are now implementing, a refined payment
methodology for drugs and biologicals for the CY 2010 OPPS that we
believe will pay more accurately for the pharmacy overhead cost of
packaged and separately payable drugs and biologicals, we do not
believe it would be appropriate to unbundle the current single combined
payment for the acquisition and overhead costs of a separately payable
drug into two distinct payments, a drug payment and a pharmacy overhead
payment. Furthermore, we note that section 1833(t)(14)(E)(ii) of the
Act specifically authorizes the Secretary to adjust the APC payment
weights for SCODs to take into account the recommendations of MedPAC on
pharmacy overhead costs. We believe our CY 2010 approach that will
adjust the APC payment for separately payable drugs and biologicals to
more accurately pay for their associated pharmacy overhead cost, rather
than provide a separate payment for a drug's pharmacy overhead cost
each time the product is separately paid, is consistent with this
statutory provision. Therefore, as we proposed, we are continuing to
make a single bundled payment for the acquisition and pharmacy overhead
costs of separately payable drugs and biologicals under the CY 2010
OPPS, an approach we believe both continues to encourage hospital
efficiencies in the provision of drugs and biologicals to Medicare
beneficiaries in the hospital outpatient setting and improves payment
accuracy for the acquisition and pharmacy overhead costs of drugs and
biologicals.
To confirm the portion of the $395 million in estimated pharmacy
overhead cost associated with coded packaged drugs and biologicals with
an ASP that should be attributable to separately payable drugs and
biologicals for the proposed rule, we used information from a variety
of sources in order to corroborate the appropriateness of our policy to
redistribute between one-third and one-half of the difference ($150
million) between the aggregate claims cost for packaged drugs and
biologicals and ASP dollars for the same drugs and biologicals to
separately payable drugs and biologicals. In the CY 2010 OPPS/ASC
proposed rule (74 FR 35330 through 35331), we presented two separate
analyses which confirmed that our proposed redistribution of $150
million in pharmacy overhead cost associated with the cost of packaged
drugs and biologicals was appropriate.
We began the analytic exercise with three fundamental assumptions.
The first assumption was that the hospital acquisition cost of
separately payable drugs and biologicals, on average, is not less than
100 percent of ASP. We believed that this assumption was valid because
we have been told that hospitals pay a range of prices for the same
drug or biological. Some hospitals may be able to take advantage of
volume and group purchasing to achieve significant discounts for
certain drugs and biologicals, but other hospitals may pay more than
average for drugs and biologicals because of their low volume
[[Page 60506]]
usage or a hospital's remote geographic location. Further, hospitals
often serve as community care resources so they must provide drugs and
biologicals to meet the needs of all of the patients who present to
their facilities for care. The amounts and nature of those drugs and
biologicals may vary significantly and unpredictably over time,
particularly for smaller hospitals, due to changing availability of
other care settings in their communities, such as physicians' offices,
or due to emergencies, and this variability may constrain hospitals'
ability to purchase all necessary quantities of certain drugs and
biologicals based on best price contractual agreements negotiated in
advance. Hence, we believed that the ASP was likely a fair estimate of
hospitals' average acquisition cost of drugs and biologicals in
general, excluding direct and indirect overhead costs.
The second assumption was that coded packaged drugs and biologicals
with an ASP, as a group, typically have an aggregate absolute pharmacy
overhead cost (direct and indirect) that exceeds the acquisition cost
of the packaged drugs and biologicals, as measured by ASP. We believed
that this assumption was appropriate because packaged drugs and
biologicals carry the same absolute amount of indirect overhead cost
per drug or biological administered as separately payable drugs and
biologicals and because many packaged drugs and biologicals have
extremely low ASPs but some of the same direct costs (for example,
recordkeeping, storage, safety precautions, and disposal requirements)
as separately payable drugs and biologicals. Our proposed rule claims
data showed that the weighted average ASP for the coded drugs and
biologicals with an ASP that we proposed to package for CY 2010 was
approximately $7 per day per packaged drug or biological, and we
believed that it was a reasonable assumption that the full pharmacy
overhead cost for a drug or biological (direct and indirect) equals or
exceeds that amount.
Our final assumption was that, on average, the pharmacy overhead
cost of separately payable drugs and biologicals, as a group, was not
greater than the acquisition cost of the separately payable drugs and
biologicals. We believed that this assumption is appropriate because
separately payable drugs and biologicals carry the same absolute amount
of indirect pharmacy overhead cost per drug or biological administered
as packaged drugs and biologicals. While we have been told by MedPAC
and the pharmacy stakeholders that separately payable drugs and
biologicals generally have direct pharmacy overhead costs that are
significantly higher than the direct overhead costs of packaged drugs
and biologicals, we do not believe that they exceed the acquisition
cost of separately payable drugs and biologicals. The weighted average
ASP for the drugs and biologicals in our proposed rule claims data that
we proposed for separate payment for CY 2010 was approximately $954 per
day per separately payable drug or biological. We believed that the
full pharmacy overhead cost for a separately payable drug or biological
would not, on average, exceed the weighted average per day ASP. Hence,
we believed these last two assumptions about the relationship of ASP to
full pharmacy overhead cost (direct and indirect) for packaged and
separately payable drugs and biologicals were appropriate for purposes
of these analyses.
Having made these assumptions, for the proposed rule, we reduced
the $395 million in estimated pharmacy overhead cost that exceeded the
ASP dollars for coded packaged drugs and biologicals with an ASP (their
average acquisition cost) by $50 million. Fifty million dollars in
additional cost was necessary to raise the estimated cost calculated
for separately payable drugs and biologicals from hospital claims data
from 98 percent of ASP to 100 percent of ASP, in order to reach our
estimate of the average hospital acquisition cost of separately payable
drugs and biologicals of ASP. This left $345 million in estimated
residual pharmacy overhead cost that continued to be associated with
packaged drugs and biologicals. We stated our belief that a portion of
this cost was associated with coded packaged drugs and biologicals with
an ASP in our claims data, both due to charge compression and our
choice of an annual drug packaging threshold, and would continue to be
less accurately associated with packaged drugs and biologicals were we
not to engage in further redistribution of that portion of this
residual pharmacy overhead cost of packaged drugs and biologicals.
We then performed two analyses using information provided by the
MedPAC Report (June 2005 Report to Congress) and by the pharmacy
stakeholders (February 2009 presentation to the APC Panel and other
meetings with CMS) that we applied to our proposed rule claims data to
estimate the amount of residual pharmacy overhead cost associated with
packaged drugs and biologicals that should more accurately be
attributed to separately payable drugs and biologicals. To perform
these analyses, we used proposed rule claims data only for those drugs
and biologicals described by HCPCS codes that met the following
criteria:
The proposed CY 2010 OPPS status indicator for the HCPCS
code was ``G'' for pass-through drugs and biologicals (excluding pass-
through radiopharmaceuticals), ``K'' for separately payable drugs and
biologicals that do not have pass-through status, or ``N'' for packaged
drugs and biologicals, where the packaged status of these nonpass-
through drugs and biologicals was determined by an estimate of cost per
day based on ASP+4 percent;
April 2009 pricing information based on the ASP
methodology (other than mean cost from claims data) was available for
the HCPCS code, and we would use the ASP methodology to pay for the
HCPCS code if it had a status indicator of ``K'' or ``G''; and
CY 2008 OPPS claims data included claims for the HCPCS
code or an equivalent predecessor code.
We first converted six of the seven categories that MedPAC
recommended for reporting pharmacy overhead costs to three CMS
categories (low, medium, and high), as we had proposed for the CY 2006
OPPS (70 FR 42729 through 42730); the seventh MedPAC category was not
pertinent for this exercise because it is for the overhead cost
attributable to radiopharmaceuticals. The CMS categories are defined
as: Low (Orals); medium (Injection/Sterile Preparation; Single IV
Solution/Sterile Preparation; Compounded Reconstituted IV
Preparations); and high (Specialty IV or Agents requiring special
handling in order to preserve their therapeutic value; Cytotoxic Agents
in all formulations requiring personal protective equipment). We then
derived a relative overhead weight for each of the three CMS categories
by averaging the overhead weights for the six pertinent MedPAC
categories. These averages were not weighted. The derived relative
overhead weights for the CMS categories were as follows: Low = 1.00
(corresponding to MedPAC Category 1); medium = 3.61 (corresponding to
MedPAC Categories 1, 2, and 3); and high = 11.11 (corresponding to
MedPAC categories 5 and 6).
We also calculated a relative overhead weight for each of the three
categories of pharmacy overhead complexity that were provided by the
pharmacy stakeholders, using the different fixed dollar amounts that
these stakeholders recommended that CMS pay for pharmacy overhead costs
if we were to
[[Page 60507]]
make such payments for ``all drugs'' (packaged and separately payable).
The pharmacy stakeholders' categories are defined as: Low (Dispense
without manipulation: e.g., oral drugs, pre-filled syringes); medium
(Injectable drug with one step manipulation: e.g., simple injections);
and high (Multiple step injectable products and chemotherapy that
require safety considerations). The pharmacy stakeholders' relative
overhead weights were as follows: Low = 1; medium = 2.67; and high =
5.50.
Using the pharmacy stakeholders' overhead categories (low, medium,
and high) and incorporating the pharmacy stakeholders' assignments of
specific drugs and biologicals to levels of pharmacy complexity that
they previously provided to CMS, we then assigned the remaining HCPCS
codes for drugs and biologicals (approximately 50 percent of all drug
and biological HCPCS codes with an associated ASP) based on our
understanding of the characteristics of the categories. Similarly, we
assigned all drug and biological HCPCS codes to the CMS categories
created from the MedPAC groups for the derived relative overhead
weights based on the definitions of those categories. Although the
subsequent analytic processes were identical, we performed these
analyses separately using the derived CMS overhead category weights
(results are in Table 39) and using the pharmacy stakeholders' overhead
category weights (results are in Table 40).
Specifically, for the proposed rule we assigned the overhead
weights to each drug and biological in the set of drugs and biologicals
qualifying for this exercise. We then calculated a per unit overhead
cost by dividing the total relative weight for all drugs and
biologicals in this exercise (low, medium, and high) into the residual
pharmacy overhead cost from packaged drugs and biologicals of $345
million. Using the relative weights for each scenario, we estimated the
exact per unit pharmacy overhead cost reallocation for each low,
medium, and high pharmacy overhead category. We then added this payment
amount to ASP for each drug and biological and reassessed the amount of
total claims cost for separately payable and packaged drugs and
biologicals and calculated our standard ratio of aggregate claims cost
to aggregate ASP dollars for separately payable and packaged drugs and
biologicals. The results of these analyses are reprinted in Tables 39
and 40 below.
Table 39--Estimated Redistribution of Pharmacy Overhead Costs Using Relative Weights Derived From MedPAC
Pharmacy Overhead Categories and CY 2010 Opps Proposed Rule Data
----------------------------------------------------------------------------------------------------------------
Total cost of
Total ASP drugs and
dollars for biologicals Ratio of cost
drugs and in claims to ASP
biologicals in data after (column C/ ASP+X Percent
claims data adjustment column B)
(in millions)* (in
millions)**
----------------------------------------------------------------------------------------------------------------
Coded Packaged Drugs and Biologicals with an ASP $160 $390 2.44 ASP+144
Separately Payable Drugs and Biologicals........ 2,589 2,704 1.04 ASP+4
All Coded Drugs and Biologicals................. 2,749 3,094 1.13 ASP+13
----------------------------------------------------------------------------------------------------------------
* Total April 2009 ASP dollars (ASP multiplied by drug or biological units in CY 2008 claims) for drugs and
biologicals with a HCPCS code and ASP information.
** Total cost in the CY 2008 claims data after adjustment for drugs and biologicals with a HCPCS code and April
2009 ASP information.
Table 40--Estimated Redistribution of Pharmacy Overhead Cost Using Relative Weights Calculated From Pharmacy
Stakeholders Recommended Pharmacy Overhead Payment Levels and CY 2010 Proposed Rule Data
----------------------------------------------------------------------------------------------------------------
Total cost of
Total ASP drugs and
dollars for biologicals Ratio of cost
drugs and in claims to ASP
biologicals in data after (column C/ ASP+X Percent
claims data adjustment column B)
(in millions)* (in
millions)**
----------------------------------------------------------------------------------------------------------------
Coded Packaged Drugs and Biologicals with an ASP $160 $402 2.51 ASP+151
Separately Payable Drugs and Biologicals........ 2,589 2,692 1.04 ASP+4
All Coded Drugs and Biologicals................. 2,749 3,094 1.13 ASP+13
----------------------------------------------------------------------------------------------------------------
* Total April 2009 ASP dollars (ASP multiplied by drug units in CY 2008 claims) for drugs with a HCPCS code and
ASP information.
** Total cost in the CY 2008 claims data after adjustment for drugs with a HCPCS code and April 2009 ASP
information.
As shown in Tables 39 and 40, the ratio of adjusted cost in the
claims data for separately payable drugs and biologicals to ASP
increased compared to the value derived from our standard methodology
and declined for packaged drugs and biologicals with an associated ASP
compared to the value calculated according to our standard drug payment
methodology as shown in Table 41. Specifically, for the proposed rule
under our standard methodology without adjustment of the pharmacy
overhead cost currently attributed to packaged drugs and biologicals
with an associated ASP, we would have made packaged payment at ASP+247
percent. Using the CMS overhead weights, this value declined to ASP+144
percent and using the pharmacy stakeholders' overhead weights, it
declined to ASP+151 percent.
Under our standard drug payment methodology, without adjustment of
the pharmacy overhead cost currently attributed to separately payable
drugs and biologicals, we estimated for the proposed rule that
separately payable drugs and biologicals would be paid at ASP-2
percent. Assuming a base average acquisition cost for all drugs and
biologicals of ASP and using the CMS overhead weights to redistribute
[[Page 60508]]
the residual $345 million in pharmacy overhead cost associated with
coded packaged drugs and biologicals with an ASP in the claims data,
this value increased to ASP+4 percent, and using the pharmacy
stakeholders' overhead weights to redistribute the residual $345
million in pharmacy overhead cost, this value also increased to ASP+4
percent.
Based on these analyses, for the proposed rule, we estimated that
we would redistribute $165 million in pharmacy overhead cost from coded
packaged drugs and biologicals with an ASP to separately payable drugs
and biologicals by setting the average acquisition cost for all drugs
and biologicals to ASP and using the CMS overhead weights, and we would
redistribute $153 million in pharmacy overhead cost from coded packaged
drugs and biologicals with an ASP to separately payable drugs and
biologicals by setting the average acquisition cost for all drugs and
biologicals to ASP and using the pharmacy stakeholders' overhead
weights. These observed outcomes were consistent with our CY 2010
proposal to redistribute between one-third and one-half of the $395
million of pharmacy overhead cost currently associated with packaged
drugs and biologicals with an ASP to separately payable drugs and
biologicals. These values were also consistent with the $150 million we
proposed to redistribute from the cost of coded packaged drugs and
biologicals with an ASP to separately payable drugs and biologicals for
CY 2010, which would represent a reduction in the cost of packaged
drugs and biologicals of 27 percent.
After we performed these analyses but prior to display of the CY
2010 OPPS/ASC proposed rule, the pharmacy stakeholders provided us with
updated assignments of CY 2009 drug HCPCS codes to their recommended
levels of pharmacy complexity. We then assigned the remaining HCPCS
codes for drugs and biologicals that the pharmacy stakeholders had not
assigned based on our understanding of the characteristics of their
categories. We recalibrated our model to incorporate the updated
information. We observed no substantive changes in our findings, with
the revised overhead category assignments redistributing $159 million
from packaged to separately payable drugs and biologicals and resulting
in an ASP+X percentage of ASP+4 percent for separately payable drugs
and biologicals and ASP+148 percent for packaged drugs and biologicals
with an ASP.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35331), we indicated
that these analyses based on our synthesis of existing data and
information from a variety of sources supported the appropriateness of
a redistribution of the magnitude we proposed for CY 2010. We believed
that our analyses of the claims data using the CMS relative overhead
weights derived from the 2005 MedPAC pharmacy overhead study and using
the pharmacy overhead category payments, levels of complexity, and
assignments of drugs provided by the pharmacy stakeholders (where
available), confirmed that payment for separately payable drugs and
biologicals at ASP+4 percent would represent a reasonable aggregate
adjustment for the pharmacy overhead cost of these separately payable
drugs and biologicals, compared to the payment that would result from
the standard drug payment methodology. We stated our belief that
payment for separately payable drugs at ASP+4 percent would ensure that
hospitals are paid appropriately for the average hospital acquisition
cost and the pharmacy overhead cost that our analyses show would be
appropriately redistributed from the estimated cost of overhead
associated with drugs and biologicals with an ASP that we proposed to
package for CY 2010.
Our proposal for CY 2010 relied upon the premise of providing a
pharmacy overhead adjustment to payment for separately payable drugs by
redistributing calculated pharmacy overhead cost from coded packaged
drugs and biologicals with an ASP to separately payable drugs and
biologicals. Therefore, regardless of the payment level that the CY
2010 OPPS/ASC final rule with comment period claims and cost report
data and July 2009 ASP data ultimately suggested, we believed that any
redistributed amount of pharmacy overhead cost should be removed from
the estimated cost of pharmacy overhead associated with coded packaged
drugs and biologicals with an ASP. We proposed to redistribute pharmacy
overhead cost within the estimated total amount of acquisition and
overhead cost for all drugs and biologicals with an ASP that has been
reported to us by hospitals by making a pharmacy overhead adjustment to
payment for separately payable drugs and biologicals that is based upon
a partial redistribution of the pharmacy overhead cost of coded
packaged drugs and biologicals with an ASP. As described previously in
this section, we proposed that any redistribution of pharmacy overhead
cost that may arise from CY 2010 final rule data would occur only from
some drugs and biologicals to other drugs and biologicals, thereby
maintaining the estimated total cost of drugs and biologicals in our
claims data (no redistribution of cost would occur from other services
to drugs and biologicals or vice versa). While there is some evidence
that relatively more pharmacy overhead cost should be associated with
separately payable drugs and biologicals and less pharmacy overhead
cost should be associated with packaged drugs and biologicals in order
to improve payment accuracy, we concluded that the recent RTI report on
the OPPS' hospital-specific CCR methodology (``Refining Cost to Charge
Ratios for Calculating APC and DRG Relative Payment Weights,'' July
2008 final report), the June 2005 MedPAC study of hospital outpatient
pharmacy overhead costs, and our claims analyses discussed in the
proposed rule presented no evidence that the total cost of drugs and
biologicals (including acquisition and overhead costs) is understated
in the claims data that we use to model the upcoming prospective
payment year in relation to the costs of other services paid under the
OPPS. Therefore, to improve the distribution of pharmacy overhead cost
within the total estimated cost for all drugs and biologicals, without
adversely affecting the relativity of payment weights for all services
paid under the OPPS, we reasoned that it would be most appropriate to
redistribute pharmacy overhead cost only within the total estimated
cost of coded packaged and separately payable drugs and biologicals. By
redistributing pharmacy overhead cost only within the total estimated
cost of packaged and separately payable drugs and biologicals, we would
maintain a constant total cost of drugs and biologicals under the OPPS
as reported to us by hospitals, without redistributing cost from other
OPPS services to the cost of drugs and biologicals under the budget
neutral OPPS.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35332), we indicated
that while we agree conceptually with the APC Panel that a
redistribution of pharmacy overhead cost in our claims data from coded
packaged drugs and biologicals with an ASP to separately payable drugs
and biologicals is appropriate, we did not accept the APC Panel's
February 2009 recommendation that CMS pay for the acquisition cost of
all separately payable drugs at no less than ASP+6 percent because, as
we discussed previously in this section, our analyses of claims data
indicated that appropriate payment for the acquisition
[[Page 60509]]
and pharmacy overhead costs of separately payable drugs would be ASP+4
percent. We also did not accept the APC Panel's February 2009
recommendation that CMS package the cost of packaged drugs at ASP+6
percent, use the difference between this cost and CMS' cost derived
from charges to provide more appropriate payment for pharmacy services
costs, and pay for pharmacy services using this amount by applying a
tiered approach to payments based on criteria related to the pharmacy
resources required for groups of drugs. We believed that the
recommendation to package the cost of packaged drugs at ASP+6 percent
would underpay for the pharmacy overhead cost of packaged drugs, which
we expected would be higher in relation to ASP than the pharmacy
overhead cost of separately payable drugs. Further, as discussed
earlier in this section, because the OPPS is a prospective payment
system that relies on payment for groups of services to encourage
hospital efficiencies, we did not believe payment for pharmacy overhead
costs that is separate from the OPPS payment for the acquisition costs
of drugs would be appropriate.
The APC Panel further recommended that, if CMS did not adopt a
methodology consistent with their recommendations summarized above, CMS
should exclude data from hospitals that participate in the 340B program
from its ratesetting calculations for drugs and that CMS should pay
340B hospitals in the same manner as it pays non-340B hospitals. In the
proposed rule, we did not accept the APC Panel's recommendation that
CMS propose to exclude data from hospitals that participate in the 340B
program from its ratesetting calculations for drugs. For CY 2010, we
note that we proposed a drug payment methodology that partially
resembled the methodology recommended by the APC Panel because the
proposal incorporated a redistribution of pharmacy overhead cost from
coded packaged drugs and biologicals with an ASP to separately payable
drugs and biologicals. However, excluding data from hospitals that
participate in the 340B program from our ASP+X calculation, but paying
those hospitals at that derived payment amount, would effectively
redistribute payment to drugs and biologicals from payment for other
services under the OPPS, and we did not believe this redistribution
would be appropriate. In our CY 2010 proposal, we did accept the APC
Panel's February 2009 recommendation that CMS propose to pay 340B
hospitals in the same manner as non-340B hospitals are paid. Commenters
on the CY 2009 OPPS/ASC final rule with comment period were generally
opposed to differential payment for hospitals based on their 340B
participation status, and we did not believe it would be appropriate to
exclude claims from this subset of hospitals in the context of our CY
2010 proposal to pay all hospitals at the same rate for separately
payable drugs and biologicals.
Moreover, as discussed above, while we did not propose to adopt the
APC Panel's specific recommended methodology to redistribute pharmacy
overhead cost that would otherwise be paid through payment for packaged
drugs and biologicals, our proposed CY 2010 pharmacy adjustment
methodology that would result in the payment of separately payable
drugs and biologicals at ASP+4 percent incorporated a more limited
redistribution of pharmacy overhead cost for coded packaged drugs and
biologicals with an ASP (ASP is necessary to calculate an overhead
amount) that would preserve the aggregate drug cost in the claims, a
result consistent with the APC Panel's recommendations. Therefore, we
believed that it would be appropriate to propose to pay 340B hospitals
at the same rates that we are proposing to pay non-340B hospitals, and
we proposed to include the claims and cost report data for 340B
hospitals in the data we had used for our analyses in order to
calculate the payment rates for drugs and biologicals and other
services for the CY 2010 OPPS.
In conclusion, we proposed for CY 2010 to redistribute between one-
third and one-half of the difference between the aggregate claims cost
for coded packaged drugs and biologicals with an ASP and ASP dollars
for those products, which resulted in proposed payment for the
acquisition and pharmacy overhead costs of separately payable drugs and
biologicals that do not have pass-through payment status of ASP+4
percent. This payment amount reflected an APC drug payment adjustment
for pharmacy overhead cost. To accomplish this payment adjustment, we
also proposed to reduce the cost of coded packaged drugs and
biologicals with an ASP that was incorporated into the payment for
procedural APCs by the amount of pharmacy overhead cost that was
redistributed from these packaged drugs and biologicals to the payment
for separately payable drugs and biologicals. The proposal was based on
the proposed redistribution of $150 million (through a 27 percent
reduction in the cost of coded packaged drug and biologicals with an
ASP), between one-third and one-half of the pharmacy overhead cost (the
cost above ASP) of coded packaged drugs and biologicals with an ASP in
hospital outpatient claims, to the cost of separately payable drugs and
biologicals, preserving the aggregate cost of all drugs and biologicals
observed in the most recent claims and cost report data available for
the proposed rule. We further proposed that the claims data for 340B
hospitals be included in the calculation of payment for drugs and
biologicals under the CY 2010 OPPS, and that 340B hospitals would be
paid the same amounts for separately payable drugs and biologicals as
hospitals that do not participate in the 340B program. Finally, we
proposed that, in accordance with our standard drug payment
methodology, the estimated payments for separately payable drugs and
biologicals would be taken into account in the calculation of the
weight scaler that would apply to the relative weights for all
procedural services (but would not apply to separately payable drugs
and biologicals) paid under the OPPS, as required by section
1833(t)(14)(H) of the Act.
At the August 2009 meeting of the APC Panel, the APC Panel
recommended that CMS pay for all separately payable drugs at a rate of
ASP+6 percent. The APC Panel recommended that CMS redistribute costs
from packaged drugs to separately payable drugs as outlined in the CY
2010 OPPS/ASC proposed rule. Further, the APC Panel recommended that
CMS analyze the impact on different classes of hospitals of payment at
ASP+6 percent for separately payable drugs compared with CY 2009
payment at ASP+4 percent. In addition, the APC Panel requested that CMS
provide an impact analysis of payment for separately payable drugs at
ASP+6 percent on payment rates for other services that use packaged
drugs compared with CY 2009 payment at ASP+4 percent. Finally, the APC
Panel recommended that CMS and stakeholders continue to refine their
analysis of payment for drugs, biologicals, and radiopharmaceuticals to
assess the infrastructure costs associated with the preparation and
handling of these products. Our responses to these recommendations are
included in our responses to comments below.
Comment: Several commenters, including MedPAC, generally agreed
with CMS' proposal to redistribute pharmacy overhead cost from packaged
to separately payable drugs and biologicals. The commenters appreciated
that the proposed
[[Page 60510]]
methodology would not pose an administrative burden to hospitals.
However, many commenters disagreed with CMS' calculation of the
total estimated pharmacy overhead cost of $395 million in the claims
data associated with packaged drugs that resulted in the proposed
redistribution of $150 million, which was between one-half and one-
third of this overhead cost. The commenters stated that CMS' estimate
of $395 million was too low to represent the aggregate pharmacy
overhead cost of all packaged drugs and biologicals, resulting in an
underestimate of how much overhead cost should be redistributed to
separately payable drugs and biologicals and, therefore, a proposed
payment rate for separately payable drugs and biologicals that was too
low. They explained that, although CMS allows flexibility in hospital
charging practices to account for drug and biological cost on hospital
claims, CMS' proposed rule calculation did not take hospital charging
practices for packaged drugs and biologicals into account.
Specifically, in CMS' estimation of the cost of packaged drugs and
biologicals, the commenters pointed out that CMS omitted costs from
claims data for drugs and biologicals that either do not have a HCPCS
code or do not have a reported ASP, including those costs reported
under a pharmacy revenue code line without a drug or biological HCPCS
code due to hospital choice or claims processing requirements. The
commenters argued that these uncoded packaged drug and biological costs
represent a substantial portion of aggregate packaged drug and
biological cost under the OPPS.
Some commenters estimated the additional packaged pharmacy overhead
cost attributable to these uncoded drugs and biologicals to be nearly
$560 million. The commenters asserted that hospitals mark up the costs
of drugs and biologicals reported on claims under pharmacy revenue code
lines without HCPCS codes similarly to packaged drugs and biologicals
reported with HCPCS codes. Several commenters provided analyses to
support their contention that the costs of uncoded pharmacy revenue
code lines reflect mostly packaged drug and biological costs, and that
when hospitals do not report packaged drugs and biologicals with HCPCS
codes, they report uncoded pharmacy revenue code lines instead for
those drugs and biologicals. The commenters concluded that a
significant percentage of the uncoded costs reported under pharmacy
revenue code lines is pharmacy overhead cost disproportionately
attributed to packaged drugs and biologicals due to the tendency of our
established methodology of converting billed charges to costs to
``compress'' the calculated costs to some degree and recognizing that
our choice of an annual drug packaging threshold contributes to the
magnitude of the ASP+X percent payment rate resulting from our standard
drug payment methodology.
In order to address these concerns, the commenters recommended that
CMS redistribute the pharmacy overhead cost attributed to uncoded cost
reported under pharmacy revenue code lines to the cost of separately
payable drugs and biologicals. Some commenters argued that, because
they believe the costs on these uncoded pharmacy revenue code lines
largely are for packaged drugs and biologicals with HCPCS codes, CMS
could accurately assume the same proportional amount of ASP and mark up
as for packaged drugs and biologicals with a HCPCS code and derive a
simulated pharmacy overhead amount. Therefore, they suggested that one-
third to one-half of residual pharmacy overhead cost associated with
these uncoded pharmacy revenue code lines, which they estimate to total
approximately $560 million, should be redistributed to the cost of
separately payable drugs and biologicals.
In addition, several commenters expressed concern that hospitals
may not be billing packaged drugs and biologicals with HCPCS codes
appropriately, resulting in uncoded costs reported under pharmacy
revenue code lines, and that this contributed to the low estimate of
pharmacy overhead costs included in the proposed rule. The commenters
stated that a review of the OPPS claims data found variations in how
hospitals are reporting drugs and biologicals with HCPCS codes under
pharmacy revenue codes. The commenters stated that some hospitals are
inappropriately assigning costs for drugs and biologicals with HCPCS
codes to revenue code 0250 (Pharmacy (also see 063x, an extension of
025x); General Classification), rather than revenue code 0636
(Pharmacy--Extension of 025x; Drugs Requiring Detailed coding (a)).
They speculated about a variety of reasons why more HCPCS-coding for
packaged drug and biological cost was not available to CMS for proposed
rule estimate purposes: (1) Hospitals may have reported their packaged
drugs with revenue code 0250 and the associated charges and units with
no HCPCS codes because HCPCS codes are not required to be reported for
packaged drugs and biologicals; (2) the associated HCPCS code may not
have printed on the claim because of provider billing system settings;
or (3) Medicare contractors may have instructed hospitals not to report
HCPCS codes under revenue code 0250. As a result, the commenters
believed that CMS' derived pharmacy overhead cost estimate for packaged
drugs and biologicals based only on the cost of packaged drugs and
biologicals with a HCPCS code and an ASP in the proposed rule were
inaccurately low. In order to provide complete drug information for
future years, they requested that CMS instruct hospitals to bill for
drugs and biologicals with HCPCS codes under revenue code 0636.
Finally, some commenters expressed frustration that CMS did not
provide information on the assignment of every drug and biological
HCPCS code with a status indicator of ``K,'' ``G,'' or ``N'' to one of
three categories of pharmacy overhead complexity in the analyses that
CMS presented to validate the proposed redistribution of pharmacy
overhead cost from packaged drugs and biologicals with an ASP to
separately payable drugs and biologicals. In light of this omission,
the commenters recommended that CMS redistribute the larger one-half
portion of the one-third to one-half of the proposed pharmacy overhead
cost to accurately account for all pharmacy costs represented in the
HOPD.
Response: We proposed to reallocate approximately $150 million in
pharmacy overhead cost from coded packaged drugs and biologicals with
an ASP to separately payable drugs and biologicals, representing a
middle ground between the one-third to one-half of the total pharmacy
overhead cost associated with this set of packaged drugs and
biologicals. We agree with the commenters that we did not include
uncoded drug and biological costs reported under pharmacy revenue code
lines in our proposed rule estimate of the pharmacy overhead costs of
packaged drugs and biologicals. We also agree with the commenters that
costs on uncoded pharmacy revenue code lines represent OPPS drug and
biological cost. The commenters suggested that we assume the same
relationship between total claim cost and ASP for the uncoded drug and
biological costs in our claims data as we observe for coded packaged
drugs and biologicals with an ASP, and then redistribute one-third of
the assumed, associated pharmacy overhead cost to the cost of
separately payable drugs and biologicals. We were interested to review
the analyses provided by some commenters that used statistical
techniques to compare the uncoded drug and biological costs to the
costs of packaged drugs and biologicals with HCPCS codes but, at this
time, we
[[Page 60511]]
cannot be certain that the assumptions suggested by the commenters
would represent an accurate portion of the uncoded drug and biological
cost attributable to acquisition cost versus pharmacy overhead cost. In
the proposed rule, we stated that a premise of our redistribution model
was our assumption that the associated aggregate ASP for packaged drugs
and biologicals was a proxy for acquisition cost for this group of
drugs and biologicals (74 FR 35327). Our proposed methodology
identified the difference between this proxy for acquisition cost and
the cost of the same coded packaged drugs and biologicals with an ASP
in our claims data as pharmacy overhead cost, and it was one-third to
one-half of that pharmacy overhead cost ($150 million) that we
specifically proposed to redistribute from coded packaged drugs and
biologicals with an ASP to the cost of separately payable drugs and
biologicals.
As shown in Table 41, we determined that the estimated aggregate
cost of separately payable drugs and biologicals, including acquisition
and pharmacy overhead costs, is equivalent to ASP-3 percent for this
final rule with comment period. A redistribution of $150 million from
the pharmacy overhead cost of coded packaged drugs and biologicals with
an ASP (one-third of that pharmacy overhead cost from final rule data)
to the cost of separately payable drugs and biologicals would result in
payment for separately payable drugs and biologicals at ASP+2 percent
for CY 2010. If we were to assume the same relationship between total
claim cost and ASP for the uncoded drug and biological cost in our
claims data as we observe for coded packaged drugs and biologicals with
an ASP as recommended by some commenters, and if we were then to
redistribute one-third of the assumed, associated pharmacy overhead
cost ($150 million) of uncoded drug and biological cost to the cost of
separately payable drugs and biologicals, the result would be payment
for separately payable drugs and biologicals at ASP+7 percent. The
total cost redistribution to separately payable drugs and biologicals
in this case would be $300 million, $150 million from the cost of coded
packaged drugs and biologicals with an ASP and $150 million from the
cost of uncoded packaged drugs and biologicals.
We understand that our proposal for a redistribution of any drug
and biological cost from packaged to separately payable drugs and
biologicals already is not our usual OPPS cost estimation methodology,
which uses the estimated cost from claims and cost report data as
reported to us by hospitals for an item or service to calculate a
relative weight for that service, or in the case of drugs and
biologicals, an ASP+X percent under our standard drug payment
methodology. We made this redistribution proposal because we were
concerned that by not redistributing pharmacy overhead cost from
packaged to separately payable drugs and biologicals, an underpayment
of separately payable drugs and biologicals at ASP-2 percent (ASP-3
percent based on final rule claims data) could result. We remain
concerned that the redistribution of $150 million from the pharmacy
overhead cost of coded packaged drugs and biologicals with an ASP to
payment for separately payable drugs and biologicals, which would
provide payment at ASP+2 percent, also could result in underpayment of
separately payable drugs and biologicals. We are also troubled,
however, that payment for separately payable drug and biologicals at
ASP+7 percent resulting from an assumption that the uncoded drug and
biological cost resembles the coded packaged cost of drugs and
biologicals with an ASP could result in a potential payment
overestimation. As noted above, we cannot be certain that we know what
portion of the uncoded drug and biological cost is acquisition cost
versus pharmacy overhead cost. Therefore, we are not willing to make
even broader assumptions about the magnitude of ASP for uncoded drug
and biological cost in claims or layer any other assumptions on the
proposed methodology that would further significantly redistribute
costs as reported to us by hospitals within the framework of the OPPS
ratesetting methodology.
While we are not making sweeping assumptions that this uncoded
packaged drug and biological cost includes a pharmacy overhead amount
comparable to that of coded packaged drugs and biologicals with an ASP,
we do acknowledge that there must be some pharmacy overhead cost
associated with these uncoded packaged drugs and biologicals that was
not accounted for in our initial estimate of the pharmacy overhead cost
of packaged drugs and biologicals because we expect that hospitals
would have attributed some pharmacy overhead cost to these products
through their mark-up practices. Therefore, while we further examine
the issue of pharmacy overhead costs and while hospitals examine
administrative changes that could result in their submission of more
accurate data to us as described below, we believe that the adoption of
a transitional payment rate of ASP+4 percent based on a pharmacy
overhead adjustment methodology for CY 2010 would base OPPS payment
upon the best available proxy for the average acquisition and pharmacy
overhead costs of separately payable drugs and biologicals. We note
that payment for separately payable drugs and biologicals at ASP+4
percent falls within the range of ASP-3 percent, that would result from
no pharmacy overhead cost redistribution from packaged to separately
payable drugs and biologicals, to ASP+7 percent, that would result from
redistribution of pharmacy overhead cost based on expansive assumptions
about the nature of uncoded packaged drug and biological cost. We
proposed payment for separately payable drugs and biologicals at ASP+4
percent for CY 2010, and our final CY 2010 transitional payment rate is
consistent with this amount. We are confident that ASP+4 percent will
provide appropriate payment for separately payable drugs and
biologicals in CY 2010, noting that this payment is consistent with our
payment in CY 2009. We are not aware of any current access problems for
Medicare beneficiaries to drugs and biologicals in the HOPD based on
our CY 2009 OPPS payment for separately payable drugs and biologicals
at this rate.
Specifically, for CY 2010, to acknowledge the uncoded drug and
biological cost without making significant further assumptions about
the amount of pharmacy overhead cost associated with the drugs and
biologicals captured by this cost and to pay separately payable drugs
and biologicals at ASP+4 percent, we believe it currently would be
appropriate to reallocate $50 million of the total uncoded drug and
biological cost in order to represent the pharmacy overhead cost of
uncoded packaged drugs and biologicals that should be appropriately
associated with the cost of separately payable drugs and biologicals.
We believe that our proposal to reallocate $150 million of cost from
coded packaged drugs and biologicals with an ASP, or one-third of the
pharmacy overhead cost of these products based upon the claims data
available for this CY 2010 final rule, to separately payable drugs and
biologicals continues to be appropriate. The commenters generally
supported the one-third to one-half redistribution estimate. While some
commenters requested a reallocation of one-half of
[[Page 60512]]
the pharmacy overhead cost of packaged drugs and biologicals to
separately payable drugs and biologicals, as already discussed, we do
not believe there is a compelling reason to reallocate that amount. We
note that the reallocation of $50 million or 8 percent of the total
cost of uncoded packaged drugs and biologicals assumes that whatever
pharmacy overhead cost is not accurately associated with uncoded
packaged drugs and biologicals, it would not be less than 8 percent of
total uncoded drug and biological cost. This is intentionally a
conservative estimate, as compared with the case of coded packaged
drugs and biologicals with an ASP and for which we have a specific
pharmacy overhead cost estimate in relationship to their known ASPs
where the reallocation of $150 million constitutes 24 percent of the
total cost of the coded packaged drugs and biologicals with an ASP. As
stated earlier, we are unwilling to make sweeping assumptions that
uncoded packaged drug and biological cost includes a pharmacy overhead
amount comparable to that of coded packaged drugs and biologicals with
an ASP. We are confident that this conservative estimate of $50 million
for redistribution from the cost of uncoded packaged drugs and
biologicals to separately payable drugs and biologicals, as opposed to
the $150 million redistribution that could result from broad
assumptions about the ASPs of these uncoded drugs and biologicals, is
an appropriate amount for CY 2010 in light of our uncertainty about the
relationship between ASP and pharmacy overhead cost for the uncoded
drugs and biologicals.
In summary, with a redistribution of a total of $200 million, $150
million from the pharmacy overhead cost of coded packaged drugs and
biologicals with an ASP as we proposed and $50 million from the cost of
uncoded packaged drugs and biologicals for which we cannot estimate a
more specific pharmacy overhead cost at this time, to separately
payable drugs and biologicals, the final CY 2010 transitional payment
rate for separately payable drugs and biologicals is ASP+4 percent
based on the final pharmacy overhead adjustment methodology.
In response to commenters' frustration that we did not provide
information on our assignment of every drug or biological HCPCS code to
one of three categories of pharmacy overhead complexity in the analyses
that we presented to validate the proposed redistribution methodology,
we did not base our proposed redistribution amount on these analyses.
We explicitly made a proposal to redistribute $150 million in estimated
pharmacy overhead cost associated with coded packaged drugs and
biologicals with an ASP, between one-third and one-half of the
estimated pharmacy overhead cost. Although we did not provide the
precise assignment of drugs and biologicals to the various categories,
we did describe each set of pharmacy overhead complexity categories in
the proposed rule and our methodology for redistributing pharmacy
overhead cost under each scenario. In addition, we posted a
clarification to this discussion for the public replicating our models
on August 6, 2009 during the comment period.
Table 41 displays the final pharmacy overhead adjustment
methodology for separately payable and packaged drugs and biologicals
under the CY 2010 OPPS.
Table 41--CY 2010 Final Rule--Pharmacy Overhead Adjustment Payment Methodology for Separately Payable and
Packaged Drugs and Biologicals
----------------------------------------------------------------------------------------------------------------
Total cost of
Total ASP drugs and
dollars for biologicals in Ratio of cost
drugs and claims data to ASP
biologicals in after (column C/ ASP+X Percent
claims data adjustment column B)
(in millions)* (in
millions)**
----------------------------------------------------------------------------------------------------------------
Uncoded Packaged Drugs and Biologicals.......... Unknown $606 N/A N/A
Coded Packaged Drugs and Biologicals with an ASP 172 466 2.71 ASP+171
Separately Payable Drugs and Biologicals with an 2,972 3,039 1.04 ASP+4
ASP............................................
All Coded Drugs and Biologicals with an ASP..... 3,144 3,505 1.11 ASP+11
----------------------------------------------------------------------------------------------------------------
* Total July 2009 ASP dollars (ASP multiplied by drug or biological units in CY 2008 claims) for drugs and
biologicals with a HCPCS code and ASP information.
** Total cost in the CY 2008 claims data for drugs and biologicals.
We note that hospitals currently have a variety of ways to bill for
drugs and biologicals that are not separately paid. They may report the
charges for the HCPCS code separately on a line, and if the HCPCS code
has a status indicator of ``N,'' no separate payment is made for the
drug or biological, but the reported charge information is available to
use for future ratesetting. Provided that information for the ASP
pricing methodology was available for the drug or biological HCPCS
code, we included drug or biological cost estimated from charges for
claims described by this scenario in our estimation of total pharmacy
overhead costs of coded packaged drugs and biologicals with an ASP for
CY 2010 because we could identify these drugs and biologicals, estimate
their cost from charges in CY 2008 claims data, and use their ASP
pricing information. Another option available to hospitals billing for
packaged drugs and biologicals is to incorporate the charge for the
drug or biological in the charge for the procedure. We are unable to
identify the cost estimated from charges as drug or biological cost
because the procedures are not reported under a pharmacy revenue code
line and, therefore, these packaged drug and biological costs were not
included in our estimate of the total pharmacy overhead cost of
packaged drugs and biologicals. The final way for hospitals to bill for
packaged drugs and biologicals is to include charges for these items
under a pharmacy revenue code line, specifically revenue code 0250,
without a HCPCS code, and it is an additional $50 million from this
uncoded cost of packaged drugs and biologicals that we have
redistributed to the cost of separately payable drugs and biologicals
in our final CY 2010 pharmacy overhead adjustment payment methodology
for drugs and biologicals.
We have adopted this pharmacy overhead adjustment payment
methodology for CY 2010 only after 3 distinct attempts over the 4 prior
years to garner more accuracy in both the
[[Page 60513]]
claim drug or biological charge and Medicare hospital cost report data
as submitted to us by hospitals in an effort to show consideration for
the significant hospital administrative burden that the commenters
cited in response to each proposal that, in turn, precluded further
refinement of our data collection efforts. In light of our commitment
to using hospital data as reported to us by hospitals to set OPPS
payment rates, we believe that it would be inappropriate to assume that
the costs reported under uncoded pharmacy revenue code lines are for
the same drugs and biologicals, with the same ASPs, as the costs of
packaged drugs and biologicals reported with HCPCS codes. We
acknowledge that the pharmacy overhead cost associated with drug and
biological costs reported under uncoded pharmacy revenue code lines
were not included in the proposed rule estimate of total pharmacy
overhead cost of coded packaged drugs and biologicals with an ASP. In
response to the concerns of commenters, we have considered only a small
percentage of this uncoded drug and biological cost to be misallocated
pharmacy overhead cost that is appropriate for redistribution in our
final CY 2010 methodology. We cannot be certain that the amount of
uncoded pharmacy overhead cost is as high as some commenters suggested,
that hospitals mark up these uncoded drugs and biologicals in the same
way as packaged drugs and biologicals with HCPCS codes, or that
significant volume for these uncoded drugs and biologicals might not
warrant allocating a greater percentage of fixed pharmacy overhead cost
to these drugs and biologicals. If hospitals truly desire significantly
greater OPPS payment accuracy for separately payable drugs and
biologicals, it is clear that hospitals will need to assume some burden
in submitting more accurate data to us. In addition, we will continue
to examine the issue of pharmacy overhead costs as we work to refine
our transitional payment methodology for separately payable drugs and
biologicals for future years.
CMS' longstanding policy is to refrain from instructing hospitals
on charging practices for services under most revenue codes. We believe
that this allows hospital flexibility in billing systems and provides
the necessary autonomy for hospitals to manage the many variations that
are possible when creating a hospital chargemaster for multiple payers.
While we do not require hospitals to use revenue code 0636 (Pharmacy-
Extension of 025x; Drugs Requiring Detailed coding (a)) when billing
for drugs and biologicals that have HCPCS codes, whether they are
separately payable or packaged, we believe that a practice of billing
all drugs and biologicals with HCPCS codes under revenue code 0636
would be consistent with NUBC billing guidelines and would provide us
with the most complete and detailed information for ratesetting. We
note that we make packaging determinations for drugs annually based on
cost information reported under HCPCS codes, so the OPPS ratesetting is
best served when hospitals report charges for all items and services
that have HCPCS codes under those HCPCS codes, whether or not payment
for the items and services is packaged or not. As already discussed, it
is our standard ratesetting methodology to rely on hospital cost and
charge information as it is reported to us through the claims data.
More complete data from hospitals on which drugs were provided for a
specific episode would help improve payment accuracy for separately
payable drugs in the future, and we encourage hospitals to change their
reporting practices if they are not already reporting HCPCS codes for
all drugs furnished, if specific codes are available.
Comment: Several commenters objected to the proposed redistribution
methodology as it decreased payments for procedural APCs with high
packaged drug costs included in their payment rates.
One commenter disagreed with the proposed redistribution
methodology and its effect on the imaging procedure APCs. The commenter
argued that because all contrast agents without pass-through status are
packaged, regardless of an individual agent's relationship to the
annual drug packaging threshold, imaging procedure APCs should be
exempt from the proposed pharmacy cost redistribution methodology. If
imaging procedures are not exempted from the redistribution, the
commenter contended that these procedures would be disproportionately
affected because the spectrum of contrast costs are currently
represented as packaged costs within the imaging procedure APCs.
Similarly, another commenter requested that CMS exempt nuclear
medicine procedures from the redistribution methodology. Again, the
commenter stated that as all diagnostic radiopharmaceuticals are
packaged, regardless of their estimated per day costs, their overhead
costs are all represented in the nuclear medicine APCs and a
redistribution would disproportionately affect these services.
Response: We agree that packaging all contrast agents into
associated imaging procedures results in the inclusion of payment for
both expensive and relatively inexpensive contrast agents in the
payment for the associated imaging procedures. While the commenters
contended that this policy thereby incorporates all contrast agents
with different hospital mark up practices in a single packaged payment
methodology and, therefore, should not be subject to the cost
redistribution, we believe that contrast agents are contributing to the
overall charge compression for all drugs and biologicals that is the
specific target of our redistribution methodology. When examining CY
2008 claims data for the final rule, we observed that hospitals
typically billed costs for contrast agents under a pharmacy revenue
code (025X (Pharmacy), 026X (IV Therapy), or 063X (Pharmacy--Extension
of 025X)). We believe that in almost all cases, hospitals capture the
costs and charges for pharmacy revenue codes in the cost center 5600
``Drugs Charged to Patients,'' and this is the cost center that we use
to estimate costs from charges for the pharmacy revenue codes in our
claims data each year. We make the revenue code-to-cost center
crosswalk that we use to match Medicare hospital cost report
information with claims data continually available for inspection and
comment on the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS. The proposed methodology of redistributing
pharmacy overhead cost from packaged drugs and biologicals to
separately payable drugs and biologicals was a proposal to address
charge compression observed within this specific cost center that
captures the vast majority of costs and charges for drugs and
biologicals billed on hospital outpatient claims. Therefore, as most
hospitals billing contrast agents with pharmacy revenue codes are
associating the contrast agent costs with the cost center 5600 ``Drugs
Charged to Patients,'' we believe it is appropriate to redistribute
cost from contrast agents to separately payable drugs and biologicals
under our final CY 2010 pharmacy overhead cost redistribution
methodology.
The commenter also suggested that it would be inappropriate to
redistribute cost from contrast agents because, as discussed in
V.B.2.d. of this final rule with comment period, it has been OPPS
policy to package payment for all contrast agents since CY 2008. The
proposed methodology for redistributing pharmacy overhead cost from
packaged drugs and biologicals to separately payable drugs and
biologicals was not only a proposal to address charge
[[Page 60514]]
compression, but specifically a proposal to address charge compression
in light of our adoption of a specific drug packaging threshold, which
is $65 for CY 2010. The argument that it would, therefore, be
inappropriate to redistribute cost from contrast agents could have
merit if there was a sizable amount of aggregate cost for contrast
agents with per day costs greater than the drug packaging threshold of
$65. In that case, it could be argued that the compression in cost
estimates for expensive contrast agents (those with per day costs
greater than the $65 packaging threshold) created by estimating costs
for those agents by applying the CCR for the single cost center 5600
``Drugs Charged to Patients'' to expensive contrast agents' charges
would be offset by the overestimation of costs for inexpensive contrast
agents (those with per day costs less than the $65 packaging threshold)
created by application of the same single CCR to inexpensive contrast
agents' charges, assuming that hospitals apply a lower markup to
expensive contrast agents and a higher markup to inexpensive contrast
agents. If the mix of expensive and inexpensive contrast agents
resembled the mix of expensive and inexpensive drugs generally captured
in the cost center 5600 ``Drugs Charged to Patients,'' the use of a
single CCR would accurately estimate total cost of contrast agents in
aggregate. Because all contrast agents not receiving pass-through
payment are packaged, packaging an accurate aggregate cost estimate for
contrast agents could argue against redistributing cost from packaged
contrast agents to separately payable drugs and biologicals. However,
in our CY 2010 final rule claims data, we observed only 3 percent of
total contrast agent cost associated with those contrast agents that
have per day costs above $65.
In conclusion, both because contrast agents are billed under
pharmacy revenue codes and accounted for in the cost center 5600
``Drugs Charged to Patients'' and because the per day cost of almost
all contrast agents falls under the CY 2010 packaging threshold of $65,
we believe the estimated cost of contrast agents contains a
disproportionate amount of pharmacy overhead cost and that it is
appropriate to include them in our final CY 2010 redistribution
methodology.
While we believe that contrast agents are commonly billed under
pharmacy revenue codes and that hospitals largely account for the cost
of contrast agents under the cost center 5600 on their Medicare
hospital cost report, we did not observe that hospitals apply the same
practice for diagnostic radiopharmaceuticals. After reviewing our
claims data, we found that the majority of diagnostic
radiopharmaceuticals are billed under revenue code 0343 (Nuclear
Medicine; Diagnostic Radiopharmaceuticals). As specified in our revenue
code-to-cost center crosswalk, we believe hospitals largely account for
the costs and charges associated with revenue code 0343 in a
nonstandard cost center for Diagnostic Nuclear Medicine or the cost
center 4100 ``Radiology-Diagnostic.'' Because the redistribution of
pharmacy overhead cost from packaged drugs and biologicals to
separately payable drugs and biologicals is intended to specifically
address charge compression in the pharmacy cost center, in light of the
above information, we excluded the costs of both diagnostic and
therapeutic radiopharmaceuticals from our estimate of total drug and
biological cost in the claims data for the final CY 2010 redistribution
methodology. As a result, the final payment rates for nuclear medicine
procedures that incorporate the costs of packaged diagnostic
radiopharmaceuticals are not impacted by the final redistribution
methodology.
Comment: Several commenters cited methodological concerns about the
approach CMS used to calculate the proposed equivalent average ASP-
based payment amount for separately payable drugs and biologicals. In
addition, the commenters expressed concern that CMS' cost estimation
methodology is very sensitive to changes in the underlying data and
assumptions. Citing these concerns, some commenters requested payment
at ASP+6 percent for parity with physician's office payment rates for
drugs, arguing that hospital costs for acquisition and associated
pharmacy overhead would be at least as high, if not significantly
greater, than the physician's office costs.
Some commenters noted that the statute requires drug cost surveys
for payment purposes for SCODs under the OPPS, and that the most recent
survey available is outdated as it was performed in CY 2004 by the GAO.
The commenters stated that the statute specifically requires survey
data as the basis for hospital acquisition costs in order to provide a
more appropriate payment methodology for drugs and biologicals, instead
of costs calculated from claims data. They concluded that, by not
performing a survey and by not paying for drugs and biologicals at the
physician's office rate, CMS is not in compliance with the statute. The
commenters acknowledged that drug cost surveys are difficult to
perform. However, they asserted that, in order to comply with the
requirements of the statute, either a survey should be performed or
payment should be made at ASP+6 percent. Other commenters cited the
methodological concerns that are described below regarding the proposed
proxy for average acquisition cost based upon claims data, and stated
that until CMS is able to adequately address these concerns, CMS should
implement payment at ASP+6 percent pursuant to section
1833(t)(14)(A)(iii)(I).
The commenters' first methodological concern is that CMS compared
cost estimates from different points in time to develop payment rates
for drugs and biologicals. Specifically, several commenters noted that
for the proposed rule, CMS used ASP data from the fourth quarter of CY
2008, which is the basis for calculating payment rates for drugs and
biologicals in the physician's office setting using the ASP methodology
effective April 1, 2009, along with hospital claims data from CY 2008
to determine the relative ASP amount for CY 2010 under CMS' proposed
drug payment methodology. The commenters requested that CMS use an
alternative ASP file for the final rule calculation of ASP+X to better
align ASP data with hospital claims and cost report data. The
commenters stated that CMS compared hospital claims data from
throughout CY 2008 with costs estimated from charges that include
pharmacy overhead cost, with ASP data as a proxy for acquisition cost
representing drug sales in the fourth quarter of CY 2008, well after
the time hospitals would have purchased most of their drugs for
administration in CY 2008. As an alternative, the commenters requested
that CMS use an earlier ASP file that is more representative of the
costs to hospitals when they purchase drugs for the claims year.
Specifically, some commenters requested that CMS use the July 1, 2008
ASP file that represents sales from the first quarter of CY 2008 when
comparing CY 2008 hospital claims data to ASP data to determine an
ASP+X amount.
Second, many commenters reiterated concerns that when CMS applies a
single CCR to adjust charges to costs for these drugs and biologicals,
charge compression leads to misallocation of the pharmacy overhead
costs associated with high and low cost drugs and biologicals during
ratesetting. The commenters noted that hospitals disproportionately
mark up their charges for low cost drugs and biologicals to account for
pharmacy overhead costs. They indicated that while the aggregate
charges for inexpensive and expensive drugs may include the total
pharmacy overhead
[[Page 60515]]
costs of the hospital, the charges for individual drugs and biologicals
do not represent the specific acquisition and pharmacy overhead costs
of that particular drug or biological. The commenters explained that
hospitals apply proportionately smaller markups to higher cost items
and proportionately larger markups to lower cost items. The commenters
argued that by using only separately payable drugs in the calculation
of the equivalent average ASP-based amount, the pharmacy overhead costs
associated with these separately payable drugs that are
disproportionately included in the charges for packaged drugs are not
factored into the calculation, resulting in an artificially low ASP
add-on percentage. Therefore, some commenters suggested using the costs
of both packaged drugs and separately payable drugs when calculating
the equivalent average ASP-based payment amount for separately payable
drugs, as they argued that this would provide a more accurate ASP-based
payment amount for separately payable drugs. As an alternative, the
commenters recommended that CMS eliminate the drug packaging threshold
and provide separate payment for all Part B drugs under the OPPS at an
ASP+X percent amount calculated from the cost of all drugs with HCPCS
codes.
Finally, several commenters noted that CMS included, in the
calculation of the costs of separately payable drugs and biologicals,
OPPS claims data from hospitals that receive Federal discounts on drug
prices under the 340B drug pricing program. The commenters pointed out
that hospital participation in the 340B program had grown substantially
over the past few years, and they believed that the costs from these
hospitals now constituted a significant proportion of hospital drug
costs on CY 2008 OPPS claims. The commenters stated that including 340B
hospital claims data when comparing aggregate hospital costs based on
claims data to ASP rates contributed to an artificially low equivalent
average ASP-based payment rate because ASP data specifically exclude
drugs sales under the 340B program.
Response: As discussed above, the provision in section
1833(t)(14)(A)(iii) of the Act continues to be applicable to
determining payments for SCODs for CY 2010. This provision requires
that payment for SCODs be equal to the average acquisition cost for the
drug for that year (which, at the option of the Secretary, may vary by
hospital group) as determined by the Secretary, subject to any
adjustment for overhead costs and taking into account the hospital
acquisition cost survey data under section 1833(t)(14)(D) of the Act,
or if hospital acquisition cost data are not available, then the
average price for the drug in the year established under section
1842(o), 1847A, or 1847B of the Act, as the case may be, as calculated
and adjusted by the Secretary as necessary for purposes of section
1833(t)(14)of the Act. In the CY 2006 OPPS final rule with comment
period (70 FR 68640), we compared hospital drug cost data that were
available to us at the time, specifically: (1) data from the GAO
survey; (2) hospital claims data from CY 2004; and (3) ASP information.
In addition, we discussed our methodology for comparing these data that
represented different timeframes from 2004 to 2006. As a result of our
analysis comparing these three sources, we concluded that, on average,
the costs from hospital claims data representing SCODs were roughly
equivalent to payment at ASP+6 percent. Therefore, we finalized a
policy that used our hospital claims data as a proxy for average
hospital acquisition cost and provided payment for separately payable
drugs that do not have pass-through status at ASP+6 percent for CY 2006
(70 FR 68639 through 68642). While the commenters are correct that the
statute allows for the use of the methodology described in section
1842(o), section 1847A or section 1847B of the Act, as calculated and
adjusted by the Secretary as necessary, this is only when hospital
acquisition cost data are not available. We believe that we have
established both our hospital claims data and ASP data as an
appropriate proxy for average hospital acquisition cost, taking the GAO
survey information into account for the base year (70 FR 68641). Many
of the drugs and biologicals covered under the OPPS are provided a
majority of the time in the hospitals setting, and the ASP information
we collect would be an adequate proxy for hospital acquisition cost.
Further, as already discussed, the commenters have not disputed the
accuracy of the total drug and biological cost estimated in our claims
data, only the estimated cost of separately payable drugs and
biologicals. While we have not yet performed hospital drug acquisition
cost surveys similar to the GAO survey, we note that the statute only
calls for ``periodic'' surveys. Therefore, we disagree that we are not
complying with the statute by not performing a survey and not paying at
the physician's office rate. We note, however, that we are considering
the possibility of such a survey at some point in the future.
Therefore, we do not believe that it is appropriate at this time to
provide payment at anything other than average acquisition cost, with a
redistribution for pharmacy overhead, based on the drug and biological
costs observed in hospital claims data and pricing information observed
in ASP data. We disagree with the commenters who believe that our
redistribution methodology is not an appropriate proxy for average
hospital acquisition cost, with an adjustment for pharmacy overhead
cost. We have no basis for providing payment for separately payable
drugs at the physician's office rate in the face of an appropriate
proxy for average hospital acquisition cost, as described in detail
below.
In response to the commenters who claimed that hospital costs for
drug acquisition and associated pharmacy overhead would be at least as
high, if not significantly greater, than the physician's office costs,
we have no information that would confirm this statement. ASP
information is only available for all sales of drugs and biologicals,
so we cannot compare hospital and physician's office acquisition costs
for individual drugs and biologicals or in aggregate. While our final
CY 2010 pharmacy overhead adjustment methodology for payment of
separately payable drugs and biologicals relies on the assumption that
ASP is a fair estimate of hospitals' average acquisition cost of drugs
and biologicals in general, we expect that drug acquisition costs could
vary across settings and clinical cases. In some cases hospital drug
acquisition costs could be lower than the costs to physicians' offices,
based on high volume purchasing agreements, and in other cases hospital
acquisition costs could be greater, based on their need for emergency
purchases outside of negotiated contracts with preestablished best
rates. We also expect that pharmacy overhead costs could vary across
hospital and physician's office settings, based on the drugs and
biologicals administered in those settings. Many hospitals provide a
range of drugs and biologicals, including those with high and low
pharmacy overhead costs, whereas physicians' offices may be more likely
to provide drugs and biologicals with typically high (or low) pharmacy
overhead costs. This unknown variability in drug acquisition and
pharmacy overhead costs across settings means that we cannot conclude
that the acquisition and pharmacy overhead costs of drugs and
biologicals in the HOPD are greater or less than the physician's office
costs. Finally, the ASP-based payment rate for drugs
[[Page 60516]]
furnished in physicians' offices is specified in the statute as ASP+6
percent, whereas the OPPS payment is based on average hospital
acquisition cost and associated pharmacy overhead cost. Therefore, we
do not believe that comparisons of OPPS drug payment rates with
physician's office payment rates suggesting that parity is necessary
are applicable to determining appropriate payment rates for separately
payable drugs and biologicals under the OPPS.
For our calculation of per day costs of HCPCS codes for drugs and
nonimplantable biologicals in the CY 2010 OPPS/ASC final rule with
comment period, we proposed to use ASP data from the first quarter of
CY 2009, which is the basis for calculating payment rates for drugs and
biologicals in the physician's office setting using the ASP methodology
effective July 1, 2009, along with updated hospital claims data from CY
2008 (74 FR 35320). We also proposed to use these data for budget
neutrality estimates and impact analyses for this CY 2010 OPPS/ASC
final rule with comment period. Payment rates for HCPCS codes for
separately payable drugs and nonimplantable biologicals included in
Addenda A and B to this final rule with comment period are based on ASP
data from the second quarter of CY 2009, which are the basis for
calculating payment rates for drugs and biologicals in the physician's
office setting using the ASP methodology effective October 1, 2009.
Since implementing the ASP+X methodology in CY 2006, we have used
the most recently available data to establish our relative ASP payment
rate for the upcoming year, consistent with our overall policy of
updating the OPPS of using the most recent claims and cost report data.
For the CY 2010 final rule, this results in using July 2009 ASP payment
rates (based on first quarter CY 2009 sales), CY 2008 hospital claims
data, and the most recently available hospital cost reports (in the
majority of cases cost reports beginning in CY 2007). As we have noted
in previous years, the relative ASP+X amount is likely to change from
the proposed rule to the final rule as a result of updated ASP data,
hospital claims data, and updated hospital cost reports. If we were to
introduce significant error into our ASP+X percent calculation by not
aligning all pricing and cost data to a single period of time, we would
consider changing the ASP data that we use. However, we believe that if
we were to use an ASP file from CY 2008, which commenters claim would
more accurately represent hospital costs associated with procuring
drugs and biologicals for that claims year, we would need to offset any
increases in the relative ASP amount resulting from the use of a
different ASP file with a deflation adjustment for each hospital's CCRs
for cost center 5600 ``Drugs Charged to Patients'' in order to simulate
costs from claim charges in the claim year. We make comparable CCR
deflation estimates when we set our fixed dollar eligibility threshold
for outlier payments described in section II.F. of this final rule with
comment period. Because over recent years hospital charges have
typically grown faster than costs, we would expect such an adjustment
to reduce estimated costs in our claims data. Therefore, we are
continuing our current policy of using the most recently available
claims, cost report, and ASP data when performing our ASP+X calculation
under the final CY 2010 redistribution methodology in order to set
payment rates for separately payable drugs and biologicals.
For CY 2010, we again attempted to address the issue of charge
compression by proposing a methodology that reallocates pharmacy
overhead costs from packaged drugs and biologicals to separately
payable drugs and biologicals. We have made several proposals in the
past to identify pharmacy overhead costs and address charge compression
in the pharmacy revenue center. For the CY 2006 OPPS, we proposed to
establish three distinct Level II HCPCS C-codes and three corresponding
APCs for drug handling categories to differentiate overhead costs for
drugs and biologicals (70 FR 42730). In the CY 2008 OPPS/ASC proposed
rule (72 FR 42735), we proposed to instruct hospitals to remove the
pharmacy overhead charge for both packaged and separately payable drugs
and biologicals from the charge for the drug or biological and report
the pharmacy overhead charge on an uncoded revenue code line on the
claim. We believed that this would provide us with an avenue for
collecting pharmacy handling cost data specific to drugs in order to
package the overhead costs of these items into the associated
procedures, most likely drug administration services. For CY 2009, we
proposed to split the ``Drugs Charged to Patients'' cost center into
two cost centers: one for drugs with high pharmacy overhead costs and
one for drugs with low pharmacy overhead costs (73 FR 41492). We noted
that we expected that CCRs from the proposed new cost centers would be
available in 2 to 3 years to refine OPPS drug cost estimates by
accounting for differential hospital markup practices for drugs with
high and low overhead costs. However, we did not finalize any of these
proposals due to concerns from the hospital community that these
proposals would create an overwhelming burden on hospitals and staff.
We have once again proposed to address the issue of charge compression,
in this case without requiring any changes to current hospital
reporting practices.
It has been our policy, since CY 2006, to only use separately
payable drugs and biologicals in the calculation of the equivalent
average ASP-based payment amount under the OPPS. We do not include
packaged drugs and biologicals in this standard analysis because cost
data for these items are already accounted for within the APC
ratesetting process through the median cost calculation methodology
discussed in section II.A.2. of this final rule with comment period. To
include the costs of coded packaged drugs and biologicals in both our
APC ratesetting process (for associated procedures present on the same
claim) and in our ratesetting process to establish an equivalent
average ASP-based payment amount for separately payable drugs and
biologicals would give these data disproportionate emphasis in the OPPS
system by skewing our analyses, as the costs of these packaged items
would be, in effect, counted twice. Accordingly, we are not adopting
the suggestion from commenters that we include all packaged and
separately payable drugs and biologicals when establishing an
equivalent average ASP-based rate to provide payment for the hospital
acquisition and pharmacy handling costs of drugs and biologicals.
However, we remind commenters that because the costs of packaged drugs
and biologicals, including their pharmacy overhead costs, are packaged
into the payments for the procedures in which they are administered,
the OPPS provides payment for both the drugs and the associated
pharmacy overhead costs through the applicable procedural APC payments.
Furthermore, we disagree with the commenters who recommend that we
should pay separately for all drugs and biologicals with HCPCS codes.
We continue to believe that packaging is a fundamental component of a
prospective payment system that contributes to important flexibility
and efficiency in the delivery of high quality hospital outpatient
services and, therefore, we believe it is appropriate to maintain a
modest drug packaging threshold that packages the costs of
[[Page 60517]]
inexpensive drugs into payment for the associated procedures.
Moreover, we continue to believe that excluding data from hospitals
that participate in the 340B program from our ASP+X calculation, and
paying those hospitals at that derived payment amount, would
inappropriately redistribute payment to drugs and biologicals from
payment for other services under the OPPS. The ASP-equivalent cost of
drugs under the OPPS that would be calculated only from claims data for
non-340B hospitals would likely be higher than the cost of all drugs
from our aggregate claims for all hospitals. To set drug payment rates
for all hospitals based on a subset of hospital cost data, determined
only from claims data for non-340B hospitals would increase the final
APC payment weights for drugs in a manner that does not reflect the
drug costs of all hospitals, although all hospitals, including 340B
hospitals, would be paid at these rates for drugs. Furthermore, as a
consequence of the statutory requirement for budget neutrality,
increasing the payment weights for drugs by excluding 340B hospital
claims would reduce the relative payment weights for other services in
a manner that does not reflect the procedural costs of all hospitals
relative to the drug costs of all hospitals, thereby distorting the
relativity of payment weights for services based on hospital costs.
Many commenters on the CY 2009 OPPS/ASC final rule with comment period
were generally opposed to differential payment for hospitals based on
their 340B participation status, and we do not believe it would be
appropriate to exclude claims from this subset of hospitals in the
context of a CY 2010 drug and biological payment policy that pays all
hospitals at the same rate for separately payable drugs and
biologicals.
Therefore, for CY 2010, we are finalizing our proposed payment for
separately payable drugs and biologicals, with modification. We are
redistributing $200 million from the cost of packaged drugs and
biologicals to separately payable drugs and biologicals. The $200
million consists of $150 million (one-third of the pharmacy overhead
cost) from the coded packaged drug and biological cost for drugs and
biologicals with an ASP and $50 million from the packaged drug and
biological cost for drugs and biologicals without an ASP. To model this
policy for the CY 2010 final rule with comment period, we reduced the
cost of coded packaged drugs and biologicals with an ASP by 24 percent
(based on final rule data; reduction was 27 percent based on proposed
rule data) and the cost of packaged drugs and biologicals without a
HCPCS code or an ASP by 8 percent when we calculated the median cost of
the CY 2010 procedural APCs. This redistribution results in payment for
separately payable drugs and biologicals at a transitional rate of
ASP+4 percent for CY 2010 under a pharmacy overhead adjustment
methodology. We are, therefore, not accepting the August 2009
recommendation of the APC Panel to pay for separately payable drugs and
biologicals at ASP+6 percent. Furthermore, because we are finalizing
payment of separately payable drugs at APS+4 percent, we are not
accepting the August 2009 APC Panel recommendations to analyze the
impact of ASP+6 percent payment on different classes or for services
that use packaged drugs compared with payment at ASP+4 percent. We are
accepting the recommendation of the APC Panel to continue to refine our
analyses of payment for drugs, biologicals, and radiopharmaceuticals
and continue to welcome information and analyses from the public
regarding pharmacy overhead costs.
Comment: One commenter requested that CMS create a HCPCS J-code for
tositumomab, currently provided under a radioimmunotherapy regimen and
billed as part of HCPCS code G3001 (Administration and supply of
tositumomab, 450 mg). The commenter argued that because tositumomab is
listed in compendia, is approved by the FDA as part of the BEXXAR[reg]
regimen, and has its own National Drug Code (NDC) number, it should be
recognized as a drug and, therefore, be paid as other drugs are paid
under the OPPS methodology, instead of having a payment rate determined
by hospital claims data. The commenter suggested that a payment rate
could be established using the ASP methodology.
Response: We have consistently noted that unlabeled tositumomab is
not approved as either a drug or a radiopharmaceutical, but it is a
supply that is required as part of the radioimmunotherapy treatment
regimen (November 18, 2008 OPPS/ASC final rule with comment period (73
FR 68658); November 27, 2007 OPPS/ASC final rule with comment period
for CY 2008 (72 FR 66765); November 10, 2005 OPPS final rule with
comment period for CY 2006 (70 FR 68654); November 7, 2003 OPPS final
rule with comment period for CY 2004 (68 FR 63443)). We do not make
separate payment for supplies used in services provided under the OPPS.
Payments for necessary supplies are packaged into payments for the
separately payable services provided by the hospital. Specifically,
administration of unlabeled tositumomab is a complete service that
qualifies for separate payment under its own clinical APC. This
complete service is currently described by HCPCS code G3001. Therefore,
we do not agree with the commenter's recommendation that we should
assign a separate HCPCS code to the supply of unlabeled tositumomab.
Rather, we will continue to make separate payment for the
administration of tositumomab, and payment for the supply of unlabeled
tositumomab is packaged into the administration payment.
We note that separately payable drug and biological payment rates
listed in Addenda A and B to this final rule with comment period, which
illustrate the final CY 2010 payment of ASP+4 percent for separately
payable nonpass-through drugs and nonimplantable biologicals and ASP+6
percent for pass-through drugs and biologicals, reflect either ASP
information that is the basis for calculating payment rates for drugs
and biologicals in the physician's office setting effective October 1,
2009 or mean unit cost from CY 2008 claims data and updated cost report
information available for this final rule with comment period. In
general, these published payment rates are not reflective of actual
January 2010 payment rates. This is because payment rates for drugs and
biologicals with ASP information for January 2010 will be determined
through the standard quarterly process where ASP data submitted by
manufacturers for the third quarter of 2009 (July 1, 2009 through
September 30, 2009) are used to set the payment rates that are released
for the quarter beginning in January 2010 near the end of December
2009. In addition, payment rates for drugs and biologicals for which
there was no ASP information available for October 2009 payment and,
therefore, these products would be paid based on mean unit cost in CY
2010 based on available information at the time of this final rule with
comment period, may have ASP information available for payment for the
quarter beginning in January 2010. These drugs and biologicals would
then be priced based on their newly available ASP information. Finally,
there may be drugs and biologicals that have ASP information available
for this final rule with comment period (reflecting October 2009 ASP
data) that do not have ASP information available for the quarter
beginning in January 2010. These drugs and biologicals would then be
paid based on mean unit cost data derived from CY 2008 hospital claims.
[[Page 60518]]
Therefore, the payment rates listed in Addenda A and B to this final
rule with comment period are not for January 2010 payment purposes and
are only illustrative of the CY 2010 OPPS payment methodology using the
most recently available information at the time of this final rule with
comment period.
4. Payment for Blood Clotting Factors
For CY 2009, we are providing payment for blood clotting factors
under the OPPS at ASP+4 percent, plus an additional payment for the
furnishing fee. We note that when blood clotting factors are provided
in physicians' offices under Medicare Part B and in other Medicare
settings, a furnishing fee is also applied to the payment. The CY 2009
updated furnishing fee is $0.164 per unit.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35333), for CY 2010,
we proposed to pay for blood clotting factors at ASP+4 percent,
consistent with our proposed payment policy for other nonpass-through
separately payable drugs and biologicals, and to continue our policy
for payment of the furnishing fee using an updated amount. Because the
furnishing fee update is based on the percentage increase in the
Consumer Price Index (CPI) for medical care for the 12-month period
ending with June of the previous year and the Bureau of Labor
Statistics releases the applicable CPI data after the MPFS and OPPS/ASC
proposed rules are published, we were not able to include the actual
updated furnishing fee in this proposed rule and we also are not able
to include the actual updated furnishing fee in this final rule with
comment period. Therefore, in accordance with our policy as finalized
in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66765),
we will announce the actual figure for the percent change in the
applicable CPI and the updated furnishing fee calculated based on that
figure through applicable program instructions and posting on the CMS
Web site at: http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/.
Comment: One commenter expressed support for CMS' proposal to
continue to apply the furnishing fee for blood clotting factors
provided in the OPD. The commenter stated that the furnishing fee helps
ensure patient access to blood clotting factors by increasing the
payment rate for these items. Another commenter disagreed with CMS'
proposed payment rate of ASP+4 percent for blood clotting factors in CY
2010, even with the furnishing fee add-on. The commenters stated that
ASP+4 percent was inadequate for all drugs and biologicals, and is
especially inappropriate for blood clotting factors. Finally, one
commenter supported the payment of blood clotting factors at the same
rate that applies to other nonpass-through separately payable drugs and
biologicals in the HOPD.
Response: We continue to believe that applying the furnishing fee
for blood clotting factors is appropriate for CY 2010. However, we see
no compelling reason to provide payment for blood clotting factors
under a different methodology for OPPS purposes at this time. We
believe that the payment rate of ASP+4 percent that we are finalizing
for payment of all nonpass-through separately payable drugs and
biologicals in CY 2010 is appropriate. In addition, we believe that it
continues to be appropriate to pay a furnishing fee for blood clotting
factors under the OPPS, as is done in the physician's office setting
and the inpatient hospital setting.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to provide
payment for blood clotting factors under the same methodology as other
separately payable drugs and biologicals under the OPPS and to continue
paying an updated furnishing fee.
5. Payment for Therapeutic Radiopharmaceuticals
a. Background
Section 303(h) of Public Law 108-173 exempted radiopharmaceuticals
from ASP pricing in the physician's office setting. Beginning in the CY
2005 OPPS final rule with comment period, we have exempted
radiopharmaceutical manufacturers from reporting ASP data for payment
purposes under the OPPS. (For more information, we refer readers to the
CY 2005 OPPS final rule with comment period (69 FR 65811) and the CY
2006 OPPS final rule with comment period (70 FR 68655).) Consequently,
we did not have ASP data for radiopharmaceuticals for consideration for
previous years' OPPS ratesetting. In accordance with section
1833(t)(14)(B)(i)(I) of the Act, we have classified
radiopharmaceuticals under the OPPS as SCODs. As such, we have paid for
radiopharmaceuticals at average acquisition cost as determined by the
Secretary and subject to any adjustment for overhead costs.
Radiopharmaceuticals also are subject to the policies affecting all
similarly classified OPPS drugs and biologicals, such as pass-through
payment for diagnostic and therapeutic radiopharmaceuticals and
individual packaging determinations for therapeutic
radiopharmaceuticals, discussed earlier in this proposed rule.
For CYs 2006 and 2007, we used mean unit cost data from hospital
claims to determine each radiopharmaceutical's packaging status and
implemented a temporary policy to pay for separately payable
radiopharmaceuticals based on the hospital's charge for each
radiopharmaceutical adjusted to cost using the hospital's overall CCR.
In addition, in the CY 2006 OPPS final rule with comment period (70 FR
68654), we instructed hospitals to include charges for
radiopharmaceutical handling in their charges for the
radiopharmaceutical products so these costs would be reflected in the
CY 2008 ratesetting process. The methodology of providing separate
radiopharmaceutical payment based on charges adjusted to cost through
application of an individual hospital's overall CCR for CYs 2006 and
2007 was finalized as an interim proxy for average acquisition cost
because of the unique circumstances associated with providing
radiopharmaceutical products to Medicare beneficiaries. The single OPPS
payment represented Medicare payment for both the acquisition cost of
the radiopharmaceutical and its associated handling costs.
During the CY 2006 and CY 2007 rulemaking processes, we encouraged
hospitals and radiopharmaceutical stakeholders to assist us in
developing a viable long-term prospective payment methodology for these
products under the OPPS. As reiterated in the CY 2008 OPPS/ASC final
rule with comment period (72 FR 66766), we were pleased to note that we
had many discussions with interested parties regarding the availability
and limitations of radiopharmaceutical cost data.
In considering payment options for therapeutic radiopharmaceuticals
for CY 2008, we examined several alternatives that we discussed in the
CY 2008 OPPS/ASC proposed rule (72 FR 42738 through 42739) and CY 2008
OPPS/ASC final rule with comment period (72 FR 66769 through 66770).
After considering the options and the public comments received, we
finalized a CY 2008 methodology to provide prospective payment for
therapeutic radiopharmaceuticals (defined as those Level II HCPCS codes
that include the term ``therapeutic'' along with a radiopharmaceutical
in their long code descriptors) using mean costs derived from the CY
2006 claims data, where the costs were determined using our standard
methodology of applying hospital-specific departmental CCRs to
[[Page 60519]]
radiopharmaceutical charges, defaulting to hospital-specific overall
CCRs only if appropriate departmental CCRs were unavailable (72 FR
66772). In addition, we finalized a policy to package payment for all
diagnostic radiopharmaceuticals (defined as those Level II HCPCS codes
that include the term ``diagnostic'' along with a radiopharmaceutical
in their long code descriptors) for CY 2008. As discussed in the CY
2008 OPPS/ASC proposed rule (72 FR 42739), we believed that adopting
prospective payment for therapeutic radiopharmaceuticals based on
historical hospital claims data was appropriate because it served as
our most accurate available proxy for the average hospital acquisition
cost of separately payable therapeutic radiopharmaceuticals. In
addition, we noted that we have found that our general prospective
payment methodology based on historical hospital claims data results in
more consistent, predictable, and equitable payment amounts across
hospitals and likely provides incentives to hospitals for efficiently
and economically providing these outpatient services.
Prior to the implementation of the final CY 2008 methodology of
providing a prospective payment for therapeutic radiopharmaceuticals,
section 106(b) of Public Law 110-173 was enacted on December 29, 2007
specifying payment for therapeutic radiopharmaceuticals based on
individual hospital charges adjusted to cost. Therefore, hospitals
continued to receive payment for therapeutic radiopharmaceuticals by
applying the hospital-specific overall CCR to each hospital's charge
for a therapeutic radiopharmaceutical from January 1, 2008, through
June 30, 2008. As we stated in the CY 2009 OPPS/ASC proposed rule (73
FR 41493), thereafter, the OPPS would provide payment for separately
payable therapeutic radiopharmaceuticals on a prospective basis, with
payment rates based upon mean costs from hospital claims data as set
forth in the CY 2008 OPPS/ASC final rule with comment period, unless
otherwise required by law.
Following issuance of the CY 2009 OPPS/ASC proposed rule, section
142 of Public Law 110-275 amended section 1833(t)(16)(C) of the Act, as
amended by section 106(a) of Public Law 110-173, to further extend the
payment period for therapeutic radiopharmaceuticals based on hospital's
charges adjusted to cost through December 31, 2009. Therefore, we are
continuing to pay hospitals for therapeutic radiopharmaceuticals at
charges adjusted to cost through the end of CY 2009.
b. Payment Policy
Since the start of the temporary cost-based payment methodology for
radiopharmaceuticals in CY 2006, we have met with several interested
parties on a number of occasions regarding payment under the OPPS for
radiopharmaceuticals and have received numerous different suggestions
from these stakeholders regarding payment methodologies that we could
employ for future use under the OPPS.
In the CY 2008 OPPS/ASC final rule with comment period (72 FR
66771), we solicited comments requesting interested parties to provide
information related to whether the existing ASP methodology could be
used to establish payment for specific therapeutic radiopharmaceuticals
under the OPPS. Similar to the recommendations we received during the
CY 2008 OPPS/ASC proposed rule comment period (72 FR 66770), we
received several suggestions regarding the establishment of an OPPS-
specific methodology for radiopharmaceutical payment that would be
similar to the ASP methodology, without following the established ASP
procedures referenced at section 1847A of the Act and implemented
through rulemaking. Some commenters recommended using external data
submitted by a variety of sources other than manufacturers. Along this
line, commenters suggested gathering information from nuclear
pharmacies using methodologies with a variety of names such as Nuclear
Pharmacy Calculated Invoiced Price (Averaged) (CIP) and Calculated
Pharmacy Sales Price (CPSP). Other commenters recommended that CMS base
payment for certain radiopharmaceuticals on manufacturer-reported ASP.
As noted in the CY 2008 OPPS/ASC final rule with comment period (72
FR 66771), a ratesetting approach based on external data would be
administratively burdensome for us because we would be required to
collect, process, and review external information to ensure that it was
valid, reliable, and representative of a diverse group of hospitals so
that it could be used to establish rates for all hospitals. However, we
specifically requested additional comments regarding the use of the
existing ASP reporting structure for therapeutic radiopharmaceuticals
as this established methodology was already used for payment of other
drugs provided in the hospital outpatient setting (72 FR 66771). While
we received several recommendations from commenters on the CY 2008
OPPS/ASC final rule with comment period regarding payment of
therapeutic radiopharmaceuticals based on estimated costs provided by
manufacturers or other parties, we believe that the use of external
data for payment of therapeutic radiopharmaceuticals should only be
adopted if those external data are subject to the same well-established
regulatory framework as the ASP data currently used for payment of
separately payable drugs and biologicals under the OPPS. We have
previously indicated that nondevice external data used for setting
payment rates should be representative of a diverse group of hospitals
both by location and type, and should also identify the relevant data
sources. We do not believe that external therapeutic
radiopharmaceutical cost data voluntarily provided outside of the
established ASP methodology, either by manufacturers or nuclear
pharmacies, would generally satisfy these criteria that are minimum
standards for setting OPPS payment rates.
We received public comments on the CY 2008 OPPS/ASC final rule with
comment period from certain radiopharmaceutical manufacturers who
indicated that the standard ASP methodology could be used for payment
of certain therapeutic radiopharmaceutical products. Specifically,
these manufacturers expressed interest in providing ASP data for their
therapeutic radiopharmaceutical products as a basis for payment under
the OPPS.
In the CY 2009 OPPS/ASC proposed rule (73 FR 41495), we proposed to
allow manufacturers to submit ASP information for any separately
payable therapeutic radiopharmaceutical for payment purposes under the
OPPS. If ASP information was not submitted or appropriately certified
by the manufacturer for a given calendar year quarter, then for that
quarter we proposed to provide prospective payment based on the
therapeutic radiopharmaceuticals mean cost from hospital claims data.
However, as stated above, section 142 of Public Law 110-275 amended
section 1833(t)(16)(C) of the Act, as amended by section 106(a) of
Public Law 110-173, to further extend the payment period for
therapeutic radiopharmaceuticals based on hospital's charges adjusted
to cost through December 31, 2009, so we did not finalize this
proposal. We note that, in response to our proposed therapeutic
radiopharmaceutical payment methodology for CY 2009, we received a
number of public comments that were supportive of the proposal for
future years.
At the February 2009 meeting of the APC Panel, the APC Panel
[[Page 60520]]
recommended that CMS use the ASP methodology to pay for therapeutic
radiopharmaceuticals and, where ASP data are not available, to pay
based on mean costs from claims data for CY 2010. We accepted this
recommendation, and for CY 2010, we proposed to allow manufacturers to
submit ASP information for any separately payable therapeutic
radiopharmaceutical in order for therapeutic radiopharmaceuticals to be
paid based on ASP beginning in CY 2010 under the OPPS (74 FR 35334
through 35336). Similar to our CY 2009 proposal, for CY 2010, we did
not propose to compel manufacturers to submit ASP information.
Furthermore, as discussed in the CY 2009 OPPS/ASC proposed rule (73 FR
41495), we stated that the ASP data submitted would need to be provided
for a patient-specific dose, or patient-ready form, of the therapeutic
radiopharmaceutical in order to properly calculate the ASP amount for a
given HCPCS code. In addition, in those instances where there is more
than one manufacturer of a particular therapeutic radiopharmaceutical,
we noted that all manufacturers would need to submit ASP information in
order for payment to be made on an ASP basis. We specifically requested
public comment on the development of a crosswalk, similar to the NDC/
HCPCS crosswalk for separately payable drugs and biologicals posted on
the CMS Web site at: http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01a1_2009aspfiles.asp#TopOfPage, for use for therapeutic
radiopharmaceuticals.
Comment: Several commenters requested guidance on how costs
associated with the manufacturing, compounding, and preparation of
therapeutic radiopharmaceuticals should be reported when submitting
ASP. The commenters stated that there are several activities that may
take place at a variety of locations in order to prepare a
radiopharmaceutical for patient administration. These services range in
complexity from activities typical to any hospital pharmacy, such as
drawing up a therapeutic radiopharmaceutical into a syringe and
ensuring proper disposal of wasted product, to more complex processing
such as preparing the therapeutic radiopharmaceutical itself by
radiolabeling a cold kit (nonradioactive compound or complex that is
combined with a radioisotope and results in a radiopharmaceutical)
supplied by the manufacturer using a radioisotope supplied by the
manufacturer or another source. As CMS requested ASP information from
separately payable radiopharmaceutical manufacturers in the form of a
patient-specific dose, or patient-ready form, several commenters argued
that the ASP amount reported to CMS should reflect all costs associated
with these additional activities or items, such as the radioisotope and
radiolabeling processes, needed to provide a patient-ready dose of a
radiopharmaceutical. Several commenters pointed out that, based on
current business practices, a single manufacturer might be unable to
report ASP data for a therapeutic radiopharmaceutical described by a
HCPCS code that incorporated all of these costs, and others were
concerned that CMS intended for the manufacturer to collect and report
the costs of the activities of other entities, such as freestanding
radiopharmacies, that would not typically be reflected in the
radiopharmaceutical manufacturer's sales price.
Response: In the following response, we discuss our expectations
for manufacturer submission of ASP data to CMS to set OPPS payment
rates for separately payable therapeutic radiopharmaceuticals. This
methodology also would apply to manufacturers submitting ASP data for
diagnostic and therapeutic radiopharmaceuticals with pass-through
status. As discussed in section V.A. of this final rule with comment
period, we would use any submitted ASP information for separately
payable diagnostic and therapeutic radiopharmaceuticals with pass-
through status to establish a payment rate of ASP+6 percent, consistent
with our policy for pass-through payment of drugs and biologicals. We
note that ASP submissions for radiopharmaceutical payment under the
OPPS would need to meet all of the existing regulatory and
subregulatory requirements of the ASP reporting process under sections
1847A and 1927(b)(3) of the Act, except as otherwise specified in this
final rule with comment period.
For CY 2010, when reporting an ASP for a separately payable
radiopharmaceutical, we expect that the ASP data reported by a
manufacturer would be representative of the item(s) sold by the
manufacturer. We used the term ``patient-ready'' in our proposed rule
to ensure that ASP data submitted for OPPS payment purposes for
separately payable radiopharmaceuticals reflect the costs of all the
component materials of the finished radiopharmaceutical product. We
expect that the ASP data would represent the sales price of all of the
component materials of the finished radiopharmaceutical product sold by
the manufacturer in terms that reflect the applicable HCPCS code
descriptor, such as ``treatment dose'' or ``millicurie.'' We understand
that manufacturers of separately payable radiopharmaceuticals produce
radiopharmaceuticals that require a variety of processing steps in
order to finalize the product for administration to a beneficiary. For
example, some radiopharmaceuticals are the combined product of a cold
kit produced by one manufacturer, which is then radiolabeled with a
radioisotope provided by a freestanding or hospital nuclear pharmacy.
At a minimum, to be used for separate OPPS radiopharmaceutical payment,
the ASP data reported by a manufacturer must represent sales of all of
the component materials associated with the radiopharmaceutical. In the
context of radiopharmaceuticals used in the HOPD, we would expect that
the component materials would include at least the cold kit and the
radioisotope needed to radiolabel the cold kit in order to make the
radiopharmaceutical.
With regard to additional processing steps, we believe
manufacturers of radiopharmaceuticals could include in their
calculations of ASP for OPPS payment purposes in addition to the prices
for the component materials, the portion of the sales price
attributable to the production of the manufactured product as it is
sold by the manufacturer reporting ASP data. Radiopharmaceuticals are
unique in that they require a radioisotope in addition to the cold kit
and, at a minimum, they require radiolabeling the cold kit in order to
produce a final radiopharmaceutical product. We note that manufacturers
have the discretion to determine the form of the final product that is
sold, and that the manufacturing process may include processing of the
component materials in a variety of ways. To the extent that the price
includes processing steps that are a service performed by the
manufacturer to produce a radiopharmaceutical, we believe that ASP data
submitted for purposes of calculating OPPS payment for
radiopharmaceuticals can appropriately capture those additional
processing costs.
However, we do not believe that all processing steps that may be
needed to prepare the separately payable radiopharmaceutical for
administration to the beneficiary must be included in the submitted ASP
data in order for the OPPS to use manufacturer-reported ASP data as the
basis for
[[Page 60521]]
radiopharmaceutical payment. We expect that the costs of any further
processing of the radiopharmaceutical component materials after the
manufacturer's sales, which could include radiolabeling when a
manufacturer only sells the component materials or could consist of
additional preparation besides radiolabeling, would not be included in
the ASP data submitted by the manufacturer. However, these processing
costs would be paid under the OPPS through the single ASP+4 percent
payment rate for nonpass-through, separately payable therapeutic
radiopharmaceuticals, in the same way that the OPPS currently pays for
the acquisition and pharmacy overhead costs of separately payable drugs
and biologicals through this single payment. We do not believe that it
would be appropriate to include in the ASP for OPPS purposes the
radiopharmaceutical processing services performed in a freestanding
radiopharmacy or hospital pharmacy to prepare a final product or its
component materials for patient administration after the manufactured
product is sold by the manufacturer reporting ASP. In this case, the
combined OPPS ASP+4 percent CY 2010 payment for the acquisition and
pharmacy overhead and handling costs of the separately payable
therapeutic radiopharmaceuticals would pay for these additional
processing activities.
To be sufficient for purposes of calculating the OPPS payment, all
radiopharmaceutical ASP submissions must meet the existing regulatory
and subregulatory requirements of the ASP submission process under
sections 1847A and 1927(b)(3) of the Act, except as otherwise specified
in this final rule with comment period. In particular, we believe the
``bona fide service fee'' test in the ASP regulations is instructive
here, and we would expect manufacturers to apply the ``bona fide
service fee'' test to determine whether service fees it pays to another
entity are ``bona fide service fees.'' We believe the ``bona fide
service fee'' test can be used in the OPPS ASP context to determine
whether a fee that the manufacturer pays to a radiopharmacy for
performing a service on behalf of the radiopharmaceutical manufacturer
could be excluded from the ASP calculation--that is, it would not be
considered a price concession that otherwise would reduce the ASP. The
definition of a ``bona fide service fee'' is included in the ASP
regulations (Sec. 414.802), which defines these fees as ``fees paid by
a manufacturer to an entity, that represent fair market value for a
bona fide, itemized service actually performed on behalf of the
manufacturer that the manufacturer would otherwise perform (or contract
for) in the absence of the service arrangement, and that are not passed
on in whole or in part to a client or customer of an entity whether or
not the entity takes title to the drug.'' In the context of the ASP
calculation under section 1847A of the Act and its implementing
regulations, ``bona fide service fees'' are not considered price
concessions that must be deducted from the ASP. Similarly, we believe
that for OPPS purposes, fees that are paid by the manufacturer that
meet the ``bona fide service fee'' test would not reduce the ASP. Thus,
a radiopharmaceutical manufacturer could contract with an entity,
consistent with these regulations, to perform certain steps in the
radiopharmaceutical manufacturing process that the manufacturer would
otherwise perform itself in order to make the final radiopharmaceutical
product, and the fees paid to the entity could qualify as a ``bona fide
service fee'' that would be included in the ASP calculation for OPPS
purposes. In light of the necessity of radiolabeling to the production
of radiopharmaceuticals, we further believe that for OPPS purposes, the
manufacturer's purchase of the radioisotope and payment for
radiolabeling the cold kit could be factored into the manufacturer's
price for the finished product, and if the fees the manufacturer paid
meet the ``bona fide service fee'' test, they would not need to be
netted against the price for purposes of calculating the manufacturer's
ASP for the therapeutic radiopharmaceutical. Thus, in effect, for OPPS
purposes, if a manufacturer chooses to contract for or purchase these
items or services, fees for these bona fide services could be included
in the manufacturer-reported ASP. We fully expect that the manufacturer
would comply with the ASP regulations and, in particular, would factor
these fees into the ASP only if the prices of the services performed by
the radiopharmacy are fair market value, and the fees are not passed on
to any purchasers of the separately payable radiopharmaceutical.
In summary, a patient-specific dose or patient-ready form in the
context of OPPS ASP submission for radiopharmaceutical payment means
that the ASP reflecting manufacturer sales must represent sales of all
of the component materials for the radiopharmaceutical, including a
minimum of a cold kit and a radioisotope, and be reported in terms that
reflect the applicable HCPCS code descriptor, such as ``treatment
dose'' or ``millicurie.'' The ASP would not necessarily take into
account the preparation of the final form of the therapeutic
radiopharmaceutical for patient administration, including
radiolabeling, which may be conducted by the manufacturer, freestanding
radiopharmacy, hospital pharmacy, or other entity. With respect to the
latter, fees paid by the manufacturer for these services would be
excluded from the ASP calculation (that is, would not be considered
price concessions that reduce the ASP), only if they are ``bona fide
service fees'' as defined in the regulations governing ASP. Thus, if
the manufacturer pays a ``bona fide service'' fee for the services of
the freestanding radiopharmacy, hospital pharmacy, or other entity, and
reflects that fee in its price for the radiopharmaceutical, the amount
of the ``bona fide service fee'' would be taken into account in the
reported ASP data. However, manufacturers are not required to pay for
the preparation of a radiopharmaceutical (including radiolabeling) in a
freestanding radiopharmacy, hospital pharmacy, or other entity after
sale of all of the component materials, and in that case, the cost of
those services would not be reflected in the ASP data submitted to CMS.
Manufacturers should submit ASP data for a separately payable
radiopharmaceutical that incorporates prices for sales of all of the
component materials by the manufacturer. Any additional costs
associated with the preparation of the radiopharmaceutical for
administration to a beneficiary after the manufacturer's sale of the
component materials and any processing that the manufacturer conducts
would be paid through the single OPPS ASP+4 percent payment for the
acquisition and pharmacy overhead and handling costs of the nonpass-
through, separately payable therapeutic radiopharmaceutical.
Comment: Several commenters expressed support for CMS's proposal to
make prospective payment for therapeutic radiopharmaceuticals using the
ASP methodology in CY 2010 to pay the same ASP+4 percent payment rate
that CMS proposed for separately payable nonpass-through drugs and
nonimplantable biologicals. A few commenters suggested that CMS
consider alternatives to the percentage-based add-on to ASP inherent in
the single combined payment for acquisition and handling costs of ASP+4
percent to better account for the more intensive handling that
radiopharmaceuticals require. The
[[Page 60522]]
commenters recommended a variety of options, including a fixed add-on
payment comparable to the complexity of handling involved, a
consignment ASP method that would account for the costs associated with
the handling of a radiopharmaceutical, the preparation of an invoice
that would give a standard drug percentage for handling charges, or the
establishment of some other separate payment mechanism to capture the
costs of radiolabeling. One commenter suggested that CMS could create a
Level II HCPCS code for hospitals to report their charges for
radiolabeling conducted by a radiopharmacy, and hospital cost
information developed from these charges could be used to establish a
separate payment for radiolabeling services.
Response: We appreciate the commenters' support for our proposal to
make prospective payment for nonpass-through, separately payable
therapeutic radiopharmaceuticals at the same ASP+4 percent payment rate
for a ``patient-ready'' dose of a radiopharmaceutical that we establish
for separately payable drugs and nonimplantable biologicals. In our
response to the previous comment, we established our interpretation of
``patient-ready'' for purposes of the OPPS to mean the ASP, reported in
terms that reflect the applicable HCPCS code descriptor, for all
component materials of the radiopharmaceutical and any additional
processing, including radiolabeling, that is reflected in the price the
manufacturer charges for the radiopharmaceutical so long as the fees
paid for such additional processing meet the ``bona fide service fee''
test under the regulations implementing section 1847A of the Act. We
explicitly note that because radiopharmaceuticals uniquely require
radiolabeling of their component materials, we believe that for
purposes of OPPS ASP reporting, radiolabeling could constitute a bona
fide service on behalf of the manufacturer, and the fees for which
could meet the ``bona fide service fee'' test. Given our position on
radiolabeling, we similarly believe that significant processing costs
associated with handling a radiopharmaceutical may be reflected in the
prices used to calculate the manufacturer's ASP data for OPPS purposes.
As noted above, the combined single payment for nonpass-through,
separately payable therapeutic radiopharmaceutical acquisition and
overhead costs embodied in the ASP+4 percent payment rate for CY 2010
would address any other processing after the sale by the manufacturer,
and we believe this payment is sufficient for these additional handling
costs borne by the hospital. Under this interpretation of ``patient-
ready'' dose, we do not believe that making an additional payment for
more intensive handling costs is necessary.
We also do not believe that establishing a separate Level II HCPCS
code to exclusively capture radiopharmaceutical handling costs is an
appropriate approach when we have not adopted such an approach to
capture the pharmacy overhead costs of other drugs and biologicals,
which also may be substantial in some cases. We have heard from
hospitals previously on the issue of separately reporting charges for
pharmacy handling costs of drugs. In the CY 2007 OPPS/ASC final rule
with comment period (71 FR 68090), we discussed our efforts to create a
set of Level II HCPCS codes that hospitals would be able to use to
indicate the relative resource levels of pharmacy handling involved in
preparing a reported drug, biological, or radiopharmaceutical for
administration. This methodology would have allowed us to begin
collecting data on pharmacy overhead costs for possible use in future
ratesetting calculations, yet we did not finalize this proposal due to
the overwhelming response from the hospital community citing the
tremendous administrative burden separately reporting these pharmacy
handling codes and charges would have placed on hospital resources. We
continue to believe that hospitals would likely view such an approach
for radiopharmaceuticals alone as burdensome.
Comment: Several commenters responded to CMS' request for public
comments on the development of a crosswalk similar to the NDC/HCPCS
crosswalk for separately payable drugs and biologicals. These
commenters support a NDC/HCPCS ``crosswalk'' to allow ASP to be
utilized.
Response: We appreciate the commenter's support for implementing a
``crosswalk'' for use for separately payable radiopharmaceuticals. We
believe that an NDC/HCPCS crosswalk for nonpass-through, separately
payable therapeutic radiopharmaceuticals and pass-through diagnostic
and therapeutic radiopharmaceuticals that is similar to the crosswalk
for separately payable drugs and biologicals is appropriate, and we
will, therefore, work to develop and implement the appropriate NDC/
HCPCS crosswalk for separately payable radiopharmaceuticals.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35335), we stated that
we continue to believe that the use of ASP information for OPPS payment
would provide an opportunity to improve payment accuracy for separately
payable radiopharmaceuticals by applying an established methodology
that has already been successfully implemented under the OPPS for other
separately payable drugs and biologicals. As is the case with other
drugs and biologicals subject to ASP reporting under section 1847A of
the Act, we stated that in order for a separately payable
radiopharmaceutical to receive OPPS payment based on ASP beginning
January 1, 2010, we would need to receive ASP information from the
manufacturer no later than November 2, 2009 that would reflect
separately payable radiopharmaceutical sales in the third quarter of CY
2009 (July 1, 2009 through September 30, 2009). Our normal deadline for
January submission is November 1, but because November 1 falls on a
Sunday, the ASP submission deadline for January 2010 payment is
November 2, 2009. We stated that these data would not be available for
publication in the CY 2010 OPPS/ASC final rule with comment period but
would be included in the January 2010 OPPS quarterly release that would
update the payment rates for separately payable drugs, biologicals, and
therapeutic radiopharmaceuticals based on the most recent ASP data,
consistent with our customary practice over the past 4 years when we
have used the ASP methodology for payment of separately payable drugs
and biologicals under the OPPS. In addition, we proposed to receive
information from radiopharmaceutical manufacturers that would allow us
to calculate a unit dose cost estimate based on the applicable HCPCS
code for the separately payable radiopharmaceutical.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35335), we
acknowledged that we realized that not all therapeutic
radiopharmaceutical manufacturers may be willing or able to submit ASP
information for a variety of reasons. We proposed to provide payment at
the OPPS ASP rate if ASP information is available for a given calendar
year quarter or, if ASP information is not available, we proposed to
provide payment based on the most recent hospital mean unit cost data
that we have available. We indicated our belief that both methodologies
represent an appropriate and adequate proxy for average hospital
acquisition cost and associated handling costs for these products.
Therefore, if ASP information for the appropriate period of sales
related to payment in any CY 2010 quarter was not available, we
proposed to rely on the CY 2008 mean unit cost
[[Page 60523]]
data derived from hospital claims to set the payment rates for
therapeutic radiopharmaceuticals. We noted that this is not the usual
OPPS process that relies on alternative data sources, such as WAC or
AWP, when ASP information is temporarily unavailable, prior to
defaulting to the mean unit cost from hospital claims data. We proposed
a methodology specific to nonpass-through, separately payable
therapeutic radiopharmaceuticals where we would immediately default to
the mean unit cost from hospital claims data if sufficient ASP data
were not available because we did not propose to require therapeutic
radiopharmaceutical manufacturers to report ASP data at this time. We
indicated that we did not believe that WAC or AWP is an appropriate
proxy to provide OPPS payment for average therapeutic
radiopharmaceutical acquisition cost and associated handling costs when
manufacturers are not required to submit ASP data. Payment based on WAC
or AWP under the established OPPS ASP methodology for payment of
separately payable drugs and biologicals is usually temporary for a
calendar quarter until a manufacturer is able to submit the required
ASP data in accordance with the quarterly ASP submission timeframes for
reporting under section 1847A of the Act. However, we were concerned
that because ASP reporting for OPPS payment of separately payable
therapeutic radiopharmaceuticals would not be required for CY 2010, a
manufacturer's choice to not submit ASP could result in payment for a
separately payable therapeutic radiopharmaceutical based on WAC or AWP
for a full year, a result which we believed would be inappropriate.
Therefore, for separately payable therapeutic radiopharmaceutical
payment under the OPPS, we proposed that the OPPS ASP methodology would
pay based on ASP, with payment based on mean unit cost from OPPS claims
data if ASP data were not available for a calendar quarter.
Recognizing that we may need to utilize mean unit cost data to pay
for nonpass-through, separately payable therapeutic
radiopharmaceuticals in CY 2010 if ASP data are not submitted, for the
CY 2010 proposed rule we evaluated the mean unit cost information in
the CY 2010 claims data for all therapeutic radiopharmaceuticals. We
noticed that we had numerous claims with service units greater than one
for HCPCS code A9543 (Yttrium Y-90 ibritumomab tiuxetan, therapeutic,
per treatment dose, up to 40 millicuries) and A9545 (Iodine I-131
tositumomab, therapeutic, per treatment dose), when the long
descriptors for these therapeutic radiopharmaceuticals clearly indicate
``per treatment dose'' and, therefore, we expected the service units on
every claim to be one. In contrast, the other six therapeutic
radiopharmaceuticals that would be separately payable in CY 2010 all
include ``per millicurie'' in their HCPCS code descriptors, so
reporting multiple service units for those items could be appropriate.
We did not believe that hospitals billing more than one unit of HCPCS
code A9543 or A9545 on a claim were correctly reporting these products
and, therefore, we believed that these claims were incorrectly coded.
Although we do not normally examine hospital reporting patterns for
individual services, pricing an individual item, such as a therapeutic
radiopharmaceutical with low volume, may argue for more aggressive
trimming to remove inaccurate claims. Therefore, we removed all claims
with units greater than one for these two therapeutic
radiopharmaceuticals before estimating their mean unit costs. Because
we did not have ASP data for therapeutic radiopharmaceuticals that were
used for payment in April 2009, the proposed payment rates included in
Addenda A and B to the proposed rule were based on mean costs from
historical hospital claims data available for the proposed rule,
subject to the additional trimming of incorrectly coded claims for
HCPCS codes A9543 and A9545 as described above.
Similar to the ASP process already in place for separately payable
drugs and biologicals under the OPPS, we proposed to update ASP data
for therapeutic radiopharmaceuticals through our quarterly process as
updates become available. In addition, we proposed to assess the
availability of ASP data for therapeutic radiopharmaceuticals
quarterly, and if ASP data become available midyear, we proposed to
transition at the next available quarter to ASP-based payment. For
example, if ASP data are not available for the quarter beginning
January 2010 (that is, ASP information reflective of third quarter CY
2009 sales are not submitted in November 2009), then the next
opportunity to begin payment based on ASP data for a therapeutic
radiopharmaceutical would be April 2010 if ASP data reflective of
fourth quarter CY 2009 sales were submitted in February 2010.
Comment: Many commenters agreed with CMS' proposal to permit, but
not require, radiopharmaceutical manufacturers to submit ASP data. One
commenter encouraged CMS to obtain data from all therapeutic
radiopharmaceutical manufacturers across all therapeutic
radiopharmaceuticals, not just a few. Several commenters expressed
concern over the proposed immediate collection of ASP data from
manufacturers for the January 2010 OPPS quarterly update. They stated
that manufacturers would need an adequate amount of time to submit ASP
data for the third quarter of CY 2009 (July 1, 2009 through September
30, 2009).
A few commenters recommended that CMS establish a transition period
of 6 months or longer to provide more time for manufacturers to compile
and submit ASP data. Another commenter recommended that CMS accept
therapeutic radiopharmaceutical ASP data 30 days after finalizing and
publishing CMS' CY 2010 OPPS/ASC final rule. This would extend the
deadline for which ASP data would be submitted for the January 2010
OPPS quarterly update from the usual November 2, 2009 ASP submission
deadline to November 30, 2009.
During a transition period, several commenters recommended that CMS
continue its current policy of paying for therapeutic
radiopharmaceuticals at charges adjusted to cost, as opposed to the
proposed default of mean unit cost derived from claims data. A number
of commenters requested open dialogue with CMS on what a manufacturer
would need to submit to accurately report ASP for a ``patient-ready''
radiopharmaceutical dose.
Response: We appreciate the commenters' support for our proposal to
pay for nonpass-through, separately payable therapeutic
radiopharmaceuticals in CY 2010 using the ASP methodology. We proposed
to allow manufacturers to submit ASP information for any nonpass-
through, separately payable therapeutic radiopharmaceutical in order to
establish an ASP+4 percent payment rate under the OPPS for the
therapeutic radiopharmaceutical beginning in CY 2010. Consistent with
our authority to collect data in order to determine payment amounts, we
intend to collect ASP data for separately payable nonpass-through and
pass-through therapeutic radiopharmaceuticals (and diagnostic
radiopharmaceuticals with pass-through status), adopting the same
submission requirements as we do for drugs and biologicals under
section 1847A of the Act and the corresponding regulations, except as
otherwise specified in this final rule with comment period for specific
OPPS purposes. As we stated in the CY 2010
[[Page 60524]]
OPPS/ASC proposed rule (74 CR 35335), we continue to believe that the
use of ASP information for OPPS payment would provide an opportunity to
improve payment accuracy for separately payable radiopharmaceuticals by
applying an established methodology that has already been successfully
implemented under the OPPS to set prospective payment rates for other
separately payable drugs and biologicals.
In recognizing the potential burden involved in reporting ASP data
and our belief in the accuracy of prospective payment rates based on
claims data, we did not propose to require manufacturers to submit ASP
information. Although one commenter suggested that we collect ASP from
all manufacturers of therapeutic radiopharmaceuticals, we continue to
believe that the challenges involved in reporting ASP for
radiopharmaceuticals, given the variety of manufacturing processes, are
significant in some cases and, therefore, that payment based on mean
unit cost from historical hospital claims data offers the best proxy
for average hospital acquisition cost and associated handling costs for
a radiopharmaceutical in the absence of ASP. We continue to believe
that we should allow, but not require, manufacturers to submit ASP
information for therapeutic radiopharmaceuticals. If ASP information is
unavailable for a therapeutic radiopharmaceutical, meaning if a
manufacturer is not willing or not able to submit ASP information, we
will provide payment based on the mean unit cost of the product that is
applicable to payment rates for the year the nonpass-through
therapeutic radiopharmaceutical is administered. We continue to believe
that both methodologies represent an appropriate proxy for average
hospital acquisition cost and associated handling costs for nonpass-
through, separately payable therapeutic radiopharmaceuticals. We expect
manufacturers to submit ASP data for all component materials and any
``bona fide service fees'' that are reflected in the price for
additional processing to produce the separately payable
radiopharmaceutical, in an aggregated form in per millicurie or per
dosage unit that matches the HCPCS code descriptor for that
radiopharmaceutical. We note that the separately payable, nonpass-
through therapeutic radiopharmaceutical payment rates listed in Addenda
A and B to this final rule with comment period are the mean unit costs
from CY 2008 hospital claims data, subject to the additional trimming
of incorrectly coded claims for HCPCS codes A9543 and A9545 as proposed
and described above, that we would use for payment of a separately
payable radiopharmaceutical if ASP information from the manufacturer
were not submitted for the product for the applicable OPPS payment
quarter.
For CY 2010, we are not implementing a transition period of payment
at charges adjusted to cost for therapeutic radiopharmaceuticals. We
note that section 1833(t)(16)(C) of the Act continues the payment
period for therapeutic radiopharmaceuticals based on a hospital's
charges adjusted to cost through December 31, 2009, and this
requirement expires beginning CY 2010. We believe it would not be
consistent with the statutory expiration of the charges-adjusted-to-
cost payment methodology to continue payment using this approach for
any portion of CY 2010. For manufacturers that cannot initially submit
ASP data, we believe that mean cost payment for a nonpass-through,
separately payable therapeutic radiopharmaceutical provides our best
proxy estimate of average hospital acquisition cost and associated
handling costs and implements prospective payment. In examining the CY
2008 claims data, aggregate therapeutic radiopharmaceutical payment at
mean unit cost would be comparable to payment at charges adjusted to
cost in CY 2010 assuming no charge inflation between CY 2008 and CY
2010, and we observe deflation in per unit charges for some therapeutic
radiopharmaceuticals between CY 2007 and CY 2008 claims. Finally,
because we proposed to update payment based on ASP submissions on a
quarterly basis, manufacturers would not need to wait one year to be
paid based on ASP but could work toward submitting ASP data for April
2010 payment if they were unable to provide data for January 2010
payment.
We recognize that the timeframe for submitting ASP information by
November 2, 2009, to begin ASP-based payment on January 1, 2010 is
extremely close to the display date of this final rule with comment
period. While we expect that most manufacturers interested in reporting
ASP for their therapeutic radiopharmaceutical already have begun the
process of compiling that data given that we have proposed ASP-based
payment under the OPPS for nonpass-through, separately payable
therapeutic radiopharmaceuticals for 2 years in a row, we understand
that manufacturers will not have had the opportunity to consider our
discussion in this final rule with comment period that clarifies the
term ``patient-ready'' in their preparation of ASP data for OPPS
purposes. As suggested by the commenters, we recognize that some
manufacturers may need to discuss with us how to report ASP for a
``patient-ready'' dose of their particular radiopharmaceutical. We
encourage manufacturers with questions regarding their submissions to
contact us, especially if they intend to submit by November 2, 2009.
Manufacturers can contact us immediately by sending an email to the
OPPS mailbox: [email protected]. We will be monitoring this
mailbox closely. We will provide any assistance that we can within the
confines of the ASP quarterly production schedule to facilitate
accurate and timely reporting of ASP and payment based on ASP as early
as possible. To further our commitment to helping manufacturers submit
ASP data in a timely fashion, we also intend to post guidance on the
definition of ``patient-ready'' dose for reporting radiopharmaceutical
ASP for OPPS use, and on how manufacturers should compile and submit
ASP data for that dose on the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/05_OPPSGuidance.asp#TopOfPage, at about the time
that this final rule with comment period goes in display at the Federal
Register.
Comment: One commenter expressed concern over CMS proposal to pay
for therapeutic radiopharmaceuticals using the ASP methodology for CY
2010. The commenter stated that the methodology established in the
proposal, to pay for therapeutic radiopharmaceuticals under the ASP
methodology and if ASP is unavailable to make payment based upon the
most recent hospital mean unit cost data that CMS has available, would
not provide accurate data and, therefore, would not pay accurately for
therapeutic radiopharmaceuticals. The commenter was skeptical that
manufacturers would submit ASP data in a timely and accurate manner,
because the commenter believed manufacturers have little incentive to
do so. The commenter recommended that CMS base payment on hospital
invoice data in order to provide accurate payment.
Response: We disagree with the commenter and continue to believe
that providing payment for therapeutic radiopharmaceuticals based on
ASP or mean unit cost if ASP information is not available would provide
appropriate payment for these products. We acknowledge in the proposed
rule (74 FR 35335) that some manufacturers may be unable or unwilling
to submit ASP
[[Page 60525]]
data for the CY 2010 January OPPS quarterly update and we, therefore,
proposed to make payment based on the most recent hospital mean unit
cost data that we have available for therapeutic radiopharmaceuticals
if ASP is not available. Many other commenters, including
radiopharmaceutical manufacturers, stated that manufacturers have a
significant incentive to submit ASP information because they believe
payment based on the default of mean unit cost would not be most
reflective of the cost to hospitals to acquire these products.
Furthermore, some therapeutic radiopharmaceutical manufacturers already
submit ASP data for separately payable drugs and biologicals and,
therefore, are familiar with the submission process, including its
timing and other requirements. As we stated previously, we continue to
believe that the use of ASP information for OPPS payment would provide
an opportunity to improve payment accuracy for nonpass-through,
separately payable therapeutic radiopharmaceuticals by applying an
established methodology that has already been successfully implemented
under the OPPS for other separately payable drugs and biologicals. The
OPPS has relied upon ASP information as an accurate method for
providing payment for drugs and biologicals for several years.
Comment: One commenter requested that CMS not include payment rates
based on mean unit cost for therapeutic radiopharmaceuticals in the
Addenda to the CY 2010 OPPS/ASC final rule with comment period when a
manufacturer intends to report ASP information for CY 2010. The
commenter offered this recommendation in order to avoid having other
payers that utilize Medicare payment rates adopt these payment rates
that the commenter believes will never be those paid to hospitals in CY
2010.
Response: We believe that payment at mean unit cost would
appropriately pay for the average hospital acquisition cost and
associated handling costs of nonpass-through, separately payable
therapeutic radiopharmaceuticals if ASP data are not available.
Therefore, we have included the mean unit cost amounts for nonpass-
through, separately payable therapeutic radiopharmaceuticals in Addenda
A and B to this CY 2010 OPPS/ASC final rule with comment period that
would be used for payment in any CY 2010 calendar quarter for which ASP
information is not submitted by the product's manufacturer(s).
Inclusion of mean unit cost for all nonpass-through, separately payable
therapeutic radiopharmaceuticals in the addenda is unique to CY 2010,
because we have no ASP information available for these products based
on their payment in CY 2009. For future years, based on our usual final
rule addenda publication policy, we note that if a radiopharmaceutical
manufacturer has submitted ASP for OPPS payment in October 2010, as
long as our CY 2011 payment methodology for nonpass-through, separately
payable therapeutic radiopharmaceuticals relies on ASP, we would
publish a payment rate in the CY 2011 OPPS/ASC final rule with comment
period that reflects the radiopharmaceutical's third quarter CY 2010
ASP information.
We follow this final rule addenda publication policy based on our
general expectation that drugs and biologicals with ASP information
available for payment in the fourth quarter of CY 2009 will have ASP
information available for payment in the first quarter of CY 2010.
Therefore, we believe that posting illustrative CY 2010 payment rates
for drugs and biologicals based on the October 2009 ASP information,
rather than mean unit cost, provides a better illustration of the
likely payment rates for these product in January 2010. In the event
that we have no ASP information for a therapeutic radiopharmaceutical
or any other drug or biological paid based on the ASP methodology for
any quarter of CY 2010, the applicable mean unit cost for payment of
the product in CY 2010 is available on the CMS web site in the OPPS
drug median file that is posted as supporting information for this
final rule with comment period at: http://www.cms.hhs.gov/HospitalOutpatientPPS/HORD/list.asp#TopOfPage.
Comment: One commenter requested that CMS establish a temporary
Level II HCPCS C-code, effective January 1, 2010, to be used in CY 2010
to report the product currently described by HCPCS code A9605 (Samarium
Sm-153 Lexidronam, per 50 millicuries). The commenter recommended that
CMS replace the current ``per 50 millicuries'' in the code descriptor
with ``per treatment dose'' in the HCPCS C-code descriptor. The
commenter stated that the current code descriptor for HCPCS code A9605
is problematic for coding and ASP reporting purposes because of the
decay in radiopharmaceutical radioactivity. Under the existing code
descriptor of ``per 50 millicuries,'' while the manufacturer would
report ASP for the HCPCS code based on the radioactivity level of the
product at the time of sale, the hospital would report units of the
HCPCS code based on the dose administered to the patient at a later
point in time, and there would be a mismatch between the reported price
and the dose actually administered to the patient. The commenter
concluded that reporting the sales and administration of this product
on a ``per treatment dose'' basis would allow ASP information to be
aligned with payment for the product under the OPPS, taking into
consideration radioactive decay over time since administration would
always occur after the manufacturer's sale of the product.
Response: We understand the concerns raised by the commenter in
regards to the current code descriptor for A9605. In response to these
concerns, CMS' HCPCS Workgroup has decided to create a new HCPCS code,
A9604 Samarium SM-153 lexidronam, therapeutic, per treatment dose, up
to 150 millicuries), effective January 1, 2010, and delete existing
HCPCS code A9605. This new code should facilitate alignment between ASP
reporting by the manufacturer and hospital reporting of administration
on a ``per treatment dose'' basis. We note that the default payment
rate for HCPCS code A9604 included in Addendum A and B to this final
rule with comment period is based on the per-day mean unit cost of
HCPCS code A9605. We believe that the CY 2008 hospital per-day cost of
HCPCS code A9605 reflects the cost of a single treatment dose and,
therefore, it is the mean per-day cost that we will use for payment of
new HCPCS code A9604 in CY 2010 if ASP information is not available.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to pay all
nonpass-through, separately payable therapeutic radiopharmaceuticals at
ASP+4 percent based on ASP information, if available, for a ``patient-
ready'' dose beginning on January 1, 2010, and updated on a quarterly
basis for products for which manufacturers report ASP data. We are
defining a ``patient-ready'' dose for OPPS purposes as including all
component materials of the radiopharmaceutical, at a minimum, and any
other processing the manufacturer requires to produce the
radiopharmaceutical that it sells that are reflected in the sales
price, including radiolabeling, as long as any fees paid for such
processing done on behalf of the manufacturer meet the definition of
``bona fide service fees'' under Sec. 414.802. We also are finalizing
our CY 2010 proposal, without modification, to base nonpass-through,
separately payable therapeutic radiopharmaceutical payment on mean
[[Page 60526]]
unit cost derived from CY 2008 claims data when ASP pricing is not
available. The nonpass-through therapeutic radiopharmaceuticals that
are separately payable in CY 2010 are identified in Table 42 below. The
CY 2010 payment rates for these products included in Addenda A and B to
this final rule with comment period are based on mean unit cost.
Moreover, we note that, should ASP be submitted timely for January 2010
OPPS payment, according to our usual process for updating the payment
rates for separately payable drugs and biologicals on a quarterly basis
if updated ASP information is available, these payment rates will be
updated through the January 2010 OPPS quarterly release.
Table 42--CY 2010 Nonpass-Through, Separately Payable Therapeutic Radiopharmaceuticals
----------------------------------------------------------------------------------------------------------------
Final CY Final CY
CY 2010 HCPCS code CY 2010 long descriptor 2010 APC 2010 SI
----------------------------------------------------------------------------------------------------------------
A9517........................................... Iodine I-131 sodium iodide capsule(s), 1064 K
therapeutic, per millicurie.
A9530........................................... Iodine I-131 sodium iodide solution, 1150 K
therapeutic, per millicurie.
A9543........................................... Yttrium Y-90 ibritumomab tiuxetan, 1643 K
therapeutic, per treatment dose, up to
40 millicuries.
A9545........................................... Iodine I-131 tositumomab, therapeutic, 1645 K
per treatment dose.
A9563........................................... Sodium phosphate P-32, therapeutic, per 1675 K
millicurie.
A9564........................................... Chromic phosphate P-32 suspension, 1676 K
therapeutic, per millicurie.
A9600........................................... Strontium Sr-89 chloride, therapeutic, 0701 K
per millicurie.
A9604........................................... Samarium SM-153 lexidronam, 1295 K
therapeutic, per treatment dose, up to
150 millicuries.
----------------------------------------------------------------------------------------------------------------
6. Payment for Nonpass-Through Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS Codes, but Without OPPS Hospital Claims
Data
Public Law 108-173 does not address the OPPS payment in CY 2005 and
after for drugs, biologicals, and radiopharmaceuticals that have
assigned HCPCS codes, but that do not have a reference AWP or approval
for payment as pass-through drugs or biologicals. Because there is no
statutory provision that dictated payment for such drugs, biologicals,
and radiopharmaceuticals in CY 2005, and because we had no hospital
claims data to use in establishing a payment rate for them, we
investigated several payment options for CY 2005 and discussed them in
detail in the CY 2005 OPPS final rule with comment period (69 FR 65797
through 65799).
For CYs 2005 to 2007, we implemented a policy to provide separate
payment for new drugs, biologicals, and radiopharmaceuticals with HCPCS
codes (specifically those new drug, biological, and radiopharmaceutical
HCPCS codes in each of those calendar years that did not crosswalk to
predecessor HCPCS codes) but which did not have pass-through status, at
a rate that was equivalent to the payment they received in the
physician's office setting, established in accordance with the ASP
methodology for drugs and biologicals, and based on charges adjusted to
cost for radiopharmaceuticals. For CYs 2008 and 2009, we finalized a
policy to provide payment for new drugs (excluding contrast agents) and
biologicals (excluding implantable biologicals for CY 2009) with HCPCS
codes, but which did not have pass-through status and were without OPPS
hospital claims data, at ASP+5 percent and ASP+4 percent, respectively,
consistent with the final OPPS payment methodology for other separately
payable drugs and biologicals. New therapeutic radiopharmaceuticals
were paid at charges adjusted to cost based on the statutory
requirement for CY 2008 and CY 2009 and payment for new diagnostic
radiopharmaceuticals was packaged in both years. In the CY 2010 OPPS/
ASC proposed rule (74 FR 35336 through 35337), for CY 2010, we proposed
to continue the CY 2009 payment methodology for new drugs (excluding
contrast agents) and nonimplantable biologicals and extend the
methodology to payment for new therapeutic radiopharmaceuticals, when
their period of payment at charges adjusted to cost no longer would
apply. Therefore, for CY 2010, we proposed to provide payment for new
drugs (excluding contrast agents), nonimplantable biologicals, and
therapeutic radiopharmaceuticals with HCPCS codes (those new CY 2010
drug (excluding contrast agents), nonimplantable biological, and
therapeutic radiopharmaceutical HCPCS codes that do not crosswalk to CY
2009 HCPCS codes), but which do not have pass-through status and are
without OPPS hospital claims data, at ASP+4 percent, consistent with
the proposed CY 2010 payment methodology for other separately payable
nonpass-through drugs, nonimplantable biologicals, and therapeutic
radiopharmaceuticals. We believed this proposed policy would ensure
that new nonpass-through drugs, nonimplantable biologicals, and
therapeutic radiopharmaceuticals would be treated like other drugs,
nonimplantable biologicals, and therapeutic radiopharmaceuticals under
the OPPS, unless they are granted pass-through status. Only if they are
pass-through drugs, nonimplantable biologicals, or therapeutic
radiopharmaceuticals would they receive a different payment for CY
2010, generally equivalent to the payment these drugs and biologicals
would receive in the physician's office setting, consistent with the
requirements of the statute. We proposed to continue packaging payment
for all new nonpass-through diagnostic radiopharmaceuticals, contrast
agents, and implantable biologicals with HCPCS codes (those new CY 2010
diagnostic radiopharmaceutical, contrast agent, and implantable
biological HCPCS codes that do not crosswalk to predecessor HCPCS
codes), consistent with the proposed packaging of all existing nonpass-
through diagnostic radiopharmaceuticals, contrast agents and
implantable biologicals, as discussed in more detail in the proposed
rule (74 FR 35323 through 35324).
In accordance with the OPPS ASP methodology, in the absence of ASP
data, in the CY 2010 OPPS/ASC proposed rule (74 FR 35336), for CY 2010,
we proposed to continue the policy we implemented beginning in CY 2005
of using the WAC for the product to establish the initial payment rate
for new nonpass-through drugs and biologicals with HCPCS codes, but
which are without OPPS claims data. However, we note that if the WAC is
[[Page 60527]]
also unavailable, we would make payment at 95 percent of the product's
most recent AWP. We also proposed to assign status indicator ``K'' to
HCPCS codes for new drugs and nonimplantable biologicals without OPPS
claims data and for which we have not granted pass-through status. We
further noted that, with respect to new items for which we do not have
ASP data, once their ASP data become available in later quarter
submissions, their payment rates under the OPPS would be adjusted so
that the rates would be based on the ASP methodology and set to the
finalized ASP-based amount (proposed for CY 2010 at ASP+4 percent) for
items that have not been granted pass-through status.
We did not receive any public comments specific to these proposals.
While commenters, in general, objected to payment for drugs and
biologicals at ASP+4 percent, these comments were not specific to new
drugs and biologicals with HCPCS codes but without OPPS claims data.
Further, we summarize the general public comments on payment for
separately payable drugs and provide our responses in section V.B.3.b.
of this final rule with comment period. In addition, commenters on the
CY 2010 OPPS/ASC proposed rule objected to packaging payment for
diagnostic radiopharmaceuticals and contrast agents in general, but
these comments were not directed to new diagnostic radiopharmaceuticals
or contrast agents with HCPCS codes but without OPPS claims data. We
summarize these comments and provide our responses in section V.A.2.d.
of this final rule with comment period.
Therefore, we are finalizing our CY 2010 proposals, without
modification, as follows: Payment for new drugs (excluding contrast
agents), nonimplantable biologicals, and therapeutic
radiopharmaceuticals with HCPCS codes, but which do not have pass-
through status and are without OPPS hospital claims data, will be made
at ASP+4 percent for CY 2010. In cases where ASP information is not
available, payment will be made using WAC, and if WAC is also
unavailable payment will be made at 95 percent of the most recent AWP.
Further, payment for all new nonpass-through diagnostic
radiopharmaceuticals, contrast agents, and implantable biologicals with
HCPCS codes but without OPPS claims data will be packaged for CY 2010.
Finally, we are assigning status indicator ``K'' to HCPCS codes for new
drugs and nonimplantable biologicals without OPPS claims data and for
which we have not granted pass-through status in CY 2010.
For CY 2010, we also proposed to base payment for new therapeutic
radiopharmaceuticals with HCPCS codes as of January 1, 2010, but which
do not have pass-through status, on the WACs for these products if ASP
data for these therapeutic radiopharmaceuticals are not available. If
the WACs are also unavailable, we proposed to make payment for new
therapeutic radiopharmaceuticals at 95 percent of their most recent
AWPs because we would not have mean costs from hospital claims data
upon which to base payment. Analogous to new drugs and biologicals, we
proposed to assign status indicator ``K'' to HCPCS codes for new
therapeutic radiopharmaceuticals for which we have not granted pass-
through status.
We did not receive any public comments specific to our proposal for
new therapeutic radiopharmaceuticals with HCPCS codes but without pass-
through status. However, commenters on the CY 2010 OPPS/ASC proposed
rule were supportive of the ASP methodology, in general, for payment
for therapeutic radiopharmaceuticals in the HOPD, and we are finalizing
an ASP payment methodology for separately payable therapeutic radio-
pharmaceuticals for CY 2010 as discussed in section V.B.5. of this
final rule with comment period.
Therefore, we are finalizing our CY 2010 proposals, without
modification, to provide payment for new therapeutic
radiopharmaceuticals with HCPCS codes but without pass-through status,
if ASP information is not available, based on WAC. If WAC information
is also unavailable, we will make payment for new therapeutic
radiopharmaceuticals at 95 percent of their most recent AWP. In
addition, we are assigning status indicator ``K'' to HCPCS codes for
new therapeutic radiopharmaceuticals in CY 2010 that do not have pass-
through status.
Consistent with other ASP-based payments, for CY 2010, we proposed
to announce any changes to the payment amounts for new drugs and
biologicals in the CY 2010 OPPS/ASC final rule with comment period and
also on a quarterly basis on the CMS Web site during CY 2010 if later
quarter ASP submissions (or more recent WACs or AWPs) indicate that
changes to the payment rates for these drugs and biologicals are
necessary. The payment rates for new therapeutic radiopharmaceuticals
would also be changed accordingly, based on later quarter ASP
submissions. We note that the new CY 2010 HCPCS codes for drugs,
biologicals, and therapeutic radiopharmaceuticals were not available at
the time of development of the proposed rule. However, they are
included in Addendum B to this CY 2010 OPPS/ASC final rule with comment
period. They are assigned comment indicator ``NI'' in Addendum B to
reflect that their interim final OPPS treatment is open to public
comment on the CY 2010 OPPS/ASC final rule with comment period.
We did not receive any public comments on our proposal to announce,
via the CMS Web site, any changes to the OPPS payment amounts for new
drugs and biologicals on a quarterly basis. Therefore, we are
finalizing our proposals and will update payment rates for new drugs,
biologicals, and therapeutic radiopharmaceuticals, as necessary, in
association with our quarterly update process and provide this
information on the CMS Web site.
There are several nonpass-through drugs and biologicals that were
payable in CY 2008 and/or CY 2009 for which we did not have any CY 2008
hospital claims data available for the proposed rule and for which
there were no other HCPCS codes that describe different doses of the
same drug but for which we did have pricing information for the ASP
methodology. In the CY 2010 OPPS/ASC proposed rule (74 FR 35337), we
noted that there are currently no therapeutic radiopharmaceuticals in
this category. In order to determine the packaging status of these
products for CY 2010, we calculated an estimate of the per day cost of
each of these items by multiplying the payment rate for each product
based on ASP+4 percent, similar to other nonpass-through drugs and
biologicals paid separately under the OPPS, by an estimated average
number of units of each product that would typically be furnished to a
patient during one administration in the hospital outpatient setting.
We proposed to package items for which we estimated the per
administration cost to be less than or equal to $65, which is the
general packaging threshold that we proposed for drugs, nonimplantable
biologicals, and therapeutic radiopharmaceuticals in CY 2010. We
proposed to pay separately for items with an estimated per day cost
greater than $65 (with the exception of diagnostic
radiopharmaceuticals, contrast agents and implantable biologicals,
which we proposed to continue to package regardless of cost, as
discussed in more detail in the proposed rule (74 FR 35323 through
35324)) in CY 2010. We proposed that the CY 2010 payment for separately
payable items without CY 2008 claims
[[Page 60528]]
data would be ASP+4 percent, similar to payment for other separately
payable nonpass-through drugs and biologicals under the OPPS. In
accordance with the ASP methodology used in the physician's office
setting, in the absence of ASP data, we proposed to use the WAC for the
product to establish the initial payment rate. However, we note that if
the WAC is also unavailable, we would make payment at 95 percent of the
most recent AWP available.
We did not receive any public comments on our proposal to use
estimated per day costs for these drugs and biologicals or on the
resulting packaging status of these drugs and biologicals. Therefore,
we are finalizing our CY 2010 proposal, without, modification to use
the estimated number of units per day included in Table 43 below to
determine estimated per day costs for the corresponding drugs and
biologicals for CY 2010. Further, we are finalizing our proposal to
package those drugs with an estimated per day cost less than or equal
to $65 and to provide separate payment for those drugs and biologicals
with estimated per day costs over $65 for CY 2010. For those drugs and
biologicals that we determined to be separately payable in CY 2010,
payment will be made at ASP+4 percent. If ASP information is not
available, payment will be based on WAC or 95 percent of the most
recently published AWP if WAC is not available. The final estimated
units per day and status indicators for these items are displayed in
Table 43 below.
Table 43--Drugs and Biologicals Without CY 2008 Claims Data
----------------------------------------------------------------------------------------------------------------
Estimated
average number Final CY Final CY
CY 2010 HCPCS code CY 2010 long descriptor of units per 2010 SI 2010 APC
administration
----------------------------------------------------------------------------------------------------------------
90681................................... Rotavirus vaccine, human, 1 K 1239
attenuated, 2 dose schedule,
live, for oral use.
90696................................... Diphtheria, tetanus toxoids, 1 N .........
acellular pertussis vaccine
and poliovirus vaccine,
inactivated (DTaP-IPV), when
administered to children 4
through 6 years of age, for
intramuscular use.
J0364................................... Injection, apomorphine 12 N .........
hydrochloride, 1 mg.
J2724................................... Injection, protein c 2240 K 1139
concentrate, intravenous,
human, 10 iu.
J3355................................... Injection, urofollitropin, 75 2 K 1741
IU.
J9215................................... Injection, interferon, alfa-n3, 5 K 0865
(human leukocyte derived),
250,000 iu.
----------------------------------------------------------------------------------------------------------------
Finally, there were eight drugs and biologicals, shown in Table 31
of the CY 2010 OPPS/ASC proposed rule (74 FR 35337), that were payable
in CY 2008, but for which we lacked CY 2008 claims data and any other
pricing information for the ASP methodology for the CY 2010 OPPS/ASC
proposed rule. In CY 2009, for similar items without CY 2007 claims
data and without pricing information for the ASP methodology, we stated
that we were unable to determine their per day cost and we packaged
these items for the year, assigning these items status indicator ``N.''
For CY 2010, we proposed to change the status indicator for eight
drugs and biologicals shown in Table 31 of the CY 2010 OPPS/ASC
proposed rule (74 FR 35337) to status indicator ``E'' (Not paid by
Medicare when submitted on outpatient claims (any outpatient bill
type)) as we understood that these drugs and biologicals are not
currently sold or have been identified as obsolete. In addition, we
proposed to provide separate payment for these drugs and biologicals if
pricing information reflecting recent sales becomes available mid-year
in CY 2010 for the ASP methodology. If pricing information becomes
available, we would assign the products status indicator ``K'' and pay
for them separately for the remainder of CY 2010.
We did not receive any public comments on our proposal to change
the status indicators for drugs and biologicals without claims data or
pricing information for the ASP methodology. Therefore, we are
finalizing our CY 2010 proposal, without modification, to assign status
indicator ``E'' to these drugs and biologicals. As we have used updated
claims data and ASP pricing information for this final rule with
comment period, we have newly identified for this final rule with
comment period CPT codes 90393 (Vaccinia immune globulin, human, for
intramuscular use); 90477 (Adenovirus vaccine, type 7, live, for oral
use); 90644 (Meningococcal conjugate vaccine, serogroups C & Y and
Hemophilus influenza b vaccine, tetanus toxoid conjugate (Hib-MenCY-
TT), 4-dose schedule, when administered to children 2-15 months of age,
for intramuscular use); and 90670 (Pneumococcal conjugate vaccine, 13
valent, for intramuscular use) as lacking CY 2008 claims data and any
other pricing information for the ASP methodology. Therefore, in
addition to the HCPCS codes we proposed to assign status indicator
``E'' for CY 2010 on this basis in the proposed rule, we are assigning
status indicator ``E'' to CPT codes 90393, 90477, 90644 and 90670 for
CY 2010. All drugs and biologicals without CY 2008 hospital claims data
and data based on the ASP methodology that are assigned status
indicator ``E'' on this basis at the time of this final rule with
comment period for CY 2010 are displayed in Table 44 below.
Table 44--Drugs and Biologicals Without CY 2008 Claims Data and Without Pricing Information for the ASP
Methodology
----------------------------------------------------------------------------------------------------------------
Final CY
CY 2010 HCPCS code CY 2010 long descriptor 2010 SI
----------------------------------------------------------------------------------------------------------------
90296...................................... Diphtheria antitoxin, equine, any route................ E
90393...................................... Vaccinia immune globulin, human, for intramuscular use. E
[[Page 60529]]
90477...................................... Adenovirus vaccine, type 7, live, for oral use......... E
90581...................................... Anthrax vaccine, for subcutaneous use.................. E
90644...................................... Meningococcal conjugate vaccine, serogroups C & Y and E
Hemophilus influenza b vaccine, tetanus toxoid
conjugate (Hib-MenCY-TT), 4-dose schedule, when
administered to children 2-15 months of age, for
intramuscular use.
90670...................................... Pneumococcal conjugate vaccine, 13 valent, for E
intramuscular use.
90727...................................... Plague vaccine, for intramuscular use.................. E
J0128...................................... Injection, abarelix, 10 mg............................. E
J0350...................................... Injection, anistreplase, per 30 units.................. E
J0395...................................... Injection, arbutamine hcl, 1 mg........................ E
J1452...................................... Injection, fomivirsen sodium, intraocular, 1.65 mg..... E
J2460...................................... Injection, oxytetracycline HCL, up to 50 mg............ E
----------------------------------------------------------------------------------------------------------------
VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs,
Biologicals, Radiopharmaceuticals, and Devices
A. Background
Section 1833(t)(6)(E) of the Act limits the total projected amount
of transitional pass-through payments for drugs, biologicals, radio-
pharmaceuticals, and categories of devices for a given year to an
``applicable percentage'' of total program payments estimated to be
made under section 1833(t) of the Act for all covered services
furnished for that year under the hospital OPPS. For a year before CY
2004, the applicable percentage was 2.5 percent; for CY 2004 and
subsequent years, we specify the applicable percentage up to 2.0
percent.
If we estimate before the beginning of the calendar year that the
total amount of pass-through payments in that year would exceed the
applicable percentage, section 1833(t)(6)(E)(iii) of the Act requires a
uniform reduction in the amount of each of the transitional pass-
through payments made in that year to ensure that the limit is not
exceeded. We make an estimate of pass-through spending to determine not
only whether payments exceed the applicable percentage, but also to
determine the appropriate reduction to the conversion factor for the
projected level of pass-through spending in the following year in order
to ensure that total estimated pass-through spending for the
prospective payment year is budget neutral as required by section
1883(t)(6)(E) of the Act.
For devices, developing an estimate of pass-through spending in CY
2010 entails estimating spending for two groups of items. The first
group of items consists of device categories that were recently made
eligible for pass-through payment and that would continue to be
eligible for pass-through payment in CY 2010. The CY 2008 OPPS/ASC
final rule with comment period (72 FR 66778) describes the methodology
we have used in previous years to develop the pass-through spending
estimate for known device categories continuing into the applicable
update year. The second group contains items that we know are newly
eligible, or project would be newly eligible, for device pass-through
payment in the remaining quarters of CY 2009 or beginning in CY 2010.
As discussed in section V.A.4. of this final rule with comment period,
we proposed that, beginning in CY 2010, the pass-through evaluation
process and pass-through payment for implantable biologicals newly
approved for pass-through payment beginning on or after January 1,
2010, that are always surgically inserted or implanted (through a
surgical incision or a natural orifice) would be the device pass-
through process and payment methodology only. Therefore, we proposed
that the estimate of pass-through spending for implantable biologicals
newly eligible for pass-through payment beginning in CY 2010 would be
included in the pass-through spending estimate for this second group of
device categories. The sum of the CY 2010 pass-through estimates for
these two groups of device categories equals the total CY 2010 pass-
through spending estimate for device categories with pass-through
status.
For devices eligible for pass-through payment, section
1833(t)(6)(D)(ii) of the Act establishes the pass-through amount as the
amount by which the hospital's charges for the device, adjusted to
cost, exceeds the portion of the otherwise applicable Medicare OPD fee
schedule that the Secretary determines is associated with the device.
As discussed in section IV.A.2. of this final rule with comment period,
we deduct from the pass-through payment for an identified device
category eligible for pass-through payment an amount that reflects the
portion of the APC payment amount that we determine is associated with
the cost of the device, defined as the device APC offset amount, when
we believe that predecessor device costs for the device category newly
approved for pass-through payment are already packaged into the
existing APC structure. For each device category that becomes newly
eligible for device pass-through payment, including an implantable
biological under our CY 2010 proposal, we estimate pass-through
spending to be the difference between payment for the device category
and the device APC offset amount, if applicable, for the procedures
that would use the device. If we determine that predecessor device
costs for the new device category are not already included in the
existing APC structure, the pass-through spending estimate for the
device category would be the full payment at charges adjusted to cost.
For drugs and biologicals eligible for pass-through payment,
section 1833(t)(6)(D)(i) of the Act establishes the pass-through
payment amount as the amount by which the amount authorized under
section 1842(o) of the Act (or, if the drug or biological is covered
under a competitive acquisition contract under section 1847B of the
Act, an amount determined by the Secretary equal to the average price
for the drug or biological for all competitive acquisition areas and
year established under such section as calculated and adjusted by the
Secretary) exceeds the portion of the otherwise applicable fee schedule
amount that the Secretary determines is associated with the drug or
biological. As we proposed, we are paying for most nonpass-through
separately payable drugs and nonimplantable biologicals under the
[[Page 60530]]
CY 2010 OPPS at ASP+4 percent, which represents the otherwise
applicable fee schedule amount associated with most pass-through drugs
and biologicals, and because we are paying for CY 2010 pass-through
drugs and nonimplantable biologicals at ASP+6 percent or the Part B
drug CAP rate, if applicable, our estimate of drug and nonimplantable
biological pass-through payment for CY 2010 is not zero. Furthermore,
payment for certain drugs, specifically diagnostic
radiopharmaceuticals, contrast agents, and implantable biologicals
without pass-through status, is always packaged into payment for the
associated procedures because these products would never be separately
paid. However, all pass-through diagnostic radiopharmaceuticals,
contrast agents, and those implantable biologicals with pass-through
status approved prior to CY 2010 are paid at ASP+6 percent or the Part
B drug CAP rate, if applicable, like other pass-through drugs and
biologicals. Therefore, our estimate of pass-through payment for all
diagnostic radiopharmaceuticals and contrast agents and those
implantable biologicals with pass-through status approved prior to CY
2010 is also not zero.
In section V.A.6. of this final rule with comment period, we
discuss our policy to determine if the cost of certain ``policy-
packaged'' drugs, including diagnostic radiopharmaceuticals and
contrast agents, are already packaged into the existing APC structure.
If we determine that a ``policy-packaged'' drug approved for pass-
through payment resembles predecessor diagnostic radiopharmaceuticals
or contrast agents already included in the costs of the APCs that would
be associated with the drug receiving pass-through payment, as we
proposed, we are offsetting the amount of pass-through payment for
diagnostic radiopharmaceuticals and contrast agents. For these drugs,
the APC offset amount is the portion of the APC payment for the
specific procedure performed with the pass-through diagnostic
radiopharmaceutical or contrast agent that is attributable to
diagnostic radiopharmaceuticals or contrast agents, which we refer to
as the ``policy-packaged'' drug APC offset amount. If we determine that
an offset is appropriate for a specific diagnostic radiopharmaceutical
or contrast agent receiving pass-through payment, we reduce our
estimate of pass-through payment for these drugs by this amount. We
have not established a policy to offset pass-through payment for
implantable biologicals when approved for pass-through payment as a
drug or biological, that is, for CY 2009 and earlier, so we consider
full payment at ASP+6 percent for these implantable biologicals
receiving biological pass-through payment in our estimate of CY 2010
pass-through spending for drugs and biologicals.
We note that the Part B drug CAP program has been suspended
beginning January 1, 2009. We refer readers to the Medicare Learning
Network (MLN) Matters Special Edition article SE0833 for more
information on this suspension. As of the publication of the CY 2010
OPPS/ASC proposed rule and this final rule with comment period, the
Part B drug CAP program has not been reinstituted. Therefore, for this
final rule with comment period, we are continuing to not have an
effective Part B drug CAP rate for pass-through drugs and biologicals.
Similar to estimates for devices, the first group of drugs and
biologicals requiring a pass-through payment estimate consists of those
products that were recently made eligible for pass-through payment and
that continue to be eligible for pass-through payment in CY 2010. The
second group contains drugs and nonimplantable biologicals that we know
are newly eligible, or project would be newly eligible, in the
remaining quarters of CY 2009 or beginning in CY 2010. The sum of the
CY 2010 pass-through estimates for these two groups of drugs and
biologicals equals the total CY 2010 pass-through spending estimate for
drugs and biologicals with pass-through status.
B. Estimate of Pass-Through Spending
For CY 2010, we proposed to set the applicable pass-through payment
percentage limit at 2.0 percent of the total projected OPPS payments
for CY 2010, consistent with our OPPS policy from CY 2004 through 2009
(74 FR 35339).
For the first group of devices for pass-through payment estimate
purposes, there were no device categories receiving pass-through
payment in CY 2009 that would continue for payment during CY 2010 (74
FR 35339) and, therefore, we proposed a device pass-through payment
estimate for the first group of pass-through device categories of $0.
We also proposed for CY 2010 to use the device pass-through process
and payment methodology for implantable biologicals that are always
surgically inserted or implanted (through a surgical incision or a
natural orifice). We proposed to consider existing implantable
biologicals approved for pass-through payment under the drugs and
biologicals pass-through provision prior to CY 2010 as drugs and
biologicals for pass-through payment estimate purposes. We proposed to
continue to consider these implantable biologicals that have been
approved for pass-through status prior to CY 2010 drugs and biologicals
until they expire from pass-through status. Therefore, the proposed
pass-through spending estimate for the first group of pass-through
devices did not include implantable biologicals that were granted pass-
through status prior to CY 2010. Finally, we proposed to provide
payment for implantable biologicals newly eligible for pass-through
payment beginning in CY 2010 based on hospital charges adjusted to
cost, rather than the ASP methodology that is applicable to pass-
through drugs and biologicals. Therefore, we proposed that, beginning
in CY 2010, the estimate of pass-through spending for implantable
biologicals first paid as pass-through devices in CY 2010 would be
based on the payment methodology for pass-through devices and would be
included in the device pass-through spending estimate.
In estimating our proposed CY 2010 pass-through spending for device
categories in the second group, that is, device categories that we knew
at the time of the development of the proposed rule would be newly
eligible for pass-through payment in CY 2010 (of which there were
none), additional device categories (including categories that describe
implantable biologicals) that we estimated could be approved for pass-
through status subsequent to the development of the proposed rule and
before January 1, 2010, and contingent projections for new categories
(including categories that describe implantable biologicals in the
second through fourth quarters of CY 2010), we proposed to use the
general methodology described in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66778), while also taking into account recent
OPPS experience in approving new pass-through device categories. There
were no new device categories (including categories that describe
implantable biologicals) for CY 2010 of which we were aware at the time
of development of the proposed rule. The estimate of CY 2010 pass-
through spending for this second group of device categories was $10.0
million for the proposed rule (74 FR 35339).
Employing our established methodology that the estimate of pass-
through device spending in CY 2010 incorporates CY 2010 estimates of
pass-through spending for known device categories continuing in CY
2010, those known or projected to be first effective
[[Page 60531]]
January 1, 2010, and those device categories projected to be approved
during subsequent quarters of CY 2009 or CY 2010, our proposed CY 2010
estimate of total pass-through spending for device categories was $10.0
million (74 FR 35339).
To estimate CY 2010 proposed pass-through spending for drugs and
biologicals in the first group, specifically those drugs (including
radiopharmaceuticals and contrast agents) and biologicals (including
implantable biologicals) recently made eligible for pass-through
payment and continuing on pass-through status for CY 2010, we proposed
to utilize the most recent Medicare physician's office data regarding
their utilization, information provided in the respective pass-through
applications, historical hospital claims data, pharmaceutical industry
information, and clinical information regarding those drugs or
biologicals, in order to project the CY 2010 OPPS utilization of the
products.
For the known drugs and biologicals (excluding diagnostic radio-
pharmaceuticals, contrast agents, and implantable biologicals) that
would be continuing on pass-through status in CY 2010, we estimated the
proposed pass-through payment amount as the difference between ASP+6
percent or the Part B drug CAP rate, as applicable, and ASP+4 percent,
aggregated across the projected CY 2010 OPPS utilization of these
products. Because payment for a diagnostic radiopharmaceutical or
contrast agent would be packaged if the product were not paid
separately due to its pass-through status, we included in the pass-
through estimate the difference between payment for the drug or
biological at ASP+6 percent (or WAC+6 percent, or 95 percent of AWP, if
ASP information is not available) and the ``policy-packaged'' drug APC
offset amount, if we determined that the diagnostic radiopharmaceutical
or contrast agent approved for pass-through payment resembles
predecessor diagnostic radiopharmaceuticals or contrast agents already
included in the costs of the APCs that would be associated with the
drug receiving pass-through payment. Because payment for an implantable
biological continuing on pass-through status in CY 2010 would be
packaged if the product were not paid separately due to its pass-
through status and because we have not established a pass-through
payment offset policy for implantable biologicals when approved for
pass-through payment as biologicals, that is, for CY 2009 and earlier,
we included in the proposed pass-through spending estimate the full
payment for these implantable biologicals at ASP+6 percent (or WAC+6
percent or 95 percent of AWP, if ASP information is not available). We
note that our spending estimate for this first group of drugs and
biologicals was stated in the CY 2010 OPPS/ASC proposed rule as $8.9
million (74 FR 35340), while our estimate for the second group of drugs
and biologicals was reported as $19.1 million. We inadvertently
mislabeled these two spending estimates in the CY 2010 OPPS/ASC
proposed rule. For this first group of drugs and biologicals, the
proposed spending estimate should have been reported as $19.1 million
and the second group should have been reported as $8.9 million.
To estimate CY 2010 pass-through spending for drugs and
nonimplantable biologicals in the second group (that is, drugs and
nonimplantable biologicals that we knew at the time of development of
the proposed rule would be newly eligible for pass-through payment in
CY 2010, additional drugs and nonimplantable biologicals that we
estimated could be approved for pass-through status subsequent to the
development of the proposed rule and before January 1, 2010, and
projections for new drugs and nonimplantable biologicals that could be
initially eligible for pass-through payment in the second through
fourth quarters of CY 2010), we proposed to use utilization estimates
from pass-through applicants, pharmaceutical industry data, clinical
information, recent trends in the per unit ASPs of hospital outpatient
drugs, and projected annual changes in service volume and intensity as
our basis for making the CY 2010 proposed pass-through payment
estimate. We also considered the most recent OPPS experience in
approving new pass-through drugs and nonimplantable biologicals. As
noted earlier, we also proposed to include new implantable biologicals
that we expect to be approved for pass-through status as devices
beginning in CY 2010 in the second group of items considered for device
pass-through estimate purposes. Therefore, we did not include
implantable biologicals in the second group of items in the proposed
drug and biological pass-through spending estimate.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35314 through 35317),
we proposed to revise our pass-through payment policy regarding ``new''
drugs and biologicals that were not receiving hospital outpatient
payment as of December 31, 1996, and that also met the other criteria
for receiving pass-through payment. Specifically, we proposed to change
the start date of the pass-through payment eligibility period for a
``new'' drug or biological from the first date on which pass-through
payment is made to the date on which payment is first made for a drug
or biological as an outpatient hospital service under Part B, using the
date of first sale of the drug or biological in the United States after
FDA approval as a proxy, to better reflect the statutory provisions for
pass-through payment under section 1833(t)(6) of the Act. We expected
that a number of the drugs and biologicals currently receiving pass-
through payment in CY 2009 would not be eligible for pass-through
payment under the proposed revised definition of the pass-through
payment eligibility period, Accordingly, for the CY 2010 OPPS/ASC
proposed rule, we reduced our estimate of CY 2010 pass-through spending
for new drugs and nonimplantable biologicals in the second group that
could be initially eligible for pass-through payment beginning in CY
2010 to take into consideration the potential effect of the proposed CY
2010 pass-through payment eligibility period policy on the future
number of drugs and biologicals newly approved for pass-through
payment, in comparison with our historical OPPS experience over the
past several years.
As noted above, we inadvertently mislabeled the spending estimates
for the two groups of drugs and biologicals in the CY 2010 OPPS/ASC
proposed rule. Therefore, while we reported that the spending estimate
for this second group of drugs and biologicals in the CY 2010 OPPS/ASC
proposed rule was $19.1 million (74 FR 35340), the estimate that should
have been reported for this second group of drugs and biologicals was
$8.9 million.
We did not receive any public comments on the proposed methodology
to estimate pass-through spending for drugs, biologicals,
radiopharmaceuticals, and device categories in CY 2010. However, we did
receive public comments on our proposal to use the first date of sale
in the United States after FDA approval as a proxy for the first date
of payment under Medicare Part B as an outpatient hospital service for
determining the pass-through payment eligibility period for pass-
through drugs and nonimplantable biologicals under the OPPS for CY
2010, which would have reduced the pass-through payment estimate for
drugs and nonimplantable biologicals. These public comments, our
responses, and our final policy for CY 2010 are discussed in section
V.A.5 of this final rule with comment period. As with our current
policy, in CY 2010 the
[[Page 60532]]
pass-through payment eligibility period and the period of pass-through
payment period will run concurrently. Thus, for our final CY 2010 pass-
through spending estimate for new drugs and nonimplantable biologicals
that could be initially eligible for pass-through payment beginning in
CY 2010, we have no need to reduce our estimate of pass-through
spending to take into consideration a policy change in the pass-through
payment eligibility period. Therefore, we are finalizing our proposed
methodology to estimate annual pass-through spending for devices and
drugs and nonimplantable biologicals, with the modification as
described above.
As stated in section V.A.4. of this final rule with comment period,
as we proposed, beginning in CY 2010, implantable biologicals that are
always surgically inserted or implanted (through a surgical incision or
a natural orifice) will be evaluated under the device pass-through
process and paid according to the device payment methodology. We are
continuing to consider implantable biologicals approved for pass-
through payment under the drug and biological pass-through provision
prior to CY 2010 as drugs and biologicals for pass-through payment
estimate purposes. These implantable biologicals that have been
approved for pass-through status prior to CY 2010 continue to be
considered drugs and biologicals until they expire from pass-through
status. Therefore, the final pass-through spending estimate for the
first group of pass-through device categories does not include
implantable biologicals that have been granted pass-through status
prior to CY 2010.
In section V.A.4. of this final rule with comment period, as we
proposed, we are providing that payment for implantable biologicals
newly eligible for pass-through payment beginning in CY 2010 is based
on hospital charges adjusted to cost, rather than the ASP methodology
that is applicable to pass-through drugs and biologicals. Therefore, we
are providing that, beginning in CY 2010, the estimate of pass-through
spending for implantable biologicals first paid as pass-through devices
in CY 2010 is based on the payment methodology for pass-through
devices, and is included in the final CY 2010 device pass-through
spending estimate for the second group of pass-through device
categories.
The final CY 2010 pass-through spending estimate for the first
group of pass-through device categories is $0. The estimate of CY 2010
pass-through spending for the second group of pass-through device
categories is $10.0 million for this final rule with comment period, as
it was for the proposed rule (74 FR 35339). Our final CY 2010 estimate
of total pass-through spending for device categories is $10.0 million.
The estimate for pass-through spending for the first group of drugs
and biologicals is $28.9 million for CY 2010. The estimate for pass-
through spending for the second group of drugs and biologicals is $6.7
million for CY 2010. As stated above, the final estimates differ, in
part, from our proposed rule estimates in order to reflect our final
policy regarding the pass-through payment eligibility period. As
discussed in section V.A. of this final rule with comment period,
radiopharmaceuticals are considered drugs for pass-through purposes.
Therefore, we have included radiopharmaceuticals in our CY 2010 pass-
through spending estimate for drugs and biologicals. Our final CY 2010
estimate of total pass-through spending for drugs and biologicals is
$35.6 million.
In summary, in accordance with the methodology described above in
this section, we estimate that total pass-through spending for the
device categories and the drugs and biologicals that are continuing to
receive pass-through payment in CY 2010 and those device categories,
drugs, and nonimplantable biologicals that first become eligible for
pass-through payment during CY 2010 is approximately $45.5 million,
which represents 0.14 percent of total OPPS projected payments for CY
2010. We estimate that pass-through spending in CY 2010 will not amount
to 2.0 percent of total projected OPPS CY 2010 program spending.
VII. OPPS Payment for Brachytherapy Sources
A. Background
Section 1833(t)(2)(H) of the Act, as added by section 621(b)(2)(C)
of Public Law 108-173 (MMA), mandated the creation of additional groups
of covered OPD services that classify devices of brachytherapy
consisting of a seed or seeds (or radioactive source) (``brachytherapy
sources'') separately from other services or groups of services. The
additional groups must reflect the number, isotope, and radioactive
intensity of the brachytherapy sources furnished and include separate
groups for palladium-103 and iodine-125 sources.
Section 1833(t)(16)(C) of the Act, as added by section 621(b)(1) of
Public Law 108-173, established payment for brachytherapy sources
furnished from January 1, 2004, through December 31, 2006, based on a
hospital's charges for each brachytherapy source furnished adjusted to
cost. Under section 1833(t)(16)(C) of the Act, charges for the
brachytherapy sources may not be used in determining any outlier
payments under the OPPS for that period of payment. Consistent with our
practice under the OPPS to exclude items paid at cost from budget
neutrality consideration, these items were excluded from budget
neutrality for that time period as well.
In our CY 2007 annual OPPS rulemaking, we proposed and finalized a
policy of prospective payment based on median costs for the 11
brachytherapy sources for which we had claims data. We based the
prospective payment rates on median costs for each source from our CY
2005 claims data (71 FR 68102 through 71 FR 68115).
Subsequent to publication of the CY 2007 OPPS/ASC final rule with
comment period, section 107 of Public Law 109-432 (MIEA-TRHCA) amended
section 1833 of the Act. Specifically, section 107(a) of Public Law
109-432 amended section 1833(t)(16)(C) of the Act by extending the
payment period for brachytherapy sources based on a hospital's charges
adjusted to cost for 1 additional year, through December 31, 2007.
Therefore, we continued to pay for brachytherapy sources based on
charges adjusted to cost for CY 2007.
Section 107(b)(1) of Public Law 109-432 amended section
1833(t)(2)(H) of the Act by adding a requirement for the establishment
of separate payment groups for ``stranded and non-stranded''
brachytherapy sources furnished on or after July 1, 2007, in addition
to the existing requirements for separate payment groups based on the
number, isotope, and radioactive intensity of brachytherapy sources
under section 1833(t)(2)(H) of the Act. Section 107(b)(2) of Pub. L.
109-432 authorized the Secretary to implement this requirement by
``program instruction or otherwise.'' We note that public commenters
who responded to the CY 2007 OPPS/ASC proposed rule asserted that
stranded sources, which they described as embedded into the stranded
suture material and separated within the strand by material of an
absorbable nature at specified intervals, had greater production costs
than non-stranded sources (71 FR 68113 through 68114).
As a result of the statutory requirement to create separate groups
for stranded and non-stranded sources as of July 1, 2007, we
established several coding changes through a transmittal, effective
July 1, 2007 (Transmittal 1259, dated June 1, 2007). Based on public
[[Page 60533]]
comments received on the CY 2007 OPPS/ASC proposed rule and industry
input, we were aware of three sources available in stranded and non-
stranded forms at that time: iodine-125; palladium-103; and cesium-131
(72 FR 42746). We created six new HCPCS codes to differentiate the
stranded and non-stranded versions of iodine, palladium, and cesium
sources.
In Transmittal 1259, we indicated that if we receive information
that any of the other sources now designated as non-stranded are also
FDA-approved and marketed as a stranded source, we would create a code
for the stranded source. We also established two ``Not Otherwise
Specified'' (NOS) codes for billing stranded and non-stranded sources
that are not yet known to us and for which we do not have source-
specific codes. We established HCPCS code C2698 (Brachytherapy source,
stranded, not otherwise specified, per source) for stranded NOS sources
and HCPCS code C2699 (Brachytherapy source, non-stranded, not otherwise
specified, per source) for non-stranded NOS sources.
In the CY 2008 OPPS/ASC final rule with comment period (72 FR
66784), we again finalized prospective payment for brachytherapy
sources, beginning in CY 2008, with payment rates determined using the
CY 2006 claims-based costs per source for each brachytherapy source.
Consistent with our policy regarding APC payments made on a prospective
basis, we finalized the policy in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66686) to subject the cost of brachytherapy
sources to the outlier provision of section 1833(t)(5) of the Act, and
to also subject brachytherapy source payment weights to scaling for
purposes of budget neutrality. Therefore, brachytherapy sources could
receive outlier payments if the costs of furnishing brachytherapy
sources met the criteria for outlier payment. In addition, as noted in
the CY 2008 OPPS/ASC final rule with comment period (72 FR 66683),
implementation of prospective payment for brachytherapy sources would
provide opportunities for hospitals to receive additional payments
under certain circumstances through the 7.1 percent rural SCH
adjustment.
For CY 2008, we also proposed and finalized a policy regarding
payment for new brachytherapy sources for which we have no claims data
(72 FR 42749 and 72 FR 66786, respectively). We indicated we would
assign future new HCPCS codes for new brachytherapy sources to their
own APCs, with prospective payment rates set based on our consideration
of external data and other relevant information regarding the expected
costs of the sources to hospitals. Finally, we proposed and finalized
our policy to discontinue using status indicator ``H'' (Pass-Through
Device Categories. Separate cost based pass-through payment; not
subject to co-payment) because we would not be paying charges adjusted
to costs after December 31, 2007, and instead adopted a policy of using
status indicator ``K'' (which includes, among others, ``Brachytherapy
Sources. Paid under OPPS; separate APC payment'') for CY 2008 (72 FR
42749 and 72 FR 66785, respectively).
After we finalized these proposals for CY 2008, section 106(a) of
Pub. L. 110-173 (MMSEA) extended the charges-adjusted-to-cost payment
methodology for brachytherapy sources for an additional 6 months,
through June 30, 2008. Because our final CY 2008 policies paid for
brachytherapy sources at prospective rates based on median costs, we
were unable to implement these policies during this extension.
In the CY 2009 OPPS/ASC proposed rule (73 FR 41502), we again
proposed prospective payment rates for brachytherapy sources for CY
2009. We proposed to pay for brachytherapy sources at prospective rates
based on their source-specific median costs as calculated from CY 2007
claims data available for CY 2009 ratesetting. Subsequent to issuance
of the CY 2009 OPPS/ASC proposed rule, Public Law 110-275 (MIPPA) was
enacted on July 15, 2008. Section 142 of Public Law 110-275 amended
section 1833(t)(16)(C) of the Act, as amended by section 106(a) of
Public Law 110-173 (MMSEA), to further extend the payment period for
brachytherapy sources based on a hospital's charges adjusted to cost
from July 1, 2008, through December 31, 2009. Therefore, we continued
to pay for brachytherapy sources at charges adjusted to cost in CY 2008
from July 1 through December 31, and we maintained the assignment of
status indicator ``H'' to brachytherapy sources for claims processing
purposes in CY 2008. For CY 2009, we have continued to pay for all
separately payable brachytherapy sources based on a hospital's charges
adjusted to cost. Because brachytherapy sources are paid at charges
adjusted to cost, we did not subject them to outlier payments under
section 1833(t)(5) of the Act, or subject brachytherapy source payment
weights to scaling for purposes of budget neutrality. Moreover, during
the CY 2009 period of payment at charges adjusted to cost,
brachytherapy sources are not eligible for the 7.1 percent rural SCH
adjustment (as discussed in detail in section II.E. of this final rule
with comment period).
Furthermore, for CY 2009, we did not adopt the policy we
established in the CY 2008 OPPS/ASC final rule with comment period of
paying stranded and non-stranded NOS codes for brachytherapy sources,
HCPCS codes C2698 and C2699, based on a rate equal to the lowest
stranded or non-stranded prospective payment for such sources. Also,
for CY 2009, we did not adopt the policy we established in the CY 2008
OPPS/ASC final rule with comment period regarding payment for new
brachytherapy sources for which we have no claims data. NOS HCPCS codes
C2698 and C2699 and newly established specific source codes are paid at
charges adjusted to cost through December 31, 2009, consistent with
section 142 of Public Law 110-275.
For CY 2009, we finalized our proposal to create new status
indicator ``U'' (Brachytherapy Sources. Paid under OPPS; separate APC
payment) for brachytherapy source payment, instead of using status
indicator ``K'' as proposed and finalized for CY 2008 for prospective
payment, or status indicator ``H,'' used during the period of charges
adjusted to cost payment. As noted in the CY 2009 OPPS/ASC final rule
with comment period (73 FR 68670), assigning a status indicator, such
as status indicator ``K,'' to several types of items and services with
potentially differing payment policies added unnecessary complexity to
our operations. Status indicator ``U'' is used only for brachytherapy
sources, regardless of their specific payment methodology for any
period of time.
At the February 2009 meeting, the APC Panel recommended paying for
brachytherapy sources in CY 2010 using a prospective payment
methodology based on median costs from claims data. The APC Panel
reviewed CY 2007 and CY 2008 brachytherapy source median costs from
claims data and noted the stability of the data from year to year.
B. OPPS Payment Policy
Under section 142 of Public Law 110-275, payment for brachytherapy
sources is mandated at charges adjusted to cost only through CY 2009.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35342), we proposed to
adopt for CY 2010 the general OPPS prospective payment methodology for
brachytherapy sources, consistent with section 1833(t)(2)(C) of the
Act.
As we have previously stated (72 FR 66780 and 73 FR 41502), we
believe that adopting the general OPPS prospective payment methodology
for brachytherapy sources is appropriate for
[[Page 60534]]
a number of reasons. The general OPPS payment methodology uses median
costs based on claims data to set the relative payment weights for
hospital outpatient services. This payment methodology results in more
consistent, predictable, and equitable payment amounts per source
across hospitals by eliminating some of the extremely high and low
payment amounts resulting from payment based on hospitals' charges
adjusted to cost. We believe the OPPS prospective payment methodology
would also provide hospitals with incentives for efficiency in the
provision of brachytherapy services to Medicare beneficiaries.
Moreover, this approach is consistent with our payment methodology for
the vast majority of items and services paid under the OPPS.
We proposed to use CY 2008 claims data for setting the CY 2010
payment rates for brachytherapy sources, as we proposed for most other
items and services that will be paid under the CY 2010 OPPS. For CY
2008, we have a full year of claims data for each of the separately
payable sources, including iodine, palladium, and cesium sources that
have stranded and non-stranded configurations. As indicated earlier,
the APC Panel, at the February 2009 meeting, recommended using the
median cost data for CY 2010 rates. Our proposal was consistent with
the APC Panel's recommendation.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35342), we proposed to
adopt the other payment policies for brachytherapy sources we finalized
in previous final rules. We proposed to pay for the stranded and non-
stranded NOS codes, HCPCS codes C2698 and C2699, at a rate equal to the
lowest stranded or non-stranded prospective payment rate for such
sources, respectively, on a per source basis (as opposed, for example,
to a per mCi), which is based on the policy we established in the CY
2008 OPPS/ASC final rule with comment period (72 FR 66785). The
proposed payment methodology for NOS sources would provide payment to a
hospital for new sources, while encouraging interested parties to
quickly bring new sources to our attention so that specific coding and
payment could be established.
We also proposed to implement the policy we established in the CY
2008 OPPS/ASC final rule with comment period (which was superseded by
section 142 of Public Law 110-275) regarding payment for new
brachytherapy sources for which we have no claims data, based on the
same reasons we discussed in that final rule with comment period (72 FR
66786). That policy is intended to enable us to assign future new HCPCS
codes for new brachytherapy sources to their own APCs, with prospective
payment rates set based on our consideration of external data and other
relevant information regarding the expected costs of the sources to
hospitals.
Consistent with our policy regarding APC payments made on a
prospective basis, we proposed to subject brachytherapy sources to
outlier payments under section 1833(t)(5) of the Act, and also to
subject brachytherapy source payment weights to scaling for purposes of
budget neutrality. Therefore, brachytherapy sources could receive
outlier payments if the costs of furnishing brachytherapy sources meet
the criteria for outlier payment. In addition, as noted in the CY 2008
OPPS/ASC final rule with comment period (72 FR 66683), implementation
of prospective payments for brachytherapy sources would provide
opportunities for hospitals to receive additional payments in CY 2010
under certain circumstances through the 7.1 percent rural adjustment as
described in section II.E. of the proposed rule (74 FR 35295) and this
final rule with comment period.
Therefore, in the CY 2010 OPPS/ASC proposed rule, we proposed to
pay for brachytherapy sources at prospective payment rates based on
their source-specific median costs for CY 2010. The separately payable
brachytherapy source HCPCS codes, long descriptors, APCs, status
indicators, and approximate median costs that we proposed for CY 2010
were presented in Table 32 of the proposed rule (74 FR 35342).
Comment: A number of commenters recommended that CMS continue to
pay for brachytherapy sources separately based on hospitals' charges
adjusted to cost due to the commenters' ongoing concerns regarding
Medicare hospital claims data for brachytherapy sources; the commenters
provided various examples of issues of concern. Some commenters were
concerned that characteristics of high dose rate (HDR) iridium-192,
which is a renewable source whose life decays over a 90-day period and
is used to treat multiple patients, makes establishment of fair and
adequate payment difficult on a fixed prospective basis. The commenters
also claimed that the CMS brachytherapy source data continue to show
huge variations in per unit costs on claims across hospitals. Several
commenters stated that one half of the current brachytherapy sources
have proposed payment rates based on 50 or fewer hospitals reporting
claims for these sources. Some commenters also indicated that ``rank
order anomalies'' exist in proposed payment rates for brachytherapy
sources, citing that HCPCS code C2635 (Brachytherapy source, non-
stranded, High Activity, Palladium-103, greater than 2.2 mCi (NIST),
per source) always costs more than low activity sources (HCPCS code
C2640, Brachytherapy source, stranded, Palladium-103, per source, and
HCPCS code C2641, Brachytherapy source, non-stranded, Palladium-103,
per source), yet hospital claims data do not reflect this difference. A
number of commenters believed that the current charges-adjusted-to-cost
methodology is more accurate and has been tested over time. A few
commenters argued that the charges-adjusted-to-cost methodology
provides overall cost savings to the Medicare program compared to the
prospective payment methodology proposed for CY 2010, according to an
analysis performed by the brachytherapy source industry. The commenters
thus concluded that implementing prospective brachytherapy source
payment would increase aggregate Medicare expenditures for
brachytherapy sources compared with the charges-adjusted-to-cost
payment methodology.
Several commenters supported the CY 2010 proposal to pay for
brachytherapy sources prospectively based on median costs from claims
data. One commenter asserted that hospital-specific payments based on
the charges-adjusted-to-cost payment methodology violate the intent of
a prospective payment system, namely to provide incentives to improve
efficiency and control costs. The commenter believed that hospital-
specific payments could be manipulated because hospitals know the CCR
used to determine payments for brachytherapy sources.
Response: As we stated in the CY 2008 final rule with comment
period (72 FR 66782), we believe that median costs based on hospital
claims data for brachytherapy sources have produced reasonably
consistent per-source cost estimates over the past several years,
comparable to the patterns we have observed for many other OPPS
services whose payments are set based upon relative payment weights
from claims data. We believe that our per-source payment methodology
specific to each source's radioisotope, radioactive intensity, and
stranded or non-stranded configuration, supplemented by payment based
on the number of sources used in a specific clinical case, adequately
accounts for the major expected sources of variability across
treatments.
As we also explained in the CY 2008 OPPS/ASC final rule with
comment
[[Page 60535]]
period (72 FR 66782), a prospective payment system such as the OPPS
relies on the concept of averaging, where the payment may be more or
less than the estimated cost of providing a service for a particular
patient, but with the exception of outlier cases, it is adequate to
ensure access to appropriate care. In the case of brachytherapy sources
for which the law requires separate payment groups, without packaging,
the costs of these individual items could be expected to show greater
variation than some other APCs under the OPPS because higher
variability in costs for some component items and services is not
balanced with lower variability for others and because relative weights
are typically estimated using a smaller set of claims.
Nevertheless, we believe that prospective payment for brachytherapy
sources based on median costs from claims calculated according to the
standard OPPS methodology is appropriate at this time and would provide
hospitals with the greatest incentives for efficiency in furnishing
brachytherapy treatment. Under the budget-neutral OPPS, it is the
relativity of costs of services, not their absolute costs, that is
important, and we believe that brachytherapy sources can now be
appropriately paid according to the standard OPPS payment approach.
Moreover, OPPS payments for all services are similarly subjected to the
same 2-year lag in costs from claims data available for ratesetting.
Therefore, we believe the relative costs of OPPS services should
generally be appropriate. It is important that the same measure of
central tendency (median cost) from claims be used to establish the
payment weights for all OPPS services in order to provide appropriate
payment for all of these services. The inflation rate of medical
services is taken into consideration through the conversion factor,
which is updated annually to account for inflation and used to
calculate payment rates from the relative payment weights based on
median costs.
It is not uncommon for OPPS prospective payment rates to be based
on claims from a relatively small number of hospitals that furnished
the service in the year of claims data available for the OPPS update
year. We are not concerned that some sources may have median costs and
proposed payment rates based on 50 or fewer providers, as are some
commenters. Fifty hospitals may report hundreds of brachytherapy source
claims for many cases and comprise the universe of providers using
particular low volume sources, for which we are required to pay
separately by statute. Further, our methodology for estimating median
costs for brachytherapy sources utilizes all line-item charges for
those sources, which allows us to use all hospital reported charge and
estimated cost information to set payment rates for these items. This
is in contrast to our limitation of relying on ``natural'' single and
``pseudo'' single procedure claims to set APC payment rates for
services with packaged costs. We have no reason to believe that
prospective payment rates based on claims from those providers
furnishing a particular source do not appropriately reflect the cost of
that source to hospitals.
As for most other OPPS services, we note that the median costs for
brachytherapy sources are based upon the costs of those providers that
furnished the sources in CY 2008. Hospitals individually determine
their charge for an item or service, and one of Medicare's primary
requirements for setting a charge is that it be reasonably and
consistently related to the cost of the item or service for that
facility (Medicare Provider Reimbursement Manual-I, Section 2203). We
then estimate a cost from that charge using the hospital's most recent
Medicare hospital cost report data in our standard OPPS ratesetting
process. In as much as we paid hospitals at charges adjusted to cost
for brachytherapy sources in CY 2008 based on these exact charges, we
believe hospital's individual charges to be accurate for their
institution.
In the case of high and low activity iodine-125 sources, our claims
data showed that the cost of the high activity source is greater than
the low activity sources, yet this relationship is reversed for
palladium-103 sources, as the commenter pointed out. We have no
information about the expected cost differential between high and low
activity sources of various isotopes other than what is available in
our claims and hospital cost report data. For high activity palladium-
103, only 16 hospitals provided this source in CY 2008, compared to 166
and 268 providers for low activity palladium sources described by HCPCS
codes C2640 and C2641, respectively. Clearly, fewer providers furnished
high activity palladium-103 sources, and we expect that the hospital
cost distribution for those hospitals could be different than the cost
distribution of the large number of providers reporting the low
activity sources. These varied cost distributions clearly contribute to
the observed relationship in median costs between the different types
of sources, yet we see no reason why our standard ratesetting
methodology for brachytherapy sources that relies on all claims from
all hospitals furnishing brachytherapy sources would not yield valid
median costs for those hospitals furnishing the different brachytherapy
sources upon which CY 2010 prospective payments rates are based.
When the statutory requirement for payment of brachytherapy sources
at a hospital's charges adjusted to cost ends on December 31, 2009
(section 1833(t)(16)(C) of the Act), prospective payment for
brachytherapy sources based on their median costs would make the source
payment an integral part of the OPPS, rather than a separate cost-based
payment methodology within the OPPS. We believe that consistent and
predictable prospectively established payment rates under the OPPS for
brachytherapy sources are appropriate because we do not believe that
the hospital resource costs associated with specific brachytherapy
sources would vary greatly across hospitals or clinical conditions
under treatment, other than through differences in the numbers of
sources utilized that would be accounted for in the standard OPPS
payment methodology we are finalizing.
We agree that sources such as HDR irirdium-192 have a fixed active
life and must be replaced every 90 days; as a result, hospitals' per-
treatment cost for the source would be dependent on the number of
treatments furnished per source. The source cost must be amortized over
the life of the source. Therefore, in establishing their charges for
HDR iridium, we expect hospitals to project the number of treatments
that would be provided over the life of the source and establish their
charges for the source accordingly, as we have stated previously (72 FR
66783). For most such OPPS services, our practice is to establish
prospective payment rates based on the median costs from hospitals
claims data, to provide incentives for efficient and cost-effective
delivery of these services.
We do not agree with the commenters that prospective brachytherapy
source payment based on median costs would increase aggregate Medicare
expenditures compared to the charges-adjusted-to-cost methodology, or
that the charges-adjusted-to-cost methodology would provide overall
cost savings to the Medicare program compared to the prospective
payment methodology. We also do not believe that the beneficiary
copayment in the aggregate would increase under the prospective payment
methodology. We have traditionally estimated charge inflation for
brachytherapy sources as higher than the market basket inflation
[[Page 60536]]
update applicable to prospective payment under the OPPS. We estimated
charge inflation for brachytherapy sources between the 2 most recent
years of hospital claims data by comparing the per-unit charge in CY
2008 claims to the per-unit charge in CY 2007 claims across all
sources, and we used this estimate in our budget neutrality
calculations. We are currently estimating a charge inflation factor of
17.1 percent for brachytherapy sources between CY 2007 and CY 2008 and,
over the past several years, we have consistently estimated
brachytherapy source charge inflation factors higher than 8 percent.
Inflating payment at hospitals' charges adjusted to cost in the CY 2008
claims to CY 2010 using this most recent charge inflation factor and
comparing it to an estimate of prospective payment for the same sources
suggest that aggregate brachytherapy source payment for CY 2010 at
charges adjusted to cost would be slightly higher than prospective
payment for brachytherapy sources in CY 2010. Although the commenters
did not include the details of their analysis in their comments, it is
possible that the analysis did not include a charge inflation factor to
increase payment estimated at charges adjusted to cost from CY 2008 to
CY 2010.
Comment: One commenter indicated that the proposed source-specific
payments were consistent with its experience with the cost per unit of
the sources, except for the proposed payment for HCPCS code C2634
(Brachytherapy source, non-stranded, High Activity, Iodine-125, greater
than 1.01 mCi (NIST), per source). The commenter noted that the
proposed payment rate for HCPCS code C2634 is $60, yet its invoices for
high activity I-125, that is, HCPCS code C2634, range between $174 and
$689. The commenter also stated that high activity I-125 sources are
ordered based on a range of activity levels. The commenter suggested
that there may have been errors in hospital reporting of HCPCS code
C2634 in CY 2008 that resulted in the low proposed payment rate. The
commenter requested that CMS reevaluate the proposed payment rate for
HCPCS code C2634 for CY 2010 using average cost data from
manufacturers.
Response: We are pleased that the proposed CY 2010 payment rates
for all but one of the brachytherapy sources are consistent with the
commenter's experience. The CY 2008 median cost of HCPCS code C2634 for
this final rule with comment period is approximately $59, compared with
approximately $31 in CY 2006 and approximately $38 in CY 2007. The CY
2008 median cost is somewhat higher than the previous 2 years, and we
acknowledge that the variability in the activity of sources reported
with HCPCS code C2634 could explain some of the variability in cost for
this source. Furthermore, we note that the CY 2008 median cost for
HCPCS code C2634 is based on 18,602 units, over 267 days, from 48
providers. We believe that some variation in relative cost from year to
year is to be expected in a prospective payment system, particularly
for low volume items.
For all APCs whose payment rates are based upon relative payment
weights, we note that the quality and accuracy of reported units and
charges significantly influence the final median costs that are the
basis for our payments. Beyond our standard OPPS trimming methodology
(described in section II.A.2. of this final rule with comment period)
that we apply to those claims that have passed various types of claims
processing edits, it is not our policy to judge the accuracy of
hospital coding and charging for the purpose of ratesetting. Moreover,
we do not believe it is necessary to incorporate external cost data
from manufacturers of brachytherapy sources or others because, in a
relative weight system like the OPPS, it is the relativity of the costs
to one another, rather than absolute cost, that is important in setting
payment rates. External data lack relativity to the estimated costs
derived from the claims and cost report data and generally are not
appropriate for determining relative weights that result in payment
rates when costs derives from hospital claims and cost report data for
services are available.
Comment: One commenter suggested that brachytherapy sources are not
reported consistently by all providers using a specific revenue center
and recommended that CMS maintain payment at charges adjusted to cost
until cost data are improved by refined information resulting from the
new cost center for high cost supplies.
Response: In analyzing the reporting of brachytherapy sources in CY
2008 claims, we found that the great majority of brachytherapy sources
are reported under revenue code 0278 (Other Implants). Under the policy
finalized in the FY 2009 IPPS final rule (73 FR 48462 through 48463),
we finalized a definition of a new'' Implantable Devices Charged to
Patients'' cost center to which costs and charges under revenue code
0278 would map in the future. Thus, brachytherapy sources would
generally be subject to the ``Implantable Devices Charged to Patients''
cost center for future cost estimation under the OPPS, potentially
leading to greater accuracy in cost estimation for these devices as
noted by the commenter. This new cost center was available for use for
cost reporting periods beginning on or after May 1, 2009, and was
discussed in Transmittal 20 (dated July 2009) that updated Chapter 36,
Hospital and Hospital Health Care Complex Cost Report (Form CMS 2552-
96) of the Medicare Provider Reimbursement Manual, Part 2, to provide
Line 55.30 to report ``Implantable Devices Charged to Patients.'' The
proposed draft cost report Form CMS-2552-10, published in the Federal
Register for public comment on July 2, 2009 (74 FR 31738), provides new
line 69 to report ``Implantable Devices Charged to Patients.'' The
proposed cost report can be viewed at: http://www.cms.hhs.gov/PaperworkReductionActof1995/PRAL/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=2&sortOrder=descending&itemID=CMS1224069&intNumPerPage=10.
We have stated previously that we continue to emphasize our
preference for long-term cost reporting changes and broad education
initiatives to address the accuracy of claims data (73 FR 68524). This
recent change to include a new cost center will ultimately influence
both the IPPS and OPPS relative weights in the future. Nevertheless, in
the meantime, we believe it is fully appropriate to utilize our current
cost estimates for brachytherapy sources and all other implantable
devices in calculating payment weights under the OPPS because these are
our best current estimates of costs as derived from claims and cost
report data. When hospital-specific CCRs from the new cost center are
available for ratesetting in several years, we will incorporate those
into the revenue code-to-cost center crosswalk that we use for OPPS
cost estimation. However, at the present time, we believe our current
methodology that generally utilizes the available single medical supply
CCR leads to appropriate cost estimates for brachytherapy sources, and
we see no reason why payment at charges adjusted to cost, which applies
an hospital-specific overall ancillary CCR to hospital charges for
brachytherapy sources, would lead to a more accurate cost estimate for
these items. The hospital-specific overall ancillary CCR is based on
costs and charges for a wide range of OPPS services, and we have no
reason to believe that hospital markup practices for brachytherapy
sources are similar to the relationship between costs
[[Page 60537]]
and charges represented in this very general CCR.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to pay for
brachytherapy sources prospectively based on CY 2008 median costs from
historical hospital claims data. In addition, we will pay the stranded
and non-stranded NOS codes, HCPCS codes C2698 and C2699, at a rate
equal to the lowest stranded or non-stranded prospective payment rate
for such sources, respectively, on a per source basis. Payment for new
brachytherapy sources, which may be established quarterly, will be made
through their own APCs, with prospective payment rates set based on our
consideration of external data and other relevant information regarding
the expected costs of the sources to hospitals because we would have no
information from claims data on the costs of these new sources to
hospitals. Finally, in CY 2010, brachytherapy sources will be subject
to outlier payments, their payment weights subject to scaling for
purposes of budget neutrality, and, under some circumstances, their
payment subject to the 7.1 percent rural adjustment as discussed in
section II.E. of this final rule with comment period.
Table 45 below displays the separately payable brachytherapy source
HCPCS codes, long descriptors, APCs, status indicators, and approximate
median costs for CY 2010.
Table 45--Separately Payable Brachytherapy Sources for CY 2010
----------------------------------------------------------------------------------------------------------------
Final CY
2010
CY 2010 HCPCS Code CY 2010 long descriptor Final CY Final CY approximate
2010 APC 2010 SI APC median
cost
----------------------------------------------------------------------------------------------------------------
A9527................................... Iodine I-125, sodium iodide 2632 U $38
solution, therapeutic, per
millicurie.
C1716................................... Brachytherapy source, non- 1716 U 42
stranded, Gold-198, per source.
C1717................................... Brachytherapy source, non- 1717 U 229
stranded, High Dose Rate
Iridium-192, per source.
C1719................................... Brachytherapy source, non- 1719 U 63
stranded, Non-High Dose Rate
Iridium-192, per source.
C2616................................... Brachytherapy source, non- 2616 U 15,635
stranded, Yttrium-90, per
source.
C2634................................... Brachytherapy source, non- 2634 U 59
stranded, High Activity, Iodine-
125, greater than 1.01 mCi
(NIST), per source.
C2635................................... Brachytherapy source, non- 2635 U 28
stranded, High Activity,
Palladium-103, greater than 2.2
mCi (NIST), per source.
C2636................................... Brachytherapy linear source, non- 2636 U 19
stranded, Palladium-103, per
1MM.
C2638................................... Brachytherapy source, stranded, 2638 U 42
Iodine-125, per source.
C2639................................... Brachytherapy source, non- 2639 U 36
stranded, Iodine-125, per
source.
C2640................................... Brachytherapy source, stranded, 2640 U 60
Palladium-103, per source.
C2641................................... Brachytherapy source, non- 2641 U 57
stranded, Palladium-103, per
source.
C2642................................... Brachytherapy source, stranded, 2642 U 109
Cesium-131, per source.
C2643................................... Brachytherapy source, non- 2643 U 65
stranded, Cesium-131, per
source.
C2698................................... Brachytherapy source, stranded, 2698 U *42
not otherwise specified, per
source.
C2699................................... Brachytherapy source, non- 2699 U *28
stranded, not otherwise
specified, per source.
----------------------------------------------------------------------------------------------------------------
* Median cost is that of the lowest cost stranded or non-stranded source upon which CY 2010 payment for the NOS
HCPCS code is based.
We continue to invite hospitals and other parties to submit
recommendations to us for new HCPCS codes to describe new brachytherapy
sources consisting of a radioactive isotope, including a detailed
rationale to support recommended new sources. Such recommendations
should be directed to the Division of Outpatient Care, Mail Stop C4-05-
17, Centers for Medicare and Medicaid Services, 7500 Security
Boulevard, Baltimore, MD 21244. We will continue to add new
brachytherapy source codes and descriptors to our systems for payment
on a quarterly basis.
VIII. OPPS Payment for Drug Administration Services
A. Background
In CY 2005, in response to the recommendations made by public
commenters and the hospital industry, OPPS transitioned from Level II
HCPCS Q-codes to the use of CPT codes for drug administration services.
These CPT codes allowed specific reporting of services regarding the
number of hours for an infusion and provided consistency in coding
between Medicare and other payers. (For a discussion regarding coding
and payment for drug administration services prior to CY 2005, we refer
readers to the CY 2008 OPPS/ASC final rule with comment period (72 FR
66787).)
While hospitals began adopting CPT codes for outpatient drug
administration services in CY 2005, physicians paid under the MPFS were
using HCPCS G-codes in CY 2005 to report office-based drug
administration services. These HCPCS G-codes were developed in
anticipation of substantial revisions to the drug administration CPT
codes by the CPT Editorial Panel that were expected for CY 2006.
In CY 2006, as anticipated, the CPT Editorial Panel revised its
coding structure for drug administration services and incorporated new
concepts, such as initial, sequential, and concurrent services, into a
structure that previously distinguished services based on type of
administration (chemotherapy/nonchemotherapy), method of administration
(injection/infusion/push), and for infusion services, first hour and
additional hours. For CY 2006, we implemented the CY 2006 drug
administration CPT codes that did not reflect the concepts of initial,
sequential, and concurrent services under the OPPS, and we created
HCPCS C-codes that generally paralleled the CY 2005 CPT codes for
reporting these other services.
For CY 2007, as a result of public comments on the proposed rule
and feedback from the hospital community and the APC Panel, we
implemented the full set of CPT codes for drug administration services,
including codes incorporating the concepts of initial, sequential, and
concurrent services. In addition, the CY 2007 update process offered us
the first opportunity to consider data gathered from the use of CY 2005
CPT codes for purposes of ratesetting. For CY 2007, we used CY 2005
claims data to implement a six-
[[Page 60538]]
level APC structure for drug administration services. In CY 2008, we
continued to use the full set of CPT codes for drug administration
services and continued our assignment of drug administration services
to this six-level APC structure.
For CY 2009, we continued to allow hospitals to use the full set of
CPT codes for drug administration services but moved from a six-level
APC structure to a five-level APC structure. We note that, while there
were changes in the CPT numerical coding for nonchemotherapy drug
administration services in CY 2009, the existing CPT codes were only
renumbered, and there were no significant changes to the code
descriptors themselves. As we discussed in the CY 2009 OPPS/ASC final
rule with comment period (73 FR 68672), the CY 2009 ratesetting process
afforded us the first opportunity to examine hospital claims data for
the full set of CPT codes that reflected the concepts of initial,
sequential, and concurrent services. For CY 2009, we performed our
standard annual OPPS review of the clinical and resource
characteristics of the drug administration CPT codes assigned to the
six-level CY 2008 APC structure based on the CY 2007 claims data
available for the CY 2009 OPPS/ASC proposed rule. As a result of our
hospital cost analysis and detailed clinical review, we adopted a five-
level APC structure for CY 2009 drug administration services to more
appropriately reflect their resource utilization in APCs that also
group clinically similar services. As we noted in the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68671), these APCs generally
demonstrated the clinically expected and actually observed comparative
relationships between the median costs of different types of drug
administration services, including initial and additional services;
chemotherapy and other diagnostic, prophylactic, or therapeutic
services; injections and infusions; and simple and complex methods of
drug administration. In the CY 2009 OPPS/ASC final rule with comment
period (73 FR 68673), we indicated our belief that the five-level APC
structure was the most appropriate structure based on updated hospital
claims data for the full range of CPT codes for drug administration for
the CY 2009 OPPS/ASC final rule with comment period because the
structure resulted in payment groups with greater clinical and resource
homogeneity.
B. Coding and Payment for Drug Administration Services
In the CY 2010 OPPS/ASC proposed rule (74 FR 35343), we proposed
for CY 2010 to continue to use the full set of CPT codes for drug
administration services. In addition, as a part of our standard annual
review, we analyzed the assignments of CPT codes for drug
administration into the five-level APC structure and, based on the
results of this review, proposed to continue a five-level APC structure
for CY 2010. Further, we proposed some minor reconfigurations of the
APCs as described below to account for changes in HCPCS code-specific
median costs resulting from updated CY 2008 claims data and the most
recent cost report data, and the CY 2010 drug payment proposal that is
discussed in section V.B.3.b. of the proposed rule (74 FR 35326 through
35333) and this final rule with comment period.
In the CY 2007 OPPS/ASC final rule with comment period (71 FR
68117), we explained that we expected CPT codes for additional hours of
infusion to be reported with CPT codes for the initial hour of drug
infusion. This would result in a substantial number of claims for drug
administration services that were unusable for ratesetting purposes
because multiple services would be present on the same bill and result
in essentially no correctly coded claims upon which to set the median
costs for the CPT codes describing additional hours of infusion. (We
refer readers to section II.A.1.b. of the proposed rule (74 FR 35239
through 35241) and this final rule with comment period for a further
discussion of multiple bills and our ratesetting methodology.) In order
to use these claims for ratesetting purposes for both the initial drug
administration codes and the additional hour drug administration codes,
we adopted the policy of adding the additional hour drug administration
codes to the bypass list in order to create ``pseudo'' single claims
that would be useable for OPPS ratesetting purposes. After the creation
of these ``pseudo'' single claims, we applied the standard OPPS
methodology to calculate HCPCS code-specific median costs for these
initial and additional hour drug administration codes.
As we explained further in the CY 2007 OPPS/ASC final rule with
comment period, bypassing these additional hour drug administration CPT
codes and developing additional ``per unit'' claims provided a
methodology for calculating median costs for these previously packaged
drug administration services which attributed all of their line-item
cost data to their assigned APCs. However, we noted that this
methodology allocates all packaged costs on claims for drug
administration services to the associated initial hour of infusion
code. Because these additional hours of infusion codes were always
reported with other drug administration services, we expected that the
packaging related to additional hours of infusion would be
appropriately assigned to the initial drug administration service also
included on the same claim. While we stated our belief that there are
some packaged costs that are clinically related to the second and
subsequent hours of infusion, especially for infusions of packaged
drugs spanning several hours, we were not able to accurately assign
representative portions of packaged costs to multiple different
services due to the limitations of our claims data.
We indicated that, while this methodology did not assign any
packaged costs to the additional hours of drug administration codes, we
believed this methodology took into account all of the packaging on
claims for drug administration services and provided a reasonable
framework for developing median costs for drug administration services
that were often provided in combination with one another.
Since this approach was first adopted for CY 2007, we have updated
and expanded the bypass methodology to reflect changing drug
administration HCPCS codes that are recognized under the OPPS. We
placed all of the add-on CPT codes for drug administration services,
including the sequential infusion and intravenous push codes, on the
bypass list in CY 2009 (73 FR 68513) and proposed to include them in CY
2010 (74 FR 35242 through 35252) in order to continue this framework
for transforming these otherwise unusable multiple bills into
``pseudo'' single claims that can be used for OPPS ratesetting
purposes. Table 33 of the proposed rule (74 FR 35345 through 35349)
displayed the proposed configurations of the five drug administration
APCs for CY 2010. In proposing to reassign several HCPCS codes for CY
2010, we took into consideration the resource characteristics of the
services, as reflected in their HCPCS code-specific median costs and
their clinical characteristics. We believed the proposed APC
configurations group drug administration services that share
sufficiently similar clinical and resource characteristics, taking into
consideration updated CY 2008 claims data and the most recent cost
report data and
[[Page 60539]]
common clinical scenarios that have been described to us.
Comment: Several commenters supported the proposal to include the
drug administration add-on codes on the bypass list. The commenters
stated that, by including these codes in the bypass methodology, more
single bills can be used for ratesetting purposes.
One commenter recommended that CPT code 96368 (Intravenous
infusion, for therapy, prophylaxis, or diagnosis (specify substance or
drug): concurrent infusion (List separately in addition to code for
primary procedure)) be included on the bypass list in order to ensure
consistency with the treatment of other drug administration codes.
Response: As stated in the CY 2007 OPPS/ASC final rule with comment
period (71 FR 68117), we expect CPT codes for additional hours of
infusion to be reported with CPT codes for the initial hour of drug
infusion. This would result in a substantial number of claims for drug
administration services that would be unusable for ratesetting purposes
because multiple services would be present on the same bill and result
in essentially no correctly coded claims upon which to set the median
costs for the CPT codes describing additional hours of infusion. In
order to use these claims for ratesetting purposes for both the initial
drug administration codes and the additional hour drug administration
codes, we adopted the policy of adding the additional hour drug
administration codes on the bypass list in order to create ``pseudo''
single claims that would be useable for OPPS ratesetting purposes. We
continue to believe that bypassing these additional hour drug
administration CPT codes and developing additional ``per unit'' claims
provide a methodology for calculating median costs for these previously
packaged additional hour drug administration services, which attributes
all of their line-item cost data to their assigned APCs. Although we
understand that this methodology does not assign any packaged costs to
the additional hours of drug administration codes, we continue to
believe this methodology takes into account all of the packaging on
claims for drug administration services and provides a reasonable
framework for developing median costs for drug administration services
that are often provided in combination with one another.
As discussed above, since this approach was first adopted for CY
2007, we have updated and expanded the bypass methodology to reflect
changing drug administration HCPCS codes that are recognized under the
OPPS. We placed all of the add-on CPT codes for drug administration
services, including the sequential infusion and intravenous push codes,
on the bypass list in CY 2009 (73 FR 68513) and proposed to include
them in CY 2010 (74 FR 35242 through 35252) in order to continue this
framework for transforming these otherwise unusable multiple bills into
``pseudo'' single claims that can be used for OPPS ratesetting
purposes.
We have not added CPT code 96368 (or its predecessor CPT code
90768) on the bypass list because our CY 2010 policy unconditionally
packages payment for this service and, therefore, it is not a candidate
for the bypass list. The purpose of the bypass list is to develop
``pseudo'' single claims so that there are more data available to
determine the median costs of separately payable services for
ratesetting purposes. Including packaged codes would be contrary to the
purpose of the bypass list.
We refer readers to section II.A.1.b. of this final rule with
comment period for a full discussion of our final bypass policy and
list for CY 2010.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to use the full
set of CPT codes for drug administration and include all separately
paid drug administration add-on HCPCS codes on the CY 2010 bypass list.
We will not add CPT code 96368 on the bypass list because it is not a
separately paid service and, therefore, it is not a candidate for the
bypass list.
Comment: Several commenters expressed support for the proposed
five-level APC structure for drug administration services. Some
commenters requested that CMS continue to evaluate the five-level
structure annually. In addition, several commenters specifically
supported the proposed CY 2010 reconfiguration of the HCPCS code
assignments to the drug administration APCs.
One commenter stated that the data used to propose reassignments of
drug administration codes to drug administration APCs for the proposed
rule were inadequate. The commenter explained that changes to CPT codes
require hospitals to train staff and implement guidelines for code use
and, therefore, accurate claims hospital data for updated CPT codes are
not immediately available from the first year of their use. The
commenter added that differences in definitions for drug administration
codes by Medicare contractors contribute to incomplete and inconsistent
data.
Response: In proposing to reassign several HCPCS codes for CY 2010,
we took into consideration the resource characteristics of the
services, as reflected in their HCPCS code-specific median costs and
their clinical characteristics. We believe the proposed APC
configurations group drug administration services that share
sufficiently similar clinical and resource characteristics, taking into
consideration updated CY 2008 claims data and the most recent cost
report data and common clinical scenarios that have been described to
us.
We disagree with the commenter who believed that our costs from
hospital claims data are inadequate. We believe that the hospital
claims data for drug administration HCPCS codes are robust and
representative of the costs of the many hospitals performing these
services. Multiple drug administration HCPCS codes are reported on
several hundred thousand hospital outpatient claims annually and almost
all drug administration HCPCS codes are reported on at least several
thousand claims. The data that we have reviewed for CY 2010 do not
dramatically differ from previous years' data for these high volume
services furnished by thousands of hospitals. This is evidenced in the
number of hospitals billing for drug administration services, the
frequency of specific drug administration services, and the resulting
median costs of the drug administration services.
Finally, we note that it is our standard practice to annually
review the configuration of all APCs. Therefore, as part of our
standard methodology, we expect to continue to review the configuration
of drug administration APCs in future years.
Comment: A few commenters requested that HCPCS code C8957
(Intravenous infusion for therapy/diagnosis; initiation of prolonged
infusion (more than eight hours), requiring use of portable or
implantable pump) not be reassigned to APC 0439 (Level IV Drug
Administration) as proposed for CY 2010. Instead, the commenters
requested that HCPCS code C8957 continue to be assigned to APC 0440
(Level V Drug Administration) for CY 2010. In addition, one commenter
requested that CPT code 96521 (Refilling and maintenance of portable
pump) not be reassigned to APC 0439 as proposed for CY 2010. Instead,
the commenter requested that CPT code 96521 continue to be assigned to
APC 0440. The commenters stated that HCPCS code C8957 and CPT code
96521 represent prolonged infusions that require the use of a pump and
a significant amount of time and nursing resources.
[[Page 60540]]
Response: As is our standard process, for the CY 2010 proposed
rule, we reviewed each APC for clinical cohesiveness and resource
homogeneity. As the commenters noted, we proposed to reassign HCPCS
code C8957 to APC 0439 because we believed that the proposed HCPCS-
specific median cost more closely matched the proposed median cost of
APC 0439. Upon further review, we agree with the commenters that the
clinical characteristics of the procedure described by HCPCS code C8957
that describes a prolonged intravenous infusion lasting more than 8
hours more closely resemble those of procedures assigned to APC 0440.
Further, the HCPCS-specific median cost of HCPCS code C8957
(approximately $179) is only slightly less than the median cost of APC
0440 (approximately $218), resulting in our belief that APC 0440 would
be the most appropriate assignment of HCPCS code C8957 for CY 2010.
In addition, we proposed to reassign CPT code 96521 to APC 0439
because we believed that the proposed HCPCS-specific median cost more
closely matched the median cost of APC 0439. We continue to believe
that the HCPCS-specific median cost of CPT code 96521 (approximately
$133) closely resembles the median cost of APC 0439 (approximately
$126). In addition, we note that while HCPCS code C8957 describes the
initiation of a prolonged infusion that we would expect to be resource-
intensive, CPT code 96521 describes the refilling and maintenance of a
portable infusion pump, a drug administration service that we would
expect to require less hospital resources. Therefore, while we believe
that there is a compelling reason to assign HCPCS code C8957 to the
higher level drug administration APC 0440, we do not find a compelling
reason to do the same for CPT code 96521.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal for the five-level APC structure for
drug administration services, with a modification to not reassign HCPCS
code C8957 to APC 0439 as proposed. Instead, we will continue to assign
HCPCS code C8957 to APC 0440 for CY 2010, with a final APC median cost
of approximately $218. We are finalizing our proposed CY 2010
assignment of CPT code 96521 to APC 0439, with a final APC median cost
of approximately $126.
Comment: A few commenters requested that CPT codes 96376
(Therapeutic, prophylactic, or diagnostic injection (specify substance
or drug); each additional sequential intravenous push of the same
substance/drug provided in a facility) and 96368 (Intravenous infusion,
for therapy, prophylaxis, or diagnosis (specify substance or drug);
concurrent infusion) be paid separately in CY 2010. Some commenters
stated that CPT code 96376 is similar to CPT code 96374 (Therapeutic,
prophylactic, or diagnostic injection (specify substance or drug);
intravenous push, single or initial substance/drug) and should be
assigned to the same APC as CPT code 96374 for CY 2010. In addition,
some commenters indicated that CPT code 96368 is similar to CPT code
96375 (Therapeutic, prophylactic, or diagnostic injection (specify
substance or drug); each additional sequential intravenous push of a
new substance/drug (List separately in additional to code for primary
procedure)) and should be assigned to the same APC as CPT code 96375
for CY 2010. Other commenters noted that because CMS now has claims
data upon which to set specific payment rate for these services, the
OPPS should pay separately for CPT codes 96376 and 96368.
Response: We agree with the commenters that we have cost data for
these CPT codes based on historical hospital claims data. However, we
also believe that these codes remain appropriate for packaging and,
therefore, we include their costs in payment for the independent
services with which they are always associated. As we discussed in the
CY 2008 OPPS/ASC final rule with comment period (72 FR 66787 through
66788) and in the CY 2009 OPPS/ASC final rule with comment period (73
FR 68674), in deciding whether to package a service or pay for it
separately, we consider a variety of factors, including whether the
service is normally provided separately or in conjunction with other
services; how likely it is for the costs of the packaged code to be
appropriately mapped to the separately payable codes with which it was
performed; and whether the expected cost of the service is relatively
low. CPT codes 96376 and 96368, by definition, are always provided in
association with other drug administration services, and we continue to
believe that they are most appropriately packaged under the OPPS.
Furthermore, we do not agree with the commenters that the services
described by CPT code 96376 are similar to those described by CPT code
96374. CPT code 96374 is an initial intravenous push code, and, per CPT
instructions, special billing guidelines apply. Commonly, this service
requires the initial establishment of intravenous access in a patient,
a resource-intensive task performed by hospital staff using special
supplies. In contrast, CPT code 96376 is an add-on code and is reported
for each additional sequential intravenous push of the same substance/
drug. In the case of this sequential service, the patient already has
established intravenous access, so we would expect the service to
require fewer hospital resources. In addition, we do not agree with
commenters that the services described by CPT code 96368 are similar to
those described by CPT code 96375. CPT code 96368 describes a
concurrent intravenous infusion while CPT code 96375 describes a
sequential intravenous push, and we would expect these services to
require different hospital resources.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to
unconditionally package payment for CPT codes 96368 and 96376. These
CPT codes are, therefore, assigned status indicator ``N'' in Addendum B
to this final rule with comment period.
Comment: Several commenters submitted questions related to coding
for drug administration services. Some commenters requested information
on how to code for specific clinical scenarios, while other commenters
were concerned about documentation requirements for a stop time for an
infusion.
Response: Each of these comments and questions is outside of the
scope of the proposals in the CY 2010 OPPS/ASC proposed rule. However,
we will consider the possibility of addressing these concerns through
other available mechanisms, as appropriate.
In summary, after review of the public comments we received, we are
finalizing our proposed coding and payment structure for drug
administration as follows. We are finalizing, without modification, our
proposal to include all separately payable drug administration add-on
codes on the bypass list for CY 2010. In addition, we are finalizing
our proposed five-level APC structure for payment of drug
administration services in the HOPD for CY 2010, with the exception of
a modification to continue to assign HCPCS code C8957 to APC 0440 for
CY 2010, rather than APC 0439 as we proposed. Finally, we are
finalizing our CY 2010 proposal, without modification, to continue to
package payment for CPT codes 96376 and 96368 for CY 2010.
Table 46 below displays the final configurations of the five drug
administration APCs for CY 2010.
[[Page 60541]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.038
[[Page 60542]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.039
[[Page 60543]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.040
[[Page 60544]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.041
[[Page 60545]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.042
IX. OPPS Payment for Hospital Outpatient Visits
A. Background
Currently, hospitals report visit HCPCS codes to describe three
types of OPPS services: Clinic visits, emergency department visits, and
critical care services. For OPPS purposes, we recognize clinic visit
codes as those codes defined in the CPT codebook to report evaluation
and management (E/M) services provided in the physician's office or in
an outpatient or other ambulatory facility. We recognize emergency
department visit codes as those codes used to report E/M services
provided in the emergency department. Emergency department visit codes
consist of five CPT codes that apply to Type A emergency departments,
and five Level II HCPCS codes that apply to Type B emergency
departments. For OPPS purposes, we recognize critical care codes as
those CPT codes used by hospitals to report critical care services that
involve the ``direct delivery by a physician(s) of medical care for a
critically ill or critically injured patient,'' as defined by the CPT
codebook. In Transmittal 1139, Change Request 5438, dated December 22,
2006, we stated that, under the OPPS, the time that can be reported as
critical care is the time spent by a physician and/or hospital staff
engaged in active face-to-face critical care of a critically ill or
critically injured patient. Under the OPPS, we also recognize HCPCS
code G0390 (Trauma response team associated with hospital critical care
service) for the reporting of a trauma response in association with
critical care services.
As we proposed in the CY 2010 OPPS/ASC proposed rule (74 FR 35349
through 35350), we are continuing to recognize these CPT and HCPCS
codes describing clinic visits, Type A and B emergency department
visits, critical care services, and trauma team activation provided in
association with critical care services for CY 2010. These codes are
listed below in Table 47.
Table 47--HCPCS Codes Used To Report Clinic and Emergency Department
Visits and Critical Care Services
------------------------------------------------------------------------
CY 2010 HCPCS Code CY 2010 Descriptor
------------------------------------------------------------------------
Clinic Visit HCPCS Codes
------------------------------------------------------------------------
99201........................ Office or other outpatient visit for the
evaluation and management of a new
patient (Level 1).
[[Page 60546]]
99202........................ Office or other outpatient visit for the
evaluation and management of a new
patient (Level 2).
99203........................ Office or other outpatient visit for the
evaluation and management of a new
patient (Level 3).
99204........................ Office or other outpatient visit for the
evaluation and management of a new
patient (Level 4).
99205........................ Office or other outpatient visit for the
evaluation and management of a new
patient (Level 5).
99211........................ Office or other outpatient visit for the
evaluation and management of an
established patient (Level 1).
99212........................ Office or other outpatient visit for the
evaluation and management of an
established patient (Level 2).
99213........................ Office or other outpatient visit for the
evaluation and management of an
established patient (Level 3).
99214........................ Office or other outpatient visit for the
evaluation and management of an
established patient (Level 4).
99215........................ Office or other outpatient visit for the
evaluation and management of an
established patient (Level 5).
------------------------------------------------------------------------
Emergency Department Visit HCPCS Codes
------------------------------------------------------------------------
99281........................ Emergency department visit for the
evaluation and management of a patient
(Level 1).
99282........................ Emergency department visit for the
evaluation and management of a patient
(Level 2).
99283........................ Emergency department visit for the
evaluation and management of a patient
(Level 3).
99284........................ Emergency department visit for the
evaluation and management of a patient
(Level 4).
99285........................ Emergency department visit for the
evaluation and management of a patient
(Level 5).
G0380........................ Type B emergency department visit (Level
1).
G0381........................ Type B emergency department visit (Level
2).
G0382........................ Type B emergency department visit (Level
3).
G0383........................ Type B emergency department visit (Level
4).
G0384........................ Type B emergency department visit (Level
5).
------------------------------------------------------------------------
Critical Care Services HCPCS Codes
------------------------------------------------------------------------
99291........................ Critical care, evaluation and management
of the critically ill or critically
injured patient; first 30-74 minutes.
99292........................ Critical care, evaluation and management
of the critically ill or critically
injured patient; each additional 30
minutes.
G0390........................ Trauma response associated with hospital
critical care service.
------------------------------------------------------------------------
During the February 2009 APC Panel meeting, the APC Panel
recommended that CMS present at the next APC Panel meeting an analysis
of the most common diagnoses and services associated with Type A and
Type B emergency department visits, including an analysis by hospital-
specific characteristics, as well as an analysis of CY 2008 claims data
for clinic and emergency department (Types A and B) visits. The APC
Panel also recommended that the work of the Visits and Observation
Subcommittee continue. We adopted these recommendations in the CY 2010
OPPS/ASC proposed rule (74 FR 35350) and provided frequency and cost
data from CY 2008 claims for clinic and emergency department visits at
the August 2009 meeting of the APC Panel. We plan to provide the
requested analysis of the most common diagnoses and services associated
with Type A and Type B emergency department visits to the APC Panel at
the winter 2010 meeting of the APC Panel.
At its August 2009 meeting, the APC Panel recommended that CMS
present an analysis of CY 2009 claims data for clinic and emergency
department (Type A and B) visits at the next meeting of the APC Panel.
The APC Panel recommended again that CMS provide analyses of the most
common diagnoses and services associated with Type A and Type B
emergency department visits at the next meeting of the APC Panel,
including analysis by hospital-specific characteristics. We are
accepting all of these recommendations and will present the available
requested data at the winter 2010 meeting of the APC Panel.
B. Policies for Hospital Outpatient Visits
1. Clinic Visits: New and Established Patient Visits
As reflected in Table 47, hospitals use different CPT codes for
clinic visits based on whether the patient being treated is a new or an
established patient. Beginning in CY 2009, we refined the definitions
of new and established patients to reflect whether or not the patient
has been registered as an inpatient or outpatient of the hospital
within the past 3 years. A patient who has been registered as an
inpatient or outpatient of the hospital within the 3 years prior to a
visit would be considered to be an established patient for that visit,
while a patient who has not been registered as an inpatient or
outpatient of the hospital within the 3 years prior to a visit would be
considered to be a new patient for that visit. We refer readers to the
CY 2009 OPPS/ASC final rule with comment period (73 FR 68677 through
68680) for a full discussion of the refined definitions.
We stated in the CY 2010 OPPS/ASC proposed rule (74 FR 35350) that
we continue to believe that defining new or established patient status
based on whether the patient has been registered as an inpatient or
outpatient of the hospital within the 3 years prior to a visit will
reduce hospitals' administrative burden associated with reporting
appropriate clinic visit CPT codes. For CY 2010, we proposed to
continue recognizing the refined definitions of new and established
patients, and our policy of calculating median costs for clinic visits
under the OPPS using historical hospital claims data.
Comment: Several commenters recommended that CMS remove the
distinction between new and established patient clinic visits, arguing
that facilities must expend the same level of resources regardless of
whether the patient was registered as an inpatient or an outpatient in
the hospital within the past 3 years. According to some commenters,
CMS' use of the CPT codes for visits, which differentiate between new
and established patients, is contrary to CMS'
[[Page 60547]]
past statements that the CPT guidelines and definitions for E/M visit
codes are not applicable in the hospital outpatient setting because
they fail to reflect hospital services and resource consumption. In
addition, some commenters stated there are significant operational
issues involved with implementing the 3-year criterion for hospital
clinic visit billing purposes, and expressed concerns that hospitals'
incorrect compliance with this requirement could be targeted by
Recovery Audit Contractor (RAC) audits and other types of audits. Some
commenters argued that any differential in costs that is evident in
claims data for new versus established patient visits would be the
result of hospitals' erroneous reporting of these codes, rather than
any real difference in the level of resources expended treating a new
versus an established patient. One commenter characterized the median
cost differences between new and established patient visit codes as
random and suggested that some providers report CPT codes 99201 and
99211 as ``default codes'' when reporting clinic visits, which,
according to the commenter, raises the costs reflected in the claims
data for these codes and artificially impacts the overall APC
ratesetting process.
Some commenters asserted that CMS' proposal in the CY 2010 MPFS
proposed rule to eliminate the use of consultation codes for physician
payment purposes provides a precedent for discontinuing the use of the
CPT E/M codes by hospitals. According to the commenters, CMS cited
findings in the March 2006 OIG report entitled ``Consultations in
Medicare: Coding and Reimbursement'' that physicians frequently misuse
CPT codes for consultation services as a basis for no longer
recognizing those codes under the MPFS. The commenters stated that
hospitals similarly misuse the clinic visit codes, and that CMS should
cease to recognize the clinic visit CPT codes under the OPPS for this
reason.
Many commenters suggested that, as an alternative to the clinic
visit CPT codes for new and established patients, hospitals bill for
visits based on the resources expended in the visit at a level
determined by the hospitals' internal reporting guidelines, regardless
of whether the patient is new or established. Some commenters supported
the use of Level II HCPCS G-codes for hospital clinic visits to
represent hospital resources expended, without the distinction between
new and established patients. According to the commenters, creation of
these HCPCS G-codes would streamline hospital reporting of visits,
enable hospitals to correctly code for visits based on established
definitions, and facilitate elimination of the new versus established
patient visit concept for hospital reporting. The commenters noted
that, in the past, providers have resisted implementing hospital-
specific HCPCS codes for reporting visits before the implementation of
national visit reporting guidelines for hospitals, but suggested that
providers may now favor HCPCS G-codes over the existing CPT codes for
visits that are tied to CMS' definition of new and established patients
for purposes of reporting those codes. Some commenters suggested that
CMS discuss the development of clinic visit HCPCS G-codes at the winter
2010 APC Panel meeting and include a proposal for clinic visit HCPCS G-
codes in the CY 2011 OPPS/ASC proposed rule.
Response: Because hospital claims data continue to show significant
cost differences between new and established patient visits, we
continue to believe it is necessary and appropriate to recognize the
CPT codes for both new and established patient visits and, in some
cases, provide differential payment for new and established patient
visits of the same level. For example, the final CY 2010 median cost
for the level 3 new patient clinic visit, described by CPT code 99203
and calculated using over 200,000 single claims from CY 2008, is
approximately $96, while the final CY 2010 median cost for the level 3
established patient clinic visit, described by CPT code 99213 and
calculated using over 4.5 million single claims from CY 2008, is
approximately $70. We believe this difference in median costs warrants
continued assignment of these CPT codes to different APCs for CY 2010.
Given that we have a substantial volume of single claims from a
significant number of hospitals upon which to calculate the median
costs for all levels of clinic visits, we do not agree with the
commenters that the differences in costs for new versus established
patient visits are random or the result of erroneous billing. We expect
hospitals to report all HCPCS codes in accordance with correct coding
principles, CPT code descriptions, and relevant CMS guidance, which, in
this case, specifies that the meanings of ``new'' and ``established''
patients as included in the clinic visit CPT code descriptors pertain
to whether or not the patient has been registered as an inpatient or an
outpatient of the hospital within the past 3 years (73 FR 68679). We
have no reason to believe that hospitals are systematically
disregarding these principles to the extent that our median costs for
clinic visits, which are based on data from millions of single claims,
would be artificially skewed.
We also do not agree with the commenters that CMS' proposal in the
CY 2010 MPFS proposed rule to eliminate the use of consultation codes
for physician payment purposes (74 FR 33553 through 33554) has any
direct relevance to the distinction between new and established patient
visits under the OPPS. As we stated previously, we have no reason to
believe that hospitals are not correctly reporting these services.
Furthermore, unlike the MPFS proposal that would require physicians to
report the existing CPT codes for new and established patient visits
instead of the consultation CPT codes, we could not easily implement a
policy to eliminate the use of the clinic visit CPT codes under the
OPPS, because there are no other existing codes that hospitals could
use to report these services.
We recognize that some commenters believe hospitals would now
support the creation of Level II HCPCS G-codes for hospital clinic
visits, whereas in the past they generally opposed hospital-specific
codes for visits in the absence of national visit reporting guidelines.
We welcome any comments hospitals have on alternative coding schemes
for reporting hospital clinic visits that would not require hospitals
to distinguish between new and established patients, such as the
creation of hospital-specific clinic visit HCPCS G-codes or the
exclusive use of established patient clinic visit codes. We are
particularly interested in commenters' thoughts on how we would develop
payment rates for clinic visits under another coding scheme,
considering the claims data that we have now for these services
demonstrate significant differences in costs between new and
established patient clinic visits and could not be easily crosswalked
to a structure that does not distinguish between new and established
patients. We will consider any ideas that we receive as we prepare for
the CY 2011 OPPS/ASC proposed rule.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to continue to
define new or established patient status for the purpose of reporting
the clinic visit CPT codes, on the basis of whether or not the patient
has been registered as an inpatient or outpatient of the hospital
within the past 3 years. We also are finalizing our CY 2010 proposal,
without modification, to continue our policy of calculating median
costs for
[[Page 60548]]
clinic visits under the OPPS using historical hospital claims data. As
discussed in detail in section II.A.2.e.(1) of this final rule with
comment period and consistent with our CY 2009 policy, when calculating
the median costs for the clinic visit APCs (0604 through 0608), we
utilized our methodology that excludes those claims for visits that are
eligible for payment through the extended assessment and management
composite APC 8002 (Level I Extended Assessment and Management
Composite). We continue to believe that this approach results in the
most accurate cost estimates for APCs 0604 through 0608 for CY 2010.
2. Emergency Department Visits
Since CY 2007, we have recognized two different types of emergency
departments for payment purposes under the OPPS--Type A emergency
departments and Type B emergency departments. As described in greater
detail below, by providing payment for two types of emergency
departments, we recognize for OPPS payment purposes both the CPT
definition of an emergency department, which requires the facility to
be available 24 hours, and the requirements for emergency departments
specified in the provisions of the Emergency Medical Treatment and
Labor Act (EMTALA) (Pub. L. 99-272), which do not stipulate 24-hour
availability but do specify other obligations for hospitals that offer
emergency services. For more detailed information on the EMTALA
provisions, we refer readers to the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68680).
In the CY 2007 OPPS/ASC final rule with comment period (71 FR
68132), we finalized the definition of Type A emergency departments to
distinguish them from Type B emergency departments. A Type A emergency
department must be available to provide services 24 hours a day, 7 days
a week, and meet one or both of the following requirements related to
the EMTALA definition of a dedicated emergency department specified at
Sec. 489.24(b), specifically: (1) It is licensed by the State in which
it is located under the applicable State law as an emergency room or
emergency department; or (2) it is held out to the public (by name,
posted signs, advertising, or other means) as a place that provides
care for emergency medical conditions on an urgent basis without
requiring a previously scheduled appointment. For CY 2007 (71 FR
68140), we assigned the five CPT E/M emergency department visit codes
for services provided in Type A emergency departments to five created
Emergency Visit APCs, specifically APC 0609 (Level 1 Emergency Visits),
APC 0613 (Level 2 Emergency Visits), APC 0614 (Level 3 Emergency
Visits), APC 0615 (Level 4 Emergency Visits), and APC 0616 (Level 5
Emergency Visits). We defined a Type B emergency department as any
dedicated emergency department that incurred EMTALA obligations, but
did not meet the CPT definition of an emergency department. For
example, a hospital department that may be characterized as a Type B
emergency department would meet the definition of a dedicated emergency
department, but may not be available 24 hours a day, 7 days a week.
Hospitals with such dedicated emergency departments incur EMTALA
obligations with respect to an individual who presents to the
department and requests, or has a request made on his or her behalf,
examination or treatment for a medical condition.
To determine whether visits to Type B emergency departments have
different resource costs than visits to either clinics or Type A
emergency departments, in the CY 2007 OPPS/ASC final rule with comment
period (71 FR 68132), we finalized a set of five HCPCS G-codes for use
by hospitals to report visits to all entities that meet the definition
of a dedicated emergency department under the EMTALA regulations but
that are not Type A emergency departments. These codes are called
``Type B emergency department visit codes.'' In the CY 2007 OPPS/ASC
final rule with comment period (71 FR 68132), we explained that these
new HCPCS G-codes would serve as a vehicle to capture median cost and
resource differences among visits provided by Type A emergency
departments, Type B emergency departments, and clinics. We stated that
the reporting of specific HCPCS G-codes for emergency department visits
provided in Type B emergency departments would permit us to
specifically collect and analyze the hospital resource costs of visits
to these facilities in order to determine if, in the future, a proposal
for an alternative payment policy might be warranted. We expected
hospitals to adjust their charges appropriately to reflect differences
in Type A and Type B emergency department visit costs.
As we noted in the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68681), the CY 2007 claims data used for that rulemaking were
from the first year of claims data available for analysis that included
hospital's cost data for these new Type B emergency department HCPCS
visit codes. Based on our analysis of the CY 2007 claims data, we
confirmed that the median costs of Type B emergency department visits
were less than the median costs of Type A emergency department visits
for all but the level 5 visit. In other words, the median costs from
the CY 2007 hospital claims represented real differences in the
hospital resource costs for the same level of visits in a Type A or
Type B emergency department. Therefore, for CY 2009, we adopted the
August 2008 APC Panel recommendation to assign levels 1 through 4 Type
B emergency department visits to their own APCs and to assign the level
5 Type B emergency department visit to the same APC as the level 5 Type
A emergency department visit.
We now have CY 2008 cost data for CY 2010 ratesetting for the Type
B emergency department HCPCS G-codes, representing a second year of
claims data for these Type B emergency department visit HCPCS codes. In
the CY 2010 OPPS/ASC proposed rule (74 FR 35351 through 35353), we
presented our observation of frequency and patterns of billing based on
the CY 2008 claims available at that time. We also repeated some of our
analyses of Type B emergency department visits using the available CY
2008 claims and cost report data to confirm that Type B emergency
department visit costs are generally lower than Type A emergency
department visit costs and to assess whether there are systematic
differences in the costs of Type A and Type B emergency department
visits by Medicare contractor. The pattern of relative cost differences
between Type A and Type B emergency department visits was largely
consistent with the distributions we observed in the CY 2007 data, with
the exception that, in the CY 2008 claims data available for the
proposed rule, we observed a relatively lower HCPCS code-specific
median cost associated with level 5 Type B emergency department visits
compared to the HCPCS-code specific median cost of level 5 Type A
emergency department visits. In contrast, in our CY 2007 claims data,
we observed similar resource costs for level 5 Type A and Type B
emergency department visits. We also determined that there are no
significant differences in how Medicare contractors have interpreted
our Type A and Type B emergency department visit reporting policies.
We shared cost and frequency data with the Visits and Observation
Subcommittee of the APC Panel during the February 2009 meeting, and in
the CY 2010 OPPS/ASC proposed rule (74
[[Page 60549]]
FR 35353), we proposed to pay for Type B emergency department visits in
CY 2010 consistent with their median costs. Specifically, we proposed
to pay for levels 1 through 4 Type B emergency department visits
through four levels of APCs: APC 0626 (Level 1 Type B Emergency
Visits), APC 0627 (Level 2 Type B Emergency Visits), APC 0628 (Level 3
Type B Emergency Visits), and APC 0629 (Level 4 Type B Emergency
Visits). In addition, we proposed to adopt new APC 0630 (Level 5 Type B
Emergency Visits) and to pay for level 5 Type B emergency department
visits through this new APC. We proposed to assign HCPCS codes G0380,
G0381, G0382, G0383, and G0384 (the levels 1, 2, 3, 4, and 5 Type B
emergency department visit Level II HCPCS codes) to APCs 0626, 0627,
0628, 0629, and 0630, respectively, for CY 2010. These HCPCS codes
would be the only HCPCS codes assigned to these APCs. Furthermore, to
distinguish new APC 0630 from the APC for the level 5 Type A emergency
visits, we proposed to modify the title of the current level 5 Type A
emergency visit APC to incorporate Type A in the title. Therefore, the
revised title of APC 0616 would be ``Level 5 Type A Emergency Visits.''
We noted in the CY 2010 OPPS/ASC proposed rule (74 FR 35353) that
the proposed policy to pay for Type B emergency department visits based
on their median costs is consistent with the APC Panel's March 2008
recommendation for payment of Type B emergency department visits. As
part of its recommended configuration of APCs for Type B emergency
department visits in CY 2009, the APC Panel also stated that, given the
limited CY 2007 claims data available for Type B emergency department
visits, CMS should reconsider payment adjustments as more claims data
become available. In general, the APC Panel's recommended CY 2009
configuration paid appropriately for each level of the Type B emergency
department visits, based on the resource costs of the Type B emergency
department visits that are reflected in claims data. We stated in the
proposed rule that we believe our proposed CY 2010 configuration also
would pay appropriately for each level of Type B emergency department
visits based on estimated resource costs from more recent claims data.
For this final rule with comment period, based on updated CY 2008
claims data, we note that 344 hospitals billed at least one Type B
emergency department visit code in CY 2008, with a total frequency of
visits provided in Type B emergency departments of approximately
220,000. All except 5 of the 344 hospitals reporting Type B emergency
department visits in CY 2008 also reported Type A emergency department
visits. Overall, many more hospitals (approximately 3,238 total
hospitals) reported Type A emergency department visits than Type B
emergency department visits. For comparison purposes, the total
frequency of visits provided in hospital outpatient clinics and Type A
emergency departments is approximately 17.5 million and 11.6 million,
respectively. The median costs for the Type B emergency department
visit APCs, as compared to the Type A emergency department visit APCs
and the clinic visit APCs, are shown in Table 48 below.
Table 48--Comparison of Median Costs for Clinic Visit APCs, Type B Emergency Department Visit APCs, and Type A
Emergency Department Visit APCs
----------------------------------------------------------------------------------------------------------------
Final CY 2010 Final CY 2010
Final CY 2010 type B type A
clinic visit emergency emergency
Visit level approximate department visit
APC median approximate approximate
cost APC median APC median
cost cost
----------------------------------------------------------------------------------------------------------------
Level 1......................................................... $57 $45 $53
Level 2......................................................... 69 62 87
Level 3......................................................... 88 97 139
Level 4......................................................... 112 141 221
Level 5......................................................... 166 230 327
----------------------------------------------------------------------------------------------------------------
As demonstrated in Table 48, the median costs of the lowest level
visits, based on the CY 2008 claims and cost report data available for
this final rule with comment period, continue to be similar across all
settings, including clinic and Type A and B emergency departments.
Visit levels 2 and 3 share similar resource costs in the clinic and
Type B emergency department settings, while visits provided in Type A
emergency departments have higher estimated resource costs at these
levels. The level 4 clinic visit APC is less resource-intensive than
the level 4 Type B emergency department visit APC, which is similarly
less resource-intensive than the level 4 Type A emergency department
visit APC. Similarly, the level 5 clinic visit APC is less resource-
intensive than the level 5 Type B emergency department visit APC, which
is less resource-intensive than the level 5 Type A emergency department
visit APC.
This pattern of relative cost differences between Type A and Type B
emergency department visits is largely consistent with the
distributions we observed in the CY 2007 data, with the exception that,
in the updated CY 2008 claims data, we observe a relatively lower HCPCS
code-specific median cost associated with level 5 Type B emergency
department visits compared to the HCPCS-code specific median cost of
level 5 Type A emergency department visits. In contrast, in our CY 2007
claims data, we observed similar resource costs for level 5 Type A and
Type B emergency department visits. In the CY 2009 OPPS/ASC final rule
with comment period (73 FR 68683), we hypothesized that, for the
highest level of emergency department visits, the resources required
would be the same in both emergency department settings. Now that more
data on Type B emergency department visits are available and hospitals
have more experience billing for Type B services, we observe
differences in the resources for the highest level emergency department
visits to Type A and Type B emergency departments.
As noted in the CY 2009 OPPS/ASC final rule with comment period (73
FR 68683), we performed data analyses regarding the costs of Type A and
Type B emergency department visits in addition to our standard median
cost calculations. These analyses included studying the emergency
department
[[Page 60550]]
visit costs of hospitals that billed Type B emergency department visits
only, analyzing the cost data for hospitals that billed both Type A and
Type B emergency department visits, and evaluating whether there were
differences in the costs of Type A and Type B emergency department
visits by Medicare contractor to ascertain whether there were
differences in how Medicare contractors have interpreted our Type A and
Type B emergency department visit policies. In the CY 2007 data, we
observed that hospitals that billed both Type A and Type B emergency
department visits had lower costs for Type B emergency department
visits than Type A emergency department visits at all levels except for
the level 5 Type B emergency department visit. Our analyses of the
differences in Type A and Type B emergency department visit median
costs by Medicare contractors did not identify concerning differences.
Overall, we observed a distribution of visit costs as expected,
including generally lower Type B emergency department visit costs in
comparison with Type A emergency department visits, and increasing
costs for Type B emergency department visits from levels 1 through 5,
similar to the cost increases we observed from levels 1 through 5 for
Type A emergency department visits. We also observed a few contractors
with more unusual cost distributions for Type B emergency department
visits, including relatively similar or higher costs across levels 1
through 5 for Type B emergency department visits. For CY 2009, we
concluded that we had no reason to believe that the cost differences
between Type A and Type B emergency department visits evident in our
aggregate OPPS claims data resulted from varying Medicare contractor
criteria as to what defines Type A and Type B emergency departments. We
also committed to monitoring these distributions in future years.
As we did for the CY 2010 OPPS/ASC proposed rule, for this final
rule with comment period, we repeated some of our analyses of Type B
emergency department visits using updated CY 2008 claims data to
confirm that Type B emergency department visit costs are generally
lower than Type A emergency department visit costs and to again assess
whether there are systematic differences in the costs of Type A and
Type B emergency department visits by Medicare contractor. As noted
above, we observed that hospitals that billed both Type A and Type B
emergency department visits had lower costs for Type B emergency
department visits than Type A emergency department visits, including
level 5 Type B emergency department visits, which is a change from the
CY 2007 data. We further evaluated differences in the costs of Type A
and Type B emergency department visits by Medicare contractor. Based on
our updated analysis of CY 2008 claims, we continue to observe similar
patterns in HCPCS code-specific median cost differences between Type A
and Type B emergency department visits as observed in the CY 2007
claims. Hospitals in the jurisdictions of most Medicare contractors
have generally lower Type B emergency department visit costs in
comparison with Type A emergency department visits, as well as
increasing costs for Type B emergency department visits from levels 1
through 5, similar to the cost increases we observed from levels 1
through 5 for Type A emergency department visits.
Like last year, we also continue to observe a few Medicare
contractors with more unusual cost distributions for Type B emergency
department visits, including those with Type B emergency department
visit costs that are relatively similar or higher than Type A emergency
department visit costs across levels 1 through 5. Some of these
Medicare contractors are the same contractors that we noted had more
unusual cost distributions for Type B emergency department visits
relative to Type A emergency department visit costs in the CY 2007
claims data. In order to confirm that these Medicare contractors are
applying our policies consistently, we examined the HCPCS code-specific
median costs for Type A and Type B emergency department visits for the
hospitals in each Medicare contractor's area. For almost all of these
Medicare contractors, we see one or two hospitals with relatively high
Type B emergency department visit costs relative to Type B emergency
department visit costs nationwide or with Type B emergency department
visit costs that are relatively similar to or higher than Type A
emergency department visit costs. These one or two hospitals have
sufficient visit volumes to influence the calculation of the HCPCS
code-specific median costs for their respective Medicare contractors.
Comment: Several commenters supported CMS' proposal to create a new
APC for level 5 Type B emergency department visits. One commenter
encouraged CMS to adopt the recommendation made by the APC Panel at the
August 2009 meeting to provide an analysis of the most common diagnoses
and services associated with Type A and Type B emergency department
visits at the next meeting of the APC Panel, including analysis by
hospital-specific characteristics, as well as an analysis of CY 2009
claims data for Type A and B emergency department visit APCs.
Response: We appreciate commenters' support of our proposal to
create a new APC for level 5 Type B emergency department visits. Our
updated analyses of Type B emergency department visits costs for this
CY 2010 OPPS/ASC final rule with comment period confirm that the median
costs of Type B emergency department visits are less than the median
costs of Type A emergency department visits across all levels. Our
updated analyses also confirm that there are no significant differences
in how Medicare contractors have interpreted our Type A and Type B
emergency department visit reporting policies. The median costs from CY
2008 hospital claims represent real differences in the hospital
resource costs for the same level of visit in a Type A or Type B
emergency department.
Therefore, as we proposed, for the CY 2010 OPPS, we are continuing
to pay for Type B emergency department visits in CY 2010 consistent
with their median costs. Specifically, we are continuing to pay levels
1 through 4 Type B emergency department visits through four levels of
APCs: APC 0626 (Level 1 Type B Emergency Visits), APC 0627 (Level 2
Type B Emergency Visits), APC 0628 (Level 3 Type B Emergency Visits),
and APC 0629 (Level 4 Type B Emergency Visits). In addition, we are
adopting new APC 0630 (Level 5 Type B Emergency Visits) and will pay
for level 5 Type B emergency department visits through this new APC. We
are assigning HCPCS codes G0380, G0381, G0382, G0383, and G0384 (the
levels 1, 2, 3, 4, and 5 Type B emergency department visit Level II
HCPCS codes) to APCs 0626, 0627, 0628, 0629, and 0630, respectively,
for CY 2010. These HCPCS codes are the only HCPCS codes assigned to
these APCs. Furthermore, to distinguish new APC 0630 from the APC for
the level 5 Type A emergency visits, as we proposed, we are modifying
the title of the current level 5 Type A emergency visit APC to
incorporate Type A in the title. Therefore, the revised title of APC
0616 is ``Level 5 Type A Emergency Visits.'' We believe our CY 2010
configuration pays appropriately for each level of Type B emergency
department visits based on estimated resource costs from more recent
claims data.
As stated previously, we plan to provide the requested analysis of
the most common diagnoses and services associated with Type A and Type
B
[[Page 60551]]
emergency department visits to the APC Panel at the winter 2010 meeting
of the APC Panel, as well as an analysis of CY 2009 claims data for
Type A and B emergency department visit APCs available at that time.
Comment: One commenter expressed concerns regarding the 30 minute
minimum to bill critical care services, described by CPT code 99291.
The commenter argued that the resources expended in less than 30
minutes warrant payment at the highest level of E/M payment, and
recommended that CMS change the criteria for payment for critical care
services to include instances of 15 minutes of critical care and
instances in which the patient expires in less than 30 minutes, despite
the critical care services furnished. According to the commenter, the
significant resources utilized during these critical care episodes are
not appropriately recognized for payment purposes because they cannot
be reported with CPT code 99291 under existing guidelines.
Another commenter requested that CMS consider extending payment for
trauma team activations, described by HCPCS code G0390, to level 5
emergency department visits, in addition to critical care services when
all other trauma activation criteria are met. According to the
commenter, an emergency department that is extremely efficient can send
a patient in need of a trauma team to surgery before the 30 minute time
threshold for reporting critical care services is met. The commenter
stated that, because the hospital would bill a level 5 emergency
department visit code, rather than a critical care code, the encounter
would not qualify for trauma response payment even though a trauma
response team was utilized. The commenter argued that hospitals should
receive an APC payment for HCPCS code G0390 under these circumstances
because equivalent trauma team resources are expended even though the
encounter lasted fewer than 30 minutes and cannot be reported with CPT
code 99291.
Response: As we have stated in the past (72 FR 66806), the CPT
instructions for reporting of critical care services with CPT code
99291 and the CPT code descriptor specify that the code can only be
billed if 30 minutes or more of critical care services are provided.
Hospitals must continue to provide a minimum of 30 minutes of critical
care services in order to bill CPT code 99291, according to the CPT
code descriptor and CPT instructions. We note that hospitals can report
the appropriate clinic or emergency department visit code consistent
with their internal guidelines if fewer than 30 minutes of critical
care is provided. These CPT instructions and our payment policies for
covered hospital outpatient services do not apply any differently if
the patient dies while undergoing treatment. We do allow hospitals to
use the HCPCS-CA modifier to address situations where a procedure on
the OPPS inpatient list must be performed to resuscitate or stabilize a
patient (whose status is that of an outpatient) with an emergent, life-
threatening condition, and the patient dies before being admitted as an
inpatient. We refer readers to section II.A.2.d.(7) of this final rule
with comment period for more information on how these services are paid
under the OPPS.
We do not agree with the commenter that we should modify our policy
to recognize HCPCS code G0390 for the reporting of a trauma response in
association with critical care services when the hospital provides
fewer than 30 minutes of critical care and cannot report CPT code
99291. We believe that it would be extremely unusual for a patient to
require trauma team services, be rushed to surgery within 30 minutes of
arrival in the emergency department, and not be subsequently admitted
to the hospital as an inpatient. Furthermore, hospitals that provide
less than 30 minutes of critical care when trauma activation occurs
under the circumstances described by the NUBC guidelines that would
permit reporting a charge under revenue code series 68x may report a
charge under 68x, but they may not report HCPCS code G0390. In these
cases, payment for the trauma team activation is packaged into payment
for the other services provided to the patient in the encounter,
including the associated emergency department visit that is reported.
Comment: One commenter requested clarification regarding ``triage
only'' visits in which a patient is seen by a nurse and triaged in the
hospital emergency department but leaves prior to a physician's
examination and treatment. The commenter asked if hospitals can bill
visit codes for such cases if the patient is not seen by a physician.
Response: As we have stated in the past (73 FR 68686), under the
OPPS, unless indicated otherwise, we do not specify the type of
hospital staff (for example, nurses or pharmacists) who may provide
services in hospitals because the OPPS only makes payment for services
provided incident to physicians' services. Hospitals providing services
incident to physicians' services may choose a variety of staffing
configurations to provide those services, taking into account other
relevant factors, including State and local laws, hospital policies,
and other Federal requirements such as EMTALA and the Medicare
conditions of participation related to hospital staffing. Billing a
visit code in addition to another service merely because the patient
interacted with hospital staff or spent time in a room for that service
is inappropriate. A hospital may bill a visit code based on the
hospital's own coding guidelines which must reasonably relate the
intensity of hospital resources to different levels of HCPCS codes.
Services furnished must be medically necessary and documented.
As described previously in this section, we are adopting our
proposal, without modification, to continue paying for Type B emergency
department visits in CY 2010 consistent with their median costs through
5 levels of Type emergency department visit APCs.
Table 49 below displays the APC median costs for each level of Type
B emergency department visit under our CY 2010 configuration. As more
cost data become available and hospitals gain additional experience
with reporting visits to Type B emergency departments, we will continue
to regularly reevaluate patterns of Type A and Type B emergency
department visit reporting to ensure that hospitals continue to bill
appropriately and differentially for these services. In addition,
according to our usual practice, we will examine trends in cost data
over time and consider proposing alternative emergency department visit
APC configurations in the future if updated data indicate that changes
to the payment structure should be considered.
We also note that, as discussed in section II.A.2.e.(1) of this
final rule with comment period and consistent with our CY 2009 policy,
when calculating the median costs for the emergency department visit
and critical care APCs (0609 through 0617 and 0626 through 0630), we
utilized our methodology that excludes those claims for visits that are
eligible for payment through the extended assessment and management
composite APC 8002 (Level I Extended Assessment and Management
Composite). We continue to believe that this approach will result in
the most accurate cost estimates for APCs 0604 through 0608 for CY
2010.
[[Page 60552]]
Table 49--CY 2010 Type B Emergency Department Visit APC Assignments and
Median Costs
------------------------------------------------------------------------
Final CY 2010
Final CY 2010 approximate
Type B emergency department level APC assignment APC median
cost
------------------------------------------------------------------------
Level 1................................. 0626 $45
Level 2................................. 0627 62
Level 3................................. 0628 97
Level 4................................. 0629 141
Level 5................................. 0630 230
------------------------------------------------------------------------
3. Visit Reporting Guidelines
Since April 7, 2000, we have instructed hospitals to report
facility resources for clinic and emergency department hospital
outpatient visits using the CPT E/M codes and to develop internal
hospital guidelines for reporting the appropriate visit level. Because
a national set of hospital-specific codes and guidelines do not
currently exist, we have advised hospitals that each hospital's
internal guidelines that determine the levels of clinic and emergency
department visits to be reported should follow the intent of the CPT
code descriptors, in that the guidelines should be designed to
reasonably relate the intensity of hospital resources to the different
levels of effort represented by the codes.
As noted in detail in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66802 through 66805), we observed a normal and stable
distribution of clinic and emergency department visit levels in
hospital claims over the past several years. The data indicated that
hospitals, on average, were billing all five levels of visit codes with
varying frequency, in a consistent pattern over time. Overall, both the
clinic and emergency department visit distributions indicated that
hospitals were billing consistently over time and in a manner that
distinguished between visit levels, resulting in relatively normal
distributions nationally for the OPPS, as well as for specific classes
of hospitals. The results of these analyses were generally consistent
with our understanding of the clinical and resource characteristics of
different levels of hospital outpatient clinic and emergency department
visits. In the CY 2008 OPPS/ASC proposed rule (72 FR 42764 through
42765), we specifically invited public comment as to whether a pressing
need for national guidelines continued at this point in the maturation
of the OPPS, or if the current system where hospitals create and apply
their own internal guidelines to report visits was currently more
practical and appropriately flexible for hospitals. We explained that
although we have reiterated our goal since CY 2000 of creating national
guidelines, this complex undertaking for these important and common
hospital services was proving more challenging than we initially
thought as we received new and expanded information from the public on
current hospital reporting practices that led to appropriate payment
for the hospital resources associated with clinic and emergency
department visits. We stated our belief that many hospitals had worked
diligently and carefully to develop and implement their own internal
guidelines that reflected the scope and types of services they provided
throughout the hospital outpatient system. Based on public comments, as
well as our own knowledge of how clinics operate, it seemed unlikely
that one set of straightforward national guidelines could apply to the
reporting of visits in all hospitals and specialty clinics. In
addition, the stable distribution of clinic and emergency department
visits reported under the OPPS over the past several years indicated
that hospitals, both nationally in the aggregate and grouped by
specific hospital classes, were generally billing in an appropriate and
consistent manner as we would expect in a system that accurately
distinguished among different levels of service based on the associated
hospital resources.
Therefore, we did not propose to implement national visit
guidelines for clinic or emergency department visits for CY 2008. Since
publication of the CY 2008 OPPS/ASC final rule with comment period, we
have again examined the distribution of clinic and Type A emergency
department visit levels based upon updated CY 2008 claims data
available for the CY 2010 proposed rule and for this final rule with
comment period and confirmed that we continue to observe a normal and
stable distribution of clinic and emergency department visit levels in
hospital claims. We continue to believe that, based on the use of their
own internal guidelines, hospitals are generally billing in an
appropriate and consistent manner that distinguishes among different
levels of visits based on their required hospital resources. As a
result of our updated analyses, we are encouraging hospitals to
continue to report visits during CY 2010 according to their own
internal hospital guidelines. In the absence of national guidelines, we
will continue to regularly reevaluate patterns of hospital outpatient
visit reporting at varying levels of disaggregation below the national
level to ensure that hospitals continue to bill appropriately and
differentially for these services. As originally noted in detail in the
CY 2008 OPPS/ASC final rule with comment period (72 FR 66648), we
continue to expect that hospitals will not purposely change their visit
guidelines or otherwise upcode clinic and emergency department visits
for purposes of extended assessment and management composite APC
payment.
In addition, we note our continued expectation that hospitals'
internal guidelines will comport with the principles listed in the CY
2008 OPPS/ASC final rule with comment period (72 FR 66805). We
encourage hospitals with more specific questions related to the
creation of internal guidelines to contact their local fiscal
intermediary or MAC.
Comment: Several commenters supported CMS' policy of requiring
hospitals to use their own internal guidelines to distinguish among
different levels of visits based on their required hospital resources
and did not favor the implementation of national guidelines at any
point in the future. Other commenters expressed appreciation for CMS'
approach of studying the challenges associated with national guidelines
prior to their implementation. However, many commenters urged CMS to
move forward with the implementation of national guidelines for
hospitals to report clinic visits because of several problems that they
believe continue to exist due to the lack of such guidelines, such as
variations in hospitals' internal guidelines that may result in
[[Page 60553]]
inconsistent cost data upon which payment rates for visits are based.
Some commenters noted that some Medicare contractors, including RACs,
use their own auditing methods rather than reviewing each hospital's
internal guidelines while conducting medical review.
The commenters urged CMS to adopt national guidelines no later than
CY 2011 due to the burden hospitals would face if they had to implement
national visit coding guidelines concurrently with the ICD-10-CM and
ICD-10-PCS changes required by FY 2013. According to the commenters,
the national guidelines should be clear, concise, and specific with
little or no room for varying interpretations, and hospitals should
have at least 1 year to prepare for the transition. Many commenters
indicated that the American Hospital Association (AHA) will reconvene
an expert panel to submit a request to the AMA CPT Editorial Panel to
create CPT codes for hospital visits and encouraged CMS to be engaged
in and supportive of the recommendations of the expert panel.
Several commenters also recommended that, in the absence of
national guidelines for hospital visit reporting, CMS provide
additional guidance relating to the specific services that should be
included or bundled into the visit levels reported by hospitals. One
commenter requested that CMS ask the AMA to supplement its CPT Codebook
to include a compilation of instructions from CMS regarding appropriate
reporting of hospital visits, such as the 11 principles specified in
the CY 2008 OPPS/ASC final rule with comment period that hospitals
should follow in developing internal guidelines for reporting visits.
Another commenter performed extensive review of a large sample of
hospital emergency department visits to determine whether the
distributions observed in this sample resembled the distribution
described by CMS and printed in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66804). The commenter explained that the results
are similar to those of CMS at the national level, but that emergency
departments have increased the proportion of level 4 and 5 emergency
department visits in recent years, and that several outlier providers
are billing significantly more high level visits than expected based on
their geographic location and hospital type. Therefore, the commenter
concluded that national guidelines could help slow rapidly increasing
health care costs.
Response: We acknowledge that it would be desirable to many
hospitals to have national guidelines. However, we also understand that
it would be disruptive and administratively burdensome to other
hospitals that have successfully adopted internal guidelines to
implement any new set of national guidelines while we address the
problems that would be inevitable in the case of any new set of
guidelines that would be applied by thousands of hospitals. As noted in
the CY 2008 OPPS/ASC final rule with comment period (72 FR 66806), we
encourage fiscal intermediaries and MACs to review a hospital's
internal guidelines when an audit occurs. While we also would encourage
RACs to review a hospital's internal guidelines when an audit occurs,
we note that currently there are no RAC activities involving visit
services. RAC audits may involve CMS-approved issues only and must be
posted to each RAC's Web site.
We agree with the commenters that national guidelines should be
clear, concise, and specific with little or no room for varying
interpretations, and that hospitals should have at least 1 year to
prepare for the transition. We look forward to reviewing any
recommendations that result from the AHA-convened expert panel
referenced by the commenters. If the AMA were to create facility-
specific CPT codes for reporting visits provided in HOPDs, we would
certainly consider such codes for OPPS use. We also appreciate the
visit level distribution analysis provided to us by one commenter and
note that, in the absence of national guidelines, we will continue to
regularly reevaluate patterns of hospital outpatient visit reporting at
varying levels of disaggregation below the national level to ensure
that hospitals continue to bill appropriately and differentially for
these services. We reiterate our expectation that hospitals' internal
guidelines fully comply with the principles listed in the CY 2008 OPPS/
ASC final rule with comment period (72 FR 68805).
Regarding the public comments requesting clarification of services
that should be included or bundled into visit codes, as we have stated
in the past (73 FR 68685), hospitals should separately report all HCPCS
codes in accordance with correct coding principles, CPT code
descriptions, and any additional CMS guidance, when applicable. We
refer readers to the July 2008 OPPS quarterly update (Transmittal 1536,
Change Request 6094, issued on June 19, 2008) for further clarification
about the reporting of CPT codes for hospital outpatient services paid
under the OPPS. In that transmittal, we note that, while CPT codes
generally are created to describe and report physician services, they
also are used by other providers/suppliers to describe and report
services that they provide. Therefore, the CPT code descriptors do not
necessarily reflect the facility component of a service furnished by
the hospital. Some CPT code descriptors include reference to a
physician performing a service. For OPPS purposes, unless indicated
otherwise, the usage of the term ``physician'' does not restrict the
reporting of the code or application of related policies to physicians
only, but applies to all practitioners, hospitals, providers, or
suppliers eligible to bill the relevant CPT codes in accordance with
applicable portions of the Act, the Medicare regulations, and other
Medicare guidance. In cases where there are separate codes for the
technical component, professional component, and/or complete procedure,
hospitals should report the code that represents the technical
component for their facility services. If there is no separate
technical component code for the service, hospitals should report the
code that represents the complete procedure. Consistent with past input
we have received from many hospitals, hospital associations, the APC
Panel, and others, we will continue to utilize CPT codes for reporting
services under the OPPS whenever possible to minimize hospitals'
reporting burden.
We do not agree with the commenter that we should ask the AMA to
supplement its CPT Codebook to include a compilation of instructions
from CMS regarding appropriate reporting of hospital visits. Under the
OPPS, we develop policies specifically and exclusively for purposes of
the Medicare program, while the CPT Codebook provides instructions that
are applicable to hospital coding for all payers, unless those payers
choose to implement different individual policies. If hospitals believe
the inclusion of such information in the CPT Codebook is necessary and
appropriate, they may directly request the AMA to do so.
Comment: One commenter requested that CMS recognize CPT codes 99363
(Anticoagulation management for an outpatient taking warfarin,
physician review and interpretation of International Normalized Ratio
(INR) testing, patient instructions, dosage adjustment (as needed), and
ordering of additional tests; initial 90 days of therapy (must include
a minimum of 8 INR measurements)) and 99364 (Anticoagulation management
for an outpatient taking warfarin, physician review and interpretation
of International Normalized Ratio (INR) testing, patient instructions,
dosage
[[Page 60554]]
adjustment (as needed), and ordering of additional tests; each
subsequent 90 days of therapy (must include a minimum of 3 INR
measurements)), which are currently assigned status indicator ``B''
(Codes that are not recognized by OPPS when submitted on an outpatient
hospital Part B bill type (12x and 13x)), as payable under the OPPS.
The commenter stated that making these CPT codes payable under the OPPS
is appropriate because they accurately describe anticoagulation
management services. The commenter argued that recognition of these CPT
codes would reduce patient liability because they are billed only once
every 90 days.
Response: While we appreciate the commenter's concern about patient
liability, we cannot assess whether recognition of CPT codes 99363 and
99364 as payable under the OPPS would actually reduce the cumulative
amount of copayment a patient may have to pay for all of the different
services that may be involved in anticoagulation management, which may
be provided at varying time intervals and with very different levels of
intensity for individual patients. We expect that a patient undergoing
anticoagulation management by hospital staff for a significant medical
condition would periodically have hospital visits, and we would package
payment for the non-face-to-face management of the patient's therapy
between visits into payment for the visits themselves. Our usual policy
is to package payment for the hospital resources associated with
managing patients' medical conditions between hospital encounters for
patients who undergo surgery or receive hospital visits for any medical
condition, including diabetes, hypertension, or cardiac arrhythmias,
and we do not believe that payment for anticoagulation management
services should be made differently than payment for other medical or
surgical management services. Therefore, we see no reason to recognize
CPT codes 99363 and 99364 for payment under the OPPS.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to continue to
assign status indicator ``B'' to CPT codes 99363 and 99364 to indicate
that these codes are not recognized for payment under the OPPS. We
expect that hospitals will continue to consider the hospital resources
required to manage patients, including patients requiring
anticoagulation management, between hospital encounters when setting
their charges for the services furnished in those encounters.
As we have stated in the past (73 FR 68686), we note that billing a
visit code in addition to another service merely because the patient
interacted with hospital staff or spent time in a room for that service
is inappropriate. A hospital may bill a visit code based on the
hospital's own coding guidelines, which must reasonably relate the
intensity of hospital resources to the different levels of HCPCS codes.
Services furnished must be medically necessary and documented. For
example, CPT code 85610 (Prothrombin time) is a code that describes
performance of the prothrombin time test. If the only service provided
is a venipuncture and laboratory test to determine the prothrombin
time, this service is the only service that should be billed. If a
hospital provides a distinct, separately identifiable service in
addition to the test, the hospital is responsible for billing the code
that most closely describes the service provided.
We appreciate all of the comments we have received in the past from
the public on visit guidelines, and we encourage continued submission
of comments throughout the year that would assist us and other
stakeholders interested in the development of national guidelines.
Until national guidelines are established, hospitals should continue
using their own internal guidelines to determine the appropriate
reporting of different levels of clinic and emergency department
visits. While we understand the interest of some hospitals in having us
move quickly to promulgate national guidelines that would ensure
standardized reporting of hospital outpatient visit levels, we believe
that the issues and concerns identified both by us and others are
important and require serious consideration prior to the implementation
of national guidelines. Because of our commitment to provide hospitals
with 6 to 12 months notice prior to implementation of national
guidelines, we would not implement national guidelines prior to CY
2011. Our goal is to ensure that OPPS national or hospital-specific
visit guidelines continue to facilitate consistent and accurate
reporting of hospital outpatient visits in a manner that is resource-
based and supportive of appropriate OPPS payments for the efficient and
effective provision of visits in hospital outpatient settings.
X. Payment for Partial Hospitalization Services
A. Background
Partial hospitalization is an intensive outpatient program of
psychiatric services provided to patients as an alternative to
inpatient psychiatric care for individuals who have an acute mental
illness. Section 1833(t)(1)(B)(i) of the Act provides the Secretary
with the authority to designate the HOPD services to be covered under
the OPPS. The Medicare regulations at Sec. 419.21 that implement this
provision specify that payments under the OPPS will be made for partial
hospitalization services furnished by community mental health centers
(CMHCs) as well as those services furnished by hospitals to their
outpatients. Section 1833(t)(2)(C) of the Act requires the Secretary to
establish relative payment weights for covered HOPD services (and any
APCs) based on median (or mean, at the election of the Secretary)
hospital costs using data on claims from 1996 and data from the most
recent available cost reports. Because a day of care is the unit that
defines the structure and scheduling of partial hospitalization
services, we established a per diem payment methodology for the partial
hospitalization program (PHP) APC, effective for services furnished on
or after August 1, 2000 (65 FR 18452).
Historically, the median per diem cost for CMHCs greatly exceeded
the median per diem cost for hospital-based PHPs and fluctuated
significantly from year to year, while the median per diem cost for
hospital-based PHPs remained relatively constant ($200-$225). We
believe that CMHCs may have increased and decreased their charges in
response to Medicare payment policies. In developing the CY 2008
update, we began an effort to strengthen the PHP benefit through
extensive data analysis and policy and payment changes. We began this
effort as a result of the significant fluctuations and declines in the
CMHC PHP median per diem costs (we refer readers to the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66670 through 66676) for a
detailed discussion). The analysis included an examination of revenue-
to-cost center mapping, refinements to the per diem methodology, and an
in-depth analysis of the number of units of service furnished per day.
For CY 2008, we proposed and finalized two refinements to the
methodology for computing the PHP median that we believe resulted in
more accurate per diem medians. First, we remapped 10 revenue codes
that are common among hospital-based PHP claims to the most appropriate
cost centers (72 FR 66671 through 66672). Typically, we map the revenue
code to the most specific cost center with a provider-specific CCR.
However, if the hospital does not have a CCR for any of
[[Page 60555]]
the listed cost centers, we consider the overall hospital CCR as the
default. For partial hospitalization services, the revenue center codes
billed by hospital-based PHPs are mapped to Primary Cost Center 3550
(Psychiatric/Psychological Services). If that cost center is not
available, they are mapped to the Secondary Cost Center 6000 (Clinic).
We use the overall facility CCR for CMHCs because PHPs are CMHCs' only
Medicare cost, and CMHCs do not have the same cost structure as
hospitals. Therefore, for CMHCs, we use the CCR from the outpatient
provider-specific file. A closer examination of the revenue-code-to-
cost-center crosswalk revealed that 10 of the revenue center codes used
by hospital-based PHPs did not map to a Primary Cost Center of 3550 or
a Secondary Cost Center of 6000. We believe this occurred because these
codes may also be used for services that are not furnished in a PHP or
services that are not psychiatric related (for example, occupational
therapy). As discussed in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66671 through 66672), we updated this analysis using more
recent PHP claims and CCR data. After remapping codes, we computed an
alternate cost for each line item of the hospital-based PHP claims.
Remapping those 10 revenue center codes reduced the number of lines
that defaulted to the hospitals' overall CCR and thus created a more
accurate estimate of PHP per diem costs for a significant number of
claims.
Secondly, we refined our methodology for calculating median PHP per
diem costs by computing a separate per diem cost for each day rather
than for each claim. When there were multiple days of care entered on a
claim, a unique cost was computed for each day of care. We only
assigned costs for line items on days when a payment was made. All of
these costs were then arrayed from lowest to highest, and the middle
value of the array was considered the median per diem cost. A complete
discussion of the refined method of computing the PHP median per diem
cost can be found in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66672).
After completing extensive data analysis, we continued to observe a
clear downward trend in the median per diem cost based on the CY 2006
data used to develop the median per diem cost under the CY 2008 OPPS/
ASC final rule with comment period. The analysis revealed that fewer
PHP services were being provided in a given day. We believed, and
continue to believe, that the data reflect the level of cost for the
type of services that were being provided and continue to be provided.
Because partial hospitalization is provided in lieu of inpatient
care, it should be a highly structured and clinically intensive
program, usually lasting most of the day. In order to improve the level
of services furnished in a PHP day, in the CY 2008 OPPS/ASC final rule
with comment period (72 FR 66673), we reiterated our expectation that
hospitals and CMHCs must provide a comprehensive program consistent
with the statutory intent. We also indicated our intent to explore
changes to our regulations and claims processing systems in order to
deny payment for low intensity days.
For CY 2009, we implemented several regulatory, policy, and payment
changes, including a two-tiered payment approach for PHP services under
which we pay one amount for days with 3 units of service (APC 0172
(Level I Partial Hospitalization)) and a higher amount for days with 4
or more units of service (APC 0173 (Level II Partial Hospitalization)).
We implemented this payment approach to reflect the lower costs of a
less intensive day while still paying programs that provide 4 or more
units of service an amount that recognizes that they have provided a
more intensive day of care. In this way, we pay more appropriately for
the level of care provided while still allowing PHPs necessary
scheduling flexibility (73 FR 68689). As we stated in the CY 2009 OPPS/
ASC final rule with comment period (73 FR 68688), it was never our
intention that days with only 3 units of service become the number of
services provided in a typical day. Our intention was to provide
payment to cover days that consisted of 3 units of service only in
certain limited circumstances. For example, we believe 3 units of
service a day may be appropriate when a patient is transitioning
towards discharge or when a patient is required to leave the PHP early
for the day due to an unexpected medical appointment. We refer readers
to section X.C.2. of the CY 2009 OPPS/ASC final rule with comment
period (73 FR 68688 through 68695) for a full discussion of this
requirement.
For CY 2009, we proposed to calculate the payment rates for PHP
APCs 0172 and 0173 using both hospital-based and CMHC PHP data (73 FR
41513). After consideration of the public comments received on our
proposal, we decided to base payment rates for the two-tiered approach
on hospital-based PHP data only. As we explained in the CY 2009 OPPS/
ASC final rule with comment period (73 FR 68689), using the CMHC data
for CY 2009 would have significantly reduced the CY 2009 PHP rates and
negatively impacted hospital-based PHPs. Because hospital-based PHPs
are geographically diverse, whereas CMHCs are located in only a few
States, we were concerned that a significant drop in the rate could
result in hospital-based PHPs closing and lead to possible beneficiary
access to care problems. To calculate the CY 2009 PHP payment rate for
APC 0172, we used the median per diem cost for hospital-based PHP days
with 3 units of service to derive a PHP payment rate of $157. For APC
0173, we used the median per diem cost for hospital-based PHP days with
4 or more units of service to derive a CY 2009 PHP payment rate of
$200.
In addition, for CY 2009, we finalized our policy to deny payment
for any PHP claims for days when fewer than 3 units of therapeutic
services are provided. As noted in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68694), we believe that 3 units of service should
be the minimum number of services allowed in a PHP day because a day
with 1 or 2 units of service does not meet the statutory intent of a
PHP program. Three units of service are a minimum threshold that
permits unforeseen circumstances, such as medical appointments, while
allowing payment, but maintains the integrity of the PHP benefit.
Further, for CY 2009, we revised the regulations at Sec. 410.43 to
codify existing basic PHP patient eligibility criteria and added a
reference to current physician certification requirements at Sec.
424.24. We believed these changes would help strengthen the PHP benefit
by conforming our regulations to our longstanding policy (73 FR 68694
through 68695). Specifically, we revised Sec. 410.43 to add a
reference to existing regulations at Sec. 424.24(e) that require that
PHP services be furnished pursuant to a physician certification and
plan of care. While the requirements at Sec. 424.24(e) are not new, we
included the reference in Sec. 410.43 to provide a more complete
description of our expectations for PHP programs in one regulatory
section. We also revised Sec. 410.43 to add the following patient
eligibility criteria and clarify that PHPs are intended for patients
who--(1) require a minimum of 20 hours per week of therapeutic services
as evidenced in their plan of care; (2) are likely to benefit from a
coordinated program of services and require more than isolated sessions
of outpatient treatment; (3) do not require 24-hour care; (4) have an
adequate support system while not actively engaged in the program; (5)
have a mental health
[[Page 60556]]
diagnosis; (6) are not judged to be dangerous to self or others; and
(7) have the cognitive and emotional ability to participate in the
active treatment process and can tolerate the intensity of the PHP. We
refer readers to section X.C.2. of the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68694 through 68695) for a full discussion of
this requirement.
Lastly, in the CY 2009 OPPS/ASC final rule with comment period (73
FR 68695 through 68697), we revised the partial hospitalization benefit
to include several coding updates. We removed three PHP billable codes
(CPT codes 90899 (Unlisted psychiatric service or procedure), 90853
(Group psychotherapy other than of a multiple-family group), and 90857
(Interactive group psychotherapy)), and created two new timed HCPCS
codes (GO410 (Group psychotherapy other than of a multiple-family
group, in a partial hospitalization setting, approximately 45 to 50
minutes) and G0411 (Interactive group psychotherapy in a partial
hospitalization setting, approximately 45 to 50 minutes)). The
elimination of CPT code 90899 was a result of our concerns about the
type of services that may be billed using an unlisted CPT code when a
more appropriate code may be available that better describes the
services for which PHP payment may be made. The decision to eliminate
the two group therapy CPT codes (90853 and 90857) and replace them with
two new parallel timed HCPCS G-codes (G-0410 and G-0411) was based on
the need for consistency. As most of the current PHP codes already
include time estimates, we wanted to maintain consistency with the
existing HCPCS codes used in the PHP by applying a time descriptor to
the group therapy codes. In addition to these coding updates, we also
decided to eliminate CPT code 90849 (multi-family group psychotherapy)
as a billable PHP code because we believed that CPT code 90849 focuses
the service on the needs of the family and not specifically on the
needs of the patient, which is not consistent with the intent of the
statute that treatment in a PHP be focused on the patient's condition
(73 FR 68696).
B. PHP APC Update for CY 2010
For the CY 2010 OPPS/ASC proposed rule (74 FR 35356), we used CY
2008 claims data and computed median per diem costs in the following
three categories: (1) All days; (2) days with 3 units of service; and
(3) days with 4 or more units of service. These updated median per diem
costs were computed separately for CMHCs and hospital-based PHPs and
are shown in Table 50 below.
Table 50--PHP Median Per Diem Costs for CMHCs and Hospital-Based PHPs,
by Category, Based on CY 2008 Claims Data
------------------------------------------------------------------------
Hospital-
CMHCs based PHPs Combined
------------------------------------------------------------------------
All Days......................... $140 $200 $144
Days with 3 units of service..... 129 149 131
Days with 4 units or more units 173 213 175
of service......................
------------------------------------------------------------------------
Using CY 2008 data and the refined methodology for computing PHP
per diem costs that we adopted in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66672), we computed the median per diem cost from
all claims of $144. The data indicate that CMHCs continue to provide
far fewer days with 4 or more units of service (33 percent compared to
70 percent for hospital-based PHPs) and that the CMHC median per diem
cost for 4 or more units of service ($173) is substantially lower than
the comparable data from hospital-based PHPs ($213). The median per
diem cost for claims containing 4 or more units of service for all PHP
claims, regardless of site of service, is $175. Medians for claims
containing 3 units of service are $129 for CMHCs, $149 for hospital-
based PHPs, and $131 for all PHP claims, regardless of site of service.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35356), for CY 2010,
we proposed to continue to use the two-tiered payment approach for PHP
services established in CY 2009. In addition, for CY 2010, we proposed
to use only hospital-based PHP data to develop the two PHP APC per diem
payment rates for the following reasons. If we used combined CMHC and
hospital-based PHP data to develop the rates, the two per diem payment
rates would be reduced by approximately $26 for APC 0172 and $25 for
APC 0173. We are concerned about further reducing both PHP APC per diem
payment rates without knowing the impact of the policy and payment
changes we made in CY 2009. Because there is a 2-year delay between
data collection and rulemaking, the changes we made in CY 2009 will not
be reflected in the claims data until next year when we are developing
the update for CY 2011. The two proposed APCs median per diem rates for
PHP services were as follows:
Table 51--CY 2010 Proposed Median Per Diem Rates for PHP Services
------------------------------------------------------------------------
Proposed
Proposed APC Group title median per
diem rate
------------------------------------------------------------------------
0172........................... Level I Partial $149
Hospitalization (3
services).
0173........................... Level II Partial 213
Hospitalization (4 or
more services).
------------------------------------------------------------------------
In general, public commenters supported the two-tiered PHP APC per
diem payment approach in the proposed rule, the proposed CY 2010
payment rates, and the use of hospital-based PHP data only for
generating the PHP APC payment rates.
Comment: A majority of the commenters supported the proposed PHP
rates for CY 2010, as well as the two-tiered PHP APC payment structure
(with high and low intensity rates). Many of these commenters strongly
recommended that CMS use only hospital-based PHP data to determine the
final rates. The commenters believed
[[Page 60557]]
that hospital-based data are more reliable, predictable, national in
scope, consistent, and stable, and that hospital-based data are meeting
the intent of the PHP statute and CMS rules.
Several commenters urged CMS not to combine the CMHC and hospital-
based PHP data to set the final CY 2010 PHP payment rates. The
commenters pointed out that the volatility and significant fluctuation
of the CMHC costs and changes in data since 2000 has continued to place
the reliability of the CMHC data in doubt. One commenter urged CMS to
use PHP hospital-based data only to set the rates because CMS does not
know the impact of the comprehensive policy and payment changes made to
PHP services during 2009.
The commenters also recommended that, if CMS were to change the
methodology to establish the per diem payment rate in CY 2010 and
beyond, CMS adopt two additional APCs for separate CMHCs PHP payment
rates. The commenter recommended establishing site specific APCs for
PHP services where the hospital-based PHP APCs for Level I (3 units of
service) and Level II (4 or more units of service) would be established
using hospital cost data and CMHC-based PHP APCs for Level I (3 units
of service) and Level II (4 or more units of service) would be
established using CMHC data. One commenter pointed out that while the
aggregate number of PHP service providers has remained relatively
stable over time, the number of hospital-based PHPs has dropped by 16
percent, while the number of CMHC PHPs has increased by 53 percent
(with the majority of CMHCs located in Florida, Louisiana, and Texas).
The commenters reported that 80 percent of the States have two or more
hospital-based programs, and only 30 percent of States have more than
one CMHC.
Response: We appreciate the commenters' support for our proposals
on the two-tiered payment approach and use of hospital-based PHP data
only to develop the CY 2010 payment rates. As we continue to evaluate
ways to reflect CMHC costs in establishing PHP future rates, we will
take the recommendation to establish site-specific PHP APCs into
consideration. After consideration of the public comments we received,
we have decided to retain the two-tiered payment approach for CY 2010,
using hospital-based PHP data only.
Comment: Several commenters urged CMS to propose an APC code or
payment rate for PHP claims for days with fewer than 3 units of service
or, at a minimum, the commenters want CMS to suspend for medical review
claims with fewer than units of services per day.
Response: We continue to believe that days with 1 or 2 units of
service are inconsistent with a benefit designed as a full-day program
to substitute for inpatient care. PHP is furnished in lieu of an
inpatient psychiatric hospitalization and is intended to be a highly
structured and clinically intense program, usually lasting most of the
day. We believe that 3 units of service should be the minimum number of
services allowed in a PHP day because a day with 1 or 2 units of
service does not meet the statutory intent of a PHP program. Our
intention was to provide payment to cover days that consisted of 3
units of service only in certain limited circumstances. Therefore, we
believe that 3 units of service are a minimum threshold that permits
unforeseen circumstances, such as medical appointments, while allowing
payment, but still maintains the integrity of a comprehensive program.
If there are legitimate instances when 1 or 2 units of service days are
justified, the provider has the option of appealing the denial of
payment for that day, as specified in the Medicare Claims Processing
Manual (Pub. 100-04), Chapter 29 and Chapter 30, Section 30.2.2.
Comment: One commenter stated that the number of rural hospital-
based PHPs has declined during the CY 2003-2006 period and indicated
that a study conducted last year found that rural areas are being hit
with the loss of PHP programs. A few commenters were greatly relieved
by the projection of an increase in the reimbursement rate for Level II
PHP services. They believed another cut in rates would jeopardize the
existence of the PHP benefit, reduce the financial viability of PHPs,
and probably lead to closure of many PHPs, thus affecting access to
care for this vulnerable population. In addition, because hospital
outpatient mental health services paid under the OPPS are capped at the
PHP per diem payment rate, many commenters were concerned about overall
access to outpatient mental health treatment. The commenters urged CMS
to keep mental health services available to all.
Response: We have established the final CY 2010 payment rate based
on hospital-based PHP data, yielding an increase in the median for days
with 4 or more units of service compared to CY 2009 payment rates. This
increase will benefit all PHP programs, including those in rural areas.
The CY 2010 payment rates for Level I (3 units of service) shows a
decrease in CY 2010 compared to CY 2009. We believe using the CMHC data
would significantly reduce the current rate and negatively impact
hospital-based PHPs and CMHCs, resulting possibly in reduced access to
care. Because hospital-based PHPs are geographically diverse, whereas
CMHCs are located in only a few states, we are concerned that a
significant drop in the rate could result in hospital-based PHPs
closing and leading to possible access problems. For this reason, we
are using hospital-based PHP data only to calculate the CY 2010 median
per diem payment rates.
Comment: One commenter expressed concern that CMS' data and
analysis regarding the median per diem costs for PHP services have been
and remain fundamentally flawed. The commenter recommended that CMS
conduct further research and, in particular, conduct detailed provider-
level research to better understand the costs necessary to deliver PHP
services in hospital and CMHC settings. The commenter recommended the
payment rate for PHP services (APC 0173) be set at approximately $325
per patient day and no less than the CY 2007 payment rate of $234.73.
Response: We base the PHP APC per diem payment rates on providers'
charges reported on claims adjusted by the providers' CCRs. This
approach is consistent with the method used to compute payment rates
for other APCs under the OPPS, except that, for PHPs for which the unit
of service is a day, we sum the charges for a given day and then
determine the median cost of all days. We expect that a provider's
charges will reflect the level of services provided, which has a
relationship to the cost of providing those services. In Medicare cost
reporting, the total charges are to be reported along with the
provider's cost. To the extent that a provider is submitting bills that
have charges that do not directly relate to the delivery or provision
of services, its CCRs will be unpredictable and would distort the costs
of the services provided.
In developing the CY 2010 PHP APC per diem payment rates, we
excluded days that have only 1 or 2 units of service. In addition, we
did not include days where no payment was made to avoid diluting the
cost. To calculate the Level I PHP APC payment rate, we used days with
3 units of service, and to calculate the Level II PHP APC payment rate,
we used days with 4 or more units of service. We believe our
methodology accurately reflects the median cost of providing these two
levels of PHP services. As discussed previously, we made several
refinements to our
[[Page 60558]]
methodology for computing the per diem costs that more accurately
reflect the per diem cost of providing PHP services.
Comment: Many commenters stated that cost report information for
CMHCs is not currently included in the Healthcare Cost Report
Information System (HCRIS) and recommended that CMS base its
calculations only on the cost report information that the agency can
verify directly and not on data provided by the fiscal intermediaries
or MACs. The commenters believed that CMS should calculate payment
rates using only cost data from those cost reports currently in and
accessible through the HCRIS.
Response: We understand the commenters concern about making CMHC
data available through the HCRIS, and we are taking steps to make the
data available in the future. For CY 2010, we will use PHP hospital-
based data only to set the PHP APC payment rates. The hospital-based
PHP data are based on cost report data currently in and accessible
through the HCRIS.
Comment: Several commenters expressed concern that there are
additional services furnished by CMHCs that are currently provided to
PHP patients for which the providers are not reimbursed. The commenters
pointed out that the Substance Abuse and Mental Health Services
Administration recognizes these additional services by including
payment for treatment of mental illness, not just for substance abuse
treatment, and for costs for other services, including locating
housing. The commenter included a list of HCPCS H-codes as an example
of additional services as specified in Table 52 below.
Table 52--Additonal HCPCS H-Codes Recommended by a Commenter for Payment
as PHP Services
------------------------------------------------------------------------
HCPCS H-code Description
------------------------------------------------------------------------
H0001............................... Alcohol and/or drug assessment.
H0004............................... Behavioral health counseling and
therapy, per 15 minutes.
H0028............................... Alcohol and/or drug prevention
problem identification and
referral service (e.g., student
assistance and employee
assistance programs), does not
include assessment.
H0029............................... Alcohol and/or drug prevention
alternatives service (services
for populations that exclude
alcohol and other drug use, e.g.
alcohol free social events).
H0030............................... Behavioral health hotline service.
H0031............................... Mental health assessment, by non-
physician.
H0032............................... Mental health service plan
development by non-physician.
H0033............................... Oral medication administration,
direct observation.
H0034............................... Medication training and support,
per 15 minutes.
H0047............................... Alcohol and/or other drug abuse
services, not otherwise
specified.
H0049............................... Alcohol and/or drug screening.
H0050............................... Alcohol and/or drug services,
brief intervention, per 15
minutes.
H1011............................... Family assessment by licensed
behavioral health professional
for state defined purposes.
H2000............................... Comprehensive multidisciplinary
evaluation.
H2010............................... Comprehensive medication services,
per 15 minutes.
H2011............................... Crisis intervention service, per
15 minutes.
H2014............................... Skills training and development,
per 15 minutes.
H2027............................... Psycho educational service, per 15
minutes.
------------------------------------------------------------------------
Response: Partial hospitalization services are specifically defined
in section 1861(ff) of the Act and are a Medicare benefit category.
Because there is no benefit category for substance abuse programs, any
such program would have to meet requirements established for PHPs,
including the requirements that a physician certify that the patient
would otherwise require inpatient psychiatric care in the absence of
the partial hospitalization services and that the program provides
active treatment (section 1835(a)(2)(F) of the Act and 42 CFR
424.27(e)). PHP services involving direct patient care costs are
payable under Medicare. The HCPCS H-codes listed above are not payable
by Medicare. However, certain services for substance abuse are payable
under a PHP because a PHP provides for patient education, mental health
assessment, occupational therapy, and behavioral health treatment/
services among other services. For a complete list of services covered
under a PHP under Medicare, we refer readers to the Medicare Claims
Processing Manual (Pub. 100-04), Chapter 4, Section 260. Medicare does
not pay for services such as 12-step programs. Many of the HCPCS H-
codes listed duplicate allowable PHP service codes, for example,
patient education and training. However, the PHP service codes
generally are not defined in 15-minute increments.
Comment: One commenter suggested that CMS consider alternative
arrangements for partial hospitalization and hospital outpatient
services for the future. The commenter suggested removing PHP from the
APC codes and instead establish a separate payment system (similar to
home health) by establishing a reasonable base rate for PHP for Level
II PHP services at a slightly higher level (such as $220-$225 per day),
annually adjusting the base rate by a conservative inflation factor
such as the CPI, establishing quality criteria to judge performance,
and dropping the payment level for Level I PHP services so that only 4
or more services are recognized for payment.
Response: Currently, the statute does not provide for a separate
payment system for partial hospitalization services. Therefore, a
statutory change would be required to establish an independent payment
system for PHPs. Regarding the commenter's recommendation to establish
quality criteria, we agree that establishing benchmarks and indicators
would be useful, and we encourage providers to share that information
with us. We believe that creating a rate specific to days with three
services is consistent with our policy to require CMHCs and hospital-
based PHPs to provide a minimum of 3 units of service per day in order
to receive payment. Although we do not expect Level I PHP service days
to be frequent, we do recognize that there are times when a patient may
need a less intensive day of service. Therefore, we continue to
recognize the need for a two-tiered payment system: one payment for
those less intensive days with three services; and another payment for
those more intensive days with four or more services.
Comment: A few commenters urged CMS to find a way to strengthen the
integrity of the program by developing and implementing standards of
participation. The commenters recommended the implementation of
standards of care with emphasis on quality of services and urged CMS to
develop conditions of participation that would be a useful regulatory
tool for
[[Page 60559]]
PHP providers. The commenters suggested that the development process
must include all providers and other stakeholders. Several commenters
offered to work with CMS to reform and improve the PHP by establishing
standards for quality of PHP services provided; adopting CMHC facility-
level quality measures and a reporting regime; and assisting with
accreditation and cost reporting reforms.
Response: We agree with the commenters that standards of
participation is an area that should be addressed, and we are exploring
proposing conditions for coverage for CMHCs to establish minimum
standards for patient rights, physical environment, staffing, and
documentation requirements. We believe that adding conditions for
coverage would contribute to more consistency between CMHCs and
hospital-based PHPs.
Comment: One commenter suggested that CMS use fiscal intermediaries
and MACs to work with hospitals and CMHC providers to establish
separate PHP lines on their appropriate Medicare cost reports to arrive
at a CCR for PHPs rather than the default psychiatric, clinics, or
overall outpatient CCR lines. The commenter believed that, nationally,
the CCRs for the PHPs are being understated by applying overall CCRs
and/or clinic CCRs and, thus, penalizing the structured intensive
partial programs.
Response: We note that most hospitals do not have a cost center for
partial hospitalization; therefore, we have used the CCR as specific to
PHP as possible. As described earlier in section X.A. of this final
rule with comment period, for CY 2008, we proposed and finalized two
refinements to the methodology for computing the PHP median per diem
cost that we believe resulted in a more accurate median per diem cost.
The first of the two CY 2008 refinements was a remapping of 10 revenue
codes-to-cost centers for hospital-based PHP claims. We believe that
the CY 2008 refinement to the mapping approach continues to be the best
method for assigning the most appropriate cost center for hospital-
based PHP claims. For a detailed explanation of the remapping of
revenue codes for hospital-based PHP claims, we refer readers to the CY
2008 OPPS/ASC proposed rule (72 FR 42691 through 42692) and the CY 2008
OPPS/ASC final rule with comment period (72 FR 66671 through 66672).
In addition, we note that this remapping refinement applies only to
hospital-based PHP claims and not to CMHC claims. In the CY 2009 OPPS/
ASC final rule with comment period (73 FR 68690), in response to
commenters' request that CMS apply the remapping of revenue codes to
cost centers to CMHC claims, we stated that we cannot apply the same
mapping method to CMHCs because PHP is the CMHCs' only Medicare cost
and CMHCs do not have the same cost structure as hospitals.
Comment: One commenter expressed concern that the PHP benefit
lacked flexibility. The commenter believed that the rigid guidelines
for attendance of 5 plus days a week (20 hours) could create excessive
overutilization at times. The commenter stated that it would be more
beneficial to restructure PHP to be a more flexible, less costly,
outcome-based system of care.
Response: Partial hospitalization is an intensive outpatient
program of psychiatric services provided to patients as an alternative
to inpatient psychiatric hospitalization or as a step down to shorten
an inpatient stay and transition a patient to a less intensive level of
care. We understand the commenters' concerns about the 20 hours per
week requirement with regard to scheduling flexibility, but we were
concerned that if we reduce the minimum number of hours lower than the
current guideline, the low end of the range will become the new
minimum. Therefore, instead of reducing the number of hours a patient
needs in order to be eligible to receive the benefit, we clarified that
the patient eligibility requirement that patients require 20 hours of
therapeutic services is evidenced in a patient's plan of care rather
than in the actual hours of therapeutic services a patient receives.
The intent of this eligibility requirement is that, for most weeks, we
expect attendance conforming to the patient's plan of care. We
recognize that there may be times at the beginning (or end) of a
patient's transition into (or out of) a PHP where the patient may not
receive 20 hours of therapeutic services.
Comment: One commenter expressed concern about the proposed cuts
for Partial Hospitalization (APC 0173) and the impact the cuts will
have on its hospital and community. The commenter reviewed the history
of APC payment rates for these services and noted the trend of the
payment rates decreasing over the past 7 years. The commenter pointed
out that it experienced a significant increase in the staff salary and
benefit costs. The commenter expressed concern that the decreasing
payment rate and increasing expenses will make it difficult for the
hospital to sustain these services and access to care for Medicare
beneficiaries could worsen.
Response: Hospital costs per day for PHP services for APC 0173 have
remained in the range of $200--$225 for CY 2000 through CY 2010. This
is the reason we have decided to use hospital-based PHP data only for
computing the CY 2010 PHP payment rates, as this approach will lead to
payment stability for CY 2010.
In summary, after consideration of the public comments we received,
we are adopting as final our CY 2010 proposal to retain the two-tiered
payment approach for PHP services and to use only hospital-based PHP
data in computing the payment. The two updated PHP APC per diem median
costs that we are finalizing for CY 2010 are shown in Table 53 below.
Table 53--CY 2010 PHP APC per Diem Median Costs
------------------------------------------------------------------------
Median per
APC Group title diem costs
------------------------------------------------------------------------
0172..................... Level I Partial Hospitalization $148
(3 services).
0173..................... Level II Partial Hospitalization 209
(4 or more services).
------------------------------------------------------------------------
C. Separate Threshold for Outlier Payments to CMHCs
In the November 7, 2003 final rule with comment period (68 FR
63469), we indicated that, given the difference in PHP charges between
hospitals and CMHCs, we did not believe it was appropriate to make
outlier payments to CMHCs using the outlier percentage target amount
and threshold established for hospitals. Prior to that time, there was
a significant difference in the amount of outlier payments made to
hospitals and CMHCs for PHP services. In addition, further analysis
indicated that using the same OPPS outlier threshold for both hospitals
and CMHCs did not limit outlier payments to high cost cases and
resulted in excessive outlier payments to CMHCs. Therefore,
[[Page 60560]]
beginning in CY 2004, we established a separate outlier threshold for
CMHCs. The separate outlier threshold for CMHCs has resulted in more
commensurate outlier payments.
In CY 2004, the separate outlier threshold for CMHCs resulted in
$1.8 million in outlier payments to CMHCs. In CY 2005, the separate
outlier threshold for CMHCs resulted in $0.5 million in outlier
payments to CMHCs. In contrast, in CY 2003, more than $30 million was
paid to CMHCs in outlier payments. We believe this difference in
outlier payments indicates that the separate outlier threshold for
CMHCs has been successful in keeping outlier payments to CMHCs in line
with the percentage of OPPS payments made to CMHCs. Table 54 below
includes a listing of the outlier target amounts and the portion of the
target amount allocated to CMHCs for PHP outliers for CYs 2004 through
2009.
Table 54--Outlier Target Amount Percentages and Portions Allocated to
CMHCs for PHP Outliers--CY 2004 Through CY 2007
------------------------------------------------------------------------
Portion of
Outlier target amount
target allocated to
Year amount CMHCs for PHP
percentage outliers (in
percent)
------------------------------------------------------------------------
CY 2004.................................... 2.0 0.5
CY 2005.................................... 2.0 0.6
CY 2006.................................... 1.0 0.6
CY 2007.................................... 1.0 0.15
CY 2008.................................... 1.0 0.02
CY 2009.................................... 1.0 0.12
------------------------------------------------------------------------
As noted in section II.F. of the CY 2010 OPPS/ASC proposed rule (74
FR 35296), for CY 2010, we proposed to continue our policy of
identifying 1.0 percent of the aggregate total payments under the OPPS
for outlier payments. We proposed that a portion of that 1.0 percent,
an amount equal to 0.02 percent of outlier payments (or 0.0002 percent
of total OPPS payments), would be allocated to CMHCs for PHP outliers.
As discussed in section II.F. of the CY 2010 OPPS/ASC proposed rule (74
FR 35296), we proposed to set a dollar threshold in addition to an APC
multiplier threshold for OPPS outlier payments. However, because the
PHP APC is the only APC for which CMHCs may receive payment under the
OPPS, we would not expect to redirect outlier payments by imposing a
dollar threshold. Therefore, we did not propose to set a dollar
threshold for CMHC outliers. As noted in section II.F. of the CY 2010
OPPS/ASC proposed rule (74 FR 35296), we proposed to set the outlier
threshold for CMHCs for CY 2010 at 3.40 times the APC payment amount
and the CY 2010 outlier payment percentage applicable to costs in
excess of the threshold at 50 percent. Specifically, we proposed that
if a CMHC's cost for partial hospitalization services, paid under
either APC 0172 or APC 0173, exceeds 3.40 times the payment for APC
0173, the outlier payment would be calculated as 50 percent of the
amount by which the cost exceeds 3.40 times the APC 0173 payment rate.
Comment: Several commenters suggested that instead of creating
separate threshold for outlier payments to CMHCs, it would be
beneficial to eliminate the outlier payment and use those funds
allocated to outlier payments to bolster payments for services provided
by CMHCs.
Response: We note that the Secretary shall provide an outlier
payment for each covered OPD service (or group of services) in
accordance with the requirements set forth in section1833(t)(5) of the
Act and the applicable regulations. Because CMHCs are a provider of PHP
services, outlier payments must be provided for them in accordance with
the statute. We note that eliminating outlier payments for CMHCs would
not result in an increase in the PHP rate, but rather would provide
additional funding for hospital outlier payments for all HOPD services.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal to set a separate outlier threshold for
CMHCs. As discussed in section II.F. of this final rule with comment
period, using more recent data for this final rule with comment period,
we set the target for hospital outpatient outlier payments at 1.0
percent of total estimated OPPS payments. We allocated a portion of
that 1.0 percent, an amount equal to 0.03 percent of outlier payments
and 0.0003 percent of total estimated OPPS payments to CMHCs for PHP
outliers. For CY 2010, as proposed, we are setting the outlier
threshold at 3.40 multiplied by the APC amount and CY 2010 outlier
percentage applicable to costs in excess of the threshold at 50
percent.
XI. Procedures That Will Be Paid Only as Inpatient Procedures
A. Background
Section 1833(t)(1)(B)(i) of the Act gives the Secretary broad
authority to determine the services to be covered and paid for under
the OPPS. Before implementation of the OPPS in August 2000, Medicare
paid reasonable costs for services provided in the HOPD. The claims
submitted were subject to medical review by the fiscal intermediaries
to determine the appropriateness of providing certain services in the
outpatient setting. We did not specify in our regulations those
services that were appropriate to provide only in the inpatient setting
and that, therefore, should be payable only when provided in that
setting.
In the April 7, 2000 final rule with comment period (65 FR 18455),
we identified procedures that are typically provided only in an
inpatient setting and, therefore, would not be paid by Medicare under
the OPPS. These procedures comprise what is referred to as the
``inpatient list.'' The inpatient list specifies those services for
which the hospital will be paid only when provided in the inpatient
setting because of the nature of the procedure, the underlying physical
condition of the patient, or the need for at least 24 hours of
postoperative recovery time or monitoring before the patient can be
safely discharged. As we discussed in that rule and in the November 30,
2001 final rule with comment period (66 FR 59856), we may use any of a
number of criteria we have specified when reviewing procedures to
determine whether or not they should be removed from the inpatient list
and assigned to an APC group for payment under the OPPS when provided
in the hospital outpatient setting. Those criteria include the
following:
Most outpatient departments are equipped to provide the
services to the Medicare population.
The simplest procedure described by the code may be
performed in most outpatient departments.
The procedure is related to codes that we have already
removed from the inpatient list.
In the November 1, 2002 final rule with comment period (67 FR
66741), we added the following criteria for use in reviewing procedures
to determine whether they should be removed from the inpatient list and
assigned to an APC group for payment under the OPPS:
A determination is made that the procedure is being
performed in numerous hospitals on an outpatient basis; or
A determination is made that the procedure can be
appropriately and safely performed in an ASC, and is on the list of
approved ASC procedures or has been proposed by us for addition to the
ASC list.
The list of codes that we proposed to be paid by Medicare in CY
2010 only as inpatient procedures was included as
[[Page 60561]]
Addendum E to the CY 2010 OPPS/ASC proposed rule.
B. Changes to the Inpatient List
In the CY 2010 OPPS/ASC proposed rule (74 FR 35358), we proposed to
use for the CY 2010 OPPS the same methodology as described in the
November 15, 2004 final rule with comment period (69 FR 65835) to
identify a subset of procedures currently on the inpatient list that
are being performed a significant amount of the time on an outpatient
basis. Using this methodology, we identified three procedures that met
the criteria for potential removal from the inpatient list. We then
clinically reviewed these three potential procedures for possible
removal from the inpatient list and found them to be appropriate
candidates for removal from the inpatient list. During the February
2009 meeting of the APC Panel, we solicited the APC Panel's input on
the appropriateness of removing the following three procedures from the
CY 2010 inpatient list: CPT codes 21256 (Reconstruction of orbit with
osteotomies (extracranial) and with bone grafts (includes obtaining
autografts) (eg, micro-ophthalmia)); 27179 (Open treatment of slipped
femoral epiphysis; osteoplasty of femoral neck (Heyman type
procedure)); and 51060 (Transvesical ureterolithotomy).
In addition to presenting to the APC Panel the three procedures
above, we also presented utilization data for the first 9 months of CY
2008 for two other specific procedures, in response to a request by the
APC Panel from the March 2008 meeting: CPT code 20660 (Application of
cranial tongs, caliper or stereotactic frame, including removal
(separate procedure)), a procedure that we removed from the inpatient
list for CY 2009; and CPT code 64818 (Sympathectomy, lumbar), a
procedure that we maintained on the inpatient list for CY 2009.
Following the discussion at the February 2009 meeting, the APC
Panel recommended that CMS remove from the CY 2010 inpatient list CPT
codes 21256, 27179, and 51060. The APC Panel also recommended that CPT
code 64818 remain on the inpatient list for CY 2010. The APC Panel made
no recommendation regarding CPT code 20660.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35358), we proposed to
accept the APC Panel's recommendations to remove the procedures
described by CPT codes 21256, 27179, and 51060 from the inpatient list
because we agree with the APC Panel that the procedures may be
appropriately provided as hospital outpatient procedures for some
Medicare beneficiaries. We also proposed to retain CPT code 64818 on
the inpatient list because we agree with the APC Panel that this
procedure should be provided to Medicare beneficiaries only in the
hospital inpatient setting. The three procedures we proposed to remove
from the inpatient list for CY 2010 and their CPT codes, long
descriptors, and proposed APC assignments were displayed in Table 37 of
the CY 2010 OPPS/ASC proposed rule (74 FR 35358).
Comment: Several commenters supported the proposal to remove the
procedures reported by CPT codes 21256, 27179, and 51060 from the
inpatient list, one commenter opposed removing the procedure coded by
CPT code 51060, and one commenter expressed concern about removing any
of the three procedures proposed for removal from the inpatient list.
The commenter that requested that CMS retain CPT code 51060 on the
inpatient list reported that the procedure is an open surgical
procedure that is much more extensive than a hernia repair. In that
commenter's experience, patients who undergo this surgery are not able
to go home the same day as surgery because most require parenteral pain
medication and ongoing monitoring of the pain, and of possible ileus or
hematuria. Another commenter provided no rationale for objecting to the
removal of the three procedures as proposed by CMS beyond stating that
if CMS does not eliminate the entire inpatient list, then the commenter
would have serious concerns about removing the three procedures.
Response: We appreciate the commenters' support of our proposal. In
response to the commenters who expressed concern about removing one or
more of the three procedures from the inpatient list, we reevaluated
the three procedures using more recent utilization data and further
clinical review by CMS medical advisors. As a result of that
reevaluation, we remain convinced that all three procedures may be
safely performed in the HOPD for some Medicare beneficiaries. As we
have indicated previously, the removal of a procedure from the
inpatient list does not signify a determination by CMS that the
procedure should be performed in the HOPD for all beneficiaries. The
removal only indicated that CMS is relying on the individual
beneficiary's surgeon to advise the most appropriate setting for the
procedure based on the beneficiary's medical condition. In fact, as
evidenced by the utilization data over the years, most of the newly-
removed procedures from the inpatient list continue to be commonly
provided in the inpatient setting after they are removed from the list.
The removal of a procedure from the inpatient list simply is
recognition that there is evidence that the procedure may be safely
performed for some beneficiaries who are outpatients and represents no
directive about whether the inpatient setting or the outpatient setting
is more appropriate in any particular circumstance.
Comment: Several commenters requested the removal of additional
procedures from the inpatient list. Although the commenters requested
that CMS remove a total of 20 additional procedures from the inpatient
list, 4 of the requested codes were not on the proposed CY 2010
inpatient list. All of the codes requested for removal are displayed in
Table 55 below.
As identified by asterisks, 11 of the procedures displayed in the
chart below were submitted by one commenter representing a group of
hospitals. This commenter stated that each of the procedures requested
for removal from the inpatient list was carefully reviewed and could be
safely provided to Medicare beneficiaries in the HOPD. The commenter
reported that research and investigation indicated that clinical
criteria sets such as the Milliman Care Guidelines support the safe
provision of the 11 procedures in outpatient settings. In addition, the
commenter stated that the group's hospitals have physicians providing
the procedures safely in the outpatient setting for non-Medicare
patients who are in the same age group as the Medicare population.
Table 55--Additional Procedures Requested by Commenters for Removal From
the Inpatient List for CY 2010
------------------------------------------------------------------------
CY 2009 short Proposed CY
CY 2009 HCPCS code descriptor 2010 SI
------------------------------------------------------------------------
01402.............................. Anesth, knee C
arthroplasty.
22548.............................. Neck spine fusion.... C
*22554............................. Neck spine fusion.... C
*22585............................. Additional spinal C
fusion.
*22851............................. Apply spine prosth T
device.
27447.............................. Total knee C
arthroplasty.
28805.............................. Amputation thru C
metatarsal.
*32662............................. Thoracoscopy, C
surgical.
*37182............................. Insert hepatic shunt C
(tips).
*37215............................. Transcath stent, cca C
w/eps.
[[Page 60562]]
*44950............................. Appendectomy......... C
44955.............................. Appendectomy, add-on. C
44960.............................. Appendectomy......... C
55866.............................. Laparo radical C
prostatectomy.
*60505............................. Explore parathyroid C
glands.
*63047............................. Removal spinal lamina T
63075.............................. Neck spine disk T
surgery.
*63076............................. Neck spine disk C
surgery.
*63267............................. Excise intraspinal C
lesion.
64999.............................. Nervous system T
surgery.
------------------------------------------------------------------------
* Submitted by commenter representing a group of hospitals.
Response: In response to the commenters' requests, we reviewed
utilization and clinical information for each of the procedures
suggested for removal from the inpatient list. Of the 16 procedures
reviewed (those with status indicator ``C'' in the chart above) our
medical advisors agreed with the commenters that it would be
appropriate to remove 5 of them from the inpatient list. Thus, for CY
2010, we are removing from the inpatient list the procedures reported
by CPT codes 28805 (Amputation, foot; transmetatarsal); 37215
(Transcatheter placement of intravascular stent(s), cervical carotid
artery, percutaneous; with distal embolic protection); 44950
(Appendectomy); 44955 (Appendectomy; when done for indicated purpose at
time of other major procedure (not as separate procedure) (List
separately in addition to code for primary procedure)); and 63076
(Discectomy, anterior, with decompression of spinal cord and/or nerve
root(s), including osteophytectomy; cervical, each additional
interspace (List separately in addition to code for primary
procedure)). These procedures and the APCs to which they are assigned
for CY 2010 are displayed in Table 56 below.
The clinical and utilization data for the other 11 procedures did
not support the appropriateness of providing the procedures to Medicare
beneficiaries in the HOPD. We believe that Medicare beneficiaries who
undergo any of these 11 procedures should do so only as inpatients.
Comment: Many commenters suggested that CMS eliminate the inpatient
list. They believed that each patient's status should be determined by
the physician who can establish the most appropriate care plan for the
individual. The commenters pointed out the many safety provisions that
are met by hospitals participating in the Medicare program as evidence
that hospitals would provide care safely and appropriately.
A few of the commenters stated that the inconsistency between the
Medicare payment policies for hospitals and physicians of allowing
physicians to receive full payment for inpatient procedures that are
performed on Medicare beneficiaries in the HOPD who are not inpatients,
but denying hospitals payment for those same procedures, gives
physicians little incentive to avoid providing inpatient procedures to
Medicare beneficiaries who are outpatients. Several commenters
suggested that if CMS maintains the inpatient list, the associated
payment restrictions be applied consistently to both hospitals and
physicians in order to promote a collaborative effort in documentation
and clinical care plans.
One commenter stated that the inpatient list, which requires that
Medicare beneficiaries be handled differently than the rest of the
patient population in some circumstances, creates chaos for the
physicians and hospitals who are trying to apply consistent clinical
criteria to determine appropriate levels of care for all of their
patients.
Many of the commenters argued that there are a variety of
circumstances that result in procedures on the inpatient list being
performed without an inpatient admission and that hospitals should not
be held accountable for those situations. For example, they explained
that sometimes during the intraoperative period, due to clinical
circumstances, the surgeon performs a procedure that is on the
inpatient list in addition to, or rather than, the procedure that was
planned.
Finally, the commenters believed that the inpatient list penalizes
hospitals unfairly and suggested that if CMS is unwilling to eliminate
the inpatient list, it consider developing an appeals process to
address circumstances in which payment for a service provided on an
outpatient basis is denied due to its presence on the inpatient list.
The commenters believed that the appeal would give the hospital the
opportunity to submit documentation on the physician's intent, the
patient's clinical condition, and the circumstances that enabled the
patient to be sent home safely without an inpatient stay.
Response: While we understand the commenters' reasons for
advocating the elimination of the inpatient list, we continue to
believe that the inpatient list serves an important purpose in
identifying procedures that cannot be safely and effectively provided
to Medicare beneficiaries in the HOPD. We are concerned that the
elimination of the inpatient list could result in unsafe or prolonged
care in hospital outpatient departments for Medicare beneficiaries.
Therefore, we are not discontinuing our use of the inpatient list at
this time.
Although the commenters suggested that we apply the same payment
restrictions to physicians and hospitals when inpatient procedures are
performed inappropriately, payment for physicians' services are outside
of the scope of OPPS payment policy and of this OPPS/ASC final rule
with comment period. We continue to believe that it is very important
for hospitals to educate physicians on Medicare services covered under
the OPPS to avoid inadvertently providing services in a hospital
outpatient setting that only are covered during an inpatient stay.
We also are concerned about the potential results of eliminating
the inpatient list on Medicare beneficiary liability. For instance, we
are concerned that, without the inpatient list, Medicare beneficiaries
could experience longer stays in HOPDs after some procedures. The APC
Panel has discussed its concern about these long stays that frequently
exceed 24 hours. Moreover, the financial liability for OPPS copayments
for complex surgical procedures and long periods of care in the HOPD
and coverage of items such as usually self-administered drugs differs
significantly from a beneficiary's inpatient cost-sharing
responsibilities and coverage, and the beneficiary may incur higher
out-of-pocket costs for prolonged outpatient encounters than for an
inpatient stay for the same surgical intervention.
We continue to encourage physicians' awareness of the implications
for Medicare beneficiaries and hospitals of performing inpatient list
procedures in the HOPD on beneficiaries who are not inpatients. We do
not plan to adopt a specific appeals process for claims related to
inpatient list procedures performed in the HOPD at this time. The
existing processes established for a beneficiary or a provider to
appeal a specific claim remain in effect.
Comment: One commenter suggested that CMS implement a method to
identify scheduled outpatient procedures that become, through
[[Page 60563]]
intraoperative circumstances, inpatient procedures. The commenter
asserted that, due to hospital billing practices, hospital coding staff
do not know until well after the surgery is completed that an
unscheduled inpatient procedure was performed on an outpatient who was
not admitted as an inpatient. The commenter suggested that CMS
implement a HCPCS modifier that the hospital could append to the
inpatient procedure on the claim and that payment for the claim could
be made at the same rate as those coded with the -CA modifier (APC 0375
(Ancillary Outpatient Services When Patient Expires)).
Response: While we appreciate the commenter's suggestion for
addressing circumstances when unplanned inpatient list procedures are
performed during operative sessions where outpatient surgical
procedures were planned, we do not believe there is a need for a
modifier to identify those situations. We continue to believe that the
inpatient list procedures are not appropriate for performance on
Medicare beneficiaries in the HOPD and, therefore, we expect that when
such a procedure is performed, the beneficiary would be admitted as an
inpatient.
We established payment for ancillary services reported in
association with an inpatient procedure to which the -CA modifier is
appended in order to provide payment to hospitals for services
furnished in those rare cases in which procedures on the inpatient list
are performed to resuscitate or stabilize a patient (whose status is
that of an outpatient) with an emergent, life-threatening condition,
and the patient dies before being admitted as an inpatient. In these
situations, hospitals are unable to admit the patients as inpatients.
In the circumstances described by the commenter, we see no
insurmountable hospital barriers to admitting the patients as
inpatients of the hospital and do not believe it would be appropriate
to provide payment (through APC 0375) for a mix of surgical procedures
provided to patients who survive at the rate developed specifically to
pay for the ancillary services furnished in association with procedures
reported with the -CA modifier when a patient dies prior to admission
as an inpatient. The calculation of the payment rate for APC 0375 is
discussed in detail in section II.A.2.d.(7) of this final rule with
comment period.
We understand hospitals' dilemma when the decision is made
intraoperatively to perform an unscheduled procedure. However, we
continue to believe that it is important for hospitals to educate
physicians on Medicare services paid under the OPPS to avoid
inadvertently providing services in a hospital outpatient setting that
would be paid only during an inpatient stay because we believe that the
HOPD is not an appropriate site of service for inpatient list
procedures.
Comment: Another commenter recommended that CMS expand the use of
the -CA modifier to allow payments to the hospitals for performance of
procedures on the inpatient list that must be performed to resuscitate
or stabilize an outpatient with an emergency, life-threatening
condition, but the patient is stabilized medically and transferred to
another acute care hospital for admission. In other words, the
commenter added, the patient is never admitted to the hospital where
the inpatient list procedure was performed.
Response: We established the -CA modifier policy to provide payment
to hospitals for services provided in the specific and rare situations
in which procedures on the inpatient list are performed in the HOPD to
resuscitate or stabilize a patient (whose status is that of an
outpatient) with an emergent, life-threatening condition, and the
patient dies before being admitted as an inpatient, not as a method for
hospitals to recoup costs incurred when inpatient procedures are
performed inappropriately on a Medicare beneficiary in the HOPD.
We see no rationale for allowing hospitals to report the -CA
modifier for any circumstances other than those for which it was
created. In the scenario described by the commenter, there is no
evidence of the hospital's insurmountable barriers to admitting the
patient, a criterion for use of the -CA modifier. In addition, we are
not convinced that there is a need for a modifier to describe these
rare events. We also do not believe it would be appropriate to provide
payment at the rate developed specifically to pay for the ancillary
services furnished in association with procedures reported with the -CA
modifier when a patient dies prior to admission as an inpatient (APC
0375), for a mix of surgical procedures provided to patients who
survive. The calculation of the payment rate for APC 0375 is discussed
in detail in section II.A.2.d.(7) of this final rule with comment
period.
Comment: One commenter suggested that CMS may lack information on
the types of inpatient procedures that are performed for beneficiaries
who are outpatients because those claims are returned to the provider
by the I/OCE, thereby preventing CMS from capturing the unpaid services
in its claims data. To address this situation, the commenter
recommended that CMS modify the I/OCE so that claims for inpatient
procedures provided on an outpatient basis could be processed as not
payable rather than returned to the provider. The commenter believed
that this modification would enable CMS to gather claims data on these
procedures and to see how many and what types of procedures physicians
believe are appropriate for performance in the HOPD. The claims data
also would provide CMS information about the hospital resources
expended to care for these Medicare beneficiaries. In addition, the
commenter suggested that CMS could share the data with the APC Panel
for discussion and review in support of their evaluations of which
procedures may appropriately be removed from the inpatient list.
Response: We believe that our outpatient claims data include the
claims for inpatient procedures that are performed on Medicare
beneficiaries who are outpatients. As would be expected, the volume for
these nonpayable procedures is low compared to the number of payable
outpatient claims, but we believe that the claims hospitals submit are
available to us for examination in our OPPS claims data each year.
The I/OCE logic does not result in claims for inpatient procedures
being returned to the provider. Rather, once the inpatient procedure is
identified, it is line-item denied and then, with very few exceptions
(for example, claims with the -CA modifier and an indication that the
beneficiary expired), it assigns line-item edits to result in payment
denial for each of the other services on the claim because these
services were furnished on the same day as the inpatient procedure. A
full description of the I/OCE logic and edits is available on the CMS
Web site at: http://www.cms.hhs.gov/OutpatientCodeEdit/.
After consideration of the public comments we received, we are
finalizing our proposal to remove the procedures reported by CPT codes
21256, 27179, and 51060 from the inpatient list. We also are removing
five additional procedures that public commenters requested be removed
from the inpatient list. These procedures are reported by CPT codes
28805 (Amputation, foot; transmetatarsal); 37215 (Transcatheter
placement of intravascular stent(s), cervical carotid artery,
percutaneous; with distal embolic protection); 44950 (Appendectomy);
44955 (Appendectomy; when done for
[[Page 60564]]
indicated purpose at time of other major procedure (not as separate
procedure) (List separately in addition to code for primary
procedure)); and 63076 (Discectomy, anterior, with decompression of
spinal cord and/or nerve root(s), including osteophytectomy; cervical,
each additional interspace (List separately in addition to code for
primary procedure)). The final eight procedures we are removing from
the inpatient list for CY 2010 and their CPT codes, long descriptors,
and final APC assignments are displayed in Table 56 below.
Table 56--Procedures Removed From the Inpatient List and Their Final APC Assignments for CY 2010
----------------------------------------------------------------------------------------------------------------
Final CY 2010
CY 2010 HCPCS Code CY 2010 long descriptor Final CY 2010 status
APC assignment indicator
----------------------------------------------------------------------------------------------------------------
21256...................................... Reconstruction of orbit with 0256 T
osteotomies (extracranial) and
with bone grafts (includes
obtaining autografts) (eg, micro-
ophthalmia).
27179...................................... Open treatment of slipped femoral 0052 T
epiphysis; osteoplasty of femoral
neck (Heyman type procedure).
28805...................................... Amputation, foot; transmetatarsal. 0055 T
37215...................................... Transcatheter placement of 0229 T
intravascular stent(s), cervical
carotid artery, percutaneous;
with distal embolic protection.
44950...................................... Appendectomy...................... 0153 T
44955...................................... Appendectomy; when done for 0153 T
indicated purpose at time of
other major procedure (not as
separate procedure) (List
separately in addition to code
for primary procedure).
51060...................................... Transvesical ureterolithotomy..... 0163 T
63076...................................... Discectomy, anterior, with 0208 T
decompression of spinal cord and/
or nerve root(s), including
osteophytectomy; cervical, each
additional interspace (List
separately in addition to code
for primary procedure).
----------------------------------------------------------------------------------------------------------------
XII. OPPS Nonrecurring Technical and Policy Changes and Clarifications
A. Kidney Disease Education Services
1. Background
Section 152(b) of Public Law 110-275 (MIPPA) amended section
1861(s)(2) of the Act by adding a new subsection (EE) to provide for
coverage of kidney disease education (KDE) services as a Medicare Part
B benefit for Medicare beneficiaries diagnosed with stage IV chronic
kidney disease (CKD) who, according to accepted clinical guidelines
identified by the Secretary, will require dialysis or a kidney
transplant, effective for services furnished on or after January 1,
2010. Section 152(b) also added a new subsection (ggg) to section 1861
of the Act to define ``kidney disease education services'' and to
specify who may furnish these services as a ``qualified person.''
Section 1861(ggg)(2)(A)(i) of the Act, as added by section 152(b) of
Public Law 110-275, defines a qualified person as a physician (as
defined in section 1861(r)(1) of the Act); or a physician assistant,
nurse practitioner, or clinical nurse specialist (as defined in section
1861(aa)(5) of the Act) who furnishes services for which payment may be
made under the fee schedule established under section 1848 of the Act.
Section 1861(ggg)(2)(A)(ii) of the Act also defines a qualified person
as a ``provider of services located in a rural area (as defined in
section 1886(d)(2)(D) [of the Act]).'' The definition of a ``qualified
person'' for this benefit includes certain rural providers of services,
such as hospitals, critical access hospitals (CAHs), skilled nursing
facilities (SNFs), home health agencies (HHAs), comprehensive
outpatient rehabilitation facilities (CORFs), and hospices. Section
1861(ggg)(2)(B) of the Act provides that a qualified person does not
include a provider of services (other than a provider of services
described in section 1861(ggg)(2)(A)(ii)) or a renal dialysis facility.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35358), we proposed to
implement the provisions of section 1861(s)(2)(EE) and 1861(ggg) of the
Act, as added by section 152(b) of Pub. L. 110-275, mainly through the
June 2009 CY 2010 MPFS proposed rule (CMS-1413-P; Medicare Program;
Payment Policies under the Physician Fee Schedule and Other Revisions
to Part B for CY 2010), hereinafter referred to as the CY 2010 MPFS
proposed rule. Specifically, in section II.G.10. of the CY 2010 MPFS
proposed rule (74 FR 33617), we proposed to define the Medicare
coverage criteria that would be applicable to KDE services and who may
provide these services (that is, a ``qualified person''), consistent
with the provisions of sections 1861(s)(2)(EE) and 1861(ggg) of the
Act. In that proposed rule, we also proposed to define a provider of
services in a rural area as defined in section 1886(d)(2)(D) of the Act
as a hospital, CAH, SNF, CORF, HHA, or hospice that is physically
located in a rural area as defined in Sec. 412.64(b)(ii)(C) of the
regulations or a hospital or CAH that is reclassified from urban to
rural status pursuant to section 1886(d)(8)(E) of the Act, as defined
in Sec. 412.103 of the regulations. According to the proposal included
in the CY 2010 MPFS proposed rule, a hospital, CAH, SNF, CORF, HHA, or
hospice would not be considered to be a qualified person if the
facility providing KDE services is located outside of a rural area
unless the service is furnished in a hospital or CAH that has
reclassified from urban to rural status under Sec. 412.103.
In addition, in the CY 2010 MPFS proposed rule (74 FR 33614),
consistent with the provisions of section 1861(ggg) of the Act, we
proposed a payment amount for KDE services furnished by a ``qualified
person.'' Specifically, we proposed to establish two new Level II HCPCS
G-codes to describe KDE services and to specify the associated relative
value units (RVUs) under the MPFS for payment for these codes.
We instructed individuals who wished to comment on the proposed
coverage criteria for KDE services under section 1861(ggg) of the Act,
including the definition of a ``qualified person,'' the proposed HCPCS
G-codes, and the proposed RVUs for KDE services to submit their
comments to CMS in response to the CY 2010 MPFS proposed rule that we
describe above. Below we discuss our proposed payment for KDE services
furnished by providers of services located in a rural area. We
instructed individuals who wished to submit public comments relating to
payment for KDE services furnished by providers of services located in
a rural area to submit those
[[Page 60565]]
comments in response to the CY 2010 OPPS/ASC proposed rule.
2. Payment for Services Furnished by Providers of Services Located in a
Rural Area
In the CY 2010 OPPS/ASC proposed rule (74 FR 35358), we proposed to
pay under the MPFS for KDE services under section 1861(ggg) of the Act
when the services are furnished by a qualified person that is a
hospital, CAH, SNF, CORF, HHA, or hospice that is located in a rural
area as defined in section 1886(d)(2)(D) of the Act or a hospital or
CAH that is reclassified from urban to rural status pursuant to section
1886(d)(8)(E) of the Act, as defined in Sec. 412.103 of the
regulations. Section 152(b) of Public Law 110-275 amended section
1848(j)(3) of the Act to add section 1861(s)(2)(EE) (kidney disease
education services) to the list of subsections of section 1861(s)(2) of
the Act, which are included in the definition of physician services in
section 1848(j)(3) of the Act. However, the statute does not specify
the payment methodology for KDE services furnished by providers of
these services located in rural areas.
Given that the statute provides the Secretary with the flexibility
to pay all qualified persons under the MPFS and there is precedent for
paying both diabetes self-management training and medical nutrition
therapy services (which we believe KDE is similar to in terms of
resource use, specifically staffing and infrastructure) under the MPFS,
we proposed to pay all qualified persons for KDE services under the
MPFS. This single payment methodology would apply to all qualified
persons, including providers of services in a rural area as we proposed
to define such providers in the CY 2010 MPFS proposed rule.
The language in section 1861(ggg) of the Act that defines KDE
services is similar to the language in section 1861(qq) of the Act that
defines ``diabetes self-management training services,'' which is a
medical or other health service under section 1861(s)(2)(S) of the Act.
In addition, the language in section 1861(ggg) of the Act is similar to
the language in section 1861(vv) of the Act that defines ``medical
nutrition therapy services,'' which is also a medical or other health
service under section 1861(s)(2)(V) of the Act. Finally, both diabetes
self-management training and medical nutrition therapy are included in
the definition of ``physicians' services'' for purposes of the MPFS at
section 1848(j)(3) of the Act, and our standard policy is to pay for
both services under the MPFS when they are furnished in an HOPD. Given
that the statute permits us to pay all qualified persons under the MPFS
and the precedent for paying both diabetes self-management training and
medical nutrition therapy under the MPFS when these services are
provided in the hospital outpatient setting, we believe that payment
under the MPFS is the most appropriate methodology for payment to
qualified persons who are providers of services located in a rural area
or who are hospitals or CAHs that have been reclassified from urban to
rural status pursuant to Sec. 412.103 of the regulations for the KDE
services they furnish.
The proposed CY 2010 MPFS payments for HCPCS codes GXX26
(Educational services related to the care of chronic kidney disease;
individual, per session; face-to-face), now finalized in the CY 2010
MPFS final rule with comment period as G0420 (Educational services
related to the care of chronic kidney disease; individual per session,
per hour, face-to-face), and GXX27 (Educational services related to the
care of chronic kidney disease; group, per session; face-to-face), now
finalized in the CY 2010 MPFS final rule with comment period as
G0421(Educational services related to the care of chronic kidney
disease; group, per session, per hour, face-to-face), are discussed in
the CY 2010 MPFS proposed rule (74 FR 33619). When the qualified person
is a rural provider, we proposed to pay the provider the applicable
amount under the MPFS and a single payment would be made for each KDE
session, limited to no more than six sessions as discussed in the CY
2010 MPFS proposed rule. Subsequently, we would not provide separate
payment for both a physician's professional services and the associated
facility services if a single session of KDE services was furnished in
a rural hospital or CAH. Therefore, because of operational constraints,
we proposed that payment would be made to only one qualified person for
KDE services on the same day for the same beneficiary. We also note
that the MPFS' geographic practice cost index would apply to the
calculation of the payment in a particular fee schedule locality
because this locality adjustment methodology is applicable to payment
for all services paid under the MPFS. We proposed to assign status
indicator ``A'' to HCPCS codes GXX26 and GXX27 in Addendum B to the CY
2010 OPPS/ASC proposed rule to signify that these services, when
covered, would be paid under a payment system other than the OPPS,
specifically the MPFS in the case of both HCPCS codes.
We instructed individuals who wished to submit public comments on
this proposal to pay under the MPFS for covered KDE services furnished
by qualified persons who are hospitals, CAHs, SNFs, CORFs, HHAs, or
hospices that are located in a rural area or are treated as being rural
under Sec. 412.103 to submit those comments in accordance with the
instructions for commenting on the CY 2010 OPPS/ASC proposed rule. We
instructed individuals who wished to submit public comments on all
other aspects of the proposed implementation of sections 1861(s)(2)(EE)
and 1861(ggg) of the Act, including, but not limited to, the proposed
criteria for coverage of the services, the proposed definition of
``session,'' the proposed HCPCS G-codes, and the proposed content of
the program, to submit those comments in response to the CY 2010 MPFS
proposed rule.
Comment: A few commenters objected to the proposed payment to rural
providers for KDE services. The commenters believed that the proposed
rates were too low for appropriate payment for KDE services and
recommended that CMS revise its KDE payment rates to reflect the
greater resources required for rural provider to furnish KDE services.
Response: As a result of our review of the public comments and
further analysis, we are adjusting the final CY 2010 MPFS RVUs for
HCPCS codes G0420 and G0421. Specifically, we reviewed the medical
nutrition therapy CPT codes, 97802 (Medical nutrition therapy; initial
assessment and intervention, individual, face-to-face with the patient,
each 15 minutes) and 97804 (Medical nutrition therapy; group (2 or more
individual(s)), each 30 minutes), that we are crosswalking to the KDE
codes for payment under the MPFS. We have adjusted the final CY 2010
values for HCPCS codes G0420 and G0421 to reflect not only the final
specification of the time of one hour for an individual or group KDE
session but also to reflect the appropriate supplies and equipment
without duplication. We multiplied the physician work RVUs for HCPCS
code G0420 by four and the work RVUs for HCPCS code G0421 by two to
account for the fact that we are crosswalking a 15 minute MNT code to a
60 minute KDE code for the individual service and a 30 minute MNT code
to a 60 minute KDE code for the group service case. We refer readers to
the CY 2010 MPFS final rule with comment period for the CY 2010 RVUs
for KDE services that determine payment to rural providers for HCPCS
codes G0420 and G0421.
[[Page 60566]]
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to pay under the
MPFS for covered KDE services furnished by qualified persons that are
hospitals, CAHs, SNFs, CORFs, HHAs, or hospices that are located in a
rural area or are treated as being rural under Sec. 412.103. Public
comments concerning the definition of a ``qualified person,'' the
proposed HCPCS G-codes, the proposed RVUs for KDE services, the
proposed criteria for coverage of the services, the proposed definition
of ``session,'' and the proposed content of the program are discussed
in the CY 2010 MPFS final rule with comment period.
B. Pulmonary Rehabilitation, Cardiac Rehabilitation, and Intensive
Cardiac Rehabilitation Services
1. Legislative Changes
Section 144(a) of Public Law 110-275 (MIPPA) made a number of
changes to the Act to provide Medicare Part B coverage and payment for
pulmonary and cardiac rehabilitation services furnished to
beneficiaries with chronic obstructive pulmonary disease and certain
other conditions, respectively, effective January 1, 2010.
Specifically, section 144(a)(1) of the Act amended section 1861(s)(2)
of the Act by adding new subparagraphs (CC) and (DD) to specify
Medicare Part B coverage of items and services furnished under (1) a
cardiac rehabilitation (CR) program (as defined in an added new section
1861(eee)(1) of the Act) or under a pulmonary rehabilitation (PR)
program (as defined under an added new section 1861(fff)(1) of the Act;
and (2) an intensive cardiac rehabilitation (ICR) program (as defined
in an added new section 1861(eee)(4) of the Act). The amendments made
by section 144(a) of Public Law 110-275 provide for coverage of CR, PR,
and ICR services provided in a physician's office, in a hospital on an
outpatient basis, or in other settings as the Secretary determines
appropriate. Section 144(a)(2) of Public Law 110-275 amended section
1848(j)(3) to provide for payment for services furnished in an ICR
program under the MPFS and also added a new section 1848(b)(5) to
provide specific language governing payment for ICR services. Under
that specific section, the Secretary shall substitute the Medicare OPD
fee schedule amount established under the prospective payment system
for hospital outpatient department services under section 1833(t)(3)(D)
of the Act for CR (under HCPCS codes 93797 (Physician services for
outpatient cardiac rehabilitation; without continuous ECG monitoring
(per session)) and 93798 (Physician services for outpatient cardiac
rehabilitation; with continuous ECG monitoring (per session)) for CY
2007, or any succeeding HCPCS codes established for cardiac
rehabilitation). Section 144(a)(2) also defines under the new section
1848(b)(5) a ``session'' for each of the component CR items and
services defined in subparagraphs (A) through (E) of section
1861(eee)(3) of the Act, when furnished for one hour, as a separate
session of ICR, and specified that payment may be made for up to 6
sessions per day of the series of 72 one-hour sessions of ICR services.
Section 144(a)(1)(B) also requires that a physician must be immediately
available and accessible for medical consultations and medical
emergencies at all times items and services are being furnished under
CR, ICR, and PR programs, except that in the case of such items and
services furnished under such a program in a hospital, such
availability shall be presumed.
As we discuss in detail in section II.G.8. of the CY 2010 MPFS
proposed rule (74 FR 33606), we proposed to use the MPFS and the OPPS
rulemaking processes, and may use the national coverage determination
(NCD) process as well, to implement the amendments made by section
144(a) of Public Law 110-275. In the CY 2010 MPFS proposed rule, we
specified our policy proposals for implementing Medicare Part B
coverage and payment for services furnished in a CR, ICR, and PR
program under the MPFS. In the CY 2010 OPPS/ASC proposed rule (74 FR
35360), we proposed the CY 2010 OPPS payment for services in a CR, ICR,
or PR program furnished to hospital outpatients.
Comment: A number of commenters asked that CMS confirm that the
services of physical therapists are not part of the PR, CR, or ICR
benefits authorized by section 144(a)(1) of Public Law 100-275 and are
always paid under the physical therapy benefit and that, therefore, the
therapy services do not require physician supervision when furnished as
part of a PR, CR, or ICR program, including in the HOPD. With regard to
PR, they stated that CMS has a longstanding history of recognizing the
services of a physical therapist as an integral part of a PR program
and requiring that these services be reported and paid as physical
therapy services. Specifically, the commenters indicated that in the CY
2002 MPFS regulation (66 FR 55246) and in the current Medicare Claims
Processing Manual (Pub. 100-04, Chapter 5, Section 20.A), CMS specifies
that when physical therapists treat respiratory conditions, they should
report CPT codes for physical therapy in the 97000 series and should
not report HCPCS codes G0237 (Therapeutic procedures to increase
strength or endurance of respiratory muscles, one on one, face to face,
per 15 minutes (includes monitoring)); G0238 (Therapeutic procedures to
improve respiratory function or increase strength or endurance of
respiratory muscles, one on one, face to face, per 15 minutes (includes
monitoring)); or G0239 (Therapeutic procedures to improve respiratory
function or increase strength or endurance of respiratory muscles, two
or more individuals (includes monitoring)). The commenters added that
in the September 25, 2007 Decision Memo for Pulmonary Rehabilitation
(CAG-00356N), CMS recognized the importance of physical therapy to
patients with pulmonary conditions and stated that these services
should be billed and paid under the physical therapy benefit. The
commenters argued that a plan of care developed by a physical therapist
to improve pulmonary function for a patient with chronic obstructive
pulmonary disease (COPD), which meets the medical necessity criteria
for physical therapy services, is covered and paid under the physical
therapy benefit. They explained that, although it is a covered PR
service, the therapy plan of care is separate from the PR benefit
authorized by section 144(a)(1) of Public Law 100-275, should continue
to be reported under the CPT codes for physical therapy services, and
should be paid under the physical therapy benefit. In addition, the
commenters requested that CMS confirm that skilled physical therapy
services that are rendered in the CR setting by a qualified physical
therapist should be conducted, reported, and paid as physical therapy
services, and that physician supervision is not necessary in the CR
setting when the physical therapist is delivering treatment that
clearly meets the criteria for a physical therapy service. The
commenters explained that CMS has recognized and codified that physical
therapy is a separate benefit and that physical therapists are
qualified to perform certain services independent of direct physician
supervision.
Response: We expect that most patients participating in PR, CR, or
ICR programs authorized by section 144(a)(1) of Public Law 100-275 and
covered by Medicare Part B will be debilitated based on their
underlying medical condition, age, or other factors. In order to
develop a PR, CR, or ICR
[[Page 60567]]
treatment plan, some debilitated patients may require evaluations by
therapists on the multidisciplinary team, in addition to assessments by
other team members. In order to participate successfully in the
prescribed exercise component of the PR, CR, or ICR program, we also
expect that these patients may receive individualized treatments by
therapists on the multidisciplinary team and others to promote the
increased functionality that is a principle goal of PR, CR, and ICR
programs. As we stated in the CY 2010 MPFS proposed rule, the items and
services furnished by a CR or PR program are individualized and set
forth in written treatment plans for each beneficiary (74 FR 33607 and
33611). We believe these evaluations and individualized treatments are
a part of the PR, CR, or ICR program. As such, we believe they should
be conducted by one or more members of the multidisciplinary team of
the PR, CR, or ICR program with the appropriate expertise.
While we have not defined PR, CR, or ICR services as always
including therapists' services as part of the comprehensive benefit (74
FR 33608 and 33614), we acknowledged that written treatment plans are
highly individualized and that there should be flexibility in the type,
amount, frequency, and duration of services provided in each session
(74 FR 33607). We expect that physical therapists could conduct
assessments and individualized treatments as part of the PR, CR, or ICR
program because physical therapists have the knowledge and skills to
assist in addressing common problems that lead to physicians ordering
PR, CR, or ICR services for their patients, including poor aerobic
capacity, poor endurance, and shortness of breath in the context of
chronic pulmonary or cardiovascular disease. In the context of PR,
while we also stated that individuals requiring PR services have a
chronic respiratory disease and are in need of supervised aerobic
exercise, we acknowledged that patients require assessments to address
individualized needs and the provision of a mix of services necessary
to address those needs (74 FR 33613).
Patients in PR, CR, or ICR programs must receive the full
complement of care as defined under these benefits, in accordance with
their individualized treatment plan, including assessments and
prescribed exercise. Additionally, the standard HCPCS coding guidance
instructs practitioners and providers to report the code for the
procedure or service that most accurately describes the service
performed. As stated in Section 20.12.1.b. of Chapter 5 of the Medicare
Contractor Beneficiary and Provider Communications Manual, in instances
where several component services, which have different CPT/HCPCS codes,
may be described in one more comprehensive code, only the single code
most accurately describing the procedure performed or service rendered
should be reported. Therefore, we would expect that when therapists
provide these evaluations and individualized treatment services under a
comprehensive PR, CR, or ICR treatment plan, these services would be
billed by the hospital as PR, CR, or ICR services under the
comprehensive PR, CR, or ICR CPT codes or Level II HCPCS G-codes that
apply, and not as physical therapy services. Furthermore, as discussed
in section XII.B.4. of this final rule with comment period, for
purposes of PR, CR, and ICR services, direct supervision must be
provided by a doctor of medicine or osteopathy as defined in section
1861(r)(1) of the Act. This direct supervision rule would also apply to
services furnished by therapists on the multidisciplinary team, and
these services would be paid to the hospital as PR, CR, or ICR
services.
We expect that most patients who meet the diagnosis requirements
for coverage of PR, CR, or ICR would receive component services covered
under the PR, CR, or ICR benefit as part of a comprehensive PR, CR, or
ICR program, subject to the coverage and payment policies that we are
finalizing in this CY 2010 OPPS/ASC final rule with comment period and
the CY 2010 MPFS final rule with comment period. We understand that
some component services of PR, CR, or ICR have previously been
furnished to beneficiaries and paid by Medicare under other benefits,
such as the outpatient physical therapy benefit. Because section
144(a)(1) of Public Law 100-275 authorized a new comprehensive PR
benefit and codified specific benefits for CR and ICR, we believe that
hospitals should furnish the full scope of the PR, CR, or ICR benefit,
where services will be paid as hospital outpatient services under the
OPPS, as comprehensive programs to those patients who qualify for
coverage. We would not expect the component services of PR, CR, and ICR
programs to be unbundled and billed separately by different providers
or practitioners under other benefit categories, such as the physical
therapy benefit where services would be paid under the MPFS. Therefore,
we expect that it would be uncommon for a patient receiving care under
a PR, CR, or ICR treatment plan to also be receiving physical therapy
services under a separate physical therapy plan of care. There may be
patients with therapy needs that are outside the treatment plan
appropriate for PR, CR, or ICR, and such patients should receive
medically necessary physical therapy services specific to those other
needs. However, we would not expect this to be the norm. Clearly, a
single period of care can only be billed as one type of treatment
service, so hospitals could never bill both physical therapy and PR,
CR, or ICR services for the same time period for the same patient (for
example, an hour session from 10 a.m. to 11 a.m. on a single date of
service).
We plan to monitor claims data for PR, CR, and ICR services, as
well as any additional claims for therapy services. If we detect
patterns of care that are inconsistent with our stated expectations for
PR, CR, or ICR services and therapy services, we may encourage Medicare
contractors to review cases in which a hospital reports both types of
services for the same patient during the same span of time (for
example, over a several month period) or we may propose changes to our
payment methodologies for these services.
After considering the public comments we received, we are
clarifying that we would expect component services that are furnished
under a PR, CR, or ICR treatment plan to beneficiaries who qualify for
PR, CR, or ICR services to be furnished as PR, CR, or ICR services,
regardless of whether they are furnished by a physical therapist or
other healthcare practitioner, and that all of the coverage and payment
requirements for hospital outpatient services, including, but not
limited to, the physician supervision requirements for hospital
outpatient therapeutic services, apply to those PR, CR, or ICR
services. We refer readers to section XII.D.3. of this final rule with
comment period for a discussion of the final CY 2010 policies for the
direct supervision of hospital outpatient therapeutic services. We
expect that hospitals will furnish the comprehensive set of services
that is contemplated in the criteria for PR, CR, or ICR programs to
beneficiaries who qualify for the benefit.
2. Payments for Services Furnished to Hospital Outpatients in a
Pulmonary Rehabilitation Program
In the CY 2010 OPPS/ASC proposed rule (74 FR 35360), we proposed to
create for CY 2010 one new Level II HCPCS code for hospitals to report
and bill for the services furnished under a PR program as specified in
section 1861(fff) of the Act. Specifically, we
[[Page 60568]]
proposed to use HCPCS code GXX30 (Pulmonary rehabilitation, including
aerobic exercise (includes monitoring), per session, per day). This
proposed new HCPCS G-code would be used by hospitals to report PR
services furnished to patients performing physician-prescribed
exercises that are targeted to improving the patient's physical
functioning and may also include the provision of other aspects of PR,
such as education and training. Consistent with our proposal in the CY
2010 MPFS proposed rule, we proposed that hospitals would use HCPCS
code GXX30 to report sessions lasting a minimum of 60 minutes each,
generally for two to three sessions of PR per week, under the OPPS. We
also proposed to allow no more than one session per day because
individuals who are furnished services in a PR program have significant
respiratory compromise and would not typically be capable of performing
more than one session of exercise per day.
We proposed that PR described by HCPCS code GXX30 would be a new
comprehensive service. We did not believe there was an existing
clinical APC to which this service could be appropriately assigned
under the OPPS based on the information currently available to us. We
did not believe that any services currently paid under the OPPS were
sufficiently similar to PR, based on both clinical and resource
characteristics, to justify the initial assignment of HCPCS code GXX30
to the same clinical APC as an existing service. Historically,
individual component services that comprise comprehensive PR have been
reported separately with existing HCPCS codes that are paid under the
OPPS through the individual APC that is most appropriate for each
service described by the specific HCPCS code reported.
For payment under the MPFS, we proposed relative value units for
new HCPCS code GXX30 for CY 2010 based on the estimated resources and
work intensity associated with existing CR and respiratory therapy
services. The nonfacility practice expense amount is the component of
the MPFS payment that is most comparable to what Medicare pays under
the OPPS. Both the MPFS nonfacility practice expense payment and the
OPPS payment include payment for the service costs other than the
physician professional services that are billed and paid under the MPFS
in all service settings. The CY 2010 proposed nonfacility practice
expense payment amount under the MPFS was between $10 and $20.
For the CY 2010 OPPS, we proposed to assign HCPCS code GXX30 to New
Technology APC 1492 (New Technology--Level IB ($10-$20)), the New
Technology APC that provides payment for new services with estimated
facility costs between $10 and $20, because we believed that we lacked
appropriate hospital cost data from claims to guide the initial
assignment of the new HCPCS code that would describe services furnished
under the new PR benefit. The New Technology APC payment of $15, at the
midpoint of the cost band, would be approximately the same as the
proposed CY 2010 MPFS nonfacility practice expense amount for PR
services described by HCPCS code GXX30. As discussed above, this is the
portion of the proposed MPFS payment that is most comparable to what
Medicare would pay under the OPPS. We believed that this proposed
temporary assignment to a New Technology APC would allow us to pay
appropriately for the service under the OPPS at a rate that is similar
to the corresponding physician's office payment amount, while we
gathered hospital claims data and experience with the new service on
which to base a clinically relevant APC assignment in the future.
Comment: Many commenters claimed that 90 percent of PR services are
furnished in HOPDs and that CMS is currently paying considerably more
for these services than the proposed payment. The commenters indicated
the PR services are commonly furnished in the group setting in the
HOPD, although they added that patients commonly require significant
one-on-one assistance from hospital staff to encourage and facilitate
their full participation in supervised exercise. The commenters
objected to the proposal to pay $15 per session under New Technology
APC 1492 because they believed that it would reduce payment for PR
services to such an extent that hospitals would no longer be able to
afford to furnish the services and that access to care would be
diminished, rather than expanded as the law intended. Specifically, the
commenters were concerned about the proposed payment rate because PR
services would be reported under a new HCPCS G-code that would include
all component services and assessments furnished in a single session
per day with a minimum session duration of 60 minutes and a maximum of
1 session per day. The commenters estimated that the proposed payment
for PR services would result in less than 25 percent of the current
payment to hospitals for the same component services that are reported
under existing HCPCS codes.
The commenters opposed the proposed payment of PR services under a
New Technology APC because they believe that CMS has considerable
experience with payment for these services under HCPCS codes G0237,
G0238, or G0239, which are currently assigned to APC 0077 (Level I
Pulmonary Treatment) under the OPPS. They argued that these three
existing HCPCS G-codes are now being reported for PR services in HOPDs
and that OPPS payment should be made for comprehensive PR services as
authorized by section 144(a)(1) of Public Law 100-275 based on the
historical payments made for services reported using these codes. They
stated that the OPPS currently pays approximately $27 per unit for
HCPCS codes G0237, G0238 and G0239 and that, therefore, the proposed
payment for PR services would be much less than hospitals are currently
being paid for the same services and would seriously erode the quality
and quantity of care currently being furnished. The commenters
indicated that PR services require considerable hospital staff and
overhead costs that include, but are not limited to, the costs of
respiratory therapists and the purchase and maintenance of a wide range
of expensive exercise equipment, such as oximeters with printers, one
channel ECG monitors, dedicated emergency cart/resuscitation equipment,
and portable oxygen equipment. They reasoned that payment at $15 per
session of one hour's duration would be insufficient to permit hospital
PR programs to continue to function because the current sessions are at
least 1 hour (and typically 2 hours) long and, therefore, OPPS payment
for 1 hour of service reported using HCPCS codes G0237 and G0238 is
currently about $100 per hour. Further, they noted that the OPPS pays
separately for all assessments and tests under the current policy. They
identified the assessment services that are currently paid separately
but for which payment would be included in the per session payment for
PR services according to the proposal as including, but not limited to,
CPT codes 94620 (Pulmonary stress testing; simple (e.g., 6-minute walk
test, prolonged exercise test for bronchospasm with pre- and post-
spirometry and oximetry)); 94664 (Demonstration and/or evaluation of
patient utilization of an aerosol generator, nebulizer, metered dose
inhaler or IPPB device); and 94667 (Manipulation chest wall, such as
cupping, percussion and vibration to facilitate lung function; initial
demonstration and/or evaluation). One
[[Page 60569]]
commenter requested that CMS create two new Level II HCPCS codes for PR
sessions, one including the assessment services and one excluding the
assessment services.
Some commenters claimed that it is not appropriate to compare the
costs of CR to PR services because the overhead costs for PR services
are higher than for CR services. They also indicated that it is
contradictory for CMS to require that lung volume reduction surgery
patients receive no less than 2 hours of PR services per day but to
limit coverage of PR for moderate to severe COPD patients to 1 session
per day.
The commenters suggested three alternatives to the proposed payment
for a single PR HCPCS code through a New Technology APC. One
alternative would be to continue to permit hospitals to bill HCPCS
codes G0237, G0238, and G0239 for PR services and also to bill
separately for the assessment services proposed to be included in the
single comprehensive PR HCPCS code (with a separate visit payment for
the initial physician or hospital staff assessment of the patient that
commenters claimed requires 60 to 90 minutes of professional time).
Payment for HCPCS codes G0237, G0238, and G0239 would continue to be
made through APC 0077 and the assessment services would be paid through
their existing clinical APCs as well. Some commenters suggested a
variation of this alternative that would establish an APC with a
payment rate of $50 to which HCPCS codes G0237, G0238, and G0239, as
currently defined, would be assigned. As a second alternative, the
commenters suggested that CMS assign the new comprehensive PR HCPCS
code to APC 0078 (Level II Pulmonary Treatment), which had a proposed
payment rate of approximately $96, and not allow separate reporting and
payment for CPT codes 94620, 94664, and 94667 and the 60 to 90 minute
intake visit. Finally, the commenters stated that CMS could establish a
payment rate for the new comprehensive PR HCPCS code by multiplying the
OPPS payment rate for APC 0077 by 4 because the cost of the new per
hour PR code would be at least 4 times the cost of HCPCS codes G0237
and G0238 that describe 15 minutes of care and are assigned to APC
0077. The commenters believed that any of these alternatives would
result in a PR payment to hospitals that is appropriate for the cost of
the services being furnished.
Response: We examined our hospital and physician claims data for
HCPCS codes G0237, G0238, and G0239, and we agree with the commenters
that most services for restoration of pulmonary function have
historically been furnished in hospitals and that there is considerable
evidence of hospital outpatient utilization and cost in our claims
data. We found that, in CY 2008, Medicare paid approximately $20
million in aggregate to about 900 hospitals for services reported under
HCPCS codes G0237, G0238, and G0239, which describe pulmonary therapy
services that commenters believe reflect the costs of the same types of
hospital staff, supplies, and overhead that would be used to furnish PR
services.
Therefore, for the CY 2010 OPPS, we will pay for PR services in
HOPDs under the OPPS through a new clinical APC with a median ``per
session'' cost simulated from historical hospital claims data for
similar pulmonary therapy services, rather than assigning the new PR
HCPCS G-code to a New Technology APC as we proposed. We have previously
used a simulation approach to develop a median cost estimate for a
single new CPT or Level II HCPCS code that would previously have been
reported under several existing HCPCS codes when furnished in the HOPD,
most recently for echocardiography services as discussed in detail in
section II.A.2.d.(4) of this final rule with comment period.
Specifically, we are assigning the comprehensive Level II HCPCS code
G0424 (Pulmonary rehabilitation, including exercise (includes
monitoring), per hour, per session) to new clinical APC 0102 (Level II
Pulmonary Treatment), with payment based on the aggregate per day
simulated ``per session'' hospital median cost of approximately $50 as
calculated from claims data for the existing pulmonary therapy HCPCS G-
codes and associated assessments and tests. No other HCPCS codes are
assigned to APC 0102 for CY 2010. (APC 0078 has been renamed Level III
Pulmonary Treatment without any change in its configuration for CY
2010.) Our claims data show that, in most cases patients furnished the
pulmonary therapy services reported by HCPCS codes G0237, G0238, and
G0239 in the HOPD on a single date of service received some individual
and some group services (approximately 2.4 units of service per day)
and, less often, associated assessments and tests. We found
approximately 19,000 days of care for patients who had diagnoses
consistent with moderate to very severe COPD, consistent with the
coverage requirements for PR in CY 2010, and that included both an
individual and group service on the same day. The claims for these days
of care, for which we calculated a ``per session'' median cost of
approximately $50, were similar to the time duration and services that
will be reported under new HCPCS code G0424 in CY 2010.
Specifically, to simulate the ``per session'' median cost of new
HCPCS code G0424 from claims data for existing services, we used only
claims that contained at least one unit of HCPCS code G0239, the group
code that is without limitation on time duration, and one unit of HCPCS
code G0237 or G0238, the individual, face-to-face codes that report 15
minutes of service, on the same date of service. We reasoned that
patients in a PR program would typically receive individual and group
services in each session of approximately 1 hour in duration. The
approach was consistent with the public comments that suggested that PR
is often provided in group sessions in the HOPD, although patients
commonly require additional one-on-one care in order to fully
participate in the program. We note that our use of ``per session''
claims reporting one unit of HCPCS code G0237 or G0238 and one unit of
HCPCS code G0239 in this simulation methodology was also consistent
with our overall finding of approximately 2.4 service units of the
HCPCS G-codes per day on a single date of service, usually consisting
of both individual and group services, for patients receiving pulmonary
therapy services in the HOPD based upon CY 2008 claims. We concluded
that the typical session of PR would be 1 hour based on public comments
that indicated that a session of PR is typically 1 hour and based on
our findings that the most commonly reported HCPCS code for pulmonary
treatment is HCPCS code G0239, which has no time definition for this
group service.
We included all costs of the related tests and assessment services
(CPT codes 94620, 94664, and 94667 and all CPT codes for established
patient clinic visits) on the same date of service as the HCPCS G-codes
in the claims we used to simulate the median cost for HCPCS code G0424.
After identifying these ``per session'' claims, which we believe to
represent 1 hour of care, we summed the costs on them and calculated
the median cost for the set of selected claims. In light of the cost
and clinical similarities of PR and the existing services described by
HCPCS codes G0237, G0238, and G0239 and the CPT codes for related
assessments and tests, and the significant number of ``per session''
hospital claims we found, we are confident that the simulated median
cost for HCPCS code G0424 is a valid
[[Page 60570]]
estimate of the expected hospital cost of a PR session. Since there is
no existing clinical APC to which HCPCS code G0424 could be
appropriately assigned based on considerations of the clinical and
resource characteristics of PR services, we are creating new APC 0102
(Level II Pulmonary Treatment) for CY 2010. Existing APC 0078 (Level II
Pulmonary Treatment) has been renamed ``Level III Pulmonary Treatment''
for CY 2010, with no change in its configuration.
We also are adding the phrase ``per hour'' to the new HCPCS code
G0424 descriptor to conform the descriptor of the code to the basis for
the payment being made for one unit of the code and to enable providers
to determine when one session of PR ends and the second session begins.
Because we are modifying our final policy to cover up to 2 sessions of
PR per day in response to public comments that we should permit more
than 1 session of PR on the same date, it became necessary to add a
time to the definition of HCPCS code G0424 so that providers could
determine when they could report a second session. Moreover, when we
based the payment for new APC 0102 on the per session costs derived
from the OPPS claims data for HCPCS codes G0237, G0238, and G0239, we
assumed that a session represented 1 hour of care; and therefore,
adding ``per hour'' to the descriptor for the new HCPCS G-code for PR
conforms the HCPCS G-code to the payment we are establishing.
We do not agree with the commenters' suggestion that we permit
hospitals to report and be paid for PR services under the existing
HCPCS codes G0237, G0238, and G0239 and the CPT codes for assessments
and tests because PR is a comprehensive program that consists of
multiple component items and services as specified in the statute and
discussed in the CY 2010 MPFS final rule with comment period. These
three HCPCS G-codes were developed principally to describe services
furnished by respiratory therapists in CORFs, and the services consist
of therapeutic procedures to increase the strength and endurance of
respiratory muscles or to improve respiratory function. When the HCPCS
G-codes were established, we indicated that these were developed to
provide more specific information about the services being delivered
since those services were not previously clearly described by existing
CPT codes (66 FR 55311). We also noted that there was no respiratory or
pulmonary rehabilitation benefit (67 FR 79999).
The existing HCPCS G-codes do not represent the full scope of
services in a comprehensive PR program as now authorized by section
144(a)(1) of Public Law 100-275. We want to ensure that when hospitals
bill and are paid for PR services, they attest to meeting all
requirements of the comprehensive PR program by the reporting of a
HCPCS G-code specific to a PR session. As discussed above in the
context of therapy services, patients in PR, CR, or ICR programs must
receive the full complement of care defined under the benefit,
including assessments and individualized treatments in accordance with
their PR treatment plan. When hospitals furnish these evaluations and
individualized treatment services under a PR treatment plan, we would
not expect the component services of PR, CR, and ICR programs to be
unbundled and billed separately. Instead, the services must be billed
by the hospital as PR services under the new Level II HCPCS G-code for
PR services, not the existing HCPCS codes G0237, G0238, and G0239 for
respiratory treatment services, the CPT codes for the individual
assessment services discussed above, or HCPCS codes for physical
therapy or other services. Furthermore, we also expect that it would be
uncommon for a patient receiving care under a PR treatment plan to also
be receiving services under a separate plan of care to improve their
respiratory strength and function, such as physical therapy or
respiratory treatment. Only those patients whose medical needs for
treatment to improve their respiratory strength and function are
outside the treatment plan appropriate for PR should receive medically
necessary services specific to those other needs. However, we would not
expect this to be the norm.
As discussed above, a single period of care can only be billed as
one type of treatment service, so hospitals could never bill services
reported by HCPCS codes G0237, G0238, or G0239 and PR services for the
same time period for the same patient (for example, an hour session
from 10:00 a.m. to 11:00 a.m. on a single date of service). We plan to
monitor claims data for PR services, as well as any additional claims
for these other services. If we detect patterns of care that are
inconsistent with our stated expectations for PR services, we may
encourage Medicare contractors to review cases in which a hospital
reports both types of services for the same patient during the same
span of time (for example, over a period of several months) or we may
propose changes to our payment methodologies for these services.
In addition, we note that a specific code for PR services allows us
to administratively account for the limit on the number of covered
sessions. Furthermore, we are not creating different HCPCS codes for PR
sessions provided with and without assessments because we continue to
believe PR is a comprehensive program and all sessions should be
reported and paid through a single HCPCS G-code. We believe that it is
most appropriate to pay for all of the assessments and tests that may
be furnished in the program as required for coverage through our single
per-session PR payment, and we took the hospital costs of these related
services into consideration in establishing the CY 2010 OPPS payment
rate for HCPCS code G0424. We also do not agree with the commenters'
recommendation to assign the new PR per session HCPCS code to APC 0078
because the median cost of APC 0078 is almost twice the simulated ``per
session'' median cost of HCPCS code G0424 that we calculated based on
historical hospital claims data for existing, similar HCPCS codes
through our ``per session'' methodology as described above. Finally, we
do not agree with the commenters' suggestion to establish a payment
rate for PR HCPCS code G0424 at the rate of 4 times the payment for APC
0077 because that also would pay for PR services at more than twice the
simulated median cost for a typical session of PR as reported in our
claims data.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, with modification, for OPPS payment
for PR services furnished as a part of the comprehensive PR program
benefit for CY 2010. We are adopting new HCPCS code G0424 (Pulmonary
rehabilitation, including exercise (includes monitoring), per hour, per
session) and are assigning the G-code to new APC 0102 (Level II
Pulmonary Treatment), with a simulated ``per-session'' median cost of
approximately $50. As discussed in the CY 2010 MPFS final rule with
comment period, PR is covered for up to 36 one-hour sessions, with a
maximum of 2 sessions per day, and with contractor discretion to
approve up to 72 sessions.
3. Payment for Services Furnished to Hospital Outpatients Under a
Cardiac Rehabilitation or an Intensive Cardiac Rehabilitation Program
Currently, CR services furnished by hospitals are reported using
CPT codes 93797 and 93798. In the CY 2010 MPFS proposed rule (74 FR
33607), we proposed that each day CR items and services are furnished
to a patient, aerobic exercises along with other exercises must be
included (that is, a
[[Page 60571]]
patient must exercise aerobically every day he or she attends a CR
session). In addition, we proposed that each session must be a minimum
of 60 minutes and patients must participate in a minimum of two CR
sessions a week, with a maximum of two CR sessions a day.
With respect to ICR services, section 1861(eee)(4)(C) of the Act,
states that ``an intensive cardiac rehabilitation program may be
provided in a series of 72 one-hour sessions (as defined in section
1848(b)(5)), up to 6 sessions per day, over a period of up to 18
weeks.'' In the CY 2010 OPPS/ASC proposed rule (74 FR 35361), for the
CY 2010 OPPS, we proposed to create two new Level II HCPCS codes to
report the services of an ICR program that are furnished to hospital
outpatients, consistent with the provisions of section 1861(eee)(4)(C)
of the Act: HCPCS code GXX28 (Intensive cardiac rehabilitation; with or
without continuous ECG monitoring with exercise, per session) and HCPCS
code GXX29 (Intensive cardiac rehabilitation; with or without
continuous ECG monitoring; without exercise, per session). These
proposed new HCPCS G-codes would be used to report ICR services
furnished by hospitals that have an ICR program that has received a
designation as a qualified ICR program. Consistent with the proposal in
the CY 2010 MPFS proposed rule, we proposed that each session of ICR
must be a minimum of 60 minutes and that each day ICR items and
services are provided to a patient, aerobic exercises along with other
exercises must be included (that is, a patient must exercise
aerobically every day he or she attends a ICR session).
For the CY 2010 OPPS, we proposed to assign HCPCS codes GXX28 and
GXX29 to APC 0095 (Cardiac Rehabilitation) with a status indicator of
``S.'' The proposed median cost of APC 0095 for CY 2010 was
approximately $39. This proposed median cost reflected historical
hospital cost data for one session of general CR services reported with
CPT code 93797 or 93798. Both CR and ICR programs consist of exercise,
cardiac risk factor modification, psychosocial assessment, outcomes
assessment, and other services, as described in the CY 2010 MPFS
proposed rule (74 CR 33607). Although more sessions per day for a
beneficiary may be provided in an ICR program than a CR program, in the
CY 2010 OPPS/ASC proposed rule (74 FR 35361) we noted our belief the
hospital costs for a single session would be similar, and OPPS payment
for CR and ICR services would be provided on a per session basis.
Therefore, because CR and ICR services are similar from both clinical
and resource perspectives, we believed that it would be appropriate to
assign the two proposed new Level II HCPCS codes for ICR services to
APC 0095 while we collect cost information from hospitals specific to
ICR. We proposed to make a single payment through APC 0095 for each
session of ICR reported on hospital outpatient claims.
Comment: Some commenters supported the proposal to create two new
HCPCS G-codes for ICR services and to pay them at the same rate as CR
services through APC 0095. Other commenters objected to setting the
payment for ICR services at the same level as CR services on the basis
that ICR services should be more costly than CR services because of
their intensive nature. Some commenters were concerned about basing
payment for CR on historical hospital costs because these costs do not
include the new level of physician and clinical staff work required for
coverage of CR and ICR, in particular, the psychosocial and outcome
assessments that are required by section 144(a)(1) of Public Law 100-
275. Under CMS' proposal, these assessments would not be paid
separately but, instead, would be paid through payment for the per
session CR CPT codes or ICR HCPCS codes.
Some commenters believed the proposed median cost for APC 0095 was
too low on the basis that the July 2008 RTI final report for CMS
entitled ``Refining Cost to Charge Ratios for Calculating APC and DRG
Relative Payment Weights'' indicated that the current payment
calculations for CR are significantly flawed because hospitals
misclassify CR costs and that, therefore, the resulting APC 0095 median
cost understates the cost of CR. The commenters indicated that the
study showed that the cost of CR is approximately $100 per session when
an appropriate CCR, based on the costs and charges for CR and not on
the application of a hospital-specific overall ancillary CCR, is
applied to the charges for CR services. The commenters were concerned
about CMS' stated delay in implementing a specific nonstandard cost
center for CR until 2011 because the true cost of CR would not be
captured by the OPPS for ratesetting until CY 2013 or later. The
commenters encouraged CMS to correct the underpayment of CR services
for CY 2010 in order to ensure the availability of CR programs for
Medicare beneficiaries.
Response: We have no reason to believe that ICR services as defined
in the coverage criteria are more costly to furnish per session than CR
services. We note that one of the major differences between CR and ICR
services is that ICR may be furnished in up to six sessions per day, in
comparison with the two sessions per day that are covered for CR. In
the case of a Medicare beneficiary who receives six ICR sessions in one
day, payment also would be six times the payment for one session and,
therefore, the total hospital payment would appropriately pay for the
additional costs of more services in a day.
With regard to the comment that our claims data do not reflect the
costs of the additional assessments that are now required for CR and
ICR coverage, we analyzed the per session cost of CR in our historical
hospital claims data and incorporated the costs of hospital outpatient
visits that we believe would have been previously reported for
assessments furnished on the same day to CR patients into our estimate
of the median cost for APC 0095. We found that the APC median cost was
essentially unchanged. We believe that psychosocial and outcomes
assessments are already a part of high quality CR/ICR programs and that
our per session payment for CR and ICR services through APC 0095 will
appropriately provide payment for all required components of CR and
ICR, including the necessary assessments.
The median cost on which the CY 2010 payment for APC 0095 is based
is approximately $38, which is an increase over the median cost of
approximately $36 on which the CY 2009 payment is based. As we
explained in the CY 2009 OPPS/ASC final rule with comment period (74 FR
68525), we recognize that there are areas of concern with the cost
report that are integral to our estimation of hospital costs for OPPS
ratesetting and we are taking steps to address some of them, including
adopting a nonstandard cost center for CR. This cost center will be
available for use in cost reporting periods beginning on or after
February 2010. We refer readers to section II.A.1.c.(2) of this final
rule with comment for further discussion of the creation of this new
cost center. However, as we have previously explained (74 FR 68522),
modifying the cost report data from its submitted form for use in OPPS
ratesetting based upon assumptions about the data typically would be
contrary to our principle of using the data as submitted by hospitals.
Therefore, we are not making changes or adjustments to our OPPS cost
estimation for CR services for CY 2010 but, instead, will await more
accurate information for future ratesetting that may be submitted to us
by hospitals when the nonstandard cost center for CR services is
available.
[[Page 60572]]
We currently have no reason to believe that Medicare beneficiaries have
limited access to CR services or that our payment is inappropriate. We
have over 2.5 million claims for CR sessions from CY 2008 claims data,
and further note that the overall number of services and the number of
providers furnishing CR have been stable over the past several years.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to continue to
assign the CPT codes for CR, specifically CPT codes 93797 and 93798, to
APC 0095. We also are finalizing our CY 2010 proposal to assign the new
HCPCS G-codes for ICR, specifically G0422 (Intensive cardiac
rehabilitation; with or without continuous ECG monitoring, with
exercise, per hour, per session) and G0423 (Intensive cardiac
rehabilitation; with or without continuous ECG monitoring, without
exercise, per hour, per session) to APC 0095. We have added the phrase
``per hour'' to the descriptors of these codes because we expect that
the OPPS cost data for CR services from the claims submitted for CPT
codes 93978 and 93979 generally reflect 1 hour of CR services, in
accordance with our reporting instructions for more than one session
per day of CR services in Section 200.1 of Chapter 4 of the Medicare
Claims Processing Manual. We believe that 1 hour of service is the
standard for a session of CR. Section 1861(eee)(4)(C) of the Act
provides for up to 72 one-hour sessions of ICR and hence, adding ``per
hour'' to the two new HCPCS code descriptors for ICR services
implements the statutory definition of an ICR session as being one hour
of service. Moreover, we have established the payment for ICR services
on the presumption that one session represents one hour of care.
Therefore, we believe that it is appropriate to specify in the
descriptors of the HCPCS codes for ICR services that one unit of the
code represents one hour of care. The final APC median cost of APC 0095
is approximately $38. As discussed in the CY 2010 MPFS final rule with
comment period, CR is covered for up to 36 one-hour sessions, with a
minimum of 1 session per week and a maximum of 2 sessions per day, and
Medicare contractors have the authority to approve additional sessions,
up to 72 sessions, over an additional period of time. With respect to
ICR, section 144(a)(1) of Public Law 100-275 authorizes coverage of ICR
programs in a series of 72 one-hour sessions, up to 6 sessions per day,
over a period of 18 weeks.
We also note that as discussed in section II.G.9. of the CY 2010
MPFS final rule with comment period, we are requiring that all ICR
programs be approved through the NCD process. Once we have approved an
ICR program or programs through the NCD process, individual sites
wishing to furnish ICR items and services via an approved ICR program
may enroll with their local Medicare contractor to become an ICR
program supplier as outlined in Sec. 424.510. This enrollment is
designed to ensure that the specific sites meet the specific statutory
and regulatory requirements to furnish these services and will provide
a mechanism to appeal a disapproval of a prospective ICR program site.
With regards to billing and payment for CR and ICR services, hospital
providers will continue to use their CMS Certification Number (CCN or
provider number) and appeals related to the payment of claims will
follow those established processes. CMS will provide further
instructions for the NCD and individual site enrollment processes.
4. Physician Supervision for Pulmonary Rehabilitation, Cardiac
Rehabilitation, and Intensive Cardiac Rehabilitation Services
Section 144 of Public Law 110-275 includes requirements for
immediate and ongoing physician availability and accessibility for both
medical consultations and medical emergencies at all times items and
services are being furnished under CR, ICR, and PR programs. In section
II.G.8. of the CY 2010 MPFS proposed rule (74 FR 33606), we proposed
that these requirements would be met through existing definitions for
direct physician supervision in physicians' offices and hospital
outpatient departments at Sec. 410.26(a)(2) (defined through cross
reference to Sec. 410.32(b)(3)(ii)) and Sec. 410.27, respectively).
We noted that direct supervision, as defined in the regulations, is
consistent with the requirements of Public Law 110-275 because the
physician must be present and immediately available where the services
are being furnished. The physician must also be able to furnish
assistance and direction throughout the performance of the services,
which would include medical consultations and medical emergencies.
For CR, ICR, and PR services provided to hospital outpatients,
direct physician supervision is the standard set forth in the April 7,
2000 OPPS final rule with comment period (68 FR 18524 through 18526)
for supervision of hospital outpatient therapeutic services covered and
paid by Medicare in hospitals and provider-based departments of
hospitals. We noted in the discussions of CR and PR in the CY 2010 MPFS
proposed rule (74 FR 33609 and 33614) that if we were to propose future
changes to the physician office or hospital outpatient policies for
direct physician supervision, we would provide our assessment of the
implications of those proposals for the supervision of CR and PR
services at that time.
As discussed in more detail in the CY 2010 OPPS/ASC proposed rule
(74 FR 35362), we proposed to refine the definition of the direct
supervision of hospital outpatient therapeutic services for those
services provided in the hospital and in an on-campus PBD of the
hospital. For services, including CR, ICR, and PR services, provided in
the hospital and in an on-campus PBD of the hospital, direct
supervision would mean that the physician must be present on the same
campus, in the hospital or the on-campus PBD of the hospital, as
defined in Sec. 413.65, and immediately available to furnish
assistance and direction throughout the performance of the procedure.
We also proposed to define ``in the hospital'' in proposed new
paragraph Sec. 410.27(g) to mean areas in the main building(s) of the
hospital that are under the ownership, financial, and administrative
control of the hospital; are operated as part of the hospital; and for
which the hospital bills the services furnished under the hospital's
CCN. We did not propose significant change to the definition or
requirements for direct supervision of hospital outpatient therapeutic
services provided in off-campus PBDs of a hospital. Thus, with respect
to CR, ICR, and PR services furnished in off-campus PBDs of the
hospital, direct supervision would continue to mean that the physician
must be in the off-campus PBD and immediately available to furnish
assistance and direction throughout the performance of the procedure.
We believe that direct supervision, as defined in the proposed
regulations for hospital outpatient therapeutic services, continues to
be consistent with the requirements of Pub. L. 110-275 for CR, ICR, and
PR services because the physician must be present and immediately
available where the services are being furnished. The physician must
also be able to furnish assistance and direction throughout the
performance of the services, which would include medical consultations
and medical emergencies. For a complete discussion of the current and
proposed requirements for the direct
[[Page 60573]]
supervision of hospital outpatient therapeutic services, we refer
readers to section XII.D. of the CY 2010 OPPS/ASC proposed rule (74 FR
35362 through 35368).
Section 144 of Public Law 110-275 also states that in the case of
items and services furnished under such a CR, ICR, or PR program in a
hospital, physician availability shall be presumed. As we have stated
in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68702
through 68704), the longstanding presumption of direct physician
supervision for hospital outpatient services means that direct
physician supervision is the standard for supervision of hospital
outpatient therapeutic services covered and paid by Medicare in
hospitals and PBDs of hospitals, and we expect that hospitals are
providing services in accordance with this standard.
We note that in the CY 2010 OPPS/ASC proposed rule (74 FR 35362),
we also proposed that nonphysician practitioners, defined for the
purpose of proposed revised Sec. 410.27 of the regulations as clinical
psychologists, physician assistants, nurse practitioners, clinical
nurse specialists, and certified nurse-midwives, may directly supervise
all hospital outpatient therapeutic services that they may perform
themselves within their State scope of practice and hospital-granted
privileges, provided that they meet all additional requirements,
including any collaboration or supervision requirements as specified in
Sec. Sec. 410.71, 410.74, 410.75, 410.76, and 410.77. However, in the
CY 2010 MPFS proposed rule and in the corresponding proposed regulation
text (74 FR 33674 and 33675, respectively), we proposed a different
requirement for the direct supervision of CR, ICR, and PR services. We
proposed that services provided in CR, ICR, and PR programs must be
supervised by a doctor of medicine or osteopathy, as defined in section
1861(r)(1) of the Act. In addition, we proposed specific requirements
for the expertise and licensure of physicians supervising CR and ICR
services. It would not be in accordance with the proposed regulations
for a nonphysician practitioner to supervise services furnished in a
CR, ICR, or PR program. The physician supervision and expertise
requirements proposed in the coverage policy and regulations for CR,
ICR, and PR services must be met for those services to be covered and,
therefore, paid by Medicare in hospital outpatient settings.
Comment: One commenter supported the proposed requirements for
physician supervision of CR programs and requested that CMS confirm
that the proposed definition of ``direct supervision'' that would apply
to therapeutic services in the HOPD would also apply to CR services.
Many commenters objected to the requirement that a physician must be
present when PR or CR/ICR services are furnished. They indicated that
the law presumes that physician supervision exists in hospitals and
that, therefore, the same rules that apply to other hospital outpatient
therapeutic services provided in hospitals should apply to PR, CR, and
ICR services. The commenters also asked that CMS permit physician
assistants, nurse practitioners, clinical nurse specialists, and
certified nurse midwives who are functioning within their State
licensure and scope of practice and who are permitted to supervise the
services under the hospital bylaws to supervise PR, CR, and ICR
services. The commenters expressed concern that the CY 2010 proposals
in the MPFS proposed rule did not include a justification for why it
would be necessary to impose physician-only direct supervision for PR,
CR, and ICR services in HOPDs than for other outpatient services. Some
commenters explained that rural providers have great difficulty
securing physician services and rely heavily on nonphysician
practitioners to furnish care in hospitals. They argued that to require
physician-only supervision would mean that some PR, CR, and ICR
programs in rural areas would have to close for lack of physician
supervision and that there would be no access to the PR, CR, and ICR
services for beneficiaries in those communities.
Response: We understand the reasoning of the commenters that PR,
CR, and ICR services should require direct supervision by physicians
and certain nonphysician practitioners, as we proposed for other
hospital outpatient therapeutic services, given that PR, CR and ICR
services are similar to other hospital outpatient therapeutic services.
However, we are unable to revise the regulations to permit nonphysician
practitioners to supervise PR, CR, and ICR services. We do not believe
that the law provides the flexibility for us to permit anyone other
than a physician to supervise hospital outpatient PR, CR, and ICR
services because nonphysician practitioners are not physicians as
defined in section 1861(r)(1) of the Act. The statutory language of
section 144(a)(1) of Public Law 100-275 defines PR, CR and ICR programs
as ``physician-supervised.'' More specifically, it establishes in
section 1861(eee)(2)(B) of the Act that for PR, CR and ICR programs,
``a physician is immediately available and accessible for medical
consultation and medical emergencies at all times items and services
are being furnished under the program, except that, in the case of
items and service furnished under such a program in a hospital, such
availability shall be presumed * * *.'' The text of the statute uses
the word ``physician'' and does not include nonphysician practitioners.
Also, as we explained in the CY 2009 OPPS/ASC proposed rule and final
rule with comment period (73 FR 41518 through 41519 and 73 FR 68702
through 68704, referencing the April 7, 2000 OPPS final rule (65 FR
18525)), the ``presumption'' or ``assumption'' of direct supervision
means that direct physician supervision is the standard for all
hospital outpatient therapeutic services. We have assumed this
requirement is met on hospital premises (meaning we have expected that
hospitals are meeting this requirement) because staff physicians would
always be nearby in the hospital. In other words, the requirement is
not negated by a presumption that the requirement is being met. Hence,
unlike the standards for the direct supervision of other hospital
outpatient therapeutic services, which we have established through
regulation based on section 1861(s) of the Act, in the case of PR, CR,
and ICR services, the authorizing provision of the Act at section
1861(eee)(2)(B) explicitly requires direct physician supervision of
these services. While we have some flexibility to determine the type of
practitioner who may supervise other hospital outpatient therapeutic
services, as discussed in XII.D.3. of this final rule with comment
period, in the case of PR, CR, and ICR services specifically, the
statutory language of section 144(a)(1) of Public Law 100-275 does not
provide such flexibility. Instead, the statute imposes strict
requirements, describing the direct physician supervision standard for
PR, CR, and ICR services, and gives us no flexibility to modify the
requirement to allow for other supervisory practitioners.
After consideration of the public comments we received, and in
accordance with the final policies set forth in sections II.G.8. and
II.G.9. of the CY 2010 MPFS final rule with comment period, we are
finalizing our CY 2010 proposal, without modification, to require the
direct physician supervision (by a doctor of medicine or doctor of
osteopathy) of PR, CR, and ICR services that are furnished to hospital
outpatients. We note that we define ``direct supervision'' with regard
to
[[Page 60574]]
what it means to be immediately available and accessible for medical
consultation and medical emergencies in the same manner for PR, CR, and
ICR programs as we do for other therapeutic services furnished in
HOPDs. The final CY 2010 definitions of direct supervision for hospital
outpatient therapeutic services provided on the campus and in off-
campus provider-based departments also apply. These definitions are
discussed in detail in section XII.D.3. of this final rule with comment
period, including the new and revised regulations.
C. Stem Cell Transplant
Stem cell transplantation is a treatment in which stem cells that
are harvested from either a patient's or a donor's bone marrow or
peripheral blood are later infused into that patient to treat an
illness. Autologous stem cell transplantation is a technique for
providing additional stem cells using the patient's own previously
harvested stem cells. Allogeneic stem cell transplantation is a
procedure in which stem cells from a healthy donor are acquired and
prepared to provide a patient with new stem cells.
We recently revised section 90.3.3 of Chapter 3 of the Medicare
Claims Processing Manual (Pub. 100-04) and created new section 231.10
of Chapter 4 of the Medicare Claims Processing Manual in order to
clarify billing under Medicare for autologous and allogeneic stem cell
transplant services. As stated in the cited new and revised manual
sections, autologous stem cell transplants performed on Medicare
beneficiaries may be provided on an inpatient or an outpatient basis.
Hospitals are instructed to bill and show all charges for autologous
stem cell harvesting, processing, and transplant procedures based on
the status of the patient (that is, inpatient or outpatient) when the
individual services are furnished. The CPT codes describing these
services may be billed and are separately payable under the OPPS when
the services are provided in the hospital outpatient setting.
In contrast, we stated in the CY 2010 OPPS/ASC proposed rule (74 FR
35362) that we believe allogeneic stem cell transplants performed on
Medicare beneficiaries are provided on an inpatient basis only, and all
services related to acquiring the stem cells from a donor (whether
performed on an inpatient or outpatient basis) are billed and are
payable under Medicare Part A through the IPPS MS-DRG payment for the
stem cell transplant. In addition to payment for the stem cell
transplant procedure itself, the MS-DRG payment for the stem cell
transplant includes payment for stem cell acquisition services, which
include, but are not limited to, National Marrow Donor Program fees for
stem cells from an unrelated donor (if applicable); tissue typing of a
donor and a recipient; donor evaluation; physician pre-admission/pre-
procedure donor evaluation services; costs associated with the
harvesting procedure; post-operative/post-procedure evaluation of a
donor; and preparation and processing of stem cells. While certain
acquisition services, such as donor harvesting procedures, may be
performed in the hospital outpatient setting, hospitals are instructed
to include the charges for these services in the recipient's inpatient
transplant bill as acquisition services and not to bill them under the
OPPS.
In order to be consistent with the revised Section 90.3.3 and the
new Section 231.10 of the Medicare Claims Processing Manual cited
earlier, which reflect what we believed at the time to be the current
clinical practice of performing allogeneic stem cell transplants on
Medicare beneficiaries on an inpatient basis only, in the CY 2010 OPPS/
ASC proposed rule (74 FR 35362), we proposed to revise the status
indicator assignments of certain stem cell transplant-related CPT codes
under the OPPS. Specifically, we proposed to change the status
indicator for CPT code 38205 (Blood-derived hematopoietic progenitor
cell harvesting for transplantation, per collection; allogenic) from
``S'' to ``E'' for the CY 2010 OPPS to reflect that, while an
allogeneic stem cell harvesting procedure performed on the donor may
take place in the HOPD, payment for the service is made through the
IPPS MS-DRG payment for the associated transplant procedure performed
on the recipient. We also proposed to change the status indicators for
CPT code 38240 (Bone marrow or blood-derived peripheral stem cell
transplantation; allogenic) and CPT code 38242 (Bone marrow or blood-
derived peripheral stem cell transplantation; allogeneic donor
lymphocyte infusions) from ``S'' to ``C'' for the CY 2010 OPPS to
reflect that these allogeneic stem cell transplant procedures are
payable by Medicare as inpatient procedures only.
At its August 2009 meeting, the APC Panel heard from presenters who
stated that reduced intensity conditioning (RIC) regimens have made
outpatient allogeneic stem cell transplants feasible for some Medicare
beneficiaries. The presenters stated that revising the status
indicators for CPT codes 38205, 38240, and 38242 to make them
nonpayable on outpatient claims would impede the current clinical
practice of providing allogeneic stem cell transplant and harvesting
procedures on an outpatient basis, which, according to public
commenters on the proposed rule, would lower costs, provide greater
patient comfort, optimize hospital resources, and decrease the risk of
nosocomial infections. The APC Panel agreed with the presenters and
recommended that CMS maintain the CY 2009 APC assignments and status
indicators for CPT codes 38205 and 38242, which are both currently
assigned to APC 0111 (Blood Product Exchange), and for CPT code 38240,
which is currently assigned to APC 0112 (Apheresis and Stem Cell
Procedures) for CY 2009.
Comment: Several commenters on the CY 2010 proposed rule disagreed
with CMS' assertion that allogeneic stem cell transplants performed on
Medicare beneficiaries are provided on an inpatient basis only.
According to the commenters, allogeneic stem cell transplants are
currently performed in both the inpatient and outpatient settings and
are considered safe and clinically appropriate for many Medicare
patients. The commenters argued that CMS' proposal would create strong
financial incentives for hospitals to unnecessarily admit patients who
could have otherwise been treated in the outpatient setting and
requested that CMS maintain the current CY 2009 status indicators and
APC assignments of CPT codes 38205, 38240, and 38242 for CY 2010. The
commenters urged CMS to continue to pay for CPT code 38205 separately
under the OPPS, regardless of where the transplant ultimately occurs,
because CMS' policy of bundling payment for stem cell harvesting
procedures into the payment for the transplant procedure is overly
complicated and burdensome, particularly when the harvesting procedure
is performed in a different hospital from the hospital where the
transplant is performed. The commenters also requested that CMS revise
its manual guidance to reflect that hospitals should report all
allogeneic stem cell harvesting, processing, and transplant services
and their associated charges based on the status of the patient (that
is, inpatient or outpatient) when the individual services are
furnished.
Some commenters summarized other billing and payment issues related
to allogeneic stem cell transplants for which they are seeking further
direction and policy development from CMS, such as how hospitals could
be paid for search and procurement costs related to
[[Page 60575]]
allogeneic stem cell transplants that do not occur due to a change in
the patient's health status and the potential creation of separate MS-
DRGs for allogeneic and autologous stem cell transplant services. The
commenters recognized that greater analysis of these complex and unique
issues would be required before CMS could address them fully.
Response: We appreciate the information on current clinical
practice for allogeneic stem cell transplants provided by commenters.
Upon further review, we agree with the commenters and the APC Panel
that the allogeneic stem cell transplant procedures described by CPT
codes 38240 and 38242 can be safely and appropriately performed on some
Medicare beneficiaries on an outpatient basis. Therefore, we are not
adopting our CY 2010 proposal to change the status indicators for CPT
codes 38240 and 38242 from ``S'' to ``C'' in order to indicate that
Medicare would only pay for these procedures when furnished in the
hospital inpatient setting. Rather, we are continuing to assign CPT
code 38240 to APC 0112 and CPT code 38242 to APC 0111 for CY 2010 for
purposes of hospital outpatient payment, and are maintaining the
assignment of status indicator ``S'' to both CPT codes that describe
these procedures. CPT codes 38240 and 38242 are assigned to these same
APCs for CY 2009, and we believe the allogeneic stem cell transplant-
related procedures they describe share the clinical and resource
characteristics of other procedures assigned to those APCs for CY 2010.
We do not agree with the public commenters and the APC Panel that
the allogeneic stem cell harvesting procedure described by CPT code
38205 should be separately payable with status indicator ``S'' under
the OPPS for CY 2010 because hospitals may bill and receive payment
only for services provided to the Medicare beneficiary who is the
recipient of the stem cell transplant and whose illness is being
treated with the stem cell transplant. We do not agree with the
commenters that we should pay for allogeneic stem cell harvesting
services separately because these services are not directly furnished
to beneficiaries. Instead, we believe that it continues to be
appropriate to pay for these services through payment for the
associated stem cell transplant procedure. The hospital should report
all allogeneic stem cell acquisition charges, including costs
associated with the harvesting procedure, on the recipient's inpatient
or outpatient transplant bill under revenue code 0819. Payment for the
allogeneic stem cell harvesting procedure performed on the donor and
reported under revenue code 0819 is packaged into the IPPS MS-DRG
payment or the OPPS APC payment for the associated transplant procedure
performed on the recipient, depending on whether the transplant
procedure is performed in the inpatient setting or the outpatient
setting. Therefore, we are modifying our CY 2010 proposal to change the
status indicator for CPT code 38205 from ``S'' to ``E'' for the CY 2010
OPPS. Instead, we are assigning status indicator ``B'' to CPT code
38205 for CY 2010 to reflect that the code is not recognized by OPPS
when submitted on an outpatient hospital Part B bill type. We will
update section 90.3.3 of Chapter 3 and section 231.10 of Chapter 4 of
the Medicare Claims Processing Manual to comport with these billing and
payment changes for allogeneic stem cell transplants and related
services as described in this section.
We appreciate the commenters' summaries of other billing and
payment issues related to allogeneic stem cell transplants for which
they sought further direction and policy development from CMS. While we
consider these issues to be outside of the scope of the proposed rule,
we will consider the commenters' suggestions as we explore this policy
area more broadly in the future. We note that current guidance in
Section 90.3.3 of Chapter 3 of the Medicare Claims Processing Manual
instructs providers to include on the Medicare cost report any costs
associated with acquisition services for allogeneic stem cell
acquisition services in cases that do not result in transplant due to
death of the intended recipient or other causes.
After consideration of the public comments we received, we are
modifying our CY 2010 proposal for allogeneic stem cell transplant
procedures. Specifically, for CY 2010, we are accepting the APC Panel's
recommendation and continuing to assign CPT code 38240 to APC 0112 and
CPT code 38242 to APC 0111, which is consistent with their CY 2009
assignments. The final APC median costs of APC 0112 and APC 0111 are
approximately $2,225 and $798, respectively, for CY 2010. We are
maintaining status indicator ``S'' for the procedures described by both
of these CPT codes. In addition, we are not adopting the APC Panel's
recommendation or the public commenters' suggestion to maintain the CY
2009 status indicator and APC assignment for CPT code 38205. Instead,
we are assigning status indicator ``B'' to CPT code 38205 for CY 2010
to reflect that the code is not recognized by OPPS when submitted on an
outpatient hospital Part B bill type because payment is made for
allogeneic stem cell harvesting through payment for the recipient's
transplant procedure, whether the transplant is provided in the
hospital inpatient setting or the outpatient setting.
D. Physician Supervision
1. Background
In the CY 2009 OPPS/ASC proposed rule and final rule with comment
period (73 FR 41518 through 41519 and 73 FR 68702 through 68704,
respectively), we provided a restatement and clarification of the
requirements for physician supervision of hospital outpatient
diagnostic and therapeutic services that were set forth in the April
2000 OPPS final rule with comment period (65 FR 18524 through 18526).
As we stated in those rules, section 1861(s)(2)(C) of the Act
authorizes payment for diagnostic services that are furnished to a
hospital outpatient for the purpose of diagnostic study. We have
further defined the requirements for diagnostic services furnished to
hospital outpatients, including requirements for physician supervision
of diagnostic services, in Sec. Sec. 410.28 and 410.32 of our
regulations. Section 410.28(e) states that Medicare Part B makes
payment for diagnostic services furnished at provider-based departments
(PBDs) of hospitals ``only when the diagnostic services are furnished
under the appropriate level of physician supervision specified by CMS
in accordance with the definitions in Sec. Sec. 410.32(b)(3)(i),
(b)(3)(ii), and (b)(3)(iii).'' In addition, in the April 2000 OPPS
final rule with comment period (65 FR 18526), we stated that our model
for the requirement was the requirement for physician supervision of
diagnostic tests payable under the MPFS that was set forth in the CY
1998 MPFS final rule (62 FR 59048). In 2000, we also explained with
respect to the supervision requirements for individual diagnostic tests
that we intended to instruct hospitals and fiscal intermediaries to use
the MPFS as a guide pending issuance of updated requirements. For
diagnostic services not listed in the MPFS, we stated that fiscal
intermediaries, in consultation with their medical directors, would
define appropriate supervision levels in order to determine whether
claims for these services are reasonable and necessary. Since 2000, we
have continued to follow the supervision requirements for individual
diagnostic tests as listed in the MPFS Relative Value File. The file is
updated quarterly and is available on the CMS Web site at:
[[Page 60576]]
http://www.cms.hhs.gov/PhysicianFeeSched/.
In the CY 2009 OPPS/ASC proposed rule and final rule with comment
period (73 FR 41518 through 41519 and 73 FR 68702 through 68704,
respectively), we also reiterated that direct physician supervision is
the standard for physician supervision as set forth in the April 2000
OPPS final rule with comment period for supervision of hospital
outpatient therapeutic services covered and paid by Medicare in
hospitals and PBDs of hospitals. We noted that section 1861(s)(2)(B) of
the Act authorizes payment for hospital services ``incident to
physicians' services rendered to outpatients.'' We have further defined
the supervision requirements for hospital outpatient therapeutic
services and supplies ``incident to'' a physician's service in Sec.
410.27 of our regulations. More specifically, Sec. 410.27(f) states:
``Services furnished at a department of a provider, as defined in Sec.
413.65(a)(2) of this subchapter, that has provider-based status in
relation to a hospital under Sec. 413.65 of this subchapter, must be
under the direct supervision of a physician. `Direct supervision' means
the physician must be present and on the premises of the location and
immediately available to furnish assistance and direction throughout
the performance of the procedure. It does not mean that the physician
must be present in the room when the procedure is performed.'' This
language makes no distinction between on-campus and off-campus PBDs.
In the preamble of the April 2000 OPPS final rule with comment
period (65 FR 18525), we further discussed the requirement for
physician supervision and the finalization of the proposed regulation
text. In that discussion, we stated that the language of Sec.
410.27(f) ``applies to services furnished at an entity that is located
off the campus of a hospital that we designate as having provider-based
status as a department of a hospital in accordance with Sec. 413.65.''
We also stated that, for services furnished in a department of a
hospital that is located on the campus of a hospital, ``we assume the
direct supervision requirement to be met as we explain in Section
3112.4(a) of the Intermediary Manual.'' We further stated that ``we
assume the physician supervision requirement is met on hospital
premises because staff physicians would always be nearby within the
hospital.''
In the CY 2009 OPPS/ASC proposed rule and final rule with comment
period (73 FR 41518 through 41519 and 73 FR 68702 through 68704,
respectively), we restated the existing physician supervision policy
for hospital outpatient therapeutic services because we were concerned
that some stakeholders may have misunderstood our use of the term
``assume'' in the April 2000 OPPS final rule with comment period,
believing that our statement meant that we do not require any
supervision in the hospital or in an on-campus PBD for hospital
outpatient therapeutic services, or that we only require general
supervision for those services. This is not the case. It has been our
expectation that hospital outpatient therapeutic services are provided
under the direct supervision of physicians in the hospital and in all
PBDs of the hospital, specifically, both on-campus and off-campus
departments of the hospital. The expectation that a physician would
always be nearby predates the OPPS and is related to the statutory
authority for payment of hospital outpatient services--that Medicare
makes payment for hospital outpatient services ``incident to'' the
services of physicians in the treatment of patients as described in
section 1861(s)(2)(B) of the Act. Section 410.27(a)(1)(ii) of the
regulations states that Medicare Part B pays for hospital services and
supplies furnished incident to a physician service to outpatients if
they are provided ``as an integral though incidental part of a
physician's services.'' In addition, we have stated in Section 20 of
Chapter 6 of the Medicare Benefit Policy Manual (Pub. 100-2) that
hospitals provide two distinct types of services to outpatients:
Services that are diagnostic in nature, and other services that aid the
physician in the treatment of the patient. We further defined these
therapeutic services and supplies in Section 20.5.1 of the Medicare
Benefit Policy Manual, stating ``therapeutic services and supplies
which hospitals provide on an outpatient basis are those services and
supplies (including the use of hospital facilities) which are incident
to the services of physicians in the treatment of patients.'' We also
provide in Section 20.5.1 that services and supplies must be furnished
on a physician's order and delivered under physician supervision.
However, the manual indicates further that each occasion of a service
by a nonphysician does not need to also be the occasion of the actual
rendition of a personal professional service by the physician
responsible for the care of the patient. Nevertheless, as stipulated in
that same section of the manual ``during any course of treatment
rendered by auxiliary personnel, the physician must personally see the
patient periodically and sufficiently often enough to assess the course
of treatment and the patient's progress and, where necessary, to change
the treatment regimen.''
The expectation that a physician would always be nearby within the
hospital also dates back to a time when hospital inpatient services
provided in a single hospital building represented the majority of
hospital payments by Medicare. Since that time, advances in medical
technology, changes in the patterns of health care delivery, and
changes in the organizational structure of hospitals have led to the
development of extensive hospital campuses, sometimes spanning several
city blocks, as well as off-campus and satellite provider-based
campuses at different locations. In the April 2000 OPPS final rule with
comment period (65 FR 18525), we described the focus of the direct
physician supervision requirement for off-campus PBDs. In the CY 2009
OPPS/ASC final rule with comment period (73 FR 68703), we stated that
we do expect direct physician supervision of all hospital outpatient
therapeutic services, regardless of their on-campus or off-campus
location, but that we would continue to emphasize the physician
supervision requirement for off-campus PBDs. However, we also noted
that if there were problems with outpatient care in a hospital or in an
on-campus PBD where direct supervision was not in place (that is, the
expectation of direct physician supervision was not met), we would
consider that to be a quality concern. We noted that we want to ensure
that payment is made for high quality hospital outpatient services
provided to beneficiaries in a safe and effective manner and consistent
with Medicare requirements.
Finally, we noted that the definition of direct supervision in
Sec. 410.27(f) for PBDs requires that the physician must be present
and on the premises of the location and immediately available to
furnish assistance and direction throughout the performance of the
procedure. In the April 2000 OPPS final rule with comment period (65 FR
18525), we further distinguished ``on the premises of the location'' by
stating ``* * * a physician must be present on the premises of the
entity accorded status as a department of the hospital and therefore,
immediately available to furnish assistance and direction for as long
as patients are being treated at the site.'' We also stated that this
characterization does not mean that the physician must be physically in
the room where a procedure or service is furnished. We noted in the CY
2009 OPPS/ASC final rule with comment
[[Page 60577]]
period (73 FR 68703) that although we have not further defined the term
``immediately available'' for this specific context, the lack of timely
physician response to a problem in the HOPD would represent a quality
concern from our perspective that hospitals should consider in
structuring their provision of services in ways that meet the direct
physician supervision requirement for HOPD services.
In response to a comment requesting clarification, we also
discussed in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68703 through 68704) that a nonphysician practitioner may not provide
the physician supervision in a PBD, even if a nurse practitioner's or a
physician assistant's professional service was being billed as a nurse
practitioner or a physician assistant service and not a physician
service. We noted that section 1861(r) of the Act defines a physician
as follows: ``[t]he term `physician', when used in connection with the
performance of any function or action, means (1) a doctor of medicine
or osteopathy legally authorized to practice medicine and surgery by
the State in which he performs such function or action * * *; (2) a
doctor of dental surgery or of dental medicine [legally authorized to
practice in the State and acting within the scope of his license]; (3)
a doctor of podiatric medicine [for certain purposes and to the extent
authorized by the State]; (4) a doctor of optometry [for certain
purposes and to the extent legally authorized by the State]; or (5) a
chiropractor [for certain purposes and to the extent legally authorized
by the State and consistent with the Secretary's standards].'' In
addition, we pointed out that the conditions of participation for
hospitals under Sec. 482.12(c)(1)(i) through (c)(1)(vi) of our
regulations require that every Medicare hospital patient is under the
care of a doctor of medicine or osteopathy, a doctor of dental surgery
or dental medicine, a doctor of podiatric medicine, a doctor of
optometry, a chiropractor, or a clinical psychologist; each practicing
within the extent of the Act, the Federal regulations, and State law.
Further, Sec. 482.12(c)(4) of our regulations requires that a doctor
of medicine or osteopathy must be responsible for the care of each
Medicare patient with respect to any medical or psychiatric condition
that is present on admission or develops during hospitalization and is
not specifically within the scope of practice of one of the other
practitioners listed in Sec. 482.12(c)(1)(ii) through (c)(1)(vi).
Moreover, section 1861(s)(2)(B) of the Act authorizes payment for
hospital services ``incident to physicians' services rendered to
outpatients.'' We have further defined the requirements for hospital
outpatient therapeutic services and supplies ``incident to'' a
physician's service in Sec. 410.27 of our regulations. Section
410.27(a)(1)(ii) describes payment for hospital outpatient services
when they are ``an integral though incidental part of a physician's
services.'' Also, Sec. 410.27(f) requires that hospital outpatient
services provided in PBDs must be under the direct supervision of a
physician. We stated that the language of the statute and regulations
does not include nonphysician practitioners other than clinical
psychologists. Therefore, it would not be in accordance with the law
and regulations for a nonphysician practitioner other than a clinical
psychologist to be providing the physician supervision in a PBD, even
if a nurse practitioner's or a physician assistant's professional
service was being billed as a nurse practitioner or a physician
assistant service and not a physician service.
2. Issues Regarding the Physician Supervision of Hospital Outpatient
Services Raised by Hospitals and Other Stakeholders
Although we received a few public comments on the discussion of
physician supervision in the CY 2009 OPPS/ASC proposed rule, since
publication of the CY 2009 OPPS/ASC final rule with comment period on
November 18, 2008, we have received many questions and concerns about
the current policies from hospitals and other stakeholders, as we
discussed in the CY 2010 OPPS/ASC proposed rule (74 FR 35364). Some
stakeholders expressed appreciation for the CMS clarification, stating
that the supervision policies were clear and represented needed
safeguards for beneficiaries. On the other hand, we have received
numerous questions about the application of the policies to hospital
outpatient therapeutic services furnished in areas of the hospital that
some stakeholders believe have not clearly been discussed, such as the
application of direct supervision to hospital outpatient therapeutic
services furnished within the main buildings of the hospital that may
not be PBDs of the hospital. Some hospitals expressed difficulty in
determining whether certain areas of their hospitals were considered
provider-based. Other stakeholders cited the direct supervision policy
as first articulated in 2000 as problematic because they believe that
CMS failed to consider hospitals' current organizational structures.
Some hospitals and other stakeholders inquired about a physician's
qualifications for providing supervision or questioned whether
physician supervision must be provided by a physician in a particular
medical specialty. A number of stakeholders challenged the current
policy that nonphysician practitioners cannot provide direct
supervision for those hospital outpatient therapeutic services they may
personally perform or that they may order to be provided by other
hospital staff incident to the nonphysician practitioner's services. In
addition, numerous stakeholders, especially rural hospitals, raised
budgetary and patient access concerns related to ensuring adequate
physician staffing, especially because nonphysician practitioners may
not directly supervise the delivery of hospital outpatient therapeutic
services. Furthermore, rural hospitals and CAHs raised concerns
regarding the inconsistency of the direct supervision requirements for
CAHs with other CAH policies, pointing out that the Medicare conditions
of participation for CAHs allow nurse practitioners and physician
assistants to be responsible for the care of Medicare patients in CAHs.
Some stakeholders specifically questioned whether Sec. 410.27(f)
applied to CAHs because the term ``CAH'' is not in the heading of Sec.
410.27, which currently reads ``Outpatient hospital services and
supplies incident to a physician service: Conditions.'' Other
stakeholders complained about the significant burden on hospitals to
provide direct physician supervision because they believe there is no
clear clinical need for such supervision, particularly a uniform level
of supervision for all types of hospital outpatient therapeutic
services. Some stakeholders challenged the applicability of the direct
supervision requirements to specific types of hospital outpatient
services, such as partial hospitalization or chemotherapy
administration services.
Similar to the issues related to direct supervision of hospital
outpatient therapeutic services raised by hospitals and other
stakeholders, we have received questions since publication of the CY
2009 OPPS/ASC final rule with comment period regarding the application
of physician supervision policies for hospital outpatient diagnostic
services, especially with respect to services provided within the main
buildings of the hospital that are not PBDs. In addition, some
stakeholders have pointed out that there is no site-of-service
requirement for hospital outpatient diagnostic services, and that,
therefore, hospitals may send
[[Page 60578]]
patients to independent diagnostic testing facilities (IDTFs) or other
entities to receive diagnostic services under arrangement. They added
that although these facilities are not PBDs, the hospital would bill
for these services as hospital outpatient services in accordance with
the hospital bundling rules. Some of these stakeholders have asked what
type of physician supervision is required for diagnostic services
provided under arrangement.
A number of stakeholders urged CMS to withdraw or delay the
physician supervision policies discussed in the CY 2009 OPPS/ASC final
rule with comment period, arguing that this rule included policy
changes rather than clarification and, therefore, sufficient
opportunity for public notice and comment was not provided. Some
further argued that CMS should suspend enforcement of these policies
while CMS gathers additional public input and considered alternatives.
These stakeholders suggested a variety of additional approaches to
soliciting full feedback from the hospital and physician communities on
the supervision policies and their impact, including holding an open
door forum or town hall meeting and reopening the discussion during the
CY 2010 OPPS rulemaking process.
As discussed in the CY 2010 OPPS/ASC proposed rule (74 FR 35365),
we provided a restatement and clarification of existing policy in the
CY 2009 OPPS/ASC proposed rule (73 FR 41518 through 41519), citing
numerous existing statutory, regulatory, manual, and prior rule
preamble statements in section XII.A. of that rule specifically titled,
``Physician Supervision of HOPD Services.'' The CY 2009 OPPS/ASC
proposed rule provided for a 60-day comment period. We stated that we
continue to believe that the CY 2009 restatement and clarification made
no change to longstanding hospital outpatient physician supervision
policies as incorporated in prior statements of policy, including the
codified Federal regulations. In addition, we provided for public
notice and comment regarding these physician supervision polices
through the CY 2009 OPPS/ASC proposed rule in which, as noted above, we
discussed physician supervision in a distinct section of the proposed
rule. However, we received only a few public comments on that section.
We also noted that the physician supervision policies for hospital
outpatient diagnostic and therapeutic services as described in the CY
2009 OPPS/ASC final rule with comment period (73 FR 68702 through
68704) continue to be in effect for CY 2009. In the CY 2010 OPPS/ASC
proposed rule (74 FR 35365), we stated that we have not instructed
contractors to delay initiation of enforcement actions or to
discontinue pursuing pending enforcement actions regarding the
physician supervision of hospital outpatient services.
However, while we did not propose to withdraw the longstanding
physician supervision policies for hospital outpatient services in CY
2009, we stated in the CY 2010 OPPS/ASC proposed rule (74 FR 35365)
that we had extensively considered the many questions and concerns on
this topic raised to us by stakeholders in the course of developing the
proposed rule in order to assess whether proposed changes to the
existing policies should be considered. We appreciated the many
detailed comments and suggestions interested stakeholders have raised
in the first few months since publication of the CY 2009 OPPS/ASC final
rule with comment period. We considered a wide variety of potential
modifications to our physician supervision policies in response to this
information about current health care delivery practices and
challenges. The dialogue with interested stakeholders provided us with
sufficient information to develop proposals for certain changes to the
supervision policies for hospital outpatient services for CY 2010 in
order to take into full consideration current clinical practice and
patterns of care, the need to ensure patient access, the associated
hospital and physician responsibilities, consistency among requirements
for different sites of services, and other important factors. We
indicated our belief that the proposals we were making for CY 2010
would address many of the concerns and questions regarding our existing
policies that had been raised to us by stakeholders over the first 6
months of CY 2009. In the CY 2010 OPPS/ASC proposed rule (74 FR 35365),
we welcomed robust public comments regarding our CY 2010 proposals for
physician supervision in order to inform our decisions regarding final
policies for CY 2010.
In considering the questions and concerns that had been raised over
the first 6 months of CY 2009, we identified three areas within our
existing hospital outpatient physician supervision policies for which
we stated our belief that proposals of policy changes were appropriate
for CY 2010, two related to the supervision of therapeutic services and
one related to the supervision of diagnostic services. Our specific CY
2010 proposals, including the proposed changes to our regulations to
conform to these proposals, the public comments on the proposals and
our responses, and our final CY 2010 supervision policies for hospital
outpatient therapeutic and diagnostic services are discussed below.
3. Policies for Direct Supervision of Hospital and CAH Outpatient
Therapeutic Services
In the CY 2010 OPPS/ASC proposed rule (74 FR 35365), we proposed
that nonphysician practitioners, specifically physician assistants,
nurse practitioners, clinical nurse specialists, and certified nurse-
midwives, may directly supervise all hospital outpatient therapeutic
services that they may perform themselves in accordance with their
State law and scope of practice and hospital-granted privileges,
provided that they continue to meet all additional requirements,
including any collaboration or supervision requirements as specified in
the regulations at Sec. Sec. 410.74 through 410.77. Clinical
psychologists may already provide direct supervision, as we mentioned
in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68703
through 68704) because they, along with physicians (as defined in
section 1861(r)(1) of the Act), may be responsible for the care of a
hospital patient, as discussed in the Medicare conditions of
participation for hospitals in Sec. 482.12(c) of our regulations. We
stated our belief that allowing certain nonphysician practitioners
(nurse practitioners, physician assistants, clinical nurse specialists,
and certified nurse-midwives) to provide direct supervision of certain
hospital outpatient therapeutic services is appropriate because, even
though these practitioners are not physicians, they are recognized in
statute and regulation as providing services that are analogous to
physicians' services. Medicare Part B covers the professional services
of clinical psychologists, nurse practitioners, physician assistants,
clinical nurse specialists, and certified nurse-midwives when the
services would be physicians' services if furnished by a physician (a
doctor of medicine or osteopathy, as set forth in section 1861(r)(1) of
the Act). Their services are described in Sec. Sec. 410.71(a),
410.74(a), 410.75(a) and (c), 410.76(a) and (c), and 410.77(a),
respectively, of our regulations. Medicare also makes payment for
services provided incident to the services of these nonphysician
practitioners as specified in Sec. Sec. 410.71(a)(2)(iii), 410.74(b),
410.75(d), 410.76(d), and 410.77(c), respectively.
We also noted that section 1861(r) of the Act does not include
clinical psychologists, nurse practitioners,
[[Page 60579]]
physician assistants, clinical nurse specialists, or certified nurse-
midwives in the definition of a physician. However, as previously
mentioned, the conditions of participation for hospitals at Sec.
482.12(c)(1)(vi) of our regulations do include clinical psychologists
as practitioners who may be responsible for the care of Medicare
patients. The conditions of participation at Sec. Sec. 482.12(c)(1)(i)
through (c)(1)(vi) require that every Medicare hospital patient be
under the care of a doctor of medicine or osteopathy, a doctor of
dental surgery or dental medicine, a doctor of podiatric medicine, a
doctor of optometry, a chiropractor, or a clinical psychologist; each
practicing in accordance with the Act, Federal regulations, and State
law. Further, Sec. 482.12(c)(4) of our regulations requires that a
doctor of medicine or osteopathy must be responsible for the care of
each Medicare patient with respect to any medical or psychiatric
condition that is present on admission or develops during
hospitalization and is not specifically within the scope of practice of
one of the other practitioners listed in Sec. Sec. 482.12(c)(1)(ii)
through (c)(1)(vi). Also, as permitted by State law, certain
nonphysician practitioners may admit individuals to a hospital or CAH
and order and provide therapeutic services to them. Since 1998, we have
allowed payment for the professional services of these nonphysician
practitioners in addition to payment for physicians' services when the
nonphysician practitioner's professional services are furnished in an
HOPD. We also have made outpatient facility payments to the hospital
for those facility services provided incident to the professional
services of these nonphysician practitioners (63 FR 58873). In
addition, the conditions of participation for CAHs at Sec. 485.631
require that a doctor of medicine or osteopathy, a nurse practitioner,
a physician assistant, or a clinical nurse specialist be available to
furnish patient care services at all times the CAH operates. A doctor
of medicine or osteopathy must be present for sufficient periods of
time to provide medical direction, medical care services, consultation
and supervision as described in the conditions of participation and
must be available through radio or telephone contact for assistance
with medical emergencies or patient referral.
Taking into consideration the totality of these existing conditions
and requirements, we proposed to revise Sec. 410.27 of the regulations
to make clear that Medicare Part B payment may be made for hospital
outpatient services and supplies furnished incident to the services of
a physician, clinical psychologist, nurse practitioner, physician
assistant, clinical nurse specialist, or certified nurse-midwife
service; and to add that, effective January 1, 2010, clinical
psychologists, nurse practitioners, physician assistants, clinical
nurse specialists, or certified nurse-midwives may provide direct
supervision for hospital outpatient therapeutic services that they may
perform themselves under State law and within their scope of practice
and hospital-granted privileges in the context of the existing
requirements in Sec. Sec. 410.71, 410.74, 410.75, 410.76, and 410.77.
However, we note that, in the CY 2010 OPPS/ASC proposed rule (74 FR
35366), we proposed that the direct supervision of CR, ICR, and PR
services must be furnished by a doctor of medicine or osteopathy, as
specified in the proposed coverage policy and regulations for CR, ICR,
and PR services. We also noted that Medicare does not make a payment to
a physician under the MPFS when the physician solely provides the
direct physician supervision of hospital outpatient therapeutic
services but furnishes no direct professional services to a patient.
This also would apply to the supervision of hospital outpatient
therapeutic services provided by nonphysician practitioners.
We also indicated that we did not propose to modify requirements
relating to physician supervision or collaboration for these
nonphysician practitioners. In regard to the supervision of physician
assistants, Sec. 410.74(a)(iv) requires that physician assistants
perform services under the general supervision of a physician. We have
further defined this general supervision in section 190(c) of Chapter
15 of the Medicare Benefit Policy Manual. Section 190(c) states that
``the PA's physician supervisor (or a physician designated by the
supervising physician or employer as provided under State law or
regulations) is primarily responsible for the overall direction and
management of the physician assistant's professional activities and for
assuring that the services provided are medically appropriate for the
patient. The physician supervisor (or physician designee) need not be
physically present with the physician assistant when a service is being
furnished to a patient and may be contacted by telephone, if necessary,
unless State law or regulations require otherwise.''
The requirements for collaboration of nurse practitioners are
defined in Sec. 410.75(c)(3) of the regulations and Section 200(D) of
Chapter 15 of the Medicare Benefit Policy Manual. The requirements for
clinical nurse specialists are located in Sec. 410.76(c)(3) of the
regulations and Section 210(D) of Chapter 15 of the Medicare Benefit
Policy Manual. These sections define collaboration as a process in
which the nurse practitioner or the clinical nurse specialist works
with one or more physicians (doctors of medicine or osteopathy) to
deliver health care services within the scope of the practitioner's
expertise, with medical direction and appropriate supervision as
required by the law of the State in which the services are being
furnished. In the absence of more stringent State law requirements
governing collaboration, collaboration is to be evidenced by the nurse
practitioner or the clinical nurse specialist documenting his or her
scope of practice and indicating the relationships that he or she has
with physicians to deal with issues outside their scope of practice.
The collaborating physician does not need to be present with the nurse
practitioner or clinical nurse specialist when the services are
furnished or to make an independent evaluation of each patient who is
seen by the nurse practitioner or clinical nurse specialist.
In addition, for CY 2010, we proposed to refine the definition of
direct supervision of hospital outpatient therapeutic services for
those services furnished in a hospital and in on-campus PBDs of a
hospital. For services furnished on a hospital's main campus, we
proposed that direct supervision means that the supervisory physician
or nonphysician practitioner must be present on the same campus, in the
hospital or the on-campus PBD of the hospital as defined in Sec.
413.65, and immediately available to furnish assistance and direction
throughout the performance of the procedure. We proposed to add a new
paragraph (a)(1)(iv)(A) to Sec. 410.27 to reflect this requirement. We
also proposed to define ``in the hospital'' in new paragraph Sec.
410.27(g) as meaning areas in the main building(s) of a hospital that
are under the ownership, financial, and administrative control of the
hospital; that are operated as part of the hospital; and for which the
hospital bills the services furnished under the hospital's CCN.
Therefore, to be present in the hospital or the on-campus PBD of the
hospital and immediately available requires that the physician or
nonphysician practitioner must be physically present in areas on the
campus of the hospital that are part of
[[Page 60580]]
the hospital, including on-campus PBDs, that are operated by the
hospital, and where services furnished in those areas are billed under
the hospital's CCN. Under the CY 2010 proposal, the supervisory
physician or nonphysician practitioner of the hospital's outpatient
therapeutic services may not be located in any other entity, such as a
physician's office, IDTF, co-located hospital, or hospital-operated
provider or supplier such as a skilled nursing facility (SNF), end-
stage renal disease (ESRD) facility, or home health agency (HHA), or
any other nonhospital space that may be co-located on the hospital's
campus, as ``hospital campus'' is defined in Sec. 413.65(a)(2) of the
regulations.
We stated that while we have not previously specified in policy
guidance a definition for the term ``immediately available'' with
respect to services provided in areas of the hospital on its main
campus that are not PBDs, we believe that the existing definitions of
direct supervision in Sec. Sec. 410.27(f) and 410.32(b)(3)(ii) that
apply to PBDs and physician office settings indicate that the physician
must be physically present in order to provide direct supervision of
services. With regard to services provided in PBDs of hospitals or
physicians' offices, these regulations specify that the physician must
be present in the PBD or in the office suite, respectively. Thus, we
have previously established that direct supervision requires immediate
physical presence. While we also have not specifically defined the word
``immediate'' for direct supervision in terms of time or distance, we
noted that the general definition of the word means ``without interval
of time.'' Therefore, the supervisory physician or nonphysician
practitioner could not be immediately available while, for example,
performing another procedure or service that he or she could not
interrupt. In addition, we stated that we understand that advances in
medical technology, changes in the patterns of health care delivery,
and changes in the organizational structure of hospitals have led to
the development of extensive hospital campuses, sometimes spanning
several city blocks. However, in the context of direct physician or
nonphysician practitioner supervision, we believed that it would be
neither appropriate nor ``immediate'' for the supervisory physician or
nonphysician practitioner to be so physically far away on the main
campus from the location where hospital outpatient services are being
furnished that he or she could not intervene right away. As we stated
in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68703),
if there were problems with outpatient care in a hospital or in an on-
campus PBD where the requirement for direct supervision was not met, we
would consider that to be a quality concern. Appropriate supervision is
a key aspect of the delivery of safe and high quality hospital
outpatient services that are paid under Medicare.
In addition, the definition of direct supervision in existing Sec.
410.27(f) has included and would continue to specify under our CY 2010
proposal that the physician or nonphysician practitioner must be
available to furnish assistance and direction throughout the
performance of the procedure. This means that the physician or
nonphysician practitioner must be prepared to step in and perform the
service, not just to respond to an emergency. This includes the ability
to take over performance of a procedure and, as appropriate to both the
supervisory physician or nonphysician practitioner and the patient, to
change a procedure or the course of treatment being provided to a
particular patient. We originally stated in the April 2000 OPPS final
rule (65 FR 18525) that the physician does not ``necessarily need to be
of the same specialty as the procedure or service that is being
performed.'' We also have stated in manual guidance that hospital
medical staff that supervises the services ``need not be in the same
department as the ordering physician'' (Section 20.5.1 of Chapter 6 of
the Medicare Benefits Policy Manual). However, in order to furnish
appropriate assistance and direction for any given service or
procedure, we believed the supervisory physician or nonphysician
practitioner must have, within his or her State scope of practice and
hospital-granted privileges, the ability to perform the service or
procedure.
We did not propose significant changes to the definition or
requirements for direct supervision in off-campus PBDs of the hospital
other than to allow nonphysician practitioners to provide direct
supervision in these PBDs for the services that these practitioners may
perform. With respect to off-campus PBDs of hospitals, direct
supervision would continue to mean that the physician or nonphysician
practitioner must be in the off-campus PBD and immediately available to
furnish assistance and direction throughout the performance of the
procedure. We proposed to revise existing Sec. 410.27(f) and include
the revised language as Sec. 410.27(a)(1)(iv) and make a technical
change in Sec. 410.27(a)(i)(iv)(B) to clarify the current language by
removing ``present and on the premises of the location'' and replacing
it with ``present in the off-campus provider-based department.'' While
the meaning of this provision is the same, we believed that this
proposed modification to the language defining direct supervision is
more consistent with the language of the other proposed changes to
Sec. 410.27. As we clarified in the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68704), the supervisory physician for hospital
outpatient therapeutic services must be in each PBD of a particular
off-campus outpatient location, but that does not mean that the
physician must be in the room when the procedure is performed. In the
April 2000 OPPS final rule (65 FR 18525), we responded to public
commenters who asserted that requiring a physician to be onsite at a
PBD throughout the performance of all ``incident to'' (therapeutic)
services would be burdensome and costly for hospitals where there are a
limited number of physicians available to provide coverage,
particularly in rural settings. We disagreed then that the supervision
requirement was unnecessary and burdensome because hospitals, prior to
2000, were already required to ``meet a direct supervision of `incident
to' services requirement that is unrelated to the provider-based rules.
That is, we require that hospital services and supplies furnished to
outpatients that are incident to physician services be furnished on a
physician's order by hospital personnel and under a physician's
supervision'' (Section 3112.4 of the Medicare Intermediary Manual). In
addition, when we discussed the ``assumption'' or expectation that the
physician supervision requirement is met on the hospital's main campus
in the April 2000 OPPS final rule (65 FR 18525), we specifically did
not extend that assumption to off-campus departments of the hospital.
We stated that we continue to believe that it would be inappropriate to
allow one physician or nonphysician practitioner to supervise all
services being provided in all PBDs at a particular off-campus
outpatient location. Since first allowing off-campus sites to be
considered PBDs of hospitals, we have placed particular emphasis on
ensuring the quality and safety of the services provided in these
locations, which can be many miles from the main hospital campus,
through both additional provider-based requirements in Sec. 413.65(e)
and our emphasis on direct physician supervision under existing Sec.
410.27(f). In addition, because
[[Page 60581]]
the physician or nonphysician practitioner must be immediately
available and have, within his or her State scope of practice and
hospital-granted privileges, the ability to perform the services being
supervised, we believed it would be highly unlikely that one physician
or nonphysician practitioner would be both immediately available at all
times that therapeutic services are being provided and would have the
knowledge and ability to adequately supervise all services being
performed at once in multiple off-campus PBDs at a single location.
To reflect these proposed changes for the provision of direct
supervision of therapeutic services provided to hospital outpatients in
our regulations, we proposed to revise the language of the existing
Sec. 410.27(f) and include the revised language in a new paragraph
(a)(1)(iv) of Sec. 410.27 to specify that direct physician or
nonphysician practitioner supervision of hospital outpatient
therapeutic services is required for Medicare Part B payment. We
proposed to add a new paragraph (a)(1)(iv)(A) to Sec. 410.27 to state
that, for services provided on the hospital's main campus, direct
supervision means that the physician or nonphysician practitioner must
be present on the same campus, in the hospital or on-campus PBD of the
hospital, as defined in Sec. 413.65, and immediately available to
furnish assistance and direction throughout the performance of the
procedure. It does not mean that the physician or nonphysician
practitioner must be in the room when the procedure is performed. We
also proposed to add new paragraph (a)(1)(iv)(B) to Sec. 410.27 to
reflect that, for off-campus PBDs of hospitals, the physician or
nonphysician practitioner must be present in the off-campus PBD, as
defined in Sec. 413.65, and immediately available to furnish
assistance and direction throughout the performance of the procedure.
It does not mean that the physician or nonphysician practitioner must
be in the room when the procedure is performed. As we stated
previously, the proposed language of paragraph (a)(1)(iv)(B) is similar
to existing Sec. 410.27(f) that we proposed to revise. Furthermore, we
proposed to make a technical change to clarify the language in this
paragraph to remove ``present and on the premises of the location'' and
replace it with ``present in the off-campus provider-based
department.'' Also, in the CY 2010 OPPS/ASC proposed rule (74 FR 35368)
and as proposed in the CY 2010 MPFS proposed rule (74 FR 33674), we
proposed that the direct supervision of CR, ICR, and PR services must
be furnished by a doctor of medicine or osteopathy, as specified in
proposed Sec. Sec. 410.47 and 410.49, respectively. We proposed to
include this exception in proposed paragraphs (a)(1)(iv)(A) and
(a)(1)(iv)(B) in Sec. 410.27. In addition, we proposed to add a new
paragraph (f) to Sec. 410.27 to define a nonphysician practitioner for
purposes of Sec. 410.27 as a clinical psychologist, a physician
assistant, a nurse practitioner, a clinical nurse specialist, or a
certified nurse-midwife. Proposed new Sec. 410.27(a)(1)(iv) would
provide that these nonphysician practitioners may directly supervise
services that they could furnish themselves in accordance with State
law and within their scope of practice and hospital-granted privileges,
as long as all requirements for coverage, including the physician
supervision or collaboration for these nonphysician practitioners, are
met in accordance with Sec. Sec. 410.71, 410.74, 410.75, 410.76, and
410.77, respectively. We also proposed to define ``in the hospital'' in
new paragraph Sec. 410.27(g) to mean areas in the main building(s) of
the hospital that are under the ownership, financial, and
administrative control of the hospital; that are operated as part of
the hospital; and for which the hospital bills the services furnished
under the hospital's CCN. Finally, we proposed to make a technical
correction to the title of Sec. 410.27 to read, ``Outpatient hospital
or CAH services and supplies incident to a physician service:
Conditions'' to clarify in the title that the requirements for payment
of hospital outpatient therapeutic services incident to a physician or
nonphysician practitioner service in that section apply to both
hospitals and CAHs. Similarly, we proposed to include the phrase
``hospital or CAH'' throughout the text of Sec. 410.27 wherever the
text currently refers just to ``hospital.'' The omission of the term
``CAH'' from Sec. 410.27 was a drafting oversight. However, we have
applied the requirements of Sec. 410.27, including ``incident to''
requirements such as the site-of-service requirement and physician
supervision, as well as other hospital policies, such as the bundling
rules, to CAHs, just as we have in 42 CFR Part 409 (Subparts A through
D and F through H) and Sec. 410.28 and Sec. 413.65 of the regulations
where CAHs are explicitly mentioned.
Comment: All commenters who addressed the proposed direct
supervision by nonphysician practitioners (specifically physician
assistants, nurse practitioners, clinical nurse specialists, and
certified nurse-midwives) supported the proposal. Some commenters also
requested that CMS include licensed clinical social workers in the list
of nonphysician practitioners who are permitted to supervise outpatient
psychiatric services and partial hospitalization program (PHP)
services. Other commenters requested that pharmacists be permitted to
supervise medication therapy management services and that specialty
certified registered nurses, such as wound care nurses, also be able to
provide the direct supervision of hospital outpatient therapeutic
services. One commenter stated that because physicians do not furnish
nursing services or the services of other ancillary health
professionals, they should not be expected to supervise those services
and it would be inappropriate to expect physicians to accept
responsibility for care that they have not personally furnished.
Response: We appreciate the commenters' support for our proposal to
revise Sec. 410.27 of the regulations to allow certain nonphysician
practitioners to directly supervise services that they may perform
themselves under their State scope of practice and hospital-granted
privileges in the context of the existing requirements in Sec. Sec.
410.71, 410.74, 410.75, 410.76 and 410.77. We agree with the commenters
that we should add licensed clinical social workers to the group of
nonphysician practitioners permitted to provide direct supervision for
hospital outpatient therapeutic services. We believe this is
appropriate because licensed clinical social workers are recognized
under the Medicare program as independent practitioners who may furnish
services for the diagnosis and treatment of mental illness that they
are legally authorized to perform under State law of the State in which
the services are performed. We further agree with the commenters that
the inclusion of licensed clinical social workers would help to ensure
continued access to mental health services, especially in rural
hospitals and CAHs where other types of practitioners may be less
available. We emphasize though, that licensed clinical social workers,
like other nonphysician practitioners, may only supervise those
therapeutic services within their own scope of practice and hospital-
granted privileges. We are not expanding the regulations further to
allow supervision by pharmacists, registered nurses, or other medical
professionals. These professionals are not recognized in the Social
Security Act as providing services that would be physicians' services
if performed by a physician and
[[Page 60582]]
they may not enroll in Medicare as independent practitioners and
receive payment directly for their professional services.
With regard to the comments about physician scope of practice and
supervision, we remind hospitals that the only statutory basis for
payment of hospital outpatient therapeutic services is incident to the
services of a physician, meaning the services are ordered by the
physician or qualified practitioner and furnished as an integral though
incidental part of his or her services. It follows, then, that a
qualified physician or nonphysician practitioner would supervise the
provision of those services to ensure the service or procedure is being
furnished appropriately.
Comment: One commenter supported the proposed requirements for the
direct physician supervision of CR programs and requested that CMS
confirm that the proposed definition of ``direct supervision'' that
would apply to therapeutic services in the HOPD would also apply to CR
services. However, many commenters, especially CAHs and rural
hospitals, asked that CMS permit physician assistants, nurse
practitioners, clinical nurse specialists, and certified nurse-midwives
who are functioning within their State licensure and scope of practice
and who are permitted to supervise the services under the hospital or
CAH bylaws to supervise CR, ICR, and PR services.
Response: As discussed in detail in sections sections II.G.8. and
II.G.9. of the CY 2010 MPFS final rule with comment period and in
section XII.B.4. of this final rule with comment period, section
144(a)(1) of Public Law 100-275 imposes strict requirements for the
direct physician supervision of PR, CR, and ICR services and gives us
no flexibility to modify the requirement. Therefore, we are finalizing
our CY 2010 proposal, without modification, to require the direct
physician supervision (by a doctor of medicine or a doctor of
osteopathy) of PR, CR, and ICR services that are furnished to hospital
outpatients. We note that we define ``direct supervision'' with regard
to what it means to be immediately available and accessible for medical
consultation and medical emergencies in the same manner for PR, CR, and
ICR services as we do for other therapeutic services furnished in
HOPDs, as discussed below. Also, the final definitions of direct
supervision in Sec. 410.27 for therapeutic services provided on campus
and in off-campus PBDs also apply. These definitions and the final
regulation text of Sec. Sec. 410.27(a)(1)(iv)(A) and (B) are discussed
in detail below.
Comment: With respect to the proposed definition of direct
supervision of hospital outpatient therapeutic services, some
commenters fully supported the proposals as appropriate and necessary
for ensuring that Medicare beneficiaries receive safe and high quality
care. Many commenters acknowledged that the proposal to broaden the
location of the supervising physician from in the department on campus
to ``in the hospital'' would give hospitals significantly more
flexibility. However, the commenters stated that, while the proposal
would be more flexible, it would still limit access to care and would
cost hospitals and the Medicare program. Other commenters questioned
why CMS has a supervision requirement at all, stating that there is no
such specified requirement for hospital inpatient services. Many
commenters believed that the proposals would not help CAHs and rural
hospitals, where physicians often maintain offices off-campus and
qualified nonphysician practitioners may not be readily available to
provide services in the hospital. The commenters claimed that the
proposed definition of direct supervision would mean that CAHs and
rural hospitals would be required to hire staff solely to supervise
services and that this extra cost would force these hospitals and CAHs
to eliminate services. These commenters requested that CMS not apply
the ``incident to'' requirements of Sec. 410.27 to CAHs.
Response: We appreciate the commenters' support and the
acknowledgement that we are striving to provide more flexibility for
hospitals, while maintaining appropriate supervision of hospital
outpatient therapeutic services that helps to ensure safe, high quality
care and providing Medicare payment that is consistent with the
statutory requirements for coverage. We have received numerous comments
and questions since publication of the CY 2009 OPPS/ASC final rule with
comment period, met with interested stakeholders to hear their
questions and concerns throughout the year, and reviewed many
thoughtful, wide-ranging comments on the CY 2010 OPPS/ASC proposed
rule. In considering all of this information, we have taken into full
consideration current clinical practice and patterns of care, the need
to ensure patient access, the associated hospital and physician
responsibilities, consistency among requirements for different sites of
services, and other important factors. We believe that our final
policies address many of the concerns and questions regarding our
proposals. Through the expansion of supervisory authority to
nonphysician practitioners and a modification to the requirement for
direct supervision of on-campus therapeutic services, discussed in more
detail below, we believe our final policies allow more flexibility for
hospitals and CAHs and help ensure access to care for Medicare
beneficiaries while maintaining our standards for safe, high quality
care and consistent interpretation of longstanding regulations.
We disagree with the commenters who suggested that there should be
no supervision requirements for hospital outpatient services because
there are not similar codified supervision requirements for hospital
inpatient services. Hospitals provide a wide variety of complex
services to their outpatients who may or may not have an established
relationship with the supervising physician or nonphysician
practitioner and hospital staff on the day the hospital outpatient
services are furnished. A treating physician or nonpractitioner in the
community may not even be aware that ordered outpatient services are
being furnished by the hospital on a given day. Therefore, we believe
it is appropriate for CMS to set requirements for the safe and
effective diagnosis and treatment of Medicare beneficiaries, including
standards for the appropriate supervision of hospital outpatient
services by a physician or nonphysician practitioner, in accordance
with the statutory basis for payment of hospital outpatient services in
section 1861(s)(2)(B) of the Act, which is ``incident to physicians'
services rendered to outpatients.''
We set the standard for direct supervision of hospital outpatient
therapeutic services that we have held since the implementation of the
OPPS in 2000, and we have assumed that this standard was being met
because we assumed that a physician would always be nearby in the
hospital. Given that hospital inpatients generally have medically
complex conditions requiring a high level of acute care, we have not
established explicit supervision requirements in regulations because we
believe hospitals would have physicians or other qualified
practitioners available at all times that complex hospital inpatient
services are being furnished. If this is not the case, we may consider
addressing the supervision of hospital inpatient services in the
future.
In regard to hospital and CAH concerns about hiring physician and
nonphysician staff solely for
[[Page 60583]]
supervisory services, we reiterate that the supervisor need only be
available when outpatient therapeutic services and procedures are being
furnished, meaning that many services or departments would not require
24 hour per day, 7 days per week direct supervision, as some commenters
believed. We also believe that allowing the supervisory physician or
nonphysician practitioner to be located anywhere on the hospital
campus, as discussed more fully below, should alleviate this concern
for many hospitals and CAHs. In addition, we remind CAHs that the
conditions of participation for CAHs at Sec. 485.631 require that a
doctor of medicine or osteopathy, a nurse practitioner, a physician
assistant, or a clinical nurse specialist is available ``to furnish
patient care services at all times the CAH operates'' (emphasis added).
It follows then that this physician or nonphysician practitioner who is
available at all times the CAH operates would be directly furnishing
services that are within his or her State scope of practice and CAH-
granted privileges and that the CAH would not be furnishing services
that are not within this practitioner's scope.
Comment: Many commenters stated that it is overly restrictive and
arbitrary to not allow direct supervision by practitioners located in
other entities on-campus and to require the immediate physical presence
of the physician. Several commenters pointed out that, because of the
varying ways that hospitals have structured their services and
campuses, a physician's office may be next door or closer to the HOPD
in which services that he or she would be supervising are furnished,
than a practitioner located in another HOPD. Other commenters stated
that the proposal would preclude physicians from taking a lunch break,
patronizing the retail establishments in the hospital, or going to
other areas such as parking lots.
The commenters were particularly concerned about specialized
services such as chemotherapy, blood transfusions, and radiation
therapy services. Several hospital associations and other commenters
requested that CMS remove the phrase ``immediately available to furnish
assistance and direction throughout the performance of the procedure.''
They instead recommended that CMS redefine direct supervision for
therapeutic services to mean that the physician may be on or in close
proximity to the campus and able to respond in a timely manner
according to hospital's policies and bylaws. The commenters also
believed that ``immediate availability'' does not and should not mean
immediate physical presence and that requiring physical presence in
every instance is impractical. Instead, the commenters believed the
supervising practitioner should be able to directly supervise services
and procedures remotely by telephone, radio, robotic device, or
electronic media.
Response: We appreciate the many public comments that we received
on the proposed definition of direct supervision for hospital
outpatient therapeutic services provided on the campus of the hospital.
We acknowledge the comments related to hospital building and campus
structures and the physical proximity of physicians' offices and other
entities to the hospital department where a particular hospital
outpatient service is furnished. We agree with the commenters that
allowing the supervising physician to be in nonhospital space on the
campus could make it easier for a supervising physician or nonphysician
practitioner to respond immediately. Therefore, we believe it would be
appropriate to allow the supervising physician or nonphysician
practitioner to be located anywhere on the same campus of the hospital,
as long as he or she was immediately available to furnish assistance
and direction throughout the performance of the procedure.
This is consistent with our longstanding definition of ``direct
supervision'' as it has been applied across settings in terms of the
immediate physical presence of the physician and what it means to
``furnish assistance and direction throughout the performance of the
procedure.'' However, we continue to believe that the supervisory
physician or nonphysician practitioner could not be immediately
available while, for example, performing another procedure or service
that he or she could not interrupt. It also would be neither
appropriate nor ``immediate'' for the supervisory physician or
nonphysician practitioner to be so physically far away on the main
campus from the location where hospital outpatient services are being
furnished that he or she could not intervene right away.
As we stated in the CY 2010 OPPS/ASC proposed rule (74 FR 35367),
we believe that the existing definitions of direct supervision in
Sec. Sec. 410.27(f) and 410.32(b)(3)(ii) that apply to PBDs and
physicians' office settings indicate that the physician must be
physically present in order to provide direct supervision of services.
With regard to services provided in PBDs of hospitals or physicians'
offices, for at least 9 years these regulations have specified that the
physician must be present in the PBD or in the office suite,
respectively. Thus, we have previously established that direct
supervision requires immediate physical presence. Medicare only covers
hospital outpatient therapeutic services furnished incident to
physicians' services, yet a hospital service ordered by a physician may
be furnished on a day when the beneficiary does not receive services
directly from a physician. Therefore, we believe it is important to
retain direct supervision as the standard.
With regard to the commenters' recommendations that CMS redefine
direct supervision for therapeutic services to mean that the physician
may be ``on or in close proximity to the campus'' and ``able to respond
in a timely manner'' according to hospital's policies and bylaws, we
believe that the suggested new definition of direct supervision for on-
campus hospital outpatient therapeutic services would be wholly
inconsistent with the definition of the term as previously codified in
at least two Medicare sections of the Code of Federal Regulations. We
disagree with the commenters that describing immediate availability as
without lapse of time would be read so narrowly as to require that the
supervising physician or nonphysician practitioner must be standing in
the room next to the nonphysician personnel furnishing the service. A
similar argument could be made that the phrase ``able to respond in a
timely manner'' is so vague that a supervising physician or
nonphysician practitioner could interpret it to mean that arriving
within an hour or hours would be reasonable. In addition, we note that
the definition proposed by commenters is virtually identical in
interpretation to the current existing definition of general
supervision. Section 410.32(b)(3)(i) of the regulations defines general
supervision to mean that ``the procedure is furnished under the
physician's overall direction and control, but the physician's presence
is not required during the performance of the procedure.'' We have
historically interpreted this to mean that the physician may be
available by telephone or other electronic device to supervise and
direct the nonphysician personnel furnishing the service. This lower
standard of general supervision would not ensure the immediate presence
of a qualified practitioner in the hospital to furnish assistance and
direction to hospital personnel providing a wide array of complex
therapeutic services to hospital outpatients. Several of the
[[Page 60584]]
commenters requesting this relaxed definition of direct supervision
also asked that certain services be designated as requiring only
general supervision. We are unclear about the commenters' understanding
of the definition of general supervision if their suggested definition
of direct supervision requires no physical presence and only specifies
availability in a reasonable period of time by telephone, radio,
robotics, or telemedicine.
We have set direct supervision as a minimum standard for
supervision of all Medicare hospital outpatient therapeutic services.
We do not believe that this standard or the definition, as codified,
precludes a hospital from developing bylaws, credentialing procedures,
and policies that it believes are appropriate to ensure that all
hospital patients receive high quality services in a safe and effective
manner. We believe that hospitals take quality of care and patient
safety very seriously, and we understand that hospitals are subject to
accreditation requirements. Considering that hospitals provide a wide
array of very complex services and procedures, including surgeries, we
would expect that hospitals already have the leadership, credentialing
procedures, bylaws, and other policies in place to ensure that services
furnished to Medicare beneficiaries are being provided only by
qualified practitioners in accordance with all applicable laws,
regulations, and coding guidance. For services not furnished directly
by a physician, we would expect that these bylaws and policies would
ensure that the services are being supervised in a manner commensurate
with the complexity of the service, including personal supervision
where appropriate.
Comment: Many commenters disagreed with statements in the proposed
rule that the supervising physician should have, within his or her
scope of practice and hospital-granted privileges, the knowledge,
ability, and hospital privileges to perform the services being
supervised. Some commenters stated that the supervisor should be
required to provide only medical consultation and attend to medical
emergencies, but should not be expected to intervene or change the
course of treatment because this usurps the responsibility of treating
physician. Other commenters stated that the supervisor should be
``clinically appropriate'' to supervise the outpatient therapeutic
services.
Response: As we explained in the CY 2010 OPPS/ASC proposed rule (74
FR 35367), we believe the supervising physician or nonphysician
practitioner must be prepared to step in and perform the service, not
just to respond to an emergency. This includes the ability to take over
performance of a procedure and, as appropriate to both the supervisory
physician or nonphysician practitioner and the patient, to change a
procedure or the course of treatment being provided to a particular
patient. We originally stated in the April 2000 OPPS final rule (65 FR
18525) that the physician does not ``necessarily need to be of the same
specialty as the procedure or service that is being performed.'' We
also have stated in manual guidance that hospital medical staff that
supervises the services ``need not be in the same department as the
ordering physician'' (Section 20.5.1 of Chapter 6 of the Medicare
Benefits Policy Manual). We understand hospitals' concerns, and note
that we would not expect that a supervising physician would operate in
a vacuum, making all decisions without informing or consulting the
patient's treating physician or nonphysician practitioner. This would
be illogical and inappropriate for good medical practice. However, in
order to furnish appropriate assistance and direction for any given
service or procedure, we continue to believe the supervisory physician
or nonphysician practitioner must have, within his or her State scope
of practice and hospital-granted privileges, the ability to perform the
service or procedure. We believe that our interpretation of the
requirement means that the supervisor must be a person who is
``clinically appropriate'' to supervise the service or procedure. We
believe it is inappropriate for a supervisory physician or nonphysician
practitioner to be responsible for patients, hospital staff, and
services that are outside the scope of their knowledge, skills,
licensure, or hospital-granted privileges.
This interpretation of the previously codified language is
consistent with our longstanding application of direct supervision
across settings in terms of the physical presence of the physician and
what it means to ``furnish assistance and direction throughout the
performance of the procedure.'' We do not believe that allowing a
supervisor to be responsible for emergencies only would satisfy the
standard to ``furnish assistance and direction throughout the
performance of the procedure'' as the language has historically been
interpreted for physicians' offices and PBDs. We disagree with
commenters who stated that the historical intent of direct supervision
has been for a supervising physician to provide guidance and direction
without expecting that professional to be able to perform the service
or procedure and that performance of the procedure applies only to
personal supervision. It would be unreasonable to think that a
physician or nonphysician practitioner could competently assist and
direct a procedure for which they do not have sufficient knowledge and
skills to perform or redirect the procedure or service.
Comment: Several commenters requested additional guidance as to
what CMS considers hospital outpatient ``incident to'' services. One
commenter requested clarification on the applicability of ``incident
to'' to emergency department services. The commenter believed that the
``incident to'' provision for hospital outpatient services may not be
applicable to emergency department services because the emergency
department physician would be immediately available in the area to care
for patients, but would not have previously seen and established a
relationship with the patient, as this commenter believed is required.
Other commenters believed that the requirements for supervision of
hospital outpatient therapeutic services should be specific to each
clinical service and should be designated as either general or direct,
as for diagnostics. Some commenters asked for clarification of how to
report services in a Condition Code 44 situation when the patient
received care as an inpatient, with no direct supervision, and the
hospital then changed the patient's status to outpatient.
Response: As previously stated in this discussion, Sec.
410.27(a)(1)(ii) of the regulations states that Medicare Part B pays
for hospital services and supplies furnished incident to a physician
service to outpatients if they are provided ``as an integral though
incidental part of a physician's services.'' In addition, we have
stated in Section 20 of Chapter 6 of the Medicare Benefit Policy Manual
that hospitals provide two distinct types of services to outpatients:
services that are diagnostic in nature and other services that aid the
physician in the treatment of the patient. We further defined these
therapeutic services and supplies in Section 20.5.1 of Chapter 6 of the
Medicare Benefit Policy Manual, stating ``therapeutic services and
supplies which hospitals provide on an outpatient basis are those
services and supplies (including the use of hospital facilities) which
are incident to the services of physicians in the treatment of
patients.'' In essence, all hospital outpatient services that are not
[[Page 60585]]
diagnostic are services that aid the physician in the treatment of the
patient, and are called therapeutic services. These are the services
for which Medicare makes a hospital facility payment only when they are
provided ``incident to'' the services of a physician.
We also provide in Section 20.5.1 that services and supplies must
be furnished on a physician's order and delivered under physician
supervision. However, the manual indicates further that each occasion
of a service by a nonphysician does not need to also be the occasion of
the actual rendition of a personal professional service by the
physician responsible for the care of the patient. Nevertheless, as
stipulated in that same section of the manual ``during any course of
treatment rendered by auxiliary personnel, the physician must
personally see the patient periodically and sufficiently often enough
to assess the course of treatment and the patient's progress and, where
necessary, to change the treatment regimen.'' Section 20.5.1 also
explicitly includes clinic and emergency room services as examples of
hospital outpatient services that are provided incident to the services
of a physician. We note in this section that the policies for hospital
services incident to physicians' services rendered to outpatients
differ in some respects from policies that pertain to ``incident to''
services furnished in office and physician-directed clinic settings.
Those requirements are discussed in Section 60 of Chapter 15 of the
Medicare Benefit Policy Manual. The commenter incorrectly believed that
for hospital services to be ``incident to'' a physician's services, the
physician must have previously seen and established a relationship with
the patient. When a patient presents to an emergency department or a
hospital clinic and a physician examines the patient and orders
services to be provided, the provision of those services is incident to
the services of that physician.
We recognize the potential benefit to hospitals of specifically
designating supervision requirements for individual therapeutic
services based on clinical complexity, especially for less complex
services that we might deem to require general supervision. We note
that the commenters requesting individual designations mentioned only
defining services as requiring general or direct supervision. However,
as we discussed earlier in this section, direct supervision represents
a minimum standard currently applicable to all outpatient therapeutic
services. If we were to designate individual supervision levels for
hospital outpatient therapeutic services just as we do for diagnostic
services, it would be most consistent and appropriate for CMS to make
specific determinations for services that we believe may only be safely
provided under the personal supervision of a physician or that must be
performed only by a physician. We stated above that we expect that
hospitals already have credentialing procedures, bylaws, and other
policies established to ensure that services furnished to Medicare
beneficiaries are being provided only by qualified practitioners in
accordance with all applicable laws, regulations and coding guidance.
For services not furnished directly by a physician, we would expect
that these bylaws and policies would ensure that the services are being
supervised in a manner commensurate with the complexity of the service,
including personal supervision where appropriate.
The use of Condition Code 44 pertains to the entire patient
encounter, the patient's status, and the hospital bill type submitted.
Reporting of individual HCPCS codes on an outpatient claim must be
consistent with all instructions and CMS guidance, including the
requirements of Sec. 410.27 of the regulations, which specify that
direct supervision is required for hospital outpatient therapeutic
services.
Comment: One commenter requested clarification of the meaning of
the phrase ``performance of the procedure'' in the definition of direct
supervision. The commenter was unclear whether this phrase specifically
applied only to surgical procedures or whether it was a general term
for services and procedures. The commenter also asked if the direct
supervision requirement would apply to recovery room services following
a surgical procedure performed by the physician.
Response: The use of the term ``procedure'' is intended to
encompass all services and procedures and includes all components of a
service or procedure furnished by a hospital to an outpatient,
including recovery room services, and covered and paid by Medicare,
regardless of whether separate payment is made for those component
services. This is how we have applied the term within the codified
definitions of the levels of supervision (general, direct, and
personal) in Sec. Sec. 410.27 and 410.32. While each supervision
definition uses the phrase ``performance of the procedure,'' the term
``service'' may be substituted for the word ``procedure'' each time
``procedure'' appears in the regulations.
Comment: Several commenters raised questions about the proposed
definition of the phrase ``in the hospital.'' Some requested
clarification of the meaning of ``on the same campus.'' Several
commenters suggested that the word ``ownership'' in the definition
seems to unintentionally exclude areas that are operated and controlled
by the hospital under a lease agreement or a written operations
agreement. These commenters suggested either removing this term from
the definition of ``in the hospital'' or clarifying in this final rule
with comment period where CMS is referring to the business operation
aspect of ownership rather than the physical building.
Response: ``On the same campus'' was used to denote that the
supervising physician or nonphysician practitioner must be physically
located on the same campus as the services being furnished by the
hospital because it is possible for some hospitals to have more than
one main campus, as well as off-campus PBDs.
We appreciate the public comments that raised the questions about
the term ``ownership.'' We agree with the commenters that a narrow
interpretation of the word ``ownership'' would exclude spaces that the
hospital leases or operates under another type of operations agreement.
This was not our intention. The commenters correctly pointed out that
the word ``ownership'' in this context applies to the actual business
operation, not solely a physical building. However, we also believe
that the rest of the definition includes these aspects. If the
definition is read as a whole, instead of parsing individual clauses
out of context, then the spirit of the regulation is understood.
Because the phrase ``in the hospital or CAH'' applies broadly to
``incident to'' requirements such as the site of service requirement
for therapeutic services provided by the hospital directly and under
arrangement, we are finalizing the proposed definition of ``in the
hospital'' in new paragraph (g) of Sec. 410.27 as meaning areas in the
main building(s) of a hospital that are under the ownership, financial,
and administrative control of the hospital; that are operated as part
of the hospital; and for which the hospital bills the services
furnished under the hospital's CCN.
Comment: One commenter requested that CMS reiterate that the
``incident to'' and physician supervision requirements of Sec. 410.27
do not apply to physical therapy, occupational therapy, and speech-
language pathology services furnished under a therapy plan of care.
Response: Section 1833(t) of the Act excludes physical therapy,
occupational
[[Page 60586]]
therapy, and speech-language pathology from hospital outpatient
services paid under the OPPS. In addition, in the April 2000 OPPS final
rule (65 FR 18525), we stated in response to a comment about physical
therapy services that the coverage provision in section 1861(s)(2)(D)
of the Act does not require that physical therapy services be provided
incident to the services of a physician. Finally, in Section 20
(Hospital Outpatient Services) of Chapter 6 of the Medicare Benefit
Policy Manual, we state, ``[t]he following rules pertaining to the
coverage of outpatient hospital services are not applicable to physical
therapy, speech-language pathology, occupational therapy, or end stage
renal disease (ESRD) services furnished by hospitals to outpatients.''
This section instructs readers to consult sections 220 and 230 of
Chapter 15 of the Medicare Benefit Policy Manual for rules on the
coverage of outpatient physical therapy, occupational therapy, and
speech-language pathology furnished by a hospital.
Comment: Several commenters from CMHCs and hospital-based PHPs
questioned whether the direct physician supervision clarifications and
the ``incident to'' requirements of Sec. 410.27 apply to those
programs. Several hospital-based PHP stakeholders noted the discrepancy
in the physician supervision requirements for PHP services furnished by
CMHCs and hospitals.
Response: Medicare makes payment for hospital outpatient
therapeutic services only when provided ``incident to'' the services of
a physician. Outpatient psychiatric and hospital-based PHP services are
outpatient hospital services paid under the OPPS and, therefore, must
meet all conditions of Sec. 410.27, including the requirement for
direct supervision by a physician or qualified nonphysician
practitioner.
Because CMHCs are paid under the OPPS for PHP services, the
``incident to'' requirements of Sec. 410.27 also apply to CMHCs, with
the exception of direct supervision for outpatient PHP services.
Currently, CMHCs have a different physician supervision standard to
meet. On February 11, 1994, CMS issued the Partial Hospitalization
Services in Community Mental Health Centers (CMHCs) interim final rule
with comment period (59 FR 6570), developing and implementing the
coverage criteria and payment methodology for CMHCs under Medicare. At
the time when the CY 1994 CMHC rule was published, the decision was
made to permit general supervision in CMHCs. As implemented in Sec.
410.110(a), services provided in a CMHC PHP must be prescribed by a
physician and furnished under the general supervision of a physician.
General supervision means that a physician must be at least available
by telephone, but is not required to be on the premises of the CMHC at
all times (59 FR 6573). We recognized that a direct supervision
requirement could cause hardship to CMHCs because some of these
entities were unable to employ physicians on a full-time basis due to
the expense involved. In the CY 1994 interim final rule with comment,
we explained that because we believed that less than direct supervision
by a full-time physician in a CMHC would not jeopardize a patient's
health or treatment program, in combination with our belief that there
would be a number of professionals involved in the care of the patient
who are authorized to furnish services that would otherwise be
furnished by a physician, we required general physician supervision.
On August 1, 2000 (65 FR 18434), the OPPS was implemented and
provided payment for PHP services provided in two settings: hospital
outpatient departments to their outpatients and CMHCs. Although PHP is
one benefit and both provider types receive the same payment for
services rendered, CMHCs have been permitted to furnish PHP services
under general supervision; and the OPPS has, since 2000, held a
standard of direct supervision for hospital outpatient therapeutic
services, including PHP services (42 CFR 410.110 (a)). While the policy
was clearly codified for PBDs of hospitals in the CY 2009 OPPS/ASC
proposed rule and final rule with comment period, CMS restated and
clarified that the policy also applies to hospital outpatient services
not provided in PBDs due to questions referencing the assumption of
physician supervision in the April 2000 OPPS final rule (73 FR 68702
through 68704 referencing 65 FR 18525). Even though there are different
physician supervision standards for CMHCs and hospital-based PHPs, the
certification, recertification, and plan of treatment requirements at
Sec. 424.24(e) and section 1835(2)(F) of the Act continue to apply to
both provider types. The physician would certify and recertify (where
services are furnished over a period of time) that the individual would
require inpatient psychiatric care in the absence of such services; an
individualized, written plan for furnishing such services has been
established by a physician and is reviewed periodically by a physician;
and such services are or were furnished while the individual is or was
under the care of a physician. The physician recertification must be
signed by a physician who is treating the patient and has knowledge of
the patient's response to treatment.
In order to unify the benefit and create more equity and
consistency, we are exploring the possibility of extending the same
physician supervision requirements to both provider types.
Specifically, we are concerned whether the current policy of requiring
only general physician supervision in CMHCs continues to be
appropriate, taking into account the differences among provider
settings. We also plan to analyze PHP claims data from the past several
years and assess whether our current policies and payment structures
are working. Therefore, we will evaluate the policies and the
possibility of extending the same physician supervision requirement to
PHP services furnished in both CMHCs and HOPDs in future rulemaking.
With that in mind, we are requesting comments on this final rule
with comment period that address: (1) What types of practitioners
currently provide the supervision of PHP services in CMHCs; (2) what is
the expertise of supervising practitioners in CMHCs and what is the
expectation for their availability; (3) based on the final CY 2010
supervision requirements for hospital outpatient therapeutic services
(including PHP services furnished in HOPDs), under what circumstances
would direct supervision of PHP services furnished in CMHCs not be
occurring, according to the applicable definitions for direct
supervision of on-campus and off-campus therapeutic services; and (4)
what would be the rationale for maintaining different supervision
requirements for PHP services furnished in CMHCs and HOPDs, given that
all PHP services are paid under the OPPS.
Comment: A few commenters stated that the provisions for off-campus
PBDs should not require the supervising practitioner to be in the
department because the existing policy is burdensome and costly,
especially for rural providers. The commenters requested that a
supervising physician or nonphysician practitioner be able to supervise
services being furnished in more than one off-campus PBD at a time.
Some commenters stated that they know of off-campus PBDs in current
operation that operate with a supervisor nearby, for example, in a
physician's office, but not in the PBD.
Response: We first note that the requirement for direct supervision
of hospital outpatient therapeutic services furnished in PBDs of the
hospital was
[[Page 60587]]
codified in Sec. 410.27(f) of the regulations in the April 2000 OPPS
final rule. In that rule, we explicitly stated that ``on the premises
of the location'' means that the supervisor must be on the premises of
the PBD (65 FR 18525). We also responded to public commenters who
asserted that requiring a physician to be onsite at a PBD throughout
the performance of all ``incident to'' therapeutic services would be
burdensome and costly for hospitals where there are a limited number of
physicians available to provide coverage, particularly in rural
settings. We disagreed then that the supervision requirement was
unnecessary and burdensome because hospitals, prior to 2000, were
already required to ``meet a direct supervision of `incident to'
services requirement that is unrelated to the provider-based rules.''
We continue to believe that it would be inappropriate to allow one
physician or nonphysician practitioner to supervise all services being
provided in all PBDs at a particular off-campus outpatient location.
Since first allowing off-campus sites to be considered PBDs of
hospitals, we have placed particular emphasis on ensuring the quality
and safety of the services provided in these locations, which can be
many miles from the main hospital campus, through both additional
provider-based requirements in Sec. 413.65(e) and our emphasis on
direct physician supervision under Sec. 410.27(f). In addition,
because the physician or nonphysician practitioner must be immediately
available and have, within his or her State scope of practice and
hospital-granted privileges, the ability to perform the services being
supervised, we believe it would be highly unlikely that one physician
or nonphysician practitioner would be both immediately available at all
times that therapeutic services are being provided and would have the
knowledge and ability to adequately supervise all services being
performed at once in multiple off-campus PBDs.
Comment: Many commenters maintained that the CY 2009 OPPS/ASC final
rule with comment period statements on supervision were not a
``restatement or clarification'' but a significant change in policy.
They argued that any enforcement should be prospective beginning in CY
2010 only, with no enforcement regarding prior years' hospital
outpatient therapeutic services. The commenters believed that the
policy prior to CY 2009 at best was unclear, and that the regulations
were not comprehensive, and therefore, they concluded that hospitals
should not be held accountable to the policy stated in the CY 2009
OPPS/ASC final rule with comment period for hospital outpatient
therapeutic services furnished in 2000 through CY 2008. The commenters
stated that CMS should also not enforce the policy as clarified in the
CY 2009 OPPS/ASC final rule with comment period for CY 2009 hospital
outpatient therapeutic services because sufficient opportunity for
public notice and comment was not provided. Many hospitals were unaware
that the policy had been discussed in the CY 2000 OPPS rulemaking
process, and the commenters argued that hospitals may not have had
enough time to meet these requirements for CY 2009. Furthermore,
hospitals expressed concern about their potential liability due to qui
tam litigation.
Response: We provided a restatement and clarification of existing
policy in the CY 2009 OPPS/ASC proposed rule (73 FR 41518 through
41519), citing numerous existing statutory, regulatory, manual, and
prior rule preamble statements in section XII.A. of that rule,
specifically titled, ``Physician Supervision of HOPD Services.'' The CY
2009 OPPS/ASC proposed rule provided for a 60-day comment period. We
continue to believe that the CY 2009 restatement and clarification made
no change to longstanding hospital outpatient physician direct
supervision policies as incorporated in prior statements of policy,
including the regulations. In addition, we provided for public notice
and comment regarding these physician supervision policies through the
CY 2009 OPPS/ASC proposed rule in which, as noted above, we discussed
physician supervision explicitly in a distinct section of the proposed
rule, and we responded in the final rule to the few public comments we
received on the supervision discussion. Therefore, we believe that the
usual enforcement practices of Medicare contractors are appropriate for
services furnished in CY 2009. Likewise, the final supervision policies
described in this CY 2010 final rule with comment period for hospital
outpatient therapeutic services are effective and, therefore, subject
to enforcement beginning January 1, 2010.
In regard to hospital outpatient therapeutic services provided in
CY 2000 through CY 2008, in CY 2009 we recognized the need for
clarification of the direct supervision policy. CMS was relatively
silent on this topic between 2000 and 2008. Furthermore, the existing
regulations at Sec. 410.27(f) only specify the supervision
requirements for hospital outpatient therapeutic services furnished in
PBDs but do not address services furnished in areas of the hospital
that may not be PBDs. However, we note that the details of the direct
supervision policy for hospital outpatient therapeutic services
furnished in off-campus PBDs were clearly and consistently stated in
the April 2000 OPPS final rule discussion and the regulations,
including the requirement that the supervising practitioner be
physically present in an off-campus PBD when such services were being
furnished. As stated earlier in this section, we have placed and will
continue to place particular emphasis on ensuring the quality and
safety of the services provided in these locations and will continue to
do so through our enforcement and other efforts. However, in the case
of hospital outpatient therapeutic services furnished on the hospital's
campus in 2000 through 2008, we plan to exercise our discretion and
decline to enforce in situations involving claims where the hospital's
noncompliance with the direct physician supervision policy resulted
from error or mistake.
After consideration of the public comments we received, we are
finalizing our proposal to allow, in addition to clinical
psychologists, certain other nonphysician practitioners to directly
supervise services that they may perform themselves under their State
license and scope of practice and hospital-granted or CAH-granted
privileges, with one modification. In addition to physician assistants,
nurse practitioners, clinical nurse specialists, and certified nurse-
midwives, in this final rule with comment period, we are allowing
licensed clinical social workers to provide direct supervision.
Specifically, we are modifying the final text of revised Sec.
410.27(f) to include licensed clinical social workers among the listing
of nonphysician practitioners who may directly supervise the provision
of hospital outpatient therapeutic services. These nonphysician
practitioners may directly supervise services that they may personally
furnish in accordance with State law and all additional requirements,
including those specified in Sec. Sec. 410.71, 410.73, 410.74, 410.75,
410.76, and 410.77, respectively. Accordingly, we also are adding the
cross-reference to Sec. 410.73 (Clinical social worker services) in
the final revision of paragraph (a)(1)(iv) of Sec. 410.27 (which
indicates that services must be furnished under the direct supervision
of a physician or a nonphysician practitioner as specified in paragraph
(f)).
We are finalizing the proposed direct physician supervision
requirements for PR, CR, and ICR services furnished in
[[Page 60588]]
the HOPD that would require the direct supervision to be provided by a
doctor of medicine or osteopathy. Accordingly, we are finalizing the
relevant language in proposed Sec. Sec. 410.27(a)(1)(iv)(A) and (B)
which indicates that, for PR, CR, and ICR services, direct supervision
must be furnished by a doctor of medicine or osteopathy, as specified
in Sec. Sec. 410.47 and 410.49, respectively.
For services furnished on a hospital's main campus, we are
finalizing a modification of our proposed definition of ``direct
supervision'' in new paragraph (a)(1)(iv)(A) of Sec. 410.27 that
allows for the supervisory physician or nonphysician practitioner to be
anywhere on the hospital campus, including a physician's office, an on-
campus SNF, RHC, or other nonhospital space. Therefore, direct
supervision means that the supervisory physician or nonphysician
practitioner must be present on the same campus and immediately
available to furnish assistance and direction throughout the
performance of the procedure.
Because the term ``in the hospital or CAH'' applies broadly to
``incident to'' requirements such as the site of service requirement
for therapeutic services provided by the hospital directly and under
arrangement, we also are finalizing the definition of ``in the
hospital'' in new paragraph Sec. 410.27(g) as meaning areas in the
main building(s) of a hospital or CAH that are under the ownership,
financial, and administrative control of the hospital or CAH; that are
operated as part of the hospital; and for which the hospital bills the
services furnished under the hospital's or CAH's CCN.
We are finalizing, without modification, the addition of new
paragraph (a)(1)(iv)(B) to Sec. 410.27 to reflect that, for off-campus
PBDs of hospitals, the physician or nonphysician practitioner must be
present in the off-campus PBD, as defined in Sec. 413.65, and
immediately available to furnish assistance and direction throughout
the performance of the procedure. It does not mean that the physician
or nonphysician practitioner must be in the room when the procedure is
performed. As we stated previously, the language of paragraph
(a)(1)(iv)(B) is similar to existing Sec. 410.27(f) that we are
revising and relocating. Furthermore, we are finalizing the proposed
technical change to clarify the language in this paragraph by removing
the phrase ``present and on the premises of the location'' and
replacing it with the phrase ``present in the off-campus provider-based
department.''
Additionally, we are finalizing the proposal to make a technical
correction to the title of Sec. 410.27 to read, ``Outpatient hospital
or CAH services and supplies incident to a physician service:
Conditions'' to clarify in the title that the requirements for payment
of hospital outpatient therapeutic services incident to a physician or
nonphysician practitioner service in that section apply to both
hospitals and CAHs. Similarly, we are including the phrase ``hospital
or CAH'' throughout the text of Sec. 410.27 wherever the text
currently refers just to ``hospital.''
4. Policies for Direct Supervision of Hospital and CAH Outpatient
Diagnostic Services
As we discussed in detail in the CY 2010 OPPS/ASC proposed rule (74
FR 35368), with respect to the physician supervision requirements for
individual diagnostic tests, we have continued since the April 2000
OPPS final rule discussion (65 FR 18526) to instruct hospitals that,
for diagnostic services furnished in PBDs of hospitals, hospitals
should follow the supervision requirements for individual diagnostic
tests as listed in the MPFS Relative Value File. For diagnostic
services not listed in the MPFS file, Medicare contractors, in
consultation with their medical directors, define appropriate
supervision levels in order to determine whether claims for these
services are reasonable and necessary. To further specify the
supervision policy across service settings and to provide consistency
for all hospital outpatient diagnostic services, for CY 2010 we
proposed to require that all hospital outpatient diagnostic services
that are provided directly or under arrangement, whether provided in
the main buildings of the hospital, in a PBD of a hospital, or at a
nonhospital location, follow the physician supervision requirements for
individual tests as listed in the MPFS Relative Value File. We also
proposed that the definitions of general, direct, and personal
supervision as defined in Sec. Sec. 410.32(b)(3)(i) through
(b)(3)(iii) would also apply. In the case of direct supervision of
diagnostic services furnished directly by the hospital or under
arrangement in the main hospital buildings or on-campus in a PBD, we
proposed that the definition of direct supervision would be the same as
the definition we proposed for therapeutic services provided on-campus
as discussed in the CY 2010 OPPS/ASC proposed rule (74 FR 35369),
meaning that the physician would be present on the same campus, in the
hospital or the on-campus PBD of the hospital, as defined in Sec.
413.65, and immediately available to furnish assistance and direction
throughout the performance of the procedure. In addition, the
definition of ``in the hospital or CAH'' as defined in proposed Sec.
410.27(g), discussed above, would apply. In the CY 2010 OPPS/ASC
proposed rule, we explained that this means that the supervisory
physician may not be located in any entity such as a physician's
office, co-located hospital, IDTF, or hospital-operated provider or
supplier such as a SNF, ESRD facility, or HHA, or any other nonhospital
space that may be co-located on the hospital's campus, as campus is
defined in Sec. 413.65(a)(2).
Similarly, in the case of direct physician supervision of
diagnostic services furnished directly or under arrangement in an off-
campus PBD, we proposed that the definition of direct supervision would
be the same as the current definition for therapeutic services provided
in an off-campus PBD as discussed in the CY 2010 OPPS/ASC proposed rule
(74 FR 35369), meaning the physician must be present in the off-campus
PBD, as defined in Sec. 413.65 and immediately available to furnish
assistance and direction throughout the performance of the procedure.
As we discussed in the April 2000 OPPS final rule (65 FR 18524 through
18525) and the CY 2009 OPPS/ASC final rule with comment period (73 FR
68702 through 68704), we have long made the analogy of the PBD to the
physician's office suite, as described in the definition of direct
supervision in Sec. 410.32(b)(3)(ii).
In addition to providing diagnostic services directly or under
arrangement in the hospital, including PBDs of the hospital, a hospital
may also send its outpatients to another entity, such as an IDTF, to
furnish these services under arrangement for the hospital. For example,
in the April 2000 OPPS final rule (65 FR 185440 through 185441), in a
discussion of the hospital bundling rules, we discussed that an entity,
like an IDTF, may be located in the main buildings of a hospital or on
the hospital campus but operated independently of the hospital. In
addition, these suppliers, providers, or other entities may be located
elsewhere, not on a hospital's main campus or other hospital property.
These entities, like IDTFs and physicians' offices, may provide
services to their own patients (not hospital outpatients) and to
hospital outpatients under arrangements with the hospital. They follow
the physician supervision requirements of the MPFS and Sec. 410.32
when providing services to Medicare beneficiaries who are not hospital
outpatients. For consistency, we proposed for CY 2010
[[Page 60589]]
that all diagnostic services provided to hospital outpatients under
arrangement in nonhospital entities, whether those entities are located
on the main campus of the hospital or elsewhere, would also follow the
requirements as described in Sec. 410.32(b)(3)(i) through (iii). When
hospitals contract with other entities to provide services under
arrangement, the hospital must exercise professional responsibility
over the arrangement for services, in accordance with the guidance
provided in Section 10.3 (Under Arrangements) of Chapter 5 of the
Medicare General Information, Eligibility and Entitlement Manual. This
means that for the hospital to receive payment, it is responsible for
ensuring that all applicable requirements in Sec. Sec. 410.28 and
410.32 are met. In the case of hospital outpatient diagnostic services
provided under arrangement at nonhospital locations, such as IDTFs, we
believe that the term ``office suite'' used in Sec. 410.32(b)(3)(ii)
is directly applicable because these facilities usually also provide
diagnostic services to their own patients and, therefore, would be able
to apply the direct supervision requirement in Sec. 410.32(b)(3)(ii)
without further definition.
We stated in the CY 2010 OPPS/ASC proposed rule (74 FR 35369) that
physician assistants, nurse practitioners, clinical nurse specialists,
and certified nurse-midwives who operate within the scope of practice
under State law may order and perform diagnostic tests, as discussed
under Sec. 410.32(a)(3) and in the corresponding manual guidance in
section 80 (Requirements for Diagnostic X-Ray, Diagnostic Laboratory,
and Other Diagnostic Tests) of Chapter 15 of the Medicare Benefit
Policy Manual. However, this manual guidance and the regulations at
Sec. 410.32(b)(1) also state that diagnostic x-ray and other
diagnostic tests must be furnished under the appropriate level of
supervision by a physician as defined in section 1861(r) of the Act.
Thus, physician assistants, nurse practitioners, clinical nurse
specialists, and certified nurse-midwives may not function as
supervisory physicians for the purposes of diagnostic tests. In
accordance with these existing requirements, we did not propose to
allow physician assistants, nurse practitioners, clinical nurse
specialists, and certified nurse-midwives to provide the supervision of
diagnostic tests provided to hospital outpatients. Clinical
psychologists may supervise only diagnostic psychological and
neuropsychological testing services as described in an exception to the
basic rule at Sec. 410.32(b)(2)(iii) for diagnostic psychological and
neuropsychological testing services, when these services are personally
furnished by a clinical psychologist or an independently practicing
psychologist or when they are furnished under the general supervision
of a physician or clinical psychologist.
To reflect these proposed changes for the provision of direct
supervision of diagnostic services provided to hospital outpatients in
the regulations, we proposed to revise existing Sec. 410.28(e). First,
we proposed to specify that the provisions of proposed revised
paragraph (e) apply to diagnostic services furnished by the hospital,
directly or under arrangement, consistent with our proposal to apply
the existing diagnostic services supervision requirement for PBDs to
diagnostic services provided directly by the hospital or under
arrangement. We would continue to specify that the definitions of
general and personal physician supervision included in Sec.
410.32(b)(3)(i) and (b)(3)(iii) apply to these levels of supervision of
hospital outpatient diagnostic services. Furthermore, we proposed to
add new paragraph (e)(1) to Sec. 410.28 to indicate that, for services
furnished directly or under arrangement, in the hospital or in an on-
campus department of a provider, as defined in Sec. 413.65, direct
supervision means that the physician must be present on the same
campus, in the hospital or PBD of the hospital as defined in Sec.
413.65, and immediately available to furnish assistance and direction
throughout the performance of the procedure. We also would continue to
provide that direct supervision does not mean that the physician must
be in the room when the procedure is performed. As discussed above, we
would apply the definition of ``in the hospital'' as proposed in Sec.
410.27(g) of the regulations. In addition, we proposed to add new
paragraph (e)(2) to Sec. 410.28 to reflect that, for the direct
physician supervision of diagnostic services furnished directly or
under arrangement in off-campus PBDs of hospitals, the physician must
present in the off-campus PBD, as defined in Sec. 413.65, and
immediately available to furnish assistance and direction throughout
the performance of the procedure. We would continue to provide that
direct supervision does not mean that the physician must be in the room
when the procedure is performed. Finally, we proposed to add new
paragraph (e)(3) to specify that for the direct supervision of hospital
outpatient services provided under arrangement in physicians' offices
and other nonhospital locations, the definition of direct supervision
in Sec. 410.32(b)(3)(ii) applies.
Comment: Some commenters fully supported the proposal for hospital
outpatient diagnostic services, agreeing with CMS that it is
appropriate to apply the requirements for physician supervision
consistently across all sites of service. Other commenters, including
major hospitals associations and commenters representing rural
hospitals, believed the proposal is unnecessary, unrealistic, costly,
and would reduce access to diagnostic services. Several commenters
stated that CMS' interpretation of ``furnish assistance and direction
throughout the performance of the procedure'' would mean that the
physician would have to be able to operate sophisticated equipment,
replacing the technicians who are trained to operate the equipment.
Some commenters indicated that rural hospitals would not be able to
meet the proposed requirements. Other commenters requested that CMS add
a column to Addendum B specifying the required level of supervision for
diagnostic tests to make it easier for hospitals to comply with the
requirements.
Response: We disagree with the commenters that requiring hospitals
to follow the MPFS levels of supervision for individual diagnostic
tests would create additional hospital burden for many services because
CMS has already applied the lowest level of supervision (general
supervision) to numerous diagnostic services. Additionally, in the
April 2000 OPPS final rule (65 FR 18536), we codified Sec. 410.28(e)
of the regulations to apply this requirement to all on and off campus
PBDs of hospitals. It is appropriate to apply the same requirements to
diagnostic services that are provided ``in the hospital'' as those that
have been long established for on-campus and off-campus PBDs of the
hospital, including rural hospitals. We also believe that, in the
interest of safe and high quality care for beneficiaries, it is
appropriate for hospitals to follow the same requirements for
supervision as physicians and IDTFs when furnishing more complex
diagnostic tests that we have specifically identified as requiring
direct or personal supervision, or should be performed only by the
physician. In addition, since hospitals may contract with other
entities to have diagnostic services provided under arrangement, it is
also appropriate to ensure that those entities are consistently
following the supervision levels that we have identified for both their
own patients as well as hospital outpatients. We recognize that
specially trained
[[Page 60590]]
ancillary staff and technicians are the primary operators of some
specialized diagnostic testing equipment. However, we also believe it
is reasonable for the physician that supervises the provision of the
services to be knowledgeable about those tests.
Therefore, we are finalizing our CY 2010 proposal that all hospital
outpatient diagnostic services that are provided directly or under
arrangement, whether provided in the main buildings of the hospital, in
a PBD of the hospital, or at a nonhospital location, follow the
physician supervision requirements for individual tests as listed in
the MPFS Relative Value File. The definitions of general, direct, and
personal supervision as defined in Sec. Sec. 410.32(b)(3)(i) through
(b)(3)(iii) also apply. In the case of direct supervision of diagnostic
services furnished directly by the hospital or under arrangement in the
main hospital buildings or on-campus in a PBD, the definition of direct
supervision is the same as the modified definition that we are
finalizing for therapeutic services provided on-campus, as discussed in
section XII.D.3. of this final rule with comment period, meaning that
the physician would be present on the same campus and immediately
available to furnish assistance and direction throughout the
performance of the procedure. We would continue to specify that direct
supervision does not mean that the physician must be in the room when
the procedure is performed. As discussed above, we are applying the
definition of ``in the hospital'' as proposed and finalized in Sec.
410.27(g) of the regulations. While the definition of ``in the
hospital'' is no longer a component of the definition of direct
supervision, it remains applicable to describe areas operated as part
of the hospital that are not PBDs for other purposes, such as services
provided under arrangement. It is also appropriate to apply the
definition of that term consistently for both diagnostic and
therapeutic hospital outpatient services. In addition, we are
finalizing our proposal to add new paragraph (e)(2) to Sec. 410.28 to
reflect that, for the direct physician supervision of diagnostic
services furnished directly or under arrangement in off-campus PBDs of
hospitals, the physician must be present in the off-campus PBD of the
hospital, as defined in Sec. 413.65, and immediately available to
furnish assistance and direction throughout the performance of the
procedure. We would continue to specify that direct supervision does
not mean that the physician must be in the room when the procedure is
performed. Also, we are finalizing our proposal to add new paragraph
(e)(3) to specify that for the direct supervision of hospital
outpatient services provided under arrangement in physicians' offices
and other nonhospital locations, the definition of direct supervision
in Sec. 410.32(b)(3)(ii) applies.
We acknowledge the commenters' request to publish the diagnostic
supervision levels in Addendum B. Addendum B currently specifies
information related directly to the payment for services described by
HCPCS codes, including relative weights, payment rates, and copayments.
We do not believe it is necessary to include the supervision levels for
diagnostic services in Addendum B that are not directly relevant to the
payment rates for those services. These supervision levels are readily
available on the CMS Web site in the MPFS RVU File, and, because we
make both the MPFS RVU File and Addendum B available in spreadsheet
format, an interested hospital can easily modify Addendum B to add
whatever code-specific information the hospital believes would be most
useful to incorporate in a single electronic file for reference
purposes.
Comment: Several commenters asserted that nonphysician
practitioners should be able to supervise diagnostic tests because they
may order and perform diagnostic tests that are within their scope of
practice under State law.
Response: We acknowledged in the CY 2010 OPPS/ASC proposed rule (74
FR 35369) that physician assistants, nurse practitioners, clinical
nurse specialists, and certified nurse-midwives who operate within the
scope practice under State law may order and perform diagnostic tests,
as discussed in Sec. 410.32(a)(3) and corresponding manual guidance in
Section 80 of Chapter 15 of the Medicare Benefit Policy Manual.
However, we noted that this manual guidance and the long established
regulation at Sec. 410.32(b)(1) also state that diagnostic x-ray and
other diagnostic tests must be furnished under the appropriate level of
supervision by a physician as defined in section 1861(r) of the Act.
Thus, CMS historically has not permitted physician assistants, nurse
practitioners, clinical nurse specialists, and certified nurse-midwives
to function as supervisory ``physicians'' for the purposes of
diagnostic tests. In accordance with these existing requirements, we
did not propose to allow physician assistants, nurse practitioners,
clinical nurse specialists, and certified nurse-midwives to provide the
supervision of diagnostic tests provided to hospital outpatients.
Because we establish the physician supervision levels in the MPFS
Relative Value File based on the policy that only a physician may
provide the supervision, we believe it continues to be most appropriate
to allow only physicians to provide the supervision of hospital
outpatient diagnostic services.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to require that
all hospital outpatient diagnostic services that are provided directly
or under arrangement, whether provided in the main buildings of the
hospital, in a PBD of a hospital, or at a nonhospital location, follow
the physician supervision requirements for individual tests as listed
in the MPFS RVU File. The definitions of general, direct, and personal
supervision as defined in Sec. Sec. 410.32(b)(3)(i) through
(b)(3)(iii) also apply. In the case of direct supervision of diagnostic
services furnished directly by the hospital or under arrangement in the
main hospital buildings or on-campus in a PBD of a hospital, the
definition of direct supervision is the same as the modified definition
that we are finalizing for therapeutic services provided on-campus as
discussed in section XII.D.3. of this final rule with comment period,
meaning that the physician must be present on the same campus and
immediately available to furnish assistance and direction throughout
the performance of the procedure. We continue to provide that direct
supervision does not mean that the physician must be in the room when
the procedure is performed. As discussed above, we are applying the
definition of ``in the hospital'' as specified in new Sec. 410.27(g)
of the regulations. While the definition of in the hospital is no
longer a component of the definition of direct supervision, it remains
applicable to describe areas operated as part of the hospital that are
not PBDs for other purposes, such as services provided under
arrangement. It is also appropriate to apply the definition of that
term consistently for both diagnostic and therapeutic hospital
outpatient services. In addition, we are finalizing our CY 2010
proposal, without modification, to add new paragraph (e)(2) to Sec.
410.28 to reflect that, for the direct physician supervision of
diagnostic services furnished directly or under arrangement in off-
campus PBDs of hospitals, the physician must present in the off-campus
PBD, as defined in Sec. 413.65, and immediately available to furnish
[[Page 60591]]
assistance and direction throughout the performance of the procedure.
We continue to provide that direct supervision does not mean that the
physician must be in the room when the procedure is performed. Also, we
are finalizing the CY 2010 proposal, without modification, to add new
paragraph (e)(3) to specify that, for the direct supervision of
hospital outpatient services provided under arrangement in physicians'
offices and other nonhospital locations, the definition of direct
supervision in Sec. 410.32(b)(3)(ii) applies. We did not propose to
allow physician assistants, nurse practitioners, clinical nurse
specialists, and certified nurse-midwives to provide the supervision of
diagnostic tests provided to hospital outpatients and we are finalizing
this policy.
5. Summary of CY 2010 Physician Supervision Final Policy
In summary, for CY 2010, nonphysician practitioners who are
specified under Sec. 410.27 of the final regulations as clinical
psychologists, licensed clinical social workers, physician assistants,
nurse practitioners, clinical nurse specialists, and certified nurse-
midwives, may directly supervise all hospital outpatient therapeutic
services that they may perform themselves within their State scope of
practice and hospital-granted privileges, provided that they meet all
additional requirements, including any collaboration or supervision
requirements as specified in Sec. Sec. 410.71, 410.73, 410.74, 410.75,
410.76, and 410.77. We are finalizing the proposed direct physician
supervision requirements for PR, CR, and ICR services furnished in the
HOPD that would require the supervision to be provided by a doctor of
medicine or osteopathy. Accordingly, we are finalizing proposed
Sec. Sec. 410.27(a)(1)(iv)(A) and (B) which indicate that, for PR, CR,
and ICR services, direct supervision must be furnished by a doctor of
medicine or osteopathy, as specified in Sec. Sec. 410.47 and 410.49,
respectively.
We also are refining the definition of the direct supervision of
hospital outpatient therapeutic services for those services provided in
the hospital or on-campus PBD of the hospital. For services provided in
the hospital or on-campus PBD of the hospital, direct supervision would
mean that the physician or nonphysician practitioner must be present on
the same campus and immediately available to furnish assistance and
direction throughout the performance of the procedure. In addition, we
are finalizing the definition of ``in the hospital'' in new paragraph
Sec. 410.27(g) to mean areas in the main building(s) of a hospital or
CAH that are under the ownership, financial, and administrative control
of the hospital or CAH; that are operated as part of the hospital or
CAH; and for which the hospital or CAH bills the services furnished
under the hospital's or CAH's CCN.
We are not making any significant changes to the definition or
requirements for direct supervision of hospital outpatient therapeutic
services provided in off-campus PBDs of a hospital or CAH, other than
to allow nonphysician practitioners to provide direct supervision for
the services that they may perform themselves in those locations.
Therefore, we are finalizing, without modification, the addition of new
paragraph (a)(1)(iv)(B) to Sec. 410.27 to reflect that, for off-campus
PBDs of hospitals or CAHs, the physician or nonphysician practitioner
must be present in the off-campus PBD, as defined in Sec. 413.65, and
immediately available to furnish assistance and direction throughout
the performance of the procedure. We state that this requirement does
not mean that the physician or nonphysician practitioner must be in the
room when the procedure is performed.
Additionally, we are finalizing the proposal to make a technical
correction to the title of Sec. 410.27 and the text of Sec. 410.27 to
clarify throughout that the requirements for payment of hospital
outpatient therapeutic services incident to a physician or nonphysician
practitioner service in that section apply to both hospitals and CAHs.
For CY 2010, we are finalizing the proposal to require that all
hospital outpatient diagnostic services provided directly or under
arrangement, whether provided in the hospital, in a PBD of a hospital,
or at a nonhospital location, follow the physician supervision
requirements for individual tests as listed in the MPFS Relative Value
File. The existing definitions of general and personal supervision as
defined in Sec. Sec. 410.32(b)(3)(i) and (b)(3)(iii) also apply. For
services furnished directly or under arrangement in the hospital or on-
campus PBD, direct supervision means that the physician must be present
on the same campus and immediately available to furnish assistance and
direction throughout the performance of the procedure. For the purposes
of Sec. 410.28, as for the general purposes of Sec. 410.27, the
definition of ``in the hospital,'' as defined in Sec. 410.27(g),
applies. For diagnostic services furnished directly or under
arrangement off-campus in a PBD of the hospital, direct supervision
continues to mean that the physician must be present in the off-campus
PBD and immediately available to furnish assistance and direction
throughout the performance of the procedures. For all hospital
outpatient diagnostic services provided under arrangement in
nonhospital locations, such as IDTFs and physicians' offices, the
existing definition of direct supervision under Sec. 410.32(b)(3)(ii)
applies. We are revising Sec. 410.28 of the regulations to reflect
these changes.
E. Direct Referral for Observation Services
Since CY 2003, hospitals have reported a Level II HCPCS code for
Medicare billing purposes for a ``direct admission'' to a hospital for
outpatient observation services. In section 290 of Chapter 4 of the
Medicare Claims Processing Manual (Pub. 100-4), we define a ``direct
admission'' as the direct referral of a patient by a community
physician to a hospital for observation services without an associated
emergency room visit, hospital outpatient clinic visit, critical care
service, or hospital outpatient surgical procedure (that is, a status
indicator ``T'' procedure) on the day of the initiation of observation
services. Since CY 2006, we have instructed hospitals to report a
``direct admission'' referred for observation services using HCPCS code
G0379 (Direct admission of patient for hospital observation care) (70
FR 68688 through 68691).
Observation care is a hospital outpatient service that is reported
using HCPCS code G0378 (Hospital observation services, per hour).
Hospitals report outpatient observation services, which are commonly
provided in association with a hospital clinic visit, emergency
department visit, or other major service, on hospital outpatient
claims, just like other outpatient services. Physicians order
observation care, defined as clinically appropriate services, including
ongoing short-term treatment, assessment, and reassessment furnished in
order for the physician to determine whether the beneficiary will
require further treatment as an inpatient or whether the beneficiary
may be safely discharged from the hospital.
We have become aware that, because the word ``admission'' is
generally used in reference to inpatient hospital care, our historical
use of the phrase ``direct admission'' in the code descriptor for HCPCS
code G0379 and the use of the phrase ``observation status'' in the
Medicare Claims Processing Manual (Chapter 4, Section 290) and the
Medicare Benefit Policy Manual
[[Page 60592]]
(Chapter 6, Section 20) may be contributing to confusion for hospitals
and beneficiaries related to a beneficiary's status as an inpatient or
an outpatient when he or she is receiving observation services. For
Medicare payment purposes, there is no patient status termed
``observation status.'' Hospitals may only bill for items and services
furnished to inpatients, outpatients, or nonpatients. We believe that
using terminology such as ``observation status'' or ``admission to
observation'' may be confusing for physicians, hospitals, and
beneficiaries. Therefore, in the CY 2010 OPPS/ASC proposed rule (74 FR
35370 through 35371), we proposed to modify the code descriptor for
HCPCS code G0379 to remove the reference to the word ``admission'' and
to replace it with ``referral.'' The proposed long code descriptor for
HCPCS code G0379 would be ``Direct referral for hospital observation
care.'' We proposed this change to more accurately reflect that the
physician in the community has referred the beneficiary to the hospital
for observation services as a hospital outpatient. In addition to the
proposed CY 2010 change to the code descriptor for HCPCS code G0379, we
modified the Medicare Claims Processing Manual and the Medicare Benefit
Policy Manual to remove most references related to ``admission'' for
observation services or ``observation status.'' We refer readers to
Transmittal 1760 dated June 23, 2009 (which rescinded and replaced
Transmittal 1745, dated May 22, 2009) and Transmittal 107 dated May 22,
2009 (both issued under Change Request 6492), for more information
regarding the specific changes incorporated in the manuals.
We did not propose to change the status indicator or payment
methodology for HCPCS code G0379 for CY 2010. Instead, we proposed to
continue the payment policy that was finalized for the CY 2009 OPPS (73
FR 68554). In the CY 2010 OPPS/ASC proposed rule (74 FR 35370 through
35371), we proposed to continue to assign HCPCS code G0379 status
indicator ``Q3,'' indicating that it would be eligible for payment
through APC 8002 (Level I Extended Assessment & Management Composite)
when certain criteria are met or through APC 0604 (Level I Hospital
Clinic Visits) when other criteria are met; otherwise, its payment
would be packaged into payment for other separately payable services in
the same encounter. The established criteria for payment of HCPCS code
G0379 under either composite APC 8002, as part of the extended
assessment and management composite service, or APC 0604, as a
separately payable individual service that we would continue for CY
2010 are: (1) both HCPCS codes G0378 and G0379 are reported with the
same date of service; and (2) no service with a status indicator of
``T'' or ``V'' or Critical Care (APC 0617) is provided on the same date
of service as HCPCS code G0379. If either of the above criteria is not
met, HCPCS code G0379 is assigned status indicator ``N'' and its
payment is packaged into the payment for other separately payable
services provided in the same encounter.
We did not receive any public comments related to our CY 2010
proposal to revise the code descriptor for HCPCS code G0379 to read
``Direct referral for hospital observation care,'' or on our proposal
to continue the CY 2009 status indicator assignment and payment
methodology for HCPCS code G0379 for CY 2010. Therefore, we are
finalizing these CY 2010 proposals, without modification.
XIII. OPPS Payment Status and Comment Indicators
A. OPPS Payment Status Indicator Definitions
Payment status indicators (SIs) that we assign to HCPCS codes and
APCs play an important role in determining payment for services under
the OPPS. They indicate whether a service represented by a HCPCS code
is payable under the OPPS or another payment system and also whether
particular OPPS policies apply to the code. The final CY 2010 status
indicator assignments for APCs and HCPCS codes are shown in Addendum A
and Addendum B, respectively, to this final rule with comment period.
As we proposed in the CY 2010 OPPS/ASC proposed rule (74 FR 35371),
in this final rule with comment period, we are changing the definitions
of status indicators ``H'' and ``K.'' We did not propose to make any
changes to the other status indicators that were listed in Addendum D1
of the CY 2009 OPPS/ASC final rule with comment period. The final
status indicators are listed in the tables under sections XIII.A.1.,
2., 3., and 4. of this final rule with comment period.
1. Payment Status Indicators to Designate Services That Are Paid Under
the OPPS
------------------------------------------------------------------------
Indicator Item/code/service OPPS payment status
------------------------------------------------------------------------
G................... Pass-Through Drugs and Paid under OPPS;
Biologicals. separate APC payment.
H................... Pass-Through Device Separate cost-based pass-
Categories. through payment; not
subject to copayment.
K................... Nonpass-Through Drugs Paid under OPPS;
and Nonimplantable separate APC payment.
Biologicals, including
Therapeutic
Radiopharmaceuticals.
N................... Items and Services Paid under OPPS; payment
Packaged into APC Rates. is packaged into
payment for other
services. Therefore,
there is no separate
APC payment.
P................... Partial Hospitalization. Paid under OPPS; per
diem APC payment.
Q1.................. STVX-Packaged Codes..... Paid under OPPS;
Addendum B displays APC
assignments when
services are separately
payable. (1) Packaged
APC payment if billed
on the same date of
service as a HCPCS code
assigned status
indicator ``S,'' ``T,''
``V,'' or ``X.'' (2) In
all other
circumstances, payment
is made through a
separate APC payment.
Q2.................. T-Packaged Codes........ Paid under OPPS;
Addendum B displays APC
assignments when
services are separately
payable. (1) Packaged
APC payment if billed
on the same date of
service as a HCPCS code
assigned status
indicator ``T.'' (2) In
all other
circumstances, payment
is made through a
separate APC payment.
[[Page 60593]]
Q3.................. Codes that may be paid Paid under OPPS;
through a composite APC. Addendum B displays APC
assignments when
services are separately
payable. Addendum M
displays composite APC
assignments when codes
are paid through a
composite APC. (1)
Composite APC payment
based on OPPS composite-
specific payment
criteria. Payment is
packaged into a single
payment for specific
combinations of
service. (2) In all
other circumstances,
payment is made through
a separate APC payment
or packaged into
payment for other
services.
R................... Blood and Blood Products Paid under OPPS;
separate APC payment.
S................... Significant Procedure, Paid under OPPS;
Not Discounted When separate APC payment.
Multiple.
T................... Significant Procedure, Paid under OPPS;
Multiple Reduction separate APC payment.
Applies.
U................... Brachytherapy Sources... Paid under OPPS;
separate APC payment.
V................... Clinic or Emergency Paid under OPPS;
Department Visit. separate APC payment.
X................... Ancillary Services...... Paid under OPPS;
separate APC payment.
------------------------------------------------------------------------
Section 142 of Public Law 110-275 (MIPPA) required CMS to pay for
therapeutic radiopharmaceuticals for the period of July 1, 2008,
through December 31, 2009, at hospitals' charges adjusted to the costs.
The status indicator ``H'' was assigned to therapeutic
radiopharmaceuticals to indicate that an item was paid at charges
adjusted to cost during CY 2009. In the CY 2010 OPPS/ASC proposed rule
(74 FR 35373), we proposed to pay prospectively and separately for
therapeutic radiopharmaceuticals with average per day costs greater
than the proposed CY 2010 drug packaging threshold of $65 under the
OPPS. Therefore, we proposed to change the status indicator for HCPCS
codes used to report separately payable therapeutic
radiopharmaceuticals from ``H'' to ``K,'' which indicates that an item
is separately paid under the OPPS at the APC payment rate established
for the item. We refer readers to section V.B.5. of the proposed rule
(74 FR 35333 through 36336) and this final rule with comment period for
discussion of the proposed and final CY 2010 changes to our payment
policy for therapeutic radiopharmaceuticals.
We received many comments on our proposal to establish prospective
payment rates for therapeutic radiopharmaceuticals. We respond to these
comments and discuss our final policy in section V. B. 5. of this final
rule with comment period. However, we did not receive any public
comments related to our proposal to change the definitions of status
indicators ``H'' and ``K,'' to reflect this change in policy.
Therefore, we are changing the definitions of status indicators ``H''
and ``K'' as proposed, without modification, to reflect our final
therapeutic radiopharmaceutical payment policy, and we are finalizing
assignment of status indicator ``K'' to therapeutic
radiopharmaceuticals with average per day costs greater than the final
CY 2010 drug packaging threshold of $65 under the OPPS.
As we discussed in detail in section V.A.4. of the CY 2010 OPPS/ASC
proposed rule (74 FR 35311 through 35314), we proposed to consider
implantable biologicals that are not on pass-through status as a
biological before January 1, 2010, as devices for pass-through
evaluation and payment beginning in CY 2010. Therefore, as devices,
pass-through implantable biologicals would be assigned a status
indicator of ``H,'' while nonpass-through implantable biologicals would
be assigned a status indicator of ``N'' beginning in CY 2010. Those
implantable biologicals that have been granted pass-through status
under the drug and biological criteria prior to January 1, 2010, would
continue to be assigned a status indicator of ``G'' until they are
proposed for expiration from pass-through status during our annual
rulemaking cycle. In the proposed rule (74 FR 35373), we proposed to
assign status indicator ``K'' to nonimplantable biologicals and to
adjust the definition of status indicator ``K'' accordingly.
We received numerous comments on our proposal to treat implantable
biologicals as devices and we respond to them in section V.A.4. of this
final rule with comment period. We did not receive any public comments
with regard to the proposed changes to status indicator ``K'' to
reflect the implantable biological pass-through payment policy.
Therefore, we are finalizing our proposal, without modification, to
assign status indicator ``K'' to nonimplantable biologicals and to
adjust the definition of status indicator ``K'' accordingly.
The final CY 2010 status indicators are displayed in the table
above, as well as in Addendum D1 to this final rule with comment
period.
2. Payment Status Indicators to Designate Services That Are Paid Under
a Payment System Other Than the OPPS
We did not propose any changes to the status indicators listed
below for the CY 2010 OPPS.
------------------------------------------------------------------------
Indicator Item/code/service OPPS payment status
------------------------------------------------------------------------
A................... Services furnished to a Not paid under OPPS.
hospital outpatient Paid by fiscal
that are paid under a intermediaries/MACs
fee schedule or payment under a fee schedule or
system other than OPPS, payment system other
for example: than OPPS.
Ambulance ........................
Services.
Clinical Not subject to
Diagnostic Laboratory deductible or
Services. coinsurance.
Non-Implantable ........................
Prosthetic and Orthotic
Devices.
EPO for ESRD ........................
Patients.
Physical, ........................
Occupational, and
Speech Therapy.
Routine ........................
Dialysis Services for
ESRD Patients Provided
in a Certified Dialysis
Unit of a Hospital.
Diagnostic ........................
Mammography.
Screening Not subject to
Mammography. deductible.
C................... Inpatient Procedures.... Not paid under OPPS.
Admit patient. Bill as
inpatient.
[[Page 60594]]
F................... Corneal Tissue Not paid under OPPS.
Acquisition; Certain Paid at reasonable
CRNA Services; and cost.
Hepatitis B Vaccines.
L................... Influenza Vaccine; Not paid under OPPS.
Pneumococcal Pneumonia Paid at reasonable
Vaccine. cost; not subject to
deductible or
coinsurance.
M................... Items and Services Not Not paid under OPPS.
Billable to the Fiscal
Intermediary/MAC.
Y................... Non-Implantable Durable Not paid under OPPS. All
Medical Equipment. institutional providers
other than home health
agencies bill to DMERC.
------------------------------------------------------------------------
We did not receive any public comments regarding the status
indicators that designate services that are paid under a payment system
other than the OPPS. Therefore, we are finalizing our CY 2010 proposal,
without modification. The final CY 2010 status indicators are displayed
in the table above, as well as in Addendum D1 to this final rule with
comment period.
3. Payment Status Indicators To Designate Services That are Not
Recognized Under the OPPS but That May Be Recognized by Other
Institutional Providers
We did not propose any changes to the status indicators listed
below for the CY 2010 OPPS.
------------------------------------------------------------------------
Indicator Item/code/service OPPS payment status
------------------------------------------------------------------------
B................... Codes that are not Not paid under OPPS.
recognized by OPPS when May be paid by
submitted on an fiscal intermediaries/
outpatient hospital MACs when submitted on
Part B bill type (12x a different bill type,
and13x). for example, 75x
(CORF), but not paid
under OPPS.
An alternate
code that is recognized
by OPPS when submitted
on an outpatient
hospital Part B bill
type (12x and 13x) may
be available.
------------------------------------------------------------------------
We did not receive any public comments regarding the status
indicators that designate services that are not recognized under the
OPPS but that may be recognized for payment to other institutional
providers. Therefore, we are finalizing our CY 2010 proposal, without
modification. The final status indicators are displayed in the table
above, as well as in Addendum D1 to this final rule with comment
period.
4. Payment Status Indicators To Designate Services That Are Not Payable
by Medicare on Outpatient Claims
We did not propose any changes to the payment status indicators
listed below for the CY 2010 OPPS.
------------------------------------------------------------------------
Indicator Item/code/service OPPS payment status
------------------------------------------------------------------------
D................... Discontinued Codes...... Not paid under OPPS or
any other Medicare
payment system.
E................... Items, Codes, and Not paid by Medicare
Services:. when submitted on
That are not outpatient claims (any
covered by any Medicare outpatient bill type).
outpatient benefit
based on statutory
exclusion.
That are not
covered by any Medicare
outpatient benefit for
reasons other than
statutory exclusion.
That are not
recognized by Medicare
for outpatient claims;
alternate code for the
same item or service
may be available.
For which
separate payment is not
provided on outpatient
claims.
------------------------------------------------------------------------
We did not receive any public comments related to payment status
indicators that designate services that are not payable by Medicare on
outpatient claims and, therefore, we are finalizing our CY 2010
proposal, without modification. The final status indicators are
displayed in the table above, as well as in Addendum D1 to this final
rule with comment period.
Addendum B, with a complete listing of HCPCS codes that includes
their payment status indicators and APC assignments for CY 2010 is
available electronically on the CMS Web site under supporting
documentation for this final rule with comment period at: http://www.cms.hhs.gov/HospitalOutpatientPPS/HORD/list.asp#TopOfPage.
B. Comment Indicator Definitions
In the CY 2010 OPPS/ASC proposed rule (74 FR35374), we proposed to
use the same two comment indicators that are in effect for the CY 2009
OPPS.
``CH''--Active HCPCS codes in current and next calendar
year; status indicator and/or APC assignment have changed or active
HCPCS code that will be discontinued at the end of the current calendar
year.
``NI''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year as compared to current calendar year, interim APC
assignment; comments will be accepted on the interim APC assignment for
the new code.
We proposed to use the ``CH'' comment indicator in this CY 2010
OPPS/ASC final rule with comment period to indicate HCPCS codes for
which the status indicator or APC assignment, or both, would change in
CY 2010 compared to their assignment as of December 31, 2009.
We believe that using the ``CH'' indicator in this CY 2010 OPPS/ASC
final rule with comment period will
[[Page 60595]]
help facilitate the public's review of the changes that we are
finalizing for CY 2010. The use of the comment indicator ``CH'' in
association with a composite APC indicates that the configuration of
the composite APC is changed in this CY 2010 OPPS/ASC final rule with
comment period.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35374 through 35375),
we did not propose any changes to the definitions of the OPPS comment
indicators for CY 2010 and we did not receive any public comments on
the comment indicators. However, we want to clarify our policy
regarding the use of comment indicator ``NI'' in this CY 2010 OPPS/ASC
final rule with comment period to describe a new code. There are
numerous instances in which the descriptor of an existing Category I
CPT code is substantially revised for CY 2010 so that it describes a
new service or procedure that could have been assigned a new code
number by the CPT Editorial Panel and that new code number would then
have been assigned the ``NI'' comment indicator. Because, for CY 2010,
not all new services or procedures will be assigned a new CPT code
number, but instead will be described by an existing CPT code number
with a substantially revised code descriptor, we are assigning the
comment indicator ``NI'' to these codes in order to allow for comment
on these substantially revised codes. Therefore, for this final rule
with comment period, we have expanded the definition of comment
indicator ``NI'' to include an existing code with a substantial
revision to its code descriptor in the next calendar year as compared
to the current calendar year to indicate that the code's CY 2010 OPPS
treatment is open to public comment on this final rule with comment
period. Like all codes labeled with comment indicator ``NI,'' we will
respond to public comments and finalize their OPPS treatment in the CY
2011 OPPS/ASC final rule with comment period. In accordance with our
usual practice, CPT and Level II HCPCS code numbers that are new for CY
2010 are also labeled with comment indicator ``NI'' in Addendum B to
this final rule with comment period.
Only HCPCS codes with comment indicator ``NI'' in this CY 2010
OPPS/ASC final rule with comment period are subject to comment. HCPCS
codes that do not appear with comment indicator ``NI'' in this CY 2010
OPPS/ASC final rule with comment period are not open to public comment,
unless we specifically have requested additional comments elsewhere in
this final rule with comment period. The CY 2010 treatment of HCPCS
codes that appears in this CY 2010 OPPS/ASC final rule with comment
period to which comment indicator ``NI'' is not appended was open to
public comment during the comment period for the CY 2010 OPPS/ASC
proposed rule, and we are responding to those comments in this final
rule with comment period.
We did not receive any public comments regarding comment
indicators. Therefore, we are finalizing our proposal, without
modification, and we are continuing to use the two comment indicators,
``CH'' and ``NI,'' for CY 2010. Their definitions are listed in
Addendum D2 to this final rule with comment period.
XIV. OPPS Policy and Payment Recommendations
A. MedPAC Recommendations
MedPAC was established under section 1805 of the Act to advise the
U.S. Congress on issues affecting the Medicare program. As required
under the statute, MedPAC submits reports to Congress not later than
March and June of each year that present its Medicare payment policy
recommendations. The following section describes recent recommendations
relevant to the OPPS that have been made by MedPAC.
The March 2009 MedPAC ``Report to Congress: Medicare Payment
Policy'' included the following recommendation relating specifically to
the Medicare hospital OPPS:
Recommendation 2A-1: The Congress should increase payment rates for
the acute inpatient and outpatient prospective payment systems in 2010
by the projected rate of increase in the hospital market basket index,
concurrent with implementation of a quality incentive payment program.
CMS Response: As proposed in the CY 2010 OPPS/ASC proposed rule (74
FR 35375), in this final rule with comment period, we are increasing
payment rates for the CY 2010 OPPS by the projected rate of increase in
the hospital market basket through adjustment of the full CY 2010
conversion factor. Simultaneously, for CY 2010, we are continuing to
reduce the annual update factor by 2.0 percentage points for hospitals
that are defined under section 1886(d)(1)(B) of the Act and that do not
meet the hospital outpatient quality data reporting required by section
1833(t)(17) of the Act. Specifically, we have calculated two conversion
factors: A full conversion factor based on the full hospital market
basket increase and a reduced conversion factor that reflects the 2.0
percentage point reduction to the hospital market basket. We discuss
our update of the conversion factor and our adoption and implementation
of the reduced conversion factor that will apply to hospitals that fail
their quality reporting requirements for the full CY 2010 OPPS update
in section XVI of this final rule with comment period.
The full March 2009 MedPAC report can be downloaded from MedPAC's
Web site at: http://www.medpac.gov/documents/Mar09_EntireReport.pdf.
We note that MedPAC also submitted comments on the CY 2010 OPPS/ASC
proposed rule. The specific issues that were the subject of MedPAC's
comments and the sections of this final rule with comment period where
they are addressed are listed below:
Pharmacy overhead costs and setting payments for
separately paid drugs: Section V.B.3.
Payment rates for brachytherapy sources and therapeutic
radiopharmaceuticals: Sections VII. and V.B.5.
Collection of quality data through clinical registries and
electronic health records (EHRs): Section XVI.I.
Collection of quality data from ASCs: Section XVI.H.
Collection of cost data from ASCs: Section XV.G.
Payment policy for healthcare-associated conditions:
Section XVII.
B. APC Panel Recommendations
Recommendations made by the APC Panel at its February 2009 and
August 2009 meetings are discussed in the sections of this final rule
with comment period that correspond to topics addressed by the APC
Panel. The report and recommendations from the APC Panel's February 18-
19, 2009 and August 5-6, 2009 meetings are available on the CMS Web
site at: http://www.cms.hhs.gov/FACA/05_AdvisoryPanelonAmbulatoryPaymentClassificationGroups.asp.
C. OIG Recommendations
The mission of the Office of the Inspector General (OIG), as
mandated by Public Law 95-452, as amended, is to protect the integrity
of the U.S. Department of Health and Human Services (HHS) programs as
well as the health and welfare of beneficiaries served by those
programs. This statutory mission is carried out through a nationwide
network of audits, investigations, and inspections. In June 2007, the
OIG released a report, entitled ``Impact of Not Retroactively Adjusting
Outpatient Outlier Payments,'' that described the OIG's research into
sources of errors in CMHC outlier payments. The OIG report included the
[[Page 60596]]
following two recommendations relating specifically to the hospital
OPPS under which payment is made for outpatient services provided by
CMHCs.
Recommendation 1: The OIG recommended that CMS require adjustments
of outpatient outlier payments at final cost report settlement,
retroactive to the beginning of the cost report period.
Recommendation 2: The OIG recommended that CMS require retroactive
adjustments of outpatient outlier payments when an error caused by the
fiscal intermediary or provider is identified after a cost report is
settled.
We addressed both of these recommendations in the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68594). We noted in that final
rule that the OIG's findings were based largely on information from the
OPPS' early implementation period, between CY 2000 and CY 2003, and
that we believed we had taken several steps since that time in order to
improve the accuracy and frequency of the Medicare contractors' CCR
calculations, including updating our instructions for calculating CCRs,
increasing the frequency of CCR calculation, and conducting an annual
review of CMHC CCRs.
However, taking into account these OIG recommendations, we proposed
and finalized a policy to provide for reconciliation of outlier
payments under the OPPS at final cost report settlement as recommended
by the OIG, beginning in CY 2009. We discuss our rationale for this
policy in detail in section II.F.4. of the CY 2009 OPPS/ASC final rule
with comment period (73 FR 68594 through 68599).
Other than the June 2007 recommendations, there have been no other
recent OIG recommendations pertaining to the OPPS.
XV. Updates to the Ambulatory Surgical Center (ASC) Payment System
A. Background
1. Legislative Authority for the ASC Payment System
Section 1832(a)(2)(F)(i) of the Act provides that benefits under
Medicare Part B include payment for facility services furnished in
connection with surgical procedures specified by the Secretary that are
performed in an ASC. To participate in the Medicare program as an ASC,
a facility must meet the standards specified in section
1832(a)(2)(F)(i) of the Act, which are set forth in 42 CFR part 416,
subpart B and Subpart C of our regulations. The regulations at 42 CFR
part 416, subpart B describe the general conditions and requirements
for ASCs, and the regulations at subpart C explain the specific
conditions for coverage for ASCs.
Section 141(b) of the Social Security Act Amendments of 1994,
Public Law 103-432, required establishment of a process for reviewing
the appropriateness of the payment amount provided under section
1833(i)(2)(A)(iii) of the Act for intraocular lenses (IOLs) that belong
to a class of new technology intraocular lenses (NTIOLs). That process
was the subject of a final rule entitled ``Adjustment in Payment
Amounts for New Technology Intraocular Lenses Furnished by Ambulatory
Surgical Centers,'' published on June 16, 1999, in the Federal Register
(64 FR 32198).
Section 626(b) of the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA), Public Law 108-173, added subparagraph
(D) to section 1833(i)(2) of the Act, which required the Secretary to
implement a revised ASC payment system to be effective not later than
January 1, 2008. Section 626(c) of the MMA amended section 1833(a)(1)
of the Act by adding new subparagraph (G), which requires that,
beginning with implementation of the revised ASC payment system,
payment for surgical procedures furnished in ASCs shall be 80 percent
of the lesser of the actual charge for the services or the amount
determined by the Secretary under the revised payment system.
Section 5103 of the Deficit Reduction Act of 2005 (DRA), Public Law
109-171, amended section 1833(i)(2) of the Act by adding a new
subparagraph (E) to place a limitation on payment amounts for surgical
procedures furnished in ASCs on or after January 1, 2007, but before
the effective date of the revised ASC payment system (that is, January
1, 2008). Section 1833(i)(2)(E) of the Act provides that if the
standard overhead amount under section 1833(i)(2)(A) of the Act for an
ASC facility service for such surgical procedures, without application
of any geographic adjustment, exceeds the Medicare payment amount under
the hospital OPPS for the service for that year, without application of
any geographic adjustment, the Secretary shall substitute the OPPS
payment amount for the ASC standard overhead amount.
Section 109(b) of the Medicare Improvements and Extension Act of
2006 of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA), Public
Law 109-432, amended section 1833(i) of the Act, in part, by
redesignating clause (iv) as clause (v) and adding a new clause (iv) to
paragraph (2)(D) and adding paragraph (7)(A), which provide the
Secretary the authority to require ASCs to submit data on quality
measures and to reduce the annual update by 2 percentage points for an
ASC that fails to submit data as required by the Secretary on selected
quality measures. Section 109(b) of the MIEA-TRHCA also amended section
1833(i) of the Act by adding new paragraph (7)(B), which requires that,
to the extent the Secretary establishes such an ASC quality reporting
program, certain quality of care reporting requirements mandated for
hospitals paid under the OPPS, under section 109(a) of the MIEA-TRHCA,
be applied in a similar manner to ASCs unless otherwise specified by
the Secretary.
For a detailed discussion of the legislative history related to
ASCs, we refer readers to the June 12, 1998 proposed rule (63 FR 32291
through 32292).
2. Prior Rulemaking
On August 2, 2007, we published in the Federal Register (72 FR
42470) the final rule for the revised ASC payment system, effective
January 1, 2008 (the ``August 2, 2007 final rule''). We revised our
criteria for identifying surgical procedures that are eligible for
Medicare payment when furnished in ASCs and adopted the method we would
use to set payment rates for ASC covered surgical procedures and
covered ancillary services furnished in association with those covered
surgical procedures beginning in CY 2008. In that final rule, we also
established a policy for updating on an annual calendar year basis the
ASC conversion factor, the relative payment weights, the ASC payment
rates, and the list of procedures for which Medicare would not make an
ASC payment. We also established a policy for treating new and revised
HCPCS and CPT codes under the ASC payment system. This policy is
consistent with the OPPS to the extent possible (72 FR 42533).
In the CY 2008 OPPS/ASC final rule with comment period (72 FR
66827), we updated and finalized the CY 2008 ASC rates and lists of
covered surgical procedures and covered ancillary services. We also
made regulatory changes to 42 CFR parts 411, 414, and 416 related to
our final policies to provide payments to physicians who perform
noncovered ASC procedures in ASCs based on the facility practice
expense (PE) relative value units (RVUs), to exclude covered ancillary
radiology services and covered ancillary drugs and biologicals from the
categories of designated health services (DHS) that are subject to the
physician self-referral prohibition, and to reduce
[[Page 60597]]
ASC payments for surgical procedures when the ASC receives full or
partial credit toward the cost of the implantable device. In the CY
2009 OPPS/ASC final rule with comment period (73 FR 68722), we updated
and finalized the CY 2009 ASC rates and lists of covered surgical
procedures and covered ancillary services.
3. Policies Governing Changes to the Lists of Codes and Payment Rates
for ASC Covered Surgical Procedures and Covered Ancillary Services
The August 2, 2007 final rule established our policies for
determining which procedures are ASC covered surgical procedures and
covered ancillary services. Under Sec. Sec. 416.2 and 416.166 of the
regulations, subject to certain exclusions, covered surgical procedures
are surgical procedures that are separately paid under the OPPS, that
would not be expected to pose a significant risk to beneficiary safety
when performed in an ASC, and that would not be expected to require
active medical monitoring and care at midnight following the procedure
(``overnight stay''). We adopted this standard for defining which
surgical procedures are covered surgical procedures under the ASC
payment system as an indicator of the complexity of the procedure and
its appropriateness for Medicare payment in ASCs. We use this standard
only for purposes of evaluating procedures to determine whether or not
they are appropriate for Medicare beneficiaries in ASCs. We define
surgical procedures as those described by Category I CPT codes in the
surgical range from 10000 through 69999, as well as those Category III
CPT codes and Level II HCPCS codes that crosswalk or are clinically
similar to ASC covered surgical procedures (72 FR 42478). We note that
we added over 800 surgical procedures to the list of covered surgical
procedures for ASC payment in CY 2008, the first year of the revised
ASC payment system, based on the criteria for payment that we adopted
in the August 2, 2007 final rule as described above in this section.
Patient safety and health outcomes continue to be important to us as
more health care moves to the ambulatory care setting. Therefore, as we
gain additional experience with the ASC payment system, we are
interested in any information the public may have regarding the
comparative patient outcomes of surgical care provided in ambulatory
settings, including HOPDs, ASCs, and physicians' offices, particularly
with regard to the Medicare population.
In the August 2, 2007 final rule, we also established our policy to
make separate ASC payments for the following ancillary items and
services when they are provided integral to ASC covered surgical
procedures: Brachytherapy sources; certain implantable items that have
pass-through status under the OPPS; certain items and services that we
designate as contractor-priced, including, but not limited to,
procurement of corneal tissue; certain drugs and biologicals for which
separate payment is allowed under the OPPS; and certain radiology
services for which separate payment is allowed under the OPPS. These
covered ancillary services are specified in Sec. 416.164(b) and, as
stated previously, are eligible for separate ASC payment (72 FR 42495).
Payment for ancillary items and services that are not paid separately
under the ASC payment system is packaged into the ASC payment for the
covered surgical procedure.
The full CY 2009 lists of ASC covered surgical procedures and
covered ancillary services are included in Addenda AA and BB,
respectively, to the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68840 through 68933 and 69270 through 69308).
We update the lists of, and payment rates for, covered surgical
procedures and covered ancillary services, in conjunction with the
annual proposed and final rulemaking process to update the OPPS and ASC
payment systems (Sec. 416.173; 72 FR 42535). In addition, because we
base ASC payment policies for covered surgical procedures, drugs,
biologicals, and certain other covered ancillary services on the OPPS
payment policies, we also provide quarterly updates for ASC services
throughout the year (January, April, July, and October), just as we do
for the OPPS. The updates are to implement newly created Level II HCPCS
codes and Category III CPT codes for ASC payment and to update the
payment rates for separately paid drugs and biologicals based on the
most recently submitted ASP data. New Category I CPT codes, except
vaccine codes, are released only once a year and, therefore, are
implemented through the January quarterly update. New Category I CPT
vaccine codes are released twice a year and thus are implemented
through the January and July quarterly updates.
In our annual updates to the ASC list of, and payment rates for,
covered surgical procedures and covered ancillary services, we
undertake a review of excluded surgical procedures (including all
procedures newly proposed for removal from the OPPS inpatient list),
new procedures, and procedures for which there is revised coding, to
identify any that we believe meet the criteria for designation as ASC
covered surgical procedures or covered ancillary services. Updating the
lists of covered surgical procedures and covered ancillary services, as
well as their payment rates, in association with the annual OPPS
rulemaking cycle is particularly important because the OPPS relative
payment weights and, in some cases, payment rates, are used as the
basis for the payment of covered surgical procedures and covered
ancillary services under the revised ASC payment system. This joint
update process ensures that the ASC updates occur in a regular,
predictable, and timely manner.
Comment: Several commenters provided a number of general
suggestions related to the ASC list of covered surgical procedures.
They contended that CMS should not restrict which procedures are
payable in ASCs any more than CMS restricts which procedures are
payable in HOPDs. The commenters added that if the policy to exclude
procedures from the list is maintained, CMS should at least provide the
exclusionary criteria for all of the payable OPPS procedures that are
excluded from the ASC list so that the public can provide meaningful
comments about CMS' decisions. They suggested that CMS publish an
addendum to the proposed and final OPPS/ASC rules that would identify
which of the criteria at Sec. 416.166(c) triggered CMS' decision to
exclude each procedure.
Some commenters urged CMS to eliminate unlisted codes from the
exclusionary criteria at Sec. 416.166(c), and other commenters
requested that ASCs be allowed to use unlisted codes to bill for
procedures that are from anatomic sites that could not possibly pose a
potential risk to beneficiary safety. The commenters reported that
unlisted codes enable surgeons to utilize innovative techniques or new
technologies and are paid under the OPPS and by commercial insurers.
They suggested that ASCs could provide documentation to the contractor
that explains and justifies the procedure reported by an unlisted code;
thus ensuring that Medicare does not make payment for a service that
would otherwise be excluded from payment.
Response: We appreciate the commenters' suggestions regarding the
consistency of CMS' decisions about which procedures are excluded from
the ASC list. However, as we explained in the August 2, 2007 final rule
(72 FR 42479), we do not believe that all
[[Page 60598]]
procedures that are appropriate for performance in HOPDs are
appropriate in ASCs. HOPDs are able to provide much higher acuity care
than ASCs. ASCs have neither patient safety standards consistent with
those in place for hospitals, nor are they required to have the trained
staff and equipment needed to provide the breadth and intensity of care
that hospitals are required to maintain. Therefore, we are not
modifying our policy and will continue to exclude from the ASC list of
covered surgical procedures certain procedures for which payment is
made in HOPDs.
We do not agree with the commenters' request that we provide
specific reasons for our decisions to exclude each procedure from the
ASC list other than that we believe a procedure is expected to pose a
significant risk to beneficiary safety or to require an overnight stay.
We believe that these reasons are sufficiently specific to enable the
public to provide meaningful comments on our decisions to exclude
procedures from the list of covered surgical procedures. Our decisions
to exclude procedures from the ASC list are based on a number of the
criteria listed at Sec. 416.166 of the regulations, and we believe
that it would be unnecessary and overly burdensome to list each and
every reason for those decisions.
We also do not agree with the commenters' recommendation that we
include certain unlisted codes on the list of covered procedures. Even
though it may be highly unlikely that any procedures that would be
expected to pose a risk to beneficiary safety or to require an
overnight stay would be reported by an unlisted code from certain
anatomic sites, we cannot know what surgical procedure is being
reported by an unlisted code. Therefore, because we cannot evaluate any
such procedure, we believe that we must exclude unlisted codes as a
group from the list of covered surgical procedures.
We do not believe it is reasonable, or within the scope of our
contractors' work, to accept the commenters' suggestion that ASCs could
provide documentation to our Medicare contractors, upon request, in
order for the contractors to make a retrospective determination about
whether or not a procedure that was billed using an unlisted code
represented a significant risk to beneficiary safety or would be
expected to require an overnight stay.
Comment: One commenter noted that, although CMS specified in the CY
2009 OPPS/ASC final rule with comment period (73 FR 68714) that
patients may remain in ASCs up to 24 hours in order to allow adequate
time for recovery following some surgical procedures, CMS did not
specify the requirements for physician supervision during the recovery
period. The commenter argued that CMS also failed to specify the time
period during which the required post-anesthesia assessment is to be
performed by requiring only that it be performed prior to discharge
from the ASC. The commenter's concern was that patients in ASCs may
have no physician supervision for extended periods, a policy in
contrast to CMS' policy regarding the direct physician supervision
required for hospital outpatient services. The commenter requested that
CMS clarify why the same supervision requirements are not applied
equally to hospitals and ASCs.
Response: Historically, Medicare has covered surgical procedures
performed in ASCs that have relatively short recovery periods and,
therefore, we have believed that physicians were always immediately
available to furnish assistance and direction in the ASC while ASC
services were being furnished, including during the postoperative
recovery period. However, as the commenter points out, not only have we
recently revised the Conditions for Coverage to allow longer stays in
ASCs, we have greatly expanded the list of covered surgical procedures
under the revised ASC payment system, including covering some surgical
procedures that may require a prolonged recovery period. Given these
two revisions, both of which enable ASCs to provide more clinically
complex surgical procedures, and taking into consideration patient
safety and quality of care, we believe it could be appropriate to
consider establishing requirements for physician or nonphysician
practitioner supervision in ASCs, similar to the requirements for the
direct supervision of hospital outpatient therapeutic services that we
are finalizing for HOPDs in this CY 2010 OPPS/ASC final rule with
comment period. We note that, for therapeutic services furnished
incident to a physician's professional service in an office setting,
there also is a requirement for direct physician supervision, meaning
that the physician must be in the office suite and immediately
available to furnish assistance and direction throughout the procedure
(Sec. 410.26(a)(2) and (b)(5)). In addition, we note that payment for
covered ancillary services may be made to ASCs, including payment for
some of the diagnostic tests that would be subject to the physician
supervision requirements for hospital outpatient diagnostic services if
provided in the HOPD. The final CY 2010 physician supervision
requirements for hospital outpatient diagnostic and therapeutic
services are discussed in detail in section XII.E. of this final rule
with comment period. For diagnostic services furnished in physicians'
offices, IDTFs and other Part B settings, the requirements of Sec.
410.32 of the regulations apply, including supervision of diagnostic
services.
We did not propose to adopt supervision requirements for
therapeutic and diagnostic services furnished in ASCs similar to the
requirements for HOPDs for CY 2010. However, given the overlap in
surgical procedures that may be performed in HOPDs and ASCs and the
increased breadth and complexity of ASC covered procedures, we are
requesting comments on this final rule with comment period that
address: (1) What types of practitioners currently provide the
diagnostic and therapeutic services in ASCs, particularly during the
extended postoperative recovery period; (2) what types of practitioners
currently provide the supervision for the diagnostic and therapeutic
services in ASCs, particularly during the extended postoperative
period; (3) what is the expertise of supervising practitioners in ASCs
and what is the expectation for their availability; (4) based on the
final CY 2010 supervision requirements for hospital outpatient
therapeutic services, under what circumstances would direct supervision
of ASC services (including during the postoperative recovery period)
not be occurring, according to the applicable definitions for direct
supervision for HOPD services; and (5) what would be the rationale for
not establishing supervision requirements for ASC services that
parallel the supervision requirements in other settings, including
HOPDs and physicians' offices.
After consideration of the public comments we received, we are not
accepting the commenters' recommendations to not exclude all procedures
reported by unlisted codes or all procedures for which Medicare payment
is made to HOPDs. We will continue to exclude all procedures that we
determine would be expected to pose a significant risk to beneficiary
safety or require an overnight stay. Further, we are not accepting the
commenters' recommendation that CMS provide more specific reasons for
its decisions regarding exclusion of specific procedures from the ASC
list of covered surgical procedures. In this final rule with comment
period, we are soliciting public comments on the issue of physician
supervision of ASC services, especially as related to extended
[[Page 60599]]
postoperative stays. In summary, we are making no changes to the final
criteria for determining which procedures are excluded from the ASC
list of covered surgical procedures.
B. Treatment of New Codes
1. Treatment of New Category I and Category III CPT Codes and Level II
HCPCS Codes
We finalized a policy in the August 2, 2007 final rule to evaluate
each year all new Category I and Category III CPT codes and Level II
HCPCS codes that describe surgical procedures, and to make preliminary
determinations in the annual OPPS/ASC final rule with comment period
regarding whether or not they meet the criteria for payment in the ASC
setting and, if so, whether they are office-based procedures (72 FR
42533). In addition, we identify new codes as ASC covered ancillary
services based upon the final payment policies of the revised ASC
payment system. New HCPCS codes that are released in the summer through
the fall of each year, to be effective January 1, are included in the
final rule with comment period updating the ASC payment system for the
following calendar year. These new codes are flagged with comment
indicator ``NI'' in Addenda AA and BB to the OPPS/ASC final rule with
comment period to indicate that we are assigning a payment indicator to
the codes on an interim basis. The interim payment indicators assigned
to the new codes under the revised ASC payment system are subject to
public comment in that final rule with comment period. These interim
determinations must be made in the OPPS/ASC final rule with comment
period because, in general, the new HCPCS codes and their descriptors
for the upcoming calendar year are not available at the time of
development of the OPPS/ASC proposed rule. We will respond to those
comments in the OPPS/ASC final rule with comment period for the
following calendar year. In the CY 2010 OPPS/ASC proposed rule (74 FR
35377), we proposed to continue this identification and recognition
process for CY 2010.
We did not receive any public comments regarding this proposal. For
CY 2010, we are continuing our established policy for recognizing new
Category I and Category III CPT codes and Level II HCPCS codes.
In addition, we proposed to continue our policy of implementing
through the ASC quarterly update process new mid-year CPT codes,
generally Category III CPT codes, that the AMA releases in January to
become effective the following July, and released in July to become
effective the following January. We proposed to include in Addenda AA
or BB, as appropriate, to this CY 2010 OPPS/ASC final rule with comment
period the new Category III CPT codes released in January 2009 for
implementation on July 1, 2009 (through the ASC quarterly update
process), that we identify as ASC covered services. Similarly, we
proposed to include in Addenda AA and BB to this final rule with
comment period any new Category III CPT codes that the AMA released in
July 2009 to be effective on January 1, 2010, that we identify as ASC
covered services. However, only those new Category III CPT codes
implemented effective January 1, 2010, are designated by comment
indicator ``NI'' in the Addenda to this CY 2010 OPPS/ASC final rule
with comment period to indicate that we have assigned them an interim
payment indicator that is subject to public comment. The two Category
III CPT codes implemented in July 2009 for ASC payment, which appeared
in Table 38 of the CY 2010 OPPS/ASC proposed rule (74 FR 35378), were
subject to comment through that proposed rule, and we proposed to
finalize their payment indicators in this CY 2010 OPPS/ASC final rule
with comment period.
We proposed to assign payment indicator ``G2'' (Non office-based
surgical procedure added in CY 2008 or later; payment based on OPPS
relative payment weight) to both of these two new codes. Because new
Category III CPT codes that become effective for July are not available
to CMS in time for incorporation into the Addenda to the OPPS/ASC
proposed rule, our policy is to include the codes, their proposed
payment indicators, and proposed payment rates in the preamble to the
proposed rule but not in the Addenda to the proposed rule. These codes
and their final payment indicators and rates are included in the
Addenda to this CY 2010 OPPS/ASC final rule with comment period.
We did not receive any public comments regarding this proposal. For
CY 2010, we are continuing our established policy for recognizing new
mid-year CPT codes, and the new mid-year codes implemented in July 2009
are displayed in Table 57 below, as well as in Addendum AA to this
final rule with comment period.
Table 57--New Category III CPT Codes Implemented in July 2009 for ASC
Payment
------------------------------------------------------------------------
Final CY 2010
CY 2010 HCPCS code CY 2010 long ASC payment
descriptor indicator
------------------------------------------------------------------------
0200T.......................... Percutaneous sacral G2
augmentation
(sacroplasty),
unilateral
injection(s),
including the use of
a balloon or
mechanical device (if
utilized), one or
more needles.
0201T.......................... Percutaneous sacral G2
augmentation
(sacroplasty),
bilateral injections,
including the use of
a balloon or
mechanical device (if
utilized), two or
more needles.
------------------------------------------------------------------------
For CY 2010, there are numerous instances in which the descriptor
of an existing Category I CPT code is substantially revised so that it
describes a new service or procedure. In each such instance, revision
of the code's descriptor created a more specific description of some of
the services or procedures that were reported by the existing CPT code
and required that at least one other code be created to describe the
other services that were described by the existing code descriptor.
Thus, the services or procedures that were described by the existing
CPT code descriptor will be described by two new codes for CY 2010: one
newly created code number and descriptor and one code with the same
code number for which the code descriptor has been substantially
revised. For example, CPT code 21556 (Excision tumor, soft tissue of
neck or thorax; deep, subfascial, intramuscular) was revised to create
two new procedures, one of which will be reported by the same CPT code
number with a different description. Thus, for CY 2010, two new
procedures are reported by revised CPT code 21556 (Excision, tumor,
soft tissue of neck or anterior thorax, subfascial (e.g.
intramuscular); less than 5 cm) and new CPT code 21554 (Excision,
tumor, soft tissue of neck or anterior thorax, subfascial (e.g.
intramuscular); 5 cm or
[[Page 60600]]
greater). In the past, the more common practice has been to delete an
existing code number which was used to report a general description of
a procedure and assign a new code number to each new, more
specifically-described procedure.
Due to the practice of maintaining an existing CPT code number for
a substantially revised descriptor, we have had to make changes to the
payment indicators for existing code numbers that now describe
different procedures. Specifically, thirty-one of the existing CPT code
numbers that are used to represent new procedures in CY 2010 are
currently used to report procedures that were on the ASC list of
covered surgical procedures in CY 2007 and, therefore, in CY 2009 are
assigned payment indicator ``A2'' (Surgical procedure on ASC list in CY
2007; payment based on OPPS relative payment weight based on their old
descriptions). All of the newly created procedures, including the 31
procedures that will be reported by an existing CPT code number, were
evaluated for appropriateness for inclusion on the ASC list of covered
surgical procedures. For the procedures that we included on the ASC
list, we also made an interim determination regarding whether the
procedure should be designated as office-based for CY 2010. Therefore,
in Addendum AA to this final rule with comment period, the same CPT
code number that was assigned payment indicator ``A2'' for CY 2009 may
be assigned payment indicators ``G2'' (Non office-based surgical
procedure added in CY 2008 or later; payment based on OPPS relative
payment weight); ``P2'' (Office-based surgical procedure added to ASC
list in CY 2008 or later with MPFS nonfacility PE RVUs; payment based
on OPPS relative payment weight); ``P3'' (Office-based surgical
procedure added to ASC list in CY 2008 or later with MPFS nonfacility
PE RVUs; payment based on MPFS nonfacility PE RVUs); or ``R2'' (Office-
based surgical procedure added to ASC list in CY 2008 or later without
MPFS nonfacility PE RVUs; payment based on OPPS relative payment
weight) due to the change in the procedure assigned to the numeric
code.
Any existing CPT codes with substantial revisions to their code
descriptors for CY 2010 such that we consider them to describe new
procedures and for which their ASC payment indicator may change are
labeled with comment indicator ``NI'' in Addendum AA to this final rule
with comment period, to indicate that we have assigned them an interim
final payment status which is subject to public comment. Like all codes
labeled with comment indicator ``NI,'' we will respond to public
comments and finalize their ASC treatment in the CY 2011 OPPS/ASC final
rule with comment period. In addition to assigning the ``NI'' indicator
to these new CPT codes, in accordance with our standard practice, all
new CPT and Level II HCPCS code numbers for CY 2010 are labeled with
comment indicator ``NI'' in Addendum AA and BB to this final rule with
comment period.
2. Treatment of New Level II HCPCS Codes Implemented in April and July
2009
New Level II HCPCS codes may describe covered surgical procedures
or covered ancillary services. All new Level II HCPCS codes implemented
in April and July 2009 for ASCs describe covered ancillary services.
During the second quarter of CY 2009, we added to the list of covered
ancillary services two new Level II HCPCS codes because they are drugs
or biologicals for which separate payment was newly allowed under the
OPPS in the same calendar quarter. The two Level II HCPCS codes added,
effective April 1, 2009, were HCPCS code C9247 (Iobenguane, I-123,
diagnostic, per study dose, up to 10 millicuries) and HCPCS code C9249
(Injection, certolizumab pegol, 1 mg). Although HCPCS code C9247 was
created for use beginning on January 1, 2009, initially it was not paid
separately under the hospital OPPS, and therefore its payment also was
packaged under the ASC payment system, until April 1, 2009.
After publication of the CY 2010 OPPS/ASC proposed rule, the CMS
HCPCS Workgroup created permanent HCPCS codes to replace these two
HCPCS C-codes that were implemented in April 2009. We will be
recognizing these HCPCS codes for payment of these drugs and
biologicals under the CY 2010 ASC payment system, consistent with our
general policy to use permanent HCPCS codes, if appropriate, for the
reporting of drugs and biologicals. Table 58 shows the new permanent
HCPCS codes that replace the HCPCS C-codes that will be deleted
effective December 31, 2009.
Specifically, HCPCS code C9247 was replaced with HCPCS code A9582
(Iodine I-123 iobenguane, diagnostic, per study dose, up to 15
millicuries) and HCPCS code C9249 was replaced with HCPCS code J0718
(Injection, certolizumab pegol, 1 mg). The new HCPCS codes, effective
January 1, 2010, describe the same drugs. Although HCPCS code A9582
indicates ``per study dose, up to 15 millicuries'' and the descriptor
of its predecessor C-code designates ``per study dose, up to 10
millicuries,'' we believe that the reporting of one study dose would be
the same in most cases under either the new permanent code or the
predecessor code. The recommended dose of I-123 iobenguane is 10
millicuries for adult patients, so we expect that hospitals would
report 1 unit of new HCPCS code A9582 for the typical dose in CY 2010,
just as they would have reported one unit of HCPCS code C9247
previously for the typical dose and, therefore, there would be no
effect on the payment indicator.
For the third quarter of CY 2009, we added 11 new Level II drug and
biological HCPCS codes to the list of ASC covered ancillary services
because they were newly eligible for separate payment under the OPPS
effective July 1, 2009. These HCPCS codes are: C9250 (Human plasma
fibrin sealant, vapor-heated, solvent-detergent (Artiss), 2 ml); C9251
(Injection, C1 esterase inhibitor (human) 10 units); C9252 (Injection,
plerixafor, 1 mg); C9253 (Injection, temozolomide, 1 mg); C9360 (Dermal
substitute, native, non-denatured collagen, neonatal bovine origin
(SurgiMend Collagen Matrix), per 0.5 square centimeters); C9361
(Collagen matrix nerve wrap (NeuroMend Collagen Nerve Wrap), per 0.5
centimeter length); C9362 (Porous purified collagen matrix bone void
filler (Integra Mozaik Osteoconductive Scaffold Strip), per 0.5 cc);
C9363 (Skin substitute, Integra Meshed Bilayer Wound Matrix, per square
centimeter); C9364 (Porcine implant, Permacol, per square centimeter);
Q2023 (Injection, factor viii (antihemophilic factor, recombinant)
(Xyntha), per i.u.); and Q4116 (Skin substitute, Alloderm, per square
centimeter).
We assigned payment indicator ``K2'' (Drugs and biologicals paid
separately when provided integral to a surgical procedure on ASC list;
payment based on OPPS rate) to all of these new Level II HCPCS codes
and added the codes to the list of covered ancillary services through
either the April 2009 update (Transmittal 1698, Change Request 6424,
dated March 13, 2009) or the July 2009 update (Transmittal 1740, Change
Request 6496, dated May 22, 2009) to the CY 2009 ASC payment system.
Initially, we assigned payment indicator ``K2'' to new HCPCS code Q4115
(Skin substitute, Alloskin, per square centimeter) for July 2009, but
then changed that assignment retroactive to July 2009 to signify that
this HCPCS code was not a covered ancillary service because it was not
recognized for payment under the OPPS during that
[[Page 60601]]
same time period. Subsequently, in the October 2009 quarterly update CR
(Transmittal 1806, Change Request 6629, dated August 28, 2009), HCPCS
code Q4115 was added as payable (assigned payment indicator ``K2''),
effective October 1, 2009.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35378), we solicited
public comment on the proposed CY 2010 ASC payment indicators and
payment rates for the drugs and biologicals, as listed in Tables 39 and
40 of the proposed rule (74 FR 35378 through 35379). Those HCPCS codes
became payable in ASCs beginning in April 2009 or July 2009,
respectively, based on the ASC rates posted for the appropriate
calendar quarter on the CMS Web site at: http://www.cms.hhs.gov/ASCPayment/.
The HCPCS codes that were listed in Table 39 of the proposed rule
became effective in April 2009 and were included in Addendum BB to the
proposed rule. However, because HCPCS codes that become effective for
July are not available to CMS in time for incorporation into the
Addenda to the OPPS/ASC proposed rule, our policy is to include these
HCPCS codes and their proposed payment indicators and payment rates in
the preamble to the proposed rule but not in the Addenda to the
proposed rule. These codes and their final payment indicators and rates
are included in the appropriate Addendum to this CY 2010 OPPS/ASC final
rule with comment period. Thus, the codes implemented by the July 2009
ASC quarterly update and their proposed CY 2010 payment rates (based on
July 2009 ASP data) that were displayed in Table 40 of the CY 2010
OPPS/ASC proposed rule were not included in Addendum BB to the CY 2010
OPPS/ASC proposed rule. We proposed to include the services reported
using the new HCPCS codes that were displayed in Tables 39 and 40 as
covered ancillary services and to incorporate all of them into Addendum
BB to this CY 2010 OPPS/ASC final rule with comment period, consistent
with our annual update policy.
After publication of the CY 2010 OPPS/ASC proposed rule, the HCPCS
Workgroup created permanent HCPCS J-codes for 4 of the 11 separately
payable covered ancillary services that were displayed in Table 40 of
the proposed rule. Consistent with our general policy of using
permanent HCPCS codes, if appropriate, rather than HCPCS C-codes in
order to streamline coding, effective for CY 2010, we are adopting the
4 permanent HCPCS J-codes to replace the HCPCS C-codes. As displayed in
Table 59 below, HCPCS code C9251 is replaced with J0598 (Injection, C1
esterase inhibitor (human), 10 units); C9252 with J2562 (Injection,
plerixafor, 1 mg); C9253 with J9328 (Injection, temozolomide, 1 mg);
and Q2023 with J7185 (Injection, factor viii (antihemophilic factor,
recombinant) (Xyntha), per i.u.). The HCPCS J-codes, effective January
1, 2010, describe the same drugs and the same dosages as the HCPCS C-
codes that will be deleted December 31, 2009. Therefore, there is no
effect on the services' payment indicators.
We did not receive any public comments regarding our proposals. We
are adopting as final the ASC payment indicators for the new Level II
HCPCS codes implemented in April and July 2009 as shown in Tables 58
and 59, respectively. Moreover, we are adopting as final the
replacement HCPCS codes, specifically, A9582 and J0718, as shown in
Table 58 and HCPCS codes J0598, J2562, J7185, and J9328 as displayed in
Table 59 below. All of the new HCPCS codes and payment indicators also
are included in Addendum BB to this final rule with comment period.
Table 58--New Level II HCPCS Codes for Covered Ancillary Services Implemented in April 2009
----------------------------------------------------------------------------------------------------------------
Final CY 2010
CY 2010 HCPCS Code CY 2009 HCPCS CY 2010 Long descriptor payment
Code indicator
----------------------------------------------------------------------------------------------------------------
A9582...................................... C9247 Iodine I-123 iobenguane, K2
diagnostic, per study dose, up to
15 millicuries.
J0718...................................... C9249 Injection, certolizumab pegol, 1 K2
mg.
----------------------------------------------------------------------------------------------------------------
Table 59--New Level II HCPCS Codes for Covered Ancillary Services Implemented in July 2009
----------------------------------------------------------------------------------------------------------------
Final CY 2010
CY 2010 HCPCS Code CY 2009 HCPCS CY 2010 Long descriptor ASC payment
Code indicator
----------------------------------------------------------------------------------------------------------------
C9250...................................... C9250 Human plasma fibrin sealant, vapor- K2
heated, solvent-detergent
(Artiss), 2 ml.
J0598...................................... C9251 Injection, C1 esterase inhibitor K2
(human), 10 units.
J2562...................................... C9252 Injection, plerixafor, 1 mg....... K2
J9328...................................... C9253 Injection, temozolomide, 1 mg..... K2
C9360...................................... C9360 Dermal substitute, native, non- K2
denatured collagen, neonatal
bovine origin (SurgiMend Collagen
Matrix), per 0.5 square
centimeters.
C9361...................................... C9361 Collagen matrix nerve wrap K2
(NeuroMend Collagen Nerve Wrap),
per 0.5 centimeter length.
C9362...................................... C9362 Porous purified collagen matrix K2
bone void filler (Integra Mozaik
Osteoconductive Scaffold Strip),
per 0.5 cc.
C9363...................................... C9363 Skin substitute, Integra Meshed K2
Bilayer Wound Matrix, per square
centimeter.
C9364...................................... C9364 Porcine implant, Permacol, per K2
square centimeter.
J7185...................................... Q2023 Injection, factor viii K2
(antihemophilic factor,
recombinant) (Xyntha), per i.u..
Q4116...................................... Q4116 Skin substitute, Alloderm, per K2
square centimeter.
----------------------------------------------------------------------------------------------------------------
[[Page 60602]]
C. Update to the Lists of ASC Covered Surgical Procedures and Covered
Ancillary Services
1. Covered Surgical Procedures
a. Additions to the List of ASC Covered Surgical Procedures
In the CY 2010 OPPS/ASC proposed rule (74 FR 35379), we proposed to
update the ASC list of covered surgical procedures by adding 28
procedures to the list. Twenty-six of these procedures were among those
excluded from the ASC list for CY 2009 because we believed they did not
meet the definition of a covered surgical procedure based on our
expectation that they would pose a significant safety risk to Medicare
beneficiaries or would require an overnight stay if performed in ASCs.
The other two procedures, specifically those described by CPT code
0200T (Percutaneous sacral augmentation (sacroplasty), unilateral
injection(s), including the use of a balloon or mechanical device (if
utilized), one or more needles) and CPT code 0201T (Percutaneous sacral
augmentation (sacroplasty), bilateral injections, including the use of
a balloon or mechanical device (if utilized), two or more needles), are
new Category III CPT codes that became effective July 1, 2009, and were
implemented in the July 2009 ASC update (Table 57 above). As a result
of our clinical evaluation of the procedures described by the new
Category III codes, we determined that these two new procedures may be
appropriately provided to Medicare beneficiaries in ASCs.
In response to comments on the CY 2009 proposed rule, we stated in
the CY 2009 OPPS/ASC final rule with comment period (73 FR 68724) that,
as we developed the CY 2010 proposed rule, we would perform a
comprehensive review of the APCs in order to identify potentially
inconsistent ASC treatment of procedures assigned to a single APC under
the OPPS. Thus, we examined surgical procedures that are excluded from
the current ASC list of covered surgical procedures and the APCs to
which they are assigned under the OPPS. We identified for review 223
excluded surgical procedures that were assigned to the same APCs in CY
2009 as one or more ASC covered surgical procedures. Based upon our
clinical review of those procedures, we determined that 26 surgical
procedures may be appropriate for performance in ASCs and proposed to
add them to the CY 2010 ASC list of covered surgical procedures and to
assign payment indicator ``G2'' (Non office-based surgical procedure
added in CY 2008 or later; payment based on OPPS relative payment
weight) to each of them. We found that the remaining 197 excluded
procedures would pose significant safety risks to beneficiaries or
would be expected to require an overnight stay if provided in ASCs.
Therefore, we did not propose to add those 197 procedures to the CY
2010 ASC list of covered surgical procedures.
The 28 procedures that we proposed to add to the ASC list of
covered surgical procedures, including their HCPCS code short
descriptors and proposed CY 2010 payment indicators, were displayed in
Table 41 in the CY 2010 OPPS/ASC proposed rule (74 FR 35379 through
35380).
Among the procedures we identified as meeting the criteria for
designation as a covered surgical procedure was CPT code 35475
(Transluminal balloon angioplasty, percutaneous; brachiocephalic trunk
or branches, each vessel). The volume and utilization data for this
procedure indicate that it is most frequently performed in outpatient
settings. After review, our CMS medical advisors found that it would be
appropriate to propose designation of CPT code 35475 as an ASC covered
surgical procedure for CY 2010. Related to our proposal to add CPT code
35475 to the list of covered surgical procedures is our concurrent
proposal to delete two Level II HCPCS codes we created effective for CY
2007, HCPCS codes G0392 (Transluminal balloon angioplasty,
percutaneous; for maintenance of hemodialysis access, arteriovenous
fistula or graft; arterial) and G0393 (Transluminal balloon
angioplasty, percutaneous; for maintenance of hemodialysis access,
arteriovenous fistula or graft; venous) to enable ASCs to receive
Medicare payment for providing the angioplasty services required to
maintain the arteriovenous fistulae that are important to individuals
who undergo routine dialysis. We proposed to delete HCPCS codes G0392
and G0393 concurrently with the designation of CPT code 35475 as a
covered surgical procedure because there no longer would be a need for
the two Level II HCPCS G-codes. ASCs would be able to use CPT 35475 and
CPT code 35476 (Transluminal balloon angioplasty, percutaneous;
venous), which was included on the list of ASC covered surgical
procedures beginning in CY 2008, to report the same procedures
currently reported by HCPCS codes G0392 and G0393.
Thus, we proposed to add the 28 surgical procedures listed in Table
41 of the OPPS/ASC proposed rule to the list of covered ASC surgical
procedures and to delete the HCPCS codes displayed in Table 42 of the
proposed rule (74 FR 35380).
Comment: One commenter requested that CMS not finalize several of
its proposed additions to the ASC list for CY 2010. The commenter
believed that the procedure described by CPT code 26037 (Decompressive
fasciotomy, hand) is inappropriate for the ASC setting. The commenter
stated that the typical patient that requires this procedure has had a
severe crush injury to the hand and/or an infection and would require
at least 23 hours of medical monitoring following the surgery. The
commenter also objected to adding procedures described by CPT codes
42225 (Palatoplasty for cleft palate; attachment pharyngeal flap) and
42227 (Lengthening of palate, with island flap) because those
procedures are overwhelmingly performed on infants and very young
children who would require at least an overnight stay to observe for
postoperative swelling, airway compromise, and bleeding. The commenter
believed that CMS' inclusion of these procedures on the ASC list would
be inappropriate because Medicare claims data are inadequate for CMS'
use in making its determination and that inclusion of the procedures on
the Medicare ASC list leads to interpretation by commercial insurers
that the ASC setting is appropriate for all patient populations and
would result in very young patients not being able to receive care in
more appropriate settings.
The commenter also reiterated a previous request (73 FR 68729) that
CMS remove other cleft lip and palate reconstruction procedures from
the ASC list of covered surgical procedures. Those procedures and their
CPT codes are: 21215 (Graft, bone; mandible (includes obtaining
graft)); 40700 (Plastic repair of cleft lip/nasal deformity; primary,
partial or complete, unilateral); 40701 (Plastic repair of cleft lip/
nasal deformity, primary bilateral, one stage procedure); 42200
(Palatoplasty for cleft palate, soft and/or hard palate only); 42205
(Palatoplasty for cleft palate, with closure of alveolar ridge; soft
tissue only); 42210 (Palatoplasty for cleft palate, with closure of
alveolar ridge; with bone graft to alveolar ridge includes obtaining
graft)), 42215 (Palatoplasty for cleft palate; major revision); and
42220 (Palatoplasty for cleft palate; secondary lengthening procedure).
The commenter stated that all of these procedures require general
anesthesia and close postoperative monitoring and are often performed
in the inpatient setting.
[[Page 60603]]
Response: Our medical advisors reviewed the three procedures
described by CPT codes 26037, 42225, and 42227 that we proposed to add
to the ASC list for CY 2010. As a result of that review, we continue to
believe that all three of the procedures may be appropriately provided
to a Medicare beneficiary in an ASC. We do not see a basis for removing
the eight procedures from the ASC list as requested by the commenter.
All of these procedures were on the list of covered surgical procedures
even before CY 2007 and, to our knowledge, have been safely performed
in ASCs for many years. We continue to believe that these 11 procedures
would not pose a significant safety risk to Medicare beneficiaries and
would not require an overnight stay if performed in ASCs.
As established at Sec. 416.166(b), decisions regarding whether a
surgical procedure should be excluded from the Medicare ASC list of
covered surgical procedures are based on assessments of the needs of
Medicare beneficiaries and not all patient populations. We include on
the ASC list all procedures we believe are appropriate for some
Medicare beneficiaries in order to provide physicians and patients with
the greatest possible choice for sites-of-service. We expect that
physicians will consider for each individual patient which site-of-
service is most appropriate. We understand that the procedures on the
ASC list are sometimes more appropriately performed on an inpatient
basis due to the individual's age or other clinical considerations.
Comment: Several commenters supported the proposal to add 28
procedures to the list of covered surgical procedures and requested
that CMS add 24 additional surgical procedures. A few commenters on the
CY 2010 OPPS/ASC proposed rule and on the CY 2009 OPPS/ASC final rule
with comment period requested that a total of 18 specific unlisted
codes be added to the ASC list. Some commenters provided specific
reasons for their requests for addition of particular procedures, but
for most of the requested additions, no specific information was
submitted.
The commenters who requested that the procedure reported by CPT
code 50593 (Ablation, renal tumor(s) unilateral, percutaneous,
cryotherapy) be added to the ASC list stated that the procedure is
similar to the procedure reported by CPT code 50592 (Ablation, 1 or
more renal tumor(s), percutaneous, unilateral, radiofrequency), which
is already on the ASC list, and that CPT code 50593 is compatible with
CMS' safety criteria. The commenters also reported that a significant
number of the laminectomy procedures listed in Table 60 below already
are being performed in ASCs for commercially insured patients. They
stated that the most common of these laminectomy procedures are
performed on the cervical and lumbar regions of the spine, take only 60
to 90 minutes to perform, and typically require only about 4 hours of
recovery time. They also stated that patients are carefully screened
before the ASC is selected as the appropriate site for their surgical
procedures, a practice they would expect to see applied to the Medicare
population as well.
The commenters who requested the addition of the procedure reported
by CPT code 52649 (Laser enucleation of the prostate with morcellation,
including control of postoperative bleeding, complete (vasectomy,
meatotomy, cystourethroscopy, urethral calibration and/or dilation,
internal urethrotomy and transurethral resection of prostate are
included if performed)) requested that the procedure be added to the
ASC list because it does not require an overnight stay and it is
similar to benign prostatic hypertrophy treatment procedures, which are
already included on the ASC list. The commenters who requested addition
of the procedure described by CPT code 57310 (Closure of urethrovaginal
fistula) reported that it should be added to the list because a
substantially similar and more complex procedure, described by CPT code
57320 (Closure of vesicovaginal fistula; vaginal approach), is already
on the ASC list.
The commenters who requested the addition of the unlisted procedure
described by CPT code 19499 (Unlisted procedure, breast) stated that it
should be added to the list because it is used for setting breast
ductoscopy prior to some surgeries in lieu of a ductogram and because
it may be used to report services described by CPT codes 0046T
(Catheter lavage of a mammary duct(s) for collection of cytology
specimen(s), in high risk individuals (GAIL risk scoring or prior
personal history of breast cancer), each breast; single duct) and 0047T
(Catheter lavage of a mammary duct(s) for collection of cytology
specimen(s), in high risk individuals (GAIL risk scoring or prior
personal history of breast cancer), each breast; each additional duct)
that were payable in ASCs in CY 2008 but were deleted effective for CY
2009. Some commenters requested the addition of unlisted CPT codes
55899 (Unlisted procedure, male genital system); 58999 (Unlisted
procedure, female genital system (nonobstetrical)); and 64999 (Unlisted
procedure, nervous system) because these codes may be used to report
the procedures that were described by CPT codes 0027T (Endoscopic lysis
of epidural adhesions with direct visualization using mechanical means
(eg, spinal endoscopic catheter system) or solution injection (eg,
normal saline) including radiologic localization and epidurography);
0031T (Speculoscopy); 0032T (Speculoscopy; with directed sampling); and
53853 (Transurethral destruction of prostate tissue; by water-induced
thermotherapy) that were payable in ASCs in CY 2008 but were deleted
effective for CY 2009.
Finally, the commenter who requested the addition of intravascular
stent placement procedures, CPT codes 37205 (Transcatheter placement of
an intravascular stent(s)(except coronary, carotid, and vertebral
vessel), percutaneous; initial vessel) and 37206 (Transcatheter
placement of an intravascular stent(s) (except coronary, carotid, and
vertebral vessel), percutaneous; each additional vessel), claimed that
the addition of these procedures to the ASC list of covered surgical
procedures would improve access to care for patients with vascular
access dysfunction, decrease costs to Medicare, and result in a higher
quality of care for these patients. The commenters requested that if
CMS is reluctant to add these procedures to the ASC list because CPT
codes 37205 and 37206 are not restricted to the treatment of
hemodialysis vascular access sites, CMS could allow reporting of the
codes for ASC payment with a new and distinct modifier that would apply
to hemodialysis vascular access procedures.
All of the procedures requested by commenters for addition to the
ASC list of covered surgical procedures are displayed in Tables 60 and
61 below.
Table 60--Surgical Procedures Requested for Addition to the CY 2010 ASC
List of Covered Surgical Procedures
------------------------------------------------------------------------
CY 2010 CPT code CY 2010 short descriptor
------------------------------------------------------------------------
27485............................. Surgery to stop leg growth.
29867............................. Allgrft implnt, knee w/scope.
29868............................. Meniscal trnspl, knee w/scope.
35470............................. Repair arterial blockage.
35474............................. Repair arterial blockage.
35493............................. Atherectomy, percutaneous.
35495............................. Atherectomy, percutaneous.
37205............................. Transcath iv stent, percut.
37206............................. Transcath iv stent/perc addl.
50593............................. Perc cryo ablate renal tum.
52649............................. Prostate laser enucleation.
57310............................. Repair urethrovaginal lesion.
60210............................. Partial thyroid excision.
60220............................. Partial removal of thyroid.
[[Page 60604]]
63001............................. Removal spinal lamina.
63005............................. Removal spinal lamina.
63020............................. Neck spine disk surgery.
63030............................. Low back disk surgery.
63035............................. Spinal disk surgery add-on.
63040............................. Laminotomy, single cervical.
63042............................. Laminotomy, single lumbar.
63045............................. Removal of spinal lamina.
63047............................. Removal of spinal lamina.
63048............................. Remove spinal lamina add-on.
------------------------------------------------------------------------
Table 61--Specific CPT Unlisted Codes Requested for Addition to ASC List
of Covered Surgical Procedures
------------------------------------------------------------------------
CY 2010 CPT code CY 2010 short descriptor
------------------------------------------------------------------------
17999............................. Skin tissue procedure.
19499............................. Breast surgery procedure.
23929............................. Shoulder surgery procedure.
27599............................. Leg surgery procedure.
27899............................. Leg/ankle surgery procedure.
28899............................. Foot/toes surgery procedure.
29999............................. Arthroscopy of joint.
31299............................. Sinus surgery procedure.
55899............................. Genital surgery procedure.
58999............................. Genital surgery procedure.
64999............................. Nervous system surgery.
66999............................. Eye surgery procedure.
67299............................. Eye surgery procedure.
67399............................. Eye muscle surgery procedure.
67999............................. Revision of eyelid.
68399............................. Eyelid lining surgery.
68899............................. Tear duct system surgery.
92499............................. Eye service or procedure.
------------------------------------------------------------------------
Response: We reviewed all of the surgical procedures that
commenters requested be added to the ASC list of covered surgical
procedures. We did not review any of the procedures that may be
reported by the CPT unlisted codes listed in Table 61 because those
codes are not eligible for addition to the ASC list, consistent with
our final policy which is discussed in detail in the August 2, 2007
final rule (72 FR 42484 through 42486). We do not agree that any of the
procedures recommended by the commenters are appropriate for provision
to Medicare beneficiaries in ASCs. Although the commenters asserted
that some of the procedures they were requesting for addition to the
list are less complex than procedures already on the list and that all
of the requested procedures are as safe as procedures on the list, our
review did not support those assertions.
We exclude from ASC payment any procedure for which standard
medical practice dictates that the beneficiary who undergoes the
procedure would typically be expected to require active medical
monitoring and care at midnight following the procedure (overnight
stay) as well as all surgical procedures that our medical advisors
determine may be expected to pose a significant safety risk to Medicare
beneficiaries. The criteria used under the revised ASC payment system
to identify procedures that would be expected to pose a significant
safety risk when performed in an ASC include, but are not limited to,
those procedures that: generally result in extensive blood loss;
require major or prolonged invasion of body cavities; directly involve
major blood vessels; are emergent or life-threatening in nature; or
commonly require systemic thrombolytic therapy (see Sec. 416.166).
In our review of the procedures listed in Table 60, we found that
all of the procedures either may be expected to pose a threat to
beneficiary safety or require active medical monitoring at midnight
following the procedure. Specifically, we found that prevailing medical
practice called for inpatient hospital stays for beneficiaries
undergoing many of the procedures and that some of the procedures
directly involve major blood vessels and/or may result in extensive
blood loss.
After consideration of the public comments we received, we are not
adding any of the procedures requested by the commenters to the list of
ASC covered surgical procedures. We also are not removing any of the
procedures from the list as requested by commenters. We are finalizing,
without modification, our proposal to add 28 procedures to the CY 2010
ASC list and to delete two Level II HCPCS codes. The procedures, their
short descriptors, and payment indicators are displayed in Tables 62
and 63 below.
Table 62--New ASC Covered Surgical Procedures for CY 2010
------------------------------------------------------------------------
Final CY
2010 ASC
CY 2010 CPT Code CY 2010 short descriptor payment
indicator
------------------------------------------------------------------------
26037........................ Decompress fingers/hand.... G2
27475........................ Surgery to stop leg growth. G2
27479........................ Surgery to stop leg growth. G2
27720........................ Repair of tibia............ G2
35460........................ Repair venous blockage..... G2
35475........................ Repair arterial blockage... G2
41512........................ Tongue suspension.......... G2
42225........................ Reconstruct cleft palate... G2
42227........................ Lengthening of palate...... G2
43130........................ Removal of esophagus pouch. G2
43752........................ Nasal/orogastric w/stent... G2
45541........................ Correct rectal prolapsed... G2
49435........................ Insert subq exten to ip G2
cath.
49436........................ Embedded ip cath exit-site. G2
49442........................ Place cecostomy tube perc.. G2
50080........................ Removal of kidney stone.... G2
50081........................ Removal of kidney stone.... G2
50727........................ Revise ureter.............. G2
51535........................ Repair of ureter lesion.... G2
57295........................ Revise vag graft via vagina G2
60210........................ Partial thyroid excision... G2
60212........................ Partial thyroid excision... G2
60220........................ Partial removal of thyroid. G2
60225........................ Partial removal of thyroid. G2
61770........................ Incise skull for treatment. G2
0193T........................ Rf bladder neck G2
microremodel.
0200T *...................... Perq sacral augmt unilat G2
inj.
0201T *...................... Perq sacral augmt bilat inj G2
------------------------------------------------------------------------
* Indicates codes are new, effective July 2009.
Table 63--HCPCS Codes Deleted Effective CY 2010
------------------------------------------------------------------------
CY 2009 ASC
CY 2009 HCPCS Code CY 2009 short descriptor payment
indicator
------------------------------------------------------------------------
G0392........................ AV fistula or graft A2
arterial.
[[Page 60605]]
G0393........................ AV fistula or graft venous. A2
------------------------------------------------------------------------
b. Covered Surgical Procedures Designated as Office-Based
(1) Background
In the August 2, 2007 final rule, we finalized our policy to
designate as ``office-based'' those procedures that are added to the
ASC list of covered surgical procedures in CY 2008 or later years that
we determine are performed predominantly (more than 50 percent of the
time) in physicians' offices based on consideration of the most recent
available volume and utilization data for each individual procedure
code and/or, if appropriate, the clinical characteristics, utilization,
and volume of related codes. In that rule, we also finalized our policy
to exempt all procedures on the CY 2007 ASC list from application of
the office-based classification (72 FR 42512). The procedures that were
added to the ASC list of covered surgical procedures beginning in CY
2008 that we determined were office-based were identified in Addendum
AA to that rule by payment indicator ``P2'' (Office-based surgical
procedure added to ASC list in CY 2008 or later with MPFS nonfacility
PE RVUs; payment based on OPPS relative payment weight); ``P3''
(Office-based surgical procedure added to ASC list in CY 2008 or later
with MPFS nonfacility PE RVUs; payment based on MPFS nonfacility PE
RVUs); or ``R2'' (Office-based surgical procedure added to ASC list in
CY 2008 or later without MPFS nonfacility PE RVUs; payment based on
OPPS relative payment weight), depending on whether we estimated it
would be paid according to the standard ASC payment methodology based
on its OPPS relative payment weight or at the MPFS nonfacility PE RVU
amount.
Consistent with our final policy to annually review and update the
list of surgical procedures eligible for payment in ASCs, each year we
identify surgical procedures as either temporarily or permanently
office-based after taking into account updated volume and utilization
data.
(2) Changes to Covered Surgical Procedures Designated as Office-Based
for CY 2010
In developing the CY 2010 OPPS/ASC proposed rule (74 FR 35381), we
followed our policy to annually review and update the surgical
procedures for which ASC payment is made and to identify new procedures
that may be appropriate for ASC payment, including their potential
designation as office-based. We reviewed CY 2008 volume and utilization
data and the clinical characteristics for all surgical procedures that
are assigned payment indicator ``G2'' in CY 2009, as well as for those
procedures assigned one of the temporary office-based payment
indicators, specifically ``P2*,'' ``P3*,'' or ``R2*'' in the CY 2009
OPPS/ASC final rule with comment period (73 FR 68730 through 68733). As
a result of that review, we proposed to newly designate 6 procedures as
office-based for CY 2010 (74 FR 35381). We also proposed to make
permanent the office-based designations of 4 surgical procedures that
have temporary office-based designations in CY 2009.
The 6 procedures we proposed to permanently designate as office-
based are: CPT code 15852 (Dressing change (for other than burns) under
anesthesia (other than local)); CPT code 19105 (Ablation, cryosurgical,
of fibroadenoma, including ultrasound guidance, each fibroadenoma); CPT
code 20555 (Placement of needles or catheters into muscle and/or soft
tissue for subsequent interstitial radioelement application (at the
time of or subsequent to the procedure)); CPT code 36420 (Venipuncture,
cutdown; younger than age 1 year); CPT code 50386 (Removal (via snare/
capture) of internally dwelling ureteral stent via transurethral
approach, without use of cystoscopy, including radiological supervision
and interpretation); and CPT code 57022 (Incision and drainage of
vaginal hematoma; obstetrical/postpartum). These procedures and their
HCPCS code short descriptors and proposed CY 2010 payment indicators
were displayed in Table 43 of the CY 2010 OPPS/ASC proposed rule (74 FR
35381).
Comment: Many commenters expressed their continued disagreement
with the policy to make payment at the lower of the ASC rate or MPFS
nonfacility PE RVU payment amount for procedures we identify as office-
based and requested that CMS not finalize any of the proposed office-
based designations. They believed that, due to the payment limits
required by CMS' payment policy for providing these procedures in ASCs,
beneficiaries who require the level of care provided in ASCs instead
have to receive treatment in the more costly HOPD setting and that the
policy makes the ASC payment rates subject to the fluctuations of the
MPFS nonfacility PE RVUs and other problems of the MPFS.
The commenters recommended that CMS revise its policies in at least
three ways. First, they recommended that CMS establish a minimum volume
threshold before designating a procedure office-based. They asserted
that it is unnecessary and inappropriate to designate as office-based
procedures with extremely low volume because the utilization data for
those procedures are variable and, thus, not reliable. Second, they
recommended that CMS raise the utilization threshold above 50 percent
for designating a procedure office-based and use multiple years of data
for making the designation because of the variability in the
utilization data across years. Third, the commenters recommended that
CMS recognize the OPPS median costs for procedures as the best proxy
for relative ASC costs and limit the reduction in payment to ASCs for
the office-based procedures. The commenters reasoned that, because the
ASC payment system was to be based on the relative payment weights
under the OPPS, which are updated annually based on hospital claims and
cost reports, OPPS median costs are a better source of relative payment
weights than the MPFS, which is not based on facility costs estimated
from claims and cost reports like the OPPS. In addition, they expressed
concern that as more procedures are designated as office-based for ASC
payment, the linkage between the OPPS and ASC ratesetting methodologies
would be eroded and the ASC payment system would be increasingly
affected by the unpredictable inflation updates under the MPFS.
Response: We continue to believe that our policy of identifying low
complexity procedures that are usually provided in physicians' offices
and limiting their payment in ASCs to the physician's office payment
amount is necessary and valid. We believe this is the most appropriate
approach to preventing the creation of payment incentives for services
to move from physicians' offices to ASCs for the many newly-covered low
complexity procedures on the ASC list. Moreover, we are confident that
the CY 2008 claims data, the most recent full year of volume and
utilization data, are an appropriate source to inform our decisions
regarding the site-of-service for procedures. In our review process,
when we believe that the available data are inadequate bases
[[Page 60606]]
upon which to make a determination that a procedure should be office-
based, we either make no change to the procedure's payment status or
make the change temporary and reevaluate our decision using data that
become available for our next evaluation. We believe that it is
appropriate to continue using our judgment regarding whether the volume
of cases and the proportion of cases that are provided in the
physicians' office setting indicate that the procedure is an office-
based procedure in addition to our medical advisors' clinical
judgments, utilization data for procedures that are closely related to
the procedures being evaluated, and any other information that is
available to us. Thus, we will not alter our review and decision
processes with respect to establishing or changing volume or
utilization thresholds as recommended by the commenters.
We continue to believe that it is appropriate that ASCs be paid no
more for performing office-based procedures than those procedures would
be paid when performed in physicians' offices, in order to deter
inappropriate migration of these surgical procedures to ASCs based on
financial considerations rather than clinical needs. Although our
policy to pay for some services at the MPFS non-facility PE RVU amount
does introduce payment for a number of procedures at rates not based on
the ASC relative payment weights and, as such, may be viewed as an
erosion of the linkage between the OPPS and ASC payment system, we do
not believe that the alternative of making payments at the higher ASC
rate is preferable. None of the office-based procedures was eligible
for ASC payment prior to implementation of the revised payment system
and we see no inherent unfairness in limiting ASC payment to the rate
for the lower-intensity site of service (physician's office) that our
data indicate is the care setting for most Medicare cases. In fact, the
lower than expected CY 2008 ASC utilization for office-based procedures
reported by commenters (discussed in section XV.I.2.of this final rule
with comment period) may be an indication that our policy does not
encourage inappropriate migration of these services to ASCs, as was our
intention. While we acknowledge the potential volatility of the office-
based payments under the MPFS, we continue to believe it is appropriate
to treat office-based procedures similarly in the office and ASC
settings for purposes of Medicare payment. Therefore, we also will not
adopt the commenters' recommendation that ASC payment rates should be
based only on OPPS median costs and will continue to update the office-
based list of ASC covered surgical procedures annually, to account for
changes in medical practice and new surgical procedures that may result
in additional surgical procedures that are predominantly performed in
physicians' offices.
The utilization data for the procedures listed in Table 43 of the
proposed rule and restated in Table 64, below, did not change between
the proposed rule and this final rule with comment period. We did not
receive any public comments that specifically addressed our proposals
to designate the 6 procedures listed in Table 64 as office-based for CY
2010. Therefore, we are finalizing our CY 2010 proposals, without
modification, to designate the procedures displayed in Table 64 below
as office-based for CY 2010.
Table 64--CY 2010 Final Designations of ASC Covered Surgical Procedures Newly Designated as Office-Based
----------------------------------------------------------------------------------------------------------------
CY 2009 ASC payment Proposed CY 2010 ASC Final CY 2010 ASC
CY 2010 HCPCS code CY 2010 short descriptor indicator payment indicator payment indicator *
----------------------------------------------------------------------------------------------------------------
15852............... Dressing change not for G2.................. R2.................. R2
burn.
19105............... Cryosurg ablate fa, each G2.................. P3.................. P2
20555............... Place ndl musc/tis for G2.................. R2.................. R2
rt.
36420............... Vein access cutdown < 1 G2.................. R2.................. R2
yr.
50386............... Remove stent via G2.................. P2.................. P2
transureth.
57022............... I & d vaginal hematoma, G2.................. R2.................. R2
pp.
----------------------------------------------------------------------------------------------------------------
* Payment indicators are based on a comparison of the rates according to the ASC standard ratesetting
methodology and the MPFS final CY 2010 rates. Under current law, the MPFS payment rates have a negative update
for CY 2010. For a discussion of those rates, we refer readers to the CY 2010 MPFS final rule with comment
period.
In the CY 2010 OPPS/ASC proposed rule (74 FR 35381), we also
reviewed CY 2008 volume and utilization data and other information for
the 10 procedures with temporary office-based designations for CY 2009.
Among these 10 procedures, there were no claims data for the 3
procedures with CPT codes that were new in CY 2009. Those 3 new
procedure codes are: CPT code 46930 (Destruction of internal
hemorrhoid(s) by thermal energy (eg, infrared coagulation, cautery,
radiofrequency)); CPT code 64455 (Injection(s), anesthetic agent and/or
steroid, plantar common digital nerve(s) (eg, Morton's neuroma)); and
CPT code 64632 (Destruction by neurolytic agent; plantar common digital
nerve). Consequently, in the CY 2010 OPPS/ASC proposed rule (74 FR
35381), we proposed to maintain their temporary office-based
designations for CY 2010.
As a result of our review of the remaining 7 procedures that have
temporary office-based designations for CY 2009, we proposed to make
permanent the office-based designations for 4 procedures for CY 2010.
The 4 surgical procedure codes are: CPT code 0084T (Insertion of a
temporary prostatic urethral stent); CPT code 21073 (Manipulation of
temporomandibular joint(s) (TMJ), therapeutic, requiring an anesthesia
service (ie, general or monitored anesthesia care)); CPT code 55876
(Placement of interstitial device(s) for radiation therapy guidance
(eg, fiducial markers, dosimeter), prostate (via needle, any approach),
single or multiple); and HCPCS code C9728 (Placement of interstitial
device(s) for radiation therapy/surgery guidance (eg, fiducial markers,
dosimeter), other than prostate (any approach), single or multiple).
Although we have no Medicare volume and utilization data in physicians'
offices for HCPCS code C9728 because this code is not recognized for
payment under the MPFS, we noted in the CY 2009 OPPS/ASC proposed rule
(73 FR 41528) that because HCPCS code C9728 is
[[Page 60607]]
analogous to CPT code 55876, we believe they should be paid according
to the same ASC payment methodology under the ASC payment system. In
the CY 2010 OPPS/ASC proposed rule, we indicated our belief that the
volume and utilization data for CPT codes 0084T, 21073, and 55876 are
sufficient to support our determination that these procedures are most
commonly provided in physicians' offices. Therefore, we proposed to
make permanent the office-based designations for the four procedures
(including HCPCS code C9728) for CY 2010.
We did not propose to make permanent the office-based designations
for the 3 other procedures for which the CY 2009 office-based
designations are temporary because we did not believe that the
currently available volume and utilization data provided an adequate
basis for proposing permanent office-based designations. Rather,
available data supported our determination that maintaining the
temporary office-based designation was appropriate for CY 2010 for CPT
code 0099T (Implantation of intrastromal corneal ring segments); CPT
code 0124T (Conjunctival incision with posterior extrascleral placement
of pharmacological agent (does not include supply of medication)); and
CPT code 67229 (Treatment of extensive or progressive retinopathy, 1 or
more sessions; preterm infant (less than 37 weeks gestation at birth),
performed from birth up to 1 year of age (eg, retinopathy of
prematurity), photocoagulation or cryotherapy). Thus, we proposed to
maintain the temporary office-based designation for those procedures
for CY 2010.
The procedures that we proposed to permanently designate as office-
based for CY 2010 that were temporarily designated as office-based
procedures in CY 2009 were displayed in Table 44 in the CY 2010 OPPS/
ASC proposed rule (74 FR 35382). The procedures that we proposed to
continue to temporarily designate as office-based for CY 2010 were
displayed in Table 45 in the CY 2010 OPPS/ASC proposed rule (74 FR
35382). The procedures for which the proposed office-based designation
for CY 2010 is temporary also were indicated by an asterisk in Addendum
AA to the proposed rule.
We did not receive any public comments that specifically addressed
our proposals to designate the 4 procedures listed in Table 44 of the
proposed rule and restated in Table 65, below, as permanently office-
based for CY 2010. Therefore, we are adopting as final for CY 2010
permanent office-based payment indicators as proposed for the
procedures reported by HCPCS codes 0084T, 21073, 55876, and C9728 that
were designated temporarily office-based for CY 2009.
Table 65--CY 2009 Temporarily Designated Office-Based ASC Covered Surgical Procedures That Are Designated as
Permanently Office-Based for CY 2010
----------------------------------------------------------------------------------------------------------------
Final CY 2010 ASC
CY 2009 HCPCS code CY 2010 HCPCS CY 2010 short CY 2009 ASC payment indicator
code descriptor payment indicator **
----------------------------------------------------------------------------------------------------------------
0084T.......................... 53855 Temp prostate urethral R2 *.............. P2
stent.
21073.......................... 21073 Mnpj of tmj w/anesth... P3 *.............. P3
55876.......................... 55876 Place rt device/marker, P3 *.............. P3
pros.
C9728.......................... C9728 Place device/marker, R2 *.............. R2
non pro.
----------------------------------------------------------------------------------------------------------------
* If designation is temporary.
** Payment indicators are based on a comparison of the rates according to the ASC standard ratesetting
methodology and the MPFS final CY 2010 rates. Under current law, the MPFS payment rates have a negative update
for CY 2010. For a discussion of those rates, we refer readers to the CY 2010 MPFS final rule with comment
period.
Comment: One commenter supported the proposal to maintain CPT codes
64455 and 64632 as temporarily office-based pending the availability of
actual claims data.
Response: We appreciate the commenter's support.
After consideration of the public comment we received, we are
finalizing our CY 2010 proposal, without modification, to maintain the
temporary office-based payment indicators as displayed in Table 66 for
the 6 procedures reported by CPT codes 0099T, 0124T, 46930, 64455,
64632, and 67229 that were designated temporarily office-based for CY
2009.
Table 66--CY 2009 Temporarily Office-Based Procedures That Are
Designated as Temporarily Office-Based for CY 2010 *
------------------------------------------------------------------------
Final CY 2010
CY 2010 HCPCS Code CY 2010 short ASC payment
descriptor indicator **
------------------------------------------------------------------------
0099T............................ Implant corneal ring R2 *
0124T............................ Conjunctival drug R2 *
placement.
46930............................ Destroy internal P3 *
hemorrhoids.
64455............................ N block inj, plantar P3 *
digit.
64632............................ N block inj, common P3 *
digit.
67229............................ Tr retinal les R2*
preterm inf.
------------------------------------------------------------------------
* If designation is temporary.
** Payment indicators are based on a comparison of the rates according
to the ASC standard ratesetting methodology and the MPFS final CY 2010
rates. Under current law, the MPFS payment rates have a negative
update for CY 2010. For a discussion of those rates, we refer readers
to the CY 2010 MPFS final rule with comment period.
Displayed in Table 67 below are new (or substantially revised) CY
2010 HCPCS codes to which we have assigned temporary office-based
payment indicators. As explained in section XV.B.1. of this final rule
with comment period, we reviewed all of the newly created HCPCS codes
that became available after the issuance of the CY 2009 OPPS/ASC
proposed rule that will be used to report surgical procedures in CY
2010 to evaluate their appropriateness for the ASC list of covered
surgical procedures. Of the procedures reported by new or substantially
revised CY 2010 HCPCS codes that we determined should not be excluded
from the ASC list based on our clinical review, including assessment of
[[Page 60608]]
available utilization and volume data for any closely related
procedures and consideration of other available information, we
determined that 16 of the procedures would predominantly be performed
in physicians' offices. However, because we had no utilization data for
the procedures specifically described by these new HCPCS codes, we made
the office-based designations temporary rather than permanent and will
reevaluate the procedures when data become available. The temporary
payment indicators for the 16 office-based procedures displayed in
Table 67 are interim designations and are open to public comment during
the 60-day comment period for this final rule with comment period.
HCPCS codes that are new (or substantially revised) for CY 2010 are
designated with an ``NI'' comment indicator in Addendum AA. We will
respond to public comments on the interim designations in the CY 2011
OPPS/ASC final rule with comment period.
Table 67--Final CY 2010 Payment Indicators for New CY 2010 HCPCS Codes
for ASC Covered Surgical Procedures Designated as Temporarily Office-
Based on an Interim Basis
------------------------------------------------------------------------
Final CY 2010
CY 2010 HCPCS Code CY 2010 short ASC payment
descriptor indicator **
------------------------------------------------------------------------
21015............................ Resection of facial R2 *
tumor.
21555............................ Remove lesion, neck/ P3 *
chest.
21930............................ Remove lesion, back P3 *
or flank.
23075............................ Removal of shoulder P3 *
lesion.
24075............................ Remove arm/elbow P3 *
lesion.
25075............................ Removal forearm P3 *
lesion subcu.
26115............................ Removal hand lesion, P3 *
subcut.
27047............................ Remove hip/pelvis P3 *
lesion.
27327............................ Removal of thigh P3 *
lesion.
27618............................ Remove lower leg P3 *
lesion.
28039............................ Exc foot/toe tum sc P3 *
> 1.5 cm.
28041............................ Exc foot/toe tum R2 *
deep > 1.5 cm.
28043............................ Excision of foot P3 *
lesion.
28045............................ Excision of foot P3 *
lesion.
28046............................ Resection of tumor, R2 *
foot.
37761............................ Ligate leg veins R2 *
open.
------------------------------------------------------------------------
* If designation is temporary.
** Payment indicators are based on a comparison of the rates according
to the ASC standard ratesetting methodology and the MPFS final CY 2010
rates. Under current law, the MPFS payment rates have a negative
update for CY 2010. For a discussion of those rates, we refer readers
to the CY 2010 MPFS final rule with comment period.
c. ASC Covered Surgical Procedures Designated as Device-Intensive
(1) Background
As discussed in the August 2, 2007 final rule (72 FR 42503 through
42508), we adopted a modified payment methodology for calculating the
ASC payment rates for covered surgical procedures that are assigned to
the subset of OPPS device-dependent APCs with a device offset
percentage greater than 50 percent of the APC cost under the OPPS, in
order to ensure that payment for the procedure is adequate to provide
packaged payment for the high-cost implantable devices used in those
procedures. We assigned payment indicators ``H8'' (Device-intensive
procedure on ASC list in CY 2007; paid at adjusted rate) and ``J8''
(Device-intensive procedure added to ASC list in CY 2008 or later; paid
at adjusted rate) to identify the procedures that were eligible for ASC
payment calculated according to the modified methodology, depending on
whether the procedure was included on the ASC list of covered surgical
procedures prior to CY 2008 and, therefore, subject to transitional
payment as discussed in the CY 2009 OPPS/ASC final rule with comment
period (73 FR 68739 through 68742). The 52 device-intensive procedures
for which the modified rate calculation methodology applies in CY 2009
were displayed in Table 47 and in Addendum AA to the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68736 through 68738 and 68840
through 68933).
(2) Changes to List of Covered Surgical Procedures Designated as
Device-Intensive for CY 2010
In the CY 2010 OPPS/ASC proposed rule (74 FR 35382), we proposed to
update the ASC list of covered surgical procedures that are eligible
for payment according to the device-intensive procedure payment
methodology for CY 2010, consistent with the proposed OPPS device-
dependent APC update, reflecting the proposed APC assignments of
procedures, designation of APCs as device-dependent, and APC device
offset percentages based on the CY 2008 OPPS claims and cost report
data available for the proposed rule. The ASC covered surgical
procedures that we proposed to designate as device-intensive and that
would be subject to the device-intensive procedure payment methodology
for CY 2010 were listed in Table 46 in the CY 2010 OPPS/ASC proposed
rule (74 FR 35383 through 35384).
Comment: Some commenters expressed general concerns regarding the
sufficiency of ASC payment for device-related services and recommended
modifications to the ASC device-intensive payment methodology. First,
the commenters argued that CMS should not apply the ASC conversion
factor to the device-related portion of the payment for all procedures
for which CMS can establish a median device cost, regardless of whether
they are designated as device-intensive under the established
methodology. The commenters stated that, unlike ASCs' general abilities
to achieve greater operational efficiencies than HOPDs, ASCs are unable
to extract greater discounts on devices and expensive operative
supplies than their hospital counterparts. Second, the commenters
argued that CMS should not adjust the device portion of the ASC payment
for device-intensive procedures by the wage index. According to the
commenters, the acquisition of devices occurs on a national market, and
ASCs in rural areas pay approximately the same for medical devices and
equipment as facilities in more expensive labor markets. The commenters
stated that CMS is underpaying device costs in markets where the wage
index is low, and overpaying in markets where the wage index is high.
One commenter specifically remarked that the procedures described
by CPT code 19296 (Placement of radiotherapy afterloading balloon
catheter into the breast for interstitial radioelement application
following partial mastectomy, includes imaging guidance; on date
separate from partial
[[Page 60609]]
mastectomy) and CPT code 19297 (Placement of radiotherapy afterloading
balloon catheter into the breast for interstitial radioelement
application following partial mastectomy, includes imaging guidance;
concurrent with partial mastectomy), which map to OPPS device-dependent
APC 0648 (Level IV Breast Surgery), require the use of a device that
has a list price that exceeds 50 percent of the median costs calculated
for those CPT codes and, therefore, concluded that these procedures
should be added to the ASC list of device-intensive procedures. Another
commenter requested that CMS add the procedure described by CPT code
66180 (Aqueous shunt to extraocular reservoir (eg, Molteno, Schocket,
Denver-Krupin)) to the ASC list of device-intensive procedures, arguing
that the list prices of devices involved in performing this procedure
are greater than 50 percent of the proposed ASC payment rate for this
procedure for CY 2010.
Response: In the August 2, 2007 final rule (72 FR 42508), we
established that the modified payment methodology for calculating ASC
payment rates for device-intensive procedures shall apply to ASC
covered surgical procedures that are assigned to device-dependent APCs
under the OPPS for the same calendar year, where those APCs have a
device cost of greater than 50 percent of the APC cost (that is, the
device offset percentage is greater than 50). We continue to believe
these criteria ensure that ASC payment rates are adequate to provide
packaged payment for high cost implantable devices and ensure Medicare
beneficiaries have access to these procedures in all appropriate
settings of care. We do not agree that we should change our criteria
and treat as device-intensive ASC services that are assigned to APCs
for which the device offset percentage is less than 50 percent (such as
the procedures described by CPT codes 19296 and 19297) or ASC services
that are not assigned to OPPS device-dependent APCs (such as the
procedure described by CPT code 66180). Under the modified payment
methodology for ASC covered surgical procedures designated as device-
intensive, we separately determine both the device payment and service
payment portions of the ASC payment rate, and apply the ASC conversion
factor only to the specifically calculated OPPS relative payment weight
for the service portion, while providing the same packaged payment for
the device portion as would be made under the OPPS. The 50-percent
device offset threshold is established to ensure that the ASC
conversion factor is not applied to the costs of high cost implantable
devices, which likely do not vary between ASCs and HOPDs in the same
manner service costs have been shown to vary. As we have stated in the
past (73 FR 68734), we believe that when device costs comprise less
than 50 percent of total procedure costs, those costs are less likely
to be as predictable across sites-of-service. Accordingly, we believe
that it is possible for ASCs to achieve efficiencies relative to HOPDs
when providing those procedures, and that the application of the ASC
conversion factor to the entire ASC payment weight is appropriate.
We also do not believe it is appropriate to vary the percentage of
the national payment that is wage adjusted for different services.
Under the revised ASC payment system, we utilize 50 percent as the
labor-related share to adjust national ASC payment rates for geographic
wage differences. We apply to ASC payments the IPPS pre-floor, pre-
reclassification wage index values associated with the June 2003 OMB
geographic localities, as recognized under the IPPS and OPPS, in order
to adjust the labor-related portion of the national ASC payment rates
for geographic wage differences. Consistent with the OPPS, we apply the
ASC geographic wage adjustment to the entire ASC payment rate for
device-intensive procedures. As we have noted in the past (73 FR
68735), MedPAC has indicated its intent to evaluate CMS' method for
adjusting payments for variations in labor costs in light of
differences in labor-related costs for device-implantation services. We
look forward to reviewing the results of its evaluation, as well as any
recommendations it may provide, regarding the OPPS or ASC wage
adjustment policy.
Comment: Some commenters argued that CMS should not subject
procedures that were on the ASC list of covered surgical procedures in
CY 2007 but were rarely performed in ASCs prior to CY 2008 to the
transitional adjustment. One commenter provided a data analysis
demonstrating that CPT code 55873 (Cryosurgical ablation of the
prostate (includes ultrasonic guidance and monitoring)) was present on
three ASC claims in CY 2007, on one claim in CY 2006, and was not
billed at all by ASCs in CY 2005. According to the commenter, the
transitional payment for CPT code 55873 is inadequate to cover ASCs'
costs of providing the procedure and will prevent Medicare
beneficiaries from accessing this procedure in the ASC setting.
Response: As established in regulation at Sec. 416.171(c), the
transitional adjustment applies to all services on the CY 2007 ASC list
of covered services. We cannot make an exception for procedures, such
as the one described by CPT code 55873, that were on the CY 2007 list
of covered services but were rarely performed in ASCs according to the
commenter. Furthermore, as we stated in the August 2, 2007 final rule
(72 FR 42520), the transition to the fully implemented revised ASC
system payment system should not be asymmetrical, meaning that
procedures with decreasing payments under the revised payment system
should not be transitioned differently from those with increasing
payments.
Comment: One commenter requested that CMS adjust the OPPS device
offset percentages for ASC device-intensive payment purposes to account
for the effects of charge compression. The commenter suggested that CMS
``decompress'' the supply median costs to minimize any artificial
reductions that charge compression causes in the estimate of the OPPS
device offset percentages.
Response: Charge compression is the practice of applying a lower
charge markup to higher-cost services and a higher charge markup to
lower-cost services. As a result of charge compression, the cost-based
OPPS weights incorporate aggregation bias, undervaluing high cost items
and overvaluing low cost items when an estimate of average markup,
embodied in a single CCR, is applied to items of widely varying costs
in the same cost center. As discussed in the CY 2009 OPPS/ASC final
rule with comment period (73 FR 68524), we did not adopt any short-term
statistical regression-based adjustments under the OPPS that would
serve to ``decompress'' the median costs for procedures involving
devices, or for any other procedures. Rather, we chose to focus on
long-term changes to Medicare cost reporting to address the effects of
charge compression, including the creation of two new cost centers,
``Medical Supplies Charged to Patients'' and ``Implantable Devices
Charged to Patients,'' as discussed in more detail in section
II.A.1.c.(2) of this final rule with comment period. We believe that
this change to how hospitals report costs for devices and supplies will
improve our future estimates of costs related to high cost implantable
devices, including the device offset percentages upon which we base the
device portions of ASC payment rates for device-intensive procedures.
[[Page 60610]]
Comment: Several commenters remarked on the adequacy of the
proposed payment rates calculated according to the ASC device-intensive
payment methodology for procedures involving cochlear implants,
described by CPT code 69930 (Cochlear device implantation, with or
without mastoidectomy). According to the commenters, the proposed
increase to the ASC payment rate for CPT code 69930 is a necessary
improvement to ensure beneficiary access to cochlear implants. Several
commenters also supported the proposed payment rate increases for
procedures involving auditory osseointegrated devices, described by CPT
codes 69714 (Implantation, osseointegrated implant, temporal bone, with
percutaneous attachment to external speech processor/cochlear
stimulator; without mastoidectomy); 69715 (Implantation,
osseointegrated implant, temporal bone, with percutaneous attachment to
external speech processor/cochlear stimulator; with mastoidectomy);
69717 (Replacement (including removal of existing device),
osseointegrated implant, temporal bone, with percutaneous attachment to
external speech processor/cochlear stimulator; without mastoidectomy);
and 69718 (Replacement (including removal of existing device),
osseointegrated implant, temporal bone, with percutaneous attachment to
external speech processor/cochlear stimulator; with mastoidectomy).
Other commenters encouraged CMS to finalize a somewhat higher payment
rate for these procedures.
Response: We appreciate the commenters' support of the proposed
payment rates for procedures involving cochlear implants and auditory
osseointegrated devices. We believe that the final CY 2010 ASC payment
rates for these procedures, calculated according to the ASC device-
intensive ratesetting methodology, are appropriate and adequate to
ensure beneficiaries have access to these procedures in the ASC
setting.
After consideration of the public comments we received, we are
designating the ASC covered surgical procedures displayed in Table 68
below as device-intensive for CY 2010. The HCPCS code, the HCPCS code
short descriptor, the CY 2010 ASC payment indicator, the CY 2010 OPPS
APC assignment, the OPPS APC Title, and the CY 2010 OPPS APC device
offset percentage are listed in Table 68. Each device-intensive
procedure is assigned payment indicator ``H8'' or ``J8,'' depending on
whether it is subject to transitional payment. All of these procedures
are included in Addendum AA to this final rule with comment period. The
OPPS device-dependent APCs are discussed further in section
II.A.2.d.(1) of this final rule with comment period.
Table 68.--ASC Covered Surgical Procedures Designated as Device-Intensive for CY 2010
----------------------------------------------------------------------------------------------------------------
Final CY
Final CY 2010 Final CY 2010 device-
CY 2010 CPT code CY 2010 short ASC payment 2010 OPPS OPPS APC title dependent
descriptor indicator APC APC offset
percentage
----------------------------------------------------------------------------------------------------------------
24361........................ Reconstruct H8............ 0425 Level II Arthroplasty 58
elbow joint. or Implantation with
Prosthesis.
24363........................ Replace elbow H8............ 0425 Level II Arthroplasty 58
joint. or Implantation with
Prosthesis.
24366........................ Reconstruct head H8............ 0425 Level II Arthroplasty 58
of radius. or Implantation with
Prosthesis.
25441........................ Reconstruct H8............ 0425 Level II Arthroplasty 58
wrist joint. or Implantation with
Prosthesis.
25442........................ Reconstruct H8............ 0425 Level II Arthroplasty 58
wrist joint. or Implantation with
Prosthesis.
25446........................ Wrist H8............ 0425 Level II Arthroplasty 58
replacement. or Implantation with
Prosthesis.
27446........................ Revision of knee J8............ 0425 Level II Arthroplasty 58
joint. or Implantation with
Prosthesis.
33206........................ Insertion of J8............ 0089 Insertion/Replacement 72
heart pacemaker. of Permanent
Pacemaker and
Electrodes.
33207........................ Insertion of J8............ 0089 Insertion/Replacement 72
heart pacemaker. of Permanent
Pacemaker and
Electrodes.
33208........................ Insertion of J8............ 0655 Insertion/Replacement/ 75
heart pacemaker. Conversion of a
permanent dual
chamber pacemaker.
33212........................ Insertion of H8............ 0090 Insertion/Replacement 74
pulse generator. of Pacemaker Pulse
Generator.
33213........................ Insertion of H8............ 0654 Insertion/Replacement 75
pulse generator. of a permanent dual
chamber pacemaker.
33214........................ Upgrade of J8............ 0655 Insertion/Replacement/ 75
pacemaker Conversion of a
system. permanent dual
chamber pacemaker.
33224........................ Insert pacing J8............ 0418 Insertion of Left 81
lead & connect. Ventricular Pacing
Elect..
33225........................ Lventric pacing J8............ 0418 Insertion of Left 81
lead add-on. Ventricular Pacing
Elect..
33240........................ Insert pulse J8............ 0107 Insertion of 89
generator. Cardioverter-
Defibrillator.
33249........................ Eltrd/insert J8............ 0108 Insertion/Replacement/ 88
pace-defib. Repair of
Cardioverter-
Defibrillator Leads.
33282........................ Implant pat- J8............ 0680 Insertion of Patient 73
active ht Activated Event
record. Recorders.
53440........................ Male sling H8............ 0385 Level I Prosthetic 59
procedure. Urological
Procedures.
53444........................ Insert tandem H8............ 0385 Level I Prosthetic 59
cuff. Urological
Procedures.
53445........................ Insert uro/ves H8............ 0386 Level II Prosthetic 71
nck sphincter. Urological
Procedures.
53447........................ Remove/replace H8............ 0386 Level II Prosthetic 71
ur sphincter. Urological
Procedures.
54400........................ Insert semi- H8............ 0385 Level I Prosthetic 59
rigid Urological
prosthesis. Procedures.
54401........................ Insert self- H8............ 0386 Level II Prosthetic 71
contd Urological
prosthesis. Procedures.
54405........................ Insert multi- H8............ 0386 Level II Prosthetic 71
comp penis pros. Urological
Procedures.
54410........................ Remove/replace H8............ 0386 Level II Prosthetic 71
penis prosth. Urological
Procedures.
54416........................ Remv/repl penis H8............ 0386 Level II Prosthetic 71
contain pros. Urological
Procedures.
[[Page 60611]]
55873........................ Cryoablate H8............ 0674 Prostate Cryoablation 56
prostate.
61885........................ Insrt/redo H8............ 0039 Level I Implantation 85
neurostim 1 of Neurostimulator
array. Generator.
61886........................ Implant H8............ 0315 Level II Implantation 88
neurostim of Neurostimulator
arrays. Generator.
62361........................ Implant spine H8............ 0227 Implantation of Drug 83
infusion pump. Infusion Device.
62362........................ Implant spine H8............ 0227 Implantation of Drug 83
infusion pump. Infusion Device.
63650........................ Implant H8............ 0040 Percutaneous 58
neuroelectrodes. Implantation of
Neurostimulator
Electrodes.
63655........................ Implant J8............ 0061 Laminectomy, 64
neuroelectrodes. Laparoscopy, or
Incision for
Implantation of
Neurostimulator
Electr.
63685........................ Insrt/redo spine H8............ 0039 Level I Implantation 85
n generator. of Neurostimulator
Generator.
64553........................ Implant H8............ 0040 Percutaneous 58
neuroelectrodes. Implantation of
Neurostimulator
Electrodes.
64555........................ Implant J8............ 0040 Percutaneous 58
neuroelectrodes. Implantation of
Neurostimulator
Electrodes.
64560........................ Implant J8............ 0040 Percutaneous 58
neuroelectrodes. Implantation of
Neurostimulator
Electrodes.
64561........................ Implant H8............ 0040 Percutaneous 58
neuroelectrodes. Implantation of
Neurostimulator
Electrodes.
64565........................ Implant J8............ 0040 Percutaneous 58
neuroelectrodes. Implantation of
Neurostimulator
Electrodes.
64573........................ Implant H8............ 0225 Implantation of 73
neuroelectrodes. Neurostimulator
Electrodes, Cranial
Nerve.
64575........................ Implant H8............ 0061 Laminectomy, 64
neuroelectrodes. Laparoscopy, or
Incision for
Implantation of
Neurostimulator
Electr.
64577........................ Implant H8............ 0061 Laminectomy, 64
neuroelectrodes. Laparoscopy, or
Incision for
Implantation of
Neurostimulator
Electr.
64580........................ Implant H8............ 0061 Laminectomy, 64
neuroelectrodes. Laparoscopy, or
Incision for
Implantation of
Neurostimulator
Electr.
64581........................ Implant H8............ 0061 Laminectomy, 64
neuroelectrodes. Laparoscopy, or
Incision for
Implantation of
Neurostimulator
Electr.
64590........................ Insrt/redo pn/ H8............ 0039 Level I Implantation 85
gastr stimul. of Neurostimulator
Generator.
65770........................ Revise cornea H8............ 0293 Level V Anterior 62
with implant. Segment Eye
Procedures.
69714........................ Implant temple H8............ 0425 Level II Arthroplasty 58
bone w/stimul. or Implantation with
Prosthesis.
69715........................ Temple bne H8............ 0425 Level II Arthroplasty 58
implnt w/ or Implantation with
stimulat. Prosthesis.
69717........................ Temple bone H8............ 0425 Level II Arthroplasty 58
implant or Implantation with
revision. Prosthesis.
69718........................ Revise temple H8............ 0425 Level II Arthroplasty 58
bone implant. or Implantation with
Prosthesis.
69930........................ Implant cochlear H8............ 0259 Level VII ENT 85
device. Procedures.
----------------------------------------------------------------------------------------------------------------
d. ASC Treatment of Surgical Procedures Removed From the OPPS Inpatient
List for CY 2010
As we discussed in the CY 2009 OPPS/ASC final rule with comment
period (73 FR 68724), we adopted a policy to include in our annual
evaluation procedures proposed for removal from the OPPS inpatient list
for possible inclusion on the ASC list of covered surgical procedures.
The final list of procedures removed from the inpatient list for CY
2009 may be found in section XI.B. of that final rule with comment
period.
We evaluated each of the 3 procedures we proposed to remove from
the OPPS inpatient list for CY 2010 according to the criteria for
exclusion from the list of covered ASC surgical procedures. As we
stated in the CY 2010 OPPS/ASC proposed rule (74 FR 35384), we believe
that all of these procedures should continue to be excluded from the
ASC list of covered surgical procedures for CY 2010 because they would
be expected to pose a significant risk to beneficiary safety or to
require an overnight stay in ASCs. A full discussion about the APC
Panel's recommendations regarding the procedures we proposed to remove
from the OPPS inpatient list for CY 2010 may be found in section XI.B.
of this final rule with comment period. The HCPCS codes for these 3
procedures and their long descriptors were listed in Table 47 in the CY
2010 OPPS/ASC proposed rule (74 FR 35384).
We did not receive any public comments specifically about our
proposal to continue to exclude from the ASC list the 3 procedures
reported by CPT codes 21256 (Reconstruction of orbit with osteotomies
(extracranial) and with bone grafts (includes obtaining autografts)
(eg, micro-ophthalmia); 27179 (Open treatment of slipped femoral
epiphysis; osteoplasty of femoral neck (Heyman type procedure); and
51060 (Transvesical
[[Page 60612]]
ureterolithotomy). However, we did receive public comments requesting
that we remove additional procedures from the OPPS inpatient list. In
response to those comments, we removed 5 additional procedures from the
OPPS inpatient list for CY 2010. The comments requesting that we remove
additional procedures from the inpatient list and our responses may be
found in section XI.B. of this final rule with comment period. Our
review of the 5 procedures removed from the OPPS inpatient list in
response to comments convinced us that none of them was appropriate for
performance in the ASC setting. Our medical advisors determined that
the procedures were expected to pose significant risks to beneficiary
safety or to require an overnight stay when provided in ASCs.
The final list of procedures that have been removed from the CY
2010 OPPS inpatient list but that continue to be excluded from the ASC
list of covered surgical procedures is displayed in Table 69 below.
Table 69--Procedures Excluded From the ASC List of Covered Surgical
Procedures for CY 2010 That Were Removed From the CY 2010 OPPS Inpatient
List
------------------------------------------------------------------------
CY 2010 HCPCS code CY 2010 long descriptor
------------------------------------------------------------------------
21256........................ Reconstruction of orbit with osteotomies
(extracranial) and with bone grafts
(includes obtaining autografts) (eg,
micro-ophthalmia).
27179........................ Open treatment of slipped femoral
epiphysis; osteoplasty of femoral neck
(Heyman type procedure).
28805........................ Amputation, foot; transmetatarsal.
37215........................ Transcatheter placement of intravascular
stent(s), cervical carotid artery,
percutaneous; with distal embolic
protection.
44950........................ Appendectomy.
44955........................ Appendectomy; when done for indicated
purpose at time of other major procedure
(not as separate procedure) (List
separately in addition to code for
primary procedure).
51060........................ Transvesical ureterolithotomy.
63076........................ Discectomy, anterior, with decompression
of spinal cord and/or nerve root(s),
including osteophytectomy; cervical,
each additional interspace (List
separately in addition to code for
primary procedure).
------------------------------------------------------------------------
2. Covered Ancillary Services
In the CY 2010 OPPS/ASC proposed rule (74 FR 35384), consistent
with the established ASC payment system policy, we proposed to update
the ASC list of covered ancillary services to reflect the proposed
payment status for the services under the CY 2010 OPPS. Maintaining
consistency with the OPPS resulted in proposed changes to ASC payment
indicators for some covered ancillary items and services because of
changes that were proposed under the OPPS for CY 2010. Comment
indicator ``CH,'' discussed in section XV.F. of the CY 2010 OPPS/ASC
proposed rule (74 FR 35390), was used in Addendum BB to that proposed
rule to indicate covered ancillary services for which we proposed a
change in the ASC payment indicator to maintain consistency with a
proposed change in the OPPS treatment of the service for CY 2010.
Except for the Level II HCPCS codes listed in Table 40 of the
proposed rule (74 FR 35379), all ASC covered ancillary services and
their proposed payment indicators for CY 2010 were included in Addendum
BB to the proposed rule.
We did not receive any public comments on our proposal to update
the ASC list of covered ancillary services to reflect the payment
status for the services under the OPPS. Therefore, we are finalizing,
without modification, our proposed updates to the ASC list of covered
ancillary services as proposed. All CY 2010 ASC covered ancillary
services and their final payment indicators are included in Addendum BB
to this final rule with comment period.
D. ASC Payment for Covered Surgical Procedures and Covered Ancillary
Services
1. Payment for Covered Surgical Procedures
a. Background
Our ASC payment policies for covered surgical procedures under the
revised ASC payment system are fully described in the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66828 through 66831). Under our
established policy for the revised ASC payment system, the ASC standard
ratesetting methodology of multiplying the ASC relative payment weight
for the procedure by the ASC conversion factor for that same year is
used to calculate the national unadjusted payment rates for procedures
with payment indicator ``G2.'' For procedures assigned payment
indicator ``A2,'' our final policy established blended rates to be used
during the transitional period and, beginning in CY 2011, ASC rates
calculated according to the ASC standard ratesetting methodology. The
rate calculation established for device-intensive procedures (payment
indicators ``H8'' and ``J8'') is structured so that the packaged device
payment amount is the same as under the OPPS, and only the service
portion of the rate is subject to the ASC standard ratesetting
methodology. In the CY 2009 OPPS/ASC final rule with comment period (73
FR 68722 through 68759), we updated the CY 2008 ASC payment rates for
ASC covered surgical procedures with payment indicators of ``A2,''
``G2,'' ``H8,''and ``J8'' using CY 2007 data, consistent with the CY
2009 OPPS update. Payment rates for device-intensive procedures also
were updated to incorporate the CY 2009 OPPS device offset percentages.
Payment rates for office-based procedures (payment indicators
``P2,'' ``P3,'' and ``R2'') are the lower of the MPFS nonfacility PE
RVU amount (we refer readers to the CY 2010 MPFS final rule with
comment period) or the amount calculated using the ASC standard
ratesetting methodology for the procedure. In the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68722 through 68759), we updated
the payment amounts for office-based procedures (payment indicators
``P2,'' ``P3,'' and ``R2'') using the most recent available MPFS and
OPPS data. We compared the estimated CY 2009 rate for each of the
office-based procedures, calculated according to the ASC standard
ratesetting methodology, to the MPFS nonfacility PE RVU amount to
determine which was lower and, therefore, would be the CY 2009 payment
rate for the procedure according to the final policy of the revised ASC
payment system (see Sec. 416.171(d)).
b. Update to ASC Covered Surgical Procedure Payment Rates for CY 2010
In the CY 2010 OPPS/ASC proposed rule (74 FR 35385), we proposed to
update ASC payment rates for CY 2010
[[Page 60613]]
using the established rate calculation methodologies under Sec.
416.171. Thus, we proposed to calculate CY 2010 payments for procedures
subject to the transitional payment methodology (payment indicators
``A2'' and ``H8'') using a blend of 75 percent of the proposed CY 2010
ASC rate calculated according to the ASC standard ratesetting
methodology and 25 percent of the CY 2007 ASC payment rate,
incorporating the device-intensive procedure methodology, as
appropriate, for procedures assigned ASC payment indicator ``H8.'' We
proposed to use the amount calculated under the ASC standard
ratesetting methodology for procedures assigned payment indicator
``G2'' because these procedures are not subject to the transitional
payment methodology.
We proposed payment rates for office-based procedures (payment
indicators ``P2,'' ``P3,'' and ``R2'') and device-intensive procedures
not subject to transitional payment (payment indicator ``J8'')
calculated according to our established policies. Thus, we proposed to
update the payment amounts for device-intensive procedures based on the
CY 2010 OPPS proposal that reflects updated OPPS device offset
percentages, and to make payment for office-based procedures at the
lesser of the CY 2010 proposed MPFS nonfacility PE RVU amount or the
proposed CY 2010 ASC payment amount calculated according to the ASC
standard ratesetting methodology.
Comment: Many commenters requested that CMS modify its packaging
policy to provide separate payment for procedures that were eligible
for separate ASC payment prior to becoming packaged into separately
payable services under the OPPS that are not reported by any of the
codes within the CPT surgical code range. The commenters stated that
these HCPCS codes into which minor procedure payments are packaged are
not on the list of ASC covered surgical procedures. The commenters
believed that, as an unintended result of CMS' OPPS packaging policies,
procedural services that meet the criteria for performance in ASCs are
being excluded from coverage. They recommended that CMS adopt a policy
under which packaging policy changes under the OPPS would not result in
surgical procedures that were on the ASC list of covered surgical
procedures in CY 2007 or CY 2008 becoming nonpayable.
Response: We did not propose to make any change in our policy to
adopt the packaging decisions made under the OPPS for the ASC payment
system. Further, we do not know which procedures the commenters were
referring to in their comments and, therefore, are unable to fully
address their other concerns.
Comment: One commenter requested that CMS correct the ASC payment
rates for the procedures reported by CPT codes 64626 (Destruction by
neurolytic agent, paravertebral facet joint nerve; cervical or
thoracic, single level); 64627 (Destruction by neurolytic agent,
paravertebral facet joint nerve; cervical or thoracic, each additional
level); and 64680 (Destruction by neurolytic agent, with or without
radiologic monitoring; celiac plexus). The commenter stated that the
rates in Addendum AA to the proposed rule for these procedures were
incorrectly listed as $299.12, $158.13, and $312.90. respectively.
Response: We reviewed the proposed payment rates for these three
procedures and found that they are all correct. We believe that the
commenter failed to notice that we proposed to assign two of the
procedures, CPT codes 64626 and 64680, to different APCs under the OPPS
for CY 2010. The proposed changes in their OPPS APC assignments
resulted in lower OPPS relative payment weights and, therefore, lower
proposed ASC payment rates for CY 2010. The proposed payment rate for
the third procedure, CPT code 64627, is correct as displayed in
Addendum AA to the CY 2010 OPPS/ASC proposed rule. There was no
proposed change to the APC assignment for that procedure under the OPPS
for CY 2010. Therefore, the proposed ASC payment rate change for CY
2010 is due to the recalibration of the OPPS APC relative payment
weight, which was subsequently incorporated into the ASC payment
system, and also due to the progression to the third year of the
transition to ASC rates calculated entirely based on the standard
ratesetting methodology.
After consideration of the public comments we received, we are
finalizing our CY 2010 proposal, without modification, to calculate the
CY 2010 final ASC payment rates according to our established
methodologies.
c. Adjustment to ASC Payments for No Cost/Full Credit and Partial
Credit Devices
Our ASC policy with regard to payment for costly devices implanted
in ASCs at no cost or with full or partial credit as set forth in Sec.
416.179 is consistent with the OPPS policy. The CY 2010 OPPS APCs and
devices subject to the adjustment policy are discussed in section
IV.B.2. of this final rule with comment period. The established ASC
policy includes adoption of the OPPS policy for reduced payment to
providers when a specified device is furnished without cost or with
full or partial credit for the cost of the device for those ASC covered
surgical procedures that are assigned to APCs under the OPPS to which
this policy applies. We refer readers to the CY 2009 OPPS/ASC final
rule with comment period for a full discussion of the ASC payment
adjustment policy for no cost/full credit and partial credit devices
(73 FR 68742 through 68745).
In the CY 2010 OPPS/ASC proposed rule (74 FR 35385), consistent
with the OPPS, we proposed to update the list of ASC covered device-
intensive procedures and devices that would be subject to the no cost/
full credit and partial credit device adjustment policy for CY 2010.
Table 48 in the CY 2010 OPPS/ASC proposed rule (74 FR 35386 through
35387) displayed the ASC covered device-intensive procedures that we
proposed would be subject to the no cost/full credit and partial credit
device adjustment policy for CY 2010. Specifically, when a procedure
that is listed in Table 48 is performed to implant a device that is
listed in Table 49 of the proposed rule (74 FR 35387), where that
device is furnished at no cost or with full credit from the
manufacturer, the ASC would append the HCPCS ``FB'' modifier on the
line with the procedure to implant the device. The contractor would
reduce payment to the ASC by the device offset amount that we estimate
represents the cost of the device when the necessary device is
furnished without cost to the ASC or with full credit. We would provide
the same amount of payment reduction based on the device offset amount
in ASCs that would apply under the OPPS under the same circumstances.
We stated in the CY 2010 OPPS/ASC proposed rule (74 FR 35385) that we
continue to believe that the reduction of ASC payment in these
circumstances is necessary to pay appropriately for the covered
surgical procedure being furnished by the ASC.
We also proposed to reduce the payment for implantation procedures
listed in Table 48 of the proposed rule by one-half of the device
offset amount that would be applied if a device was provided at no cost
or with full credit, if the credit to the ASC is 50 percent or more of
the cost of the new device. The ASC would append the HCPCS ``FC''
modifier to the HCPCS code for a surgical procedure listed in Table 48
in the proposed rule when the facility receives a partial credit of 50
percent or more of the cost of a device listed in Table 49. In order to
report that they received a partial credit of 50 percent or
[[Page 60614]]
more of the cost of a new device, ASCs would have the option of either:
(1) Submitting the claim for the device replacement procedure to their
Medicare contractor after the procedure's performance but prior to
manufacturer acknowledgment of credit for the device, and subsequently
contacting the contractor regarding a claim adjustment once the credit
determination is made; or (2) holding the claim for the device
implantation procedure until a determination is made by the
manufacturer on the partial credit and submitting the claim with the
``FC'' modifier appended to the implantation procedure HCPCS code if
the partial credit is 50 percent or more of the cost of the replacement
device. Beneficiary coinsurance would continue to be based on the
reduced payment amount.
We did not receive any comments on our CY 2010 proposal to continue
the no cost/full credit and partial credit device adjustment policy for
ASCs. For CY 2010, as we proposed, we will reduce the payment for the
device implantation procedures listed in Table 70, below, by the full
device offset amount for no cost/full credit cases. ASCs must append
the modifier ``FB'' to the HCPCS procedure code when the device
furnished without cost or with full credit is listed in Table 71,
below, and the associated implantation procedure code is listed in
Table 70. In addition, for CY 2010, we will reduce the payment for
implantation procedures listed in Table 70 by one half of the device
offset amount that would be applied if a device were provided at no
cost or with full credit, if the credit to the ASC is 50 percent or
more of the device cost. If the ASC receives a partial credit of 50
percent or more of the cost of a device listed in Table 71, the ASC
must append the modifier ``FC'' to the associated implantation
procedure code if the procedure is listed in Table 70. We are adding
device HCPCS code L8680 (Implantable neurostimulator electrode, each)
to the list of devices in Table 71 because we are recognizing this code
as packaged under the OPPS for CY 2010, as described in section IV.B.2.
of this final rule with comment period.
BILLING CODE 4120-01-P
[[Page 60615]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.043
[[Page 60616]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.044
[[Page 60617]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.045
BILLING CODE 4120-01-C
Table 71--Devices for which the ``FB'' or ``FC'' modifier must be
reported with the procedure code in CY 2010 when furnished at no cost or
with full or partial credit
------------------------------------------------------------------------
CY 2010 device HCPCS code CY 2010 short descriptor
------------------------------------------------------------------------
C1721..................................... AICD, dual chamber.
C1722..................................... AICD, single chamber.
C1764..................................... Event recorder, cardiac.
C1767..................................... Generator, neurostim, imp.
C1771..................................... Rep dev, urinary, w/sling.
C1772..................................... Infusion pump, programmable.
C1776..................................... Joint device (implantable).
C1778..................................... Lead, neurostimulator.
C1779..................................... Lead, pmkr, transvenous VDD.
C1785..................................... Pmkr, dual, rate-resp.
C1786..................................... Pmkr, single, rate-resp.
C1813..................................... Prosthesis, penile,
inflatab.
C1815..................................... Pros, urinary sph, imp.
C1820..................................... Generator, neuro rechg bat
sys.
C1881..................................... Dialysis access system.
C1882..................................... AICD, other than sing/dual.
C1891..................................... Infusion pump, non-prog,
perm.
C1897..................................... Lead, neurostim, test kit.
C1898..................................... Lead, pmkr, other than
trans.
C1900..................................... Lead coronary venous.
C2619..................................... Pmkr, dual, non rate-resp.
C2620..................................... Pmkr, single, non rate-resp.
C2621..................................... Pmkr, other than sing/dual.
[[Page 60618]]
C2622..................................... Prosthesis, penile, non-inf.
C2626..................................... Infusion pump, non-prog,
temp.
C2631..................................... Rep dev, urinary, w/o sling.
L8614..................................... Cochlear device/system.
L8680..................................... Implt neurostim elctr each.
L8685..................................... Implt nrostm pls gen sng
rec.
L8686..................................... Implt nrostm pls gen sng
non.
L8687..................................... Implt nrostm pls gen dua
rec.
L8688..................................... Implt nrostm pls gen dua
non.
L8690..................................... Aud osseo dev, int/ext comp.
------------------------------------------------------------------------
2. Payment for Covered Ancillary Services
a. Background
Our final payment policies under the revised ASC payment system for
covered ancillary services vary according to the particular type of
service and its payment policy under the OPPS. Our overall policy
provides separate ASC payment for certain ancillary items and services
integrally related to the provision of ASC covered surgical procedures
that are paid separately under the OPPS and provides packaged ASC
payment for other ancillary items and services that are packaged under
the OPPS. Thus, we established a final policy to align ASC payment
bundles with those under the OPPS (72 FR 42495).
Our ASC payment policies provide separate payment for drugs and
biologicals that are separately paid under the OPPS at the OPPS rates,
while we pay for separately payable radiology services at the lower of
the MPFS nonfacility PE RVU (or technical component) amount or the rate
calculated according to the ASC standard ratesetting methodology (72 FR
42497). In all cases, ancillary items and services must be provided
integral to the performance of ASC covered surgical procedures for
which the ASC bills Medicare, in order for those ancillary services
also to be paid.
ASC payment policy for brachytherapy sources generally mirrors the
payment policy under the OPPS. We finalized our policy in the CY 2008
OPPS/ASC final rule with comment period (72 FR 42499) to pay for
brachytherapy sources applied in ASCs at the same prospective rates
that were adopted under the OPPS or, if OPPS rates were unavailable, at
contractor-priced rates. Subsequent to publication of that rule,
section 106 of the Medicare, Medicaid, and SCHIP Extension Act of 2007
(Pub. L. 110-173) mandated that, for the period January 1, 2008 through
June 30, 2008, brachytherapy sources be paid under the OPPS at charges
adjusted to cost. Therefore, consistent with our final overall ASC
payment policy, we paid ASCs at contractor-priced rates for
brachytherapy sources provided in ASCs during that period of time.
Beginning July 1, 2008, brachytherapy sources applied in ASCs were to
be paid at the same prospectively set rates that were finalized in the
CY 2008 OPPS/ASC final rule with comment period (72 FR 67165 through
67188). Immediately prior to the publication of the CY 2009 OPPS/ASC
proposed rule, section 142 of the Medicare Improvements for Patients
and Providers Act of 2008 (Pub. L. 110-275) amended section
1833(t)(16)(C) of the Act (as amended by section 106 of the Medicare,
Medicaid, and SCHIP Extension Act of 2007) to extend the requirement
that brachytherapy sources be paid under the OPPS at charges adjusted
to cost through December 31, 2009. Therefore, consistent with final ASC
payment policy, ASCs continued to be paid at contractor-priced rates
for brachytherapy sources provided integral to ASC covered surgical
procedures during that period of time.
Other separately paid covered ancillary services in ASCs,
specifically corneal tissue acquisition and device categories with OPPS
pass-through status, do not have prospectively established ASC payment
rates according to the final policies of the revised ASC payment system
(72 FR 42502 and 42509). Under the revised ASC payment system, corneal
tissue acquisition is paid based on the invoiced costs for acquiring
the corneal tissue for transplantation. As discussed in section IV.A.1.
of this final rule with comment period, new pass-through device
categories may be established on a quarterly basis, but currently there
are no OPPS device pass-through categories that would continue for OPPS
pass-through payment (and, correspondingly, separate ASC payment) in CY
2010.
b. Payment for Covered Ancillary Services for CY 2010
In the CY 2010 OPPS/ASC proposed rule (74 FR 35388), we proposed to
update the ASC payment rates and make changes to ASC payment indicators
as necessary to maintain consistency between the OPPS and ASC payment
system regarding the packaged or separately payable status of services
and the proposed CY 2010 OPPS and ASC payment rates. The proposed CY
2010 OPPS payment methodologies for separately payable drugs and
biologicals and brachytherapy sources were discussed in sections V. and
VII. of the CY 2010 OPPS/ASC proposed rule (74 FR 35324 through 35333
and 74 FR 35340 through 35343), respectively, and we proposed to set
the CY 2010 ASC payment rates for those services equal to the proposed
CY 2010 OPPS rates.
Consistent with established ASC payment policy (72 FR 42497), the
proposed CY 2010 payment for separately payable covered radiology
services was based on a comparison of the CY 2010 proposed MPFS
nonfacility PE RVU amounts (74 FR 33687 through 33800) and the proposed
CY 2010 ASC payment rates calculated according to the ASC standard
ratesetting methodology and then set at the lower of the two amounts.
Alternatively, payment for a radiology service may be packaged into the
payment for the ASC covered surgical procedure if the radiology service
is packaged under the OPPS. The payment indicators in Addendum BB to
the CY 2010 OPPS/ASC proposed rule indicated whether the proposed
payment rates for radiology services are based on the MPFS nonfacility
PE RVU amount or the ASC standard ratesetting methodology, or whether
payment for a radiology service is packaged into the payment for the
covered surgical procedure (payment indicator ``N1''). Radiology
services that we proposed to pay based on the ASC standard ratesetting
methodology are assigned payment indicator ``Z2'' (Radiology service
paid separately when provided integral to a surgical procedure on ASC
list; payment based on OPPS relative payment weight) and those for
which the proposed payment is based on the MPFS nonfacility PE RVU
amount are assigned payment indicator ``Z3'' (Radiology service paid
separately when provided integral to a surgical procedure on ASC list;
payment based on MPFS nonfacility PE RVUs).
All covered ancillary services and their proposed payment
indicators were listed in Addendum BB to the CY 2010 OPPS/ASC proposed
rule.
Comment: One commenter expressed continued disagreement with the
ASC packaging policy related to discography services. According to the
policy, the injection procedures reported by CPT codes 62290 (Injection
procedure for
[[Page 60619]]
discography, each level; lumbar) and 62291 (Injection procedure for
discography, each level; cervical or thoracic) are packaged into the
services reported by CPT codes 72285 (Discography, cervical or
thoracic, radiological supervision and interpretation) and 72295
(Discography, lumbar, radiological supervision and interpretation) and,
therefore, separate payment is made to an ASC only when the radiology
service is provided integral to a covered surgical procedure. The
commenter asserted that the injection procedures reported by CPT codes
62290 and 62291 are the major procedures of the discography because
they require more time and resources than the radiological services
and, as such, should not be packaged into the lesser radiological
services.
The commenter believed that discography has many similarities to
vertebroplasty, for which separate payment is made under the ASC
payment system. The commenter stated that both procedures require
sedation, insertion of a needle into the spine (one into the disc and
the other into the bone), and image guidance, and that material
(contrast agent or bone cement, respectively) is injected into the
spine in both procedures. Based on discography's similarities to the
separately payable vertebroplasty procedures, the commenter requested
that CMS implement separate payments for discography and radiological
supervision and interpretation, recognizing that the injection
procedures are the major procedures in discography.
Response: As we explained fully in the CY 2009 OPPS/ASC final rule
with comment period (73 FR 68747), we continue to believe that our
packaging policy for discography services is appropriate and we do not
agree that packaging policies under the ASC payment system should vary
from those under the OPPS. Also, we continue to believe that
discography is a radiology service, even though a component of it may
be defined as surgical, and that radiology services are not appropriate
for performance and separate payment in ASCs unless they are integral
to covered surgical procedures.
Comment: Several commenters requested that CMS pay for low dose
rate (LDR) prostate brachytherapy services under the ASC payment system
based on the composite APC methodology used under the OPPS rather than
making two separate payments for the services reported by CPT codes
55875 (Transperineal placement of needles or catheters into prostate
for interstitial radioelement application, with or without cystoscopy)
and 77778 (Interstitial radiation source application; complex). The
composite APCs were developed for procedures like LDR prostate
brachytherapy in which two procedures are frequently performed in a
single hospital visit. The commenters asserted that basing ASC payments
for the services on the composite APC methodology in which one payment
is made for the combination of the two services, would result in a more
accurate payment than is currently being made to ASCs because ASC
payment is based on the median costs from single-service claims that
CMS has acknowledged are mostly incorrectly coded claims.
Response: Although we have tried to align the ASC and OPPS
packaging polices to the fullest extent, in the case of the LDR
prostate brachytherapy composite APC and other composite APCs, the
differences in the payment policies across the two payment systems pose
some obstacles to making payment to ASCs using the composite packages
of services. In the case of the two services included in the LDR
brachytherapy composite APC, the surgical procedure was on the ASC list
in CY 2007 and, therefore, is subject to the transitional payment
methodology in CY 2010. The other service in the LDR brachytherapy
composite APC is a covered ancillary service for which the ASC payment
is made at the lesser of the ASC rate calculated according to the ASC
standard ratesetting methodology or the MPFS nonfacility PE RVU amount
for that year. We do not see a method by which to calculate an ASC rate
for the package of the two procedures that is consistent with the
established ASC payment policies. Further, we did not propose to
implement composite payment policies under the ASC payment system.
After consideration of the public comments we received, we are
providing CY 2010 payment for covered ancillary services in accordance
with the final policies of the revised ASC payment system as described
in the CY 2008 OPPS/ASC final rule with comment period (72 FR 42493
through 42501). Covered ancillary services and their final CY 2010
payment indicators are listed in Addendum BB to this final rule with
comment period.
E. New Technology Intraocular Lenses (NTIOLs)
1. Background
In the CY 2007 OPPS/ASC final rule with comment period (71 FR
68176), we finalized our current process for reviewing applications to
establish new active classes of new technology intraocular lenses
(NTIOLs) and for recognizing new candidate intraocular lenses (IOLs)
inserted during or subsequent to cataract extraction as belonging to a
NTIOL class that is qualified for a payment adjustment. Specifically,
we established the following process:
We announce annually in the Federal Register a document
that proposes the update of ASC payment rates for the following
calendar year, a list of all requests to establish new NTIOL classes
accepted for review during the calendar year in which the proposal is
published and the deadline for submission of public comments regarding
those requests. Pursuant to Section 141(b)(3) of Public Law 103-432 and
our regulations at Sec. 416.185(b), the deadline for receipt of public
comments is 30 days following publication of the list of requests.
In the Federal Register document that finalizes the update
of ASC payment rates for the following calendar year, we--
[cir] Provide a list of determinations made as a result of our
review of all new class requests and public comments; and
[cir] Announce the deadline for submitting requests for review of
an application for a new NTIOL class for the following calendar year.
In determining whether a lens belongs to a new class of NTIOLs and
whether the ASC payment amount for insertion of that lens in
conjunction with cataract surgery is appropriate, we expect that the
insertion of the candidate IOL would result in significantly improved
clinical outcomes compared to currently available IOLs. In addition, to
establish a new NTIOL class, the candidate lens must be distinguishable
from lenses already approved as members of active or expired classes of
NTIOLs that share a predominant characteristic associated with improved
clinical outcomes that was identified for each class. Furthermore, in
the CY 2007 OPPS/ASC final rule with comment period (71 FR 68227), we
finalized our proposal to base our determinations on consideration of
the following factors set out at Sec. 416.195:
The IOL must have been approved by the FDA and claims of
specific clinical benefits and/or lens characteristics with established
clinical relevance in comparison with currently available IOLs must
have been approved by the FDA for use in labeling and advertising;
The IOL is not described by an active or expired NTIOL
class; that is, it does not share the predominant, class-
[[Page 60620]]
defining characteristic associated with improved clinical outcomes with
designated members of an active or expired NTIOL class; and
Evidence demonstrates that use of the IOL results in
measurable, clinically meaningful, improved outcomes in comparison with
use of currently available IOLs. According to the statute, and
consistent with previous examples provided by CMS, superior outcomes
that we consider include the following:
[cir] Reduced risk of intraoperative or postoperative complication
or trauma;
[cir] Accelerated postoperative recovery;
[cir] Reduced induced astigmatism;
[cir] Improved postoperative visual acuity;
[cir] More stable postoperative vision; and/or
[cir] Other comparable clinical advantages, such as--
[dec221] Reduced dependence on other eyewear (for example,
spectacles, contact lenses, and reading glasses);
[dec221] Decreased rate of subsequent diagnostic or therapeutic
interventions, such as the need for YAG laser treatment;
[dec221] Decreased incidence of subsequent IOL exchange; and
[dec221] Decreased blurred vision, glare, other quantifiable
symptom or vision deficiency.
For a request to be considered complete, we require submission of
the information that is found in the guidance document entitled
``Application Process and Information Requirements for Requests for a
New Class of New Technology Intraocular Lens (NTIOL)'' posted on the
CMS Web site at: http://www.cms.hhs.gov/ASCPayment/08_NTIOLs.asp#TopOfPage.
As we stated in the CY 2007 OPPS/ASC final rule with comment period
(71 FR 68180), there are three possible outcomes from our review of a
request for establishment of a new NTIOL class. As appropriate, for
each completed request for consideration of a candidate IOL into a new
class that is received by the established deadline, one of the
following determinations is announced annually in the final rule
updating the ASC payment rates for the next calendar year:
The request for a payment adjustment is approved for the
candidate IOL for 5 full years as a member of a new NTIOL class
described by a new HCPCS code;
The request for a payment adjustment is approved for the
candidate IOL for the balance of time remaining as a member of an
active NTIOL class; or
The request for a payment adjustment is not approved.
We also discussed our plan to summarize briefly in the final rule
with comment period the evidence that we reviewed, the public comments,
and the basis for our determinations in consideration of applications
for establishment of a new NTIOL class. We established that when a new
NTIOL class is created, we identify the predominant characteristic of
NTIOLs in that class that sets them apart from other IOLs (including
those previously approved as members of other expired or active NTIOL
classes) and that is associated with improved clinical outcomes. The
date of implementation of a payment adjustment in the case of approval
of an IOL as a member of a new NTIOL class would be set prospectively
as of 30 days after publication of the ASC payment update final rule,
consistent with the statutory requirement.
2. NTIOL Application Process for Payment Adjustment
In CY 2007, we posted an updated guidance document to the CMS Web
site to provide process and information requirements for applications
requesting a review of the appropriateness of the payment amount for
insertion of an IOL to ensure that the ASC payment for covered surgical
procedures includes payment that is reasonable and related to the cost
of acquiring a lens that is approved as belonging to a new class of
NTIOLs. This guidance document can be accessed on the CMS Web site at:
http://www.cms.hhs.gov/ASCPayment/downloads/NTIOLprocess.pdf.
We note that we have also issued a guidance document entitled
``Revised Process for Recognizing Intraocular Lenses Furnished by
Ambulatory Surgery Centers (ASCs) as Belonging to an Active Subset of
New Technology Intraocular Lenses (NTIOLs).'' This guidance document
can be accessed on the CMS Web site at: http://www.cms.hhs.gov/ASCPayment/Downloads/Request_for_inclusion_in_current_NTIOL_subset.pdf.
This second guidance document provides specific details regarding
requests for recognition of IOLs as belonging to an existing, active
NTIOL class, the review process, and information required for a request
to review. Currently, there is one active NTIOL class whose defining
characteristic is the reduction of spherical aberration. CMS accepts
requests throughout the year to review the appropriateness of
recognizing an IOL as a member of an active class of NTIOLs. That is,
review of candidate lenses for membership in an existing, active NTIOL
class is ongoing and not limited to the annual review process that
applies to the establishment of new NTIOL classes. We ordinarily
complete the review of such a request within 90 days of receipt of all
information that we consider pertinent to our review, and upon
completion of our review, we notify the requestor of our determination
and post on the CMS Web site notification of a lens newly approved for
a payment adjustment as an NTIOL belonging to an active NTIOL class
when furnished in an ASC.
3. Classes of NTIOLs Approved and New Requests for Payment Adjustment
a. Background
Since implementation of the process for adjustment of payment
amounts for NTIOLs that was established in the June 16, 1999 Federal
Register, we have approved three classes of NTIOLs, as shown in the
following table, with the associated qualifying IOLs to date:
----------------------------------------------------------------------------------------------------------------
$50 approved for
NTIOL class HCPCS services furnished on NTIOL characteristic IOLs eligible for
code or after adjustment
----------------------------------------------------------------------------------------------------------------
1................................. Q1001 May 18, 2000, through Multifocal........... Allergan AMO Array
May 18, 2005. Multifocal lens,
model SA40N.
2................................. Q1002 May 18, 2000, through Reduction in STAAR Surgical
May 18, 2005. Preexisting Elastic Ultraviolet-
Astigmatism. Absorbing Silicone
Posterior Chamber
IOL with Toric
Optic, models
AA4203T, AA4203TF,
and AA4203TL.
[[Page 60621]]
3................................. Q1003 February 27, 2006, Reduced Spherical Advanced Medical
through February 26, Aberration. Optics (AMO)
2011. Tecnis[supreg] IOL
models Z9000, Z9001,
Z9002, ZA9003, and
AR40xEM and
Tecnis[supreg] 1-
Piece model ZCB00;
Alcon
Acrysof[supreg] IQ
Model SN60WF,
Acrysert Delivery
System model SN60WS
and Acrysof [supreg]
IQ Toric model
SN6ATT; Bausch &
Lomb Sofport AO
models LI61AO and
LI61AOV and Akreos
AO models AO60 and
MI60; STAAR Affinity
Collamer model
CQ2015A and CC4204A
and Elastimide model
AQ2015A; Hoya model
FY-60AD, FC-60AD, PY-
60AD, and PC-60AD.
----------------------------------------------------------------------------------------------------------------
b. Request To Establish New NTIOL Class for CY 2010 and Deadline for
Public Comment
As explained in the guidance document on the CMS Web site, the
deadline for each year's requests for review of the appropriateness of
the ASC payment amount for insertion of a candidate IOL as a member of
a new class of NTIOLs is announced in the final rule updating the ASC
and OPPS payment rates for that calendar year. Therefore, a request for
review for a new class of NTIOLs for CY 2010 must have been submitted
to CMS by March 2, 2009, the due date published in the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68752). We did not receive any
requests for review to establish a new NTIOL class for CY 2010 by the
March 2, 2009 due date.
4. Payment Adjustment
The current payment adjustment for a 5-year period from the
implementation date of a new NTIOL class is $50. In the CY 2007 OPPS/
ASC final rule with comment period, we revised Sec. 416.200(a) through
(c) to clarify how the IOL payment adjustment is made and how an NTIOL
is paid after expiration of the payment adjustment, and made minor
editorial changes to Sec. 416.200(d). For CY 2008 and CY 2009, we did
not revise the payment adjustment amount, and, in the CY 2010 OPPS/ASC
proposed rule (74 FR 35390), we did not propose to revise the payment
adjustment amount for CY 2010 in light of our limited experience with
the revised ASC payment system, implemented initially on January 1,
2008. Therefore, the final ASC payment adjustment amount for NTIOLS in
CY 2010 is $50.
5. ASC Payment for Insertion of IOLs
In accordance with the final policies of the revised ASC payment
system, for CY 2010, payment for IOL insertion procedures is
established according to the standard payment methodology of the
revised payment system, which multiplies the ASC conversion factor by
the ASC payment weight for the surgical procedure to implant the IOL.
CY 2010 ASC payment for the cost of a conventional lens is packaged
into the payment for the associated covered surgical procedures
performed by the ASC. The HCPCS codes for IOL insertion procedures were
included in Table 50 in the CY 2010 OPPS/ASC proposed rule (74 FR
35390), and their proposed CY 2010 payment rates were included in
Addendum AA to that proposed rule.
We did not receive any public comments concerning the proposed CY
2010 payment rates for the insertion of IOL procedures. Therefore, we
are finalizing the payment rates for the insertion of IOL procedures,
calculated according to the standard methodology of the revised ASC
payment system. The HCPCS codes for IOL insertion procedures are
displayed in Table 72 below, and their final CY 2010 payment rates may
be found in Addendum AA to this final rule with comment period.
Table 72--Insertion of IOL Procedures
------------------------------------------------------------------------
CY 2009 HCPCS code CY 2009 long descriptor
------------------------------------------------------------------------
66983.................................. Intracapsular cataract
extraction with insertion of
intraocular lens prosthesis
(one stage procedure).
66984.................................. Extracapsular cataract removal
with insertion of intraocular
lens prosthesis (one stage
procedure), manual or
mechanical technique (eg,
irrigation and aspiration or
phacoemulsification).
66985.................................. Insertion of intraocular lens
prosthesis (secondary
implant), not associated with
concurrent cataract removal.
66986.................................. Exchange of intraocular lens.
------------------------------------------------------------------------
6. Announcement of CY 2010 Deadline for Submitting Requests for CMS
Review of Appropriateness of ASC Payment for Insertion of an NTIOL
Following Cataract Surgery
In accordance with Sec. 416.185(a) of our regulations as revised
by the CY 2007 OPPS/ASC final rule with comment period, CMS announces
that in order to be considered for payment effective January 1, 2011,
requests for review of applications for a new class of new technology
IOLs must be received at CMS by 5 p.m. EST, on March 8, 2010. Send
requests to ASC/NTIOL, Division of Outpatient Care, Mailstop C4-05-17,
Centers for Medicare and Medicaid, 7500 Security Boulevard, Baltimore,
MD 21244-1850.
To be considered, requests for NTIOL reviews must include the
information on the CMS Web site at: http://www.cms.hhs.gov/ASCPayment/downloads/NTIOLprocess.pdf.
F. ASC Payment and Comment Indicators
1. Background
In addition to the payment indicators that we introduced in the
August 2, 2007 final rule, we also created final comment indicators for
the ASC payment system in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66855). We created Addendum DD1 to define ASC payment
indicators that we use in Addenda AA and BB to provide payment
information regarding covered surgical procedures and covered ancillary
services, respectively, under the revised ASC payment system. The ASC
payment indicators in Addendum DD1 are intended to capture policy-
relevant characteristics of HCPCS codes that may receive packaged or
separate payment in ASCs, including: their ASC payment status prior to
CY 2008; their designation as device-intensive or office-based and the
corresponding ASC payment methodology; and their classification as
separately payable radiology services,
[[Page 60622]]
brachytherapy sources, OPPS pass-through devices, corneal tissue
acquisition services, drugs or biologicals, or NTIOLs.
We also created Addendum DD2 that lists the ASC comment indicators.
The ASC comment indicators used in Addenda AA and BB to the proposed
rules and final rules with comment period serve to identify, for the
revised ASC payment system, the status of a specific HCPCS code and its
payment indicator with respect to the timeframe when comments will be
accepted. The comment indicator ``NI'' is used in the OPPS/ASC final
rule with comment period to indicate new HCPCS codes for the next
calendar year or existing codes with substantial revisions to their
descriptors such that we consider them to be describing new services or
procedures for which their ASC payment indicators may change. All HCPCS
codes to which the interim payment indicator is assigned are subject to
comment.
The ``CH'' comment indicator was used in Addenda AA and BB to the
CY 2010 OPPS/ASC proposed rule to indicate that a new payment indicator
(in comparison with the indicator for the CY 2009 ASC April quarterly
update) was proposed for assignment to an active HCPCS code for the
next calendar year; an active HCPCS code was proposed for addition to
the list of procedures or services payable in ASCs; or an active HCPCS
code was proposed for deletion at the end of the current calendar year.
The ``CH'' comment indicators that are published in the final rule with
comment period are provided to alert readers that a change has been
made from one calendar year to the next, but do not indicate that the
change is subject to comment. The full definitions of the payment
indicators and comment indicators are provided in Addenda DD1 and DD2
to this final rule with comment period.
2. ASC Payment and Comment Indicators
In the CY 2010 OPPS/ASC proposed rule (74 FR 35390 through 35391),
we did not propose any changes to the definitions of the ASC payment
and comment indicators for CY 2010 and we did not receive any public
comments on the payment and comment indicators. Therefore, we are
finalizing our proposed CY 2010 payment and comment indicators in
Addenda DD1 and DD2 to this final rule with comment period, with
modification to the meaning of comment indicator ``NI'' as follows. We
want to clarify our policy regarding the use of comment indicator
``NI'' in this CY 2010 OPPS/ASC final rule with comment period to
describe a new code. There are numerous instances in which the
descriptor of an existing Category I CPT code is substantially revised
for CY 2010 so that it describes a new service or procedure that could
have been assigned a new code number by the CPT Editorial Panel and
that new code number would then have been assigned the ``NI'' comment
indicator. Because, for CY 2010, not all new services or procedures
will be assigned a new CPT code number, but instead will be described
by an existing CPT code number with a substantially revised code
descriptor, we are assigning the comment indicator ``NI'' to these
codes in order to allow for comment on these substantially revised
codes. Like all codes labeled with comment indicator ``NI,'' we will
respond to public comments and finalize their ASC treatment in the CY
2011 OPPS/ASC final rule with comment period. In accordance with our
usual practice, CPT and Level II HCPCS code numbers that are new for CY
2010 and are ASC covered surgical procedures or covered ancillary items
and services are also labeled with comment indicator ``NI'' in Addenda
AA and BB to this final rule with comment period.
G. ASC Policy and Payment Recommendations
MedPAC was established under section 1805 of the Act to advise the
U.S. Congress on issues affecting the Medicare program. Sections
1805(b)(1)(B) and 1805(b)(1)(C) of the Act require MedPAC to submit
reports to Congress not later than March 1 and June 15 of each year
that present its Medicare payment policy reviews and recommendations.
The following section describes a recent MedPAC recommendation that is
relevant to the ASC payment system.
The March 2009 MedPAC ``Report to the Congress: Medicare Payment
Policy'' included the following recommendation relating specifically to
the ASC payment system for CY 2010:
Recommendation 2B-4: The Congress should increase payments for
ambulatory surgery center (ASC) services in calendar year 2010 by 0.6
percent. In addition, the Congress should require ASCs to submit to the
Secretary cost data and quality data that will allow for an effective
evaluation of the adequacy of ASC payment rates.
CMS Response: As we proposed in the CY 2010 proposed rule (74 FR
35391), in this final rule with comment period we are increasing the
payment amounts for the ASC payment system according to our established
policy as stated in the August 2, 2007 final rule (72 FR 42518 through
42519). Section 1833(i)(2)(C) of the Act requires that, if the
Secretary has not updated the ASC payment amounts in a calendar year,
the payment amounts shall be increased by the percentage increase in
the Consumer Price Index for All Urban Consumers (CPI-U) as estimated
by the Secretary for the 12-month period ending with the midpoint of
the year involved. We indicated that we planned to implement the annual
updates through an adjustment to the conversion factor under the ASC
payment system beginning in CY 2010 when the statutory requirement for
a zero update no longer applies. Further, we noted that we were
proposing to update the conversion factor for the CY 2010 ASC payment
system by the percentage increase in the CPI-U, consistent with our
policy as codified under Sec. 416.171(a)(2).
We also did not propose to require ASCs to submit cost data to the
Secretary for CY 2010 and, therefore, will not require cost reporting
in this final rule with comment period. We explained that the 2006 GAO
report, ``Medicare: Payment for Ambulatory Surgical Centers Should Be
Based on the Hospital Outpatient Payment System'' (GAO-07-86),
concluded that the APC groups in the OPPS reflect the relative costs of
surgical procedures performed in ASCs in the same way they reflect the
relative costs of the same procedures when they are performed in HOPDs.
Consistent with the GAO findings, CMS is using the OPPS as the basis
for the ASC payment system, which provides for an annual revision of
the ASC payment rates under the budget neutral ASC payment system. In
addition, we noted that under the methodology of the revised ASC
payment system, we do not utilize ASC cost information to set and
revise the payment rates for ASCs but, instead, rely on the relativity
of hospital outpatient costs developed for the OPPS, consistent with
the recommendation of the GAO. Furthermore, we explained that we have
never required ASCs to routinely submit cost data and expressed our
concern that a new Medicare requirement for ASCs to do so could be
administratively burdensome for ASCs. However, in light of the MedPAC
recommendation, in the CY 2010 OPPS/ASC proposed rule (74 FR 35391), we
solicited public comment on the feasibility of ASCs submitting cost
information to CMS, including whether costs should be collected from a
sample or the universe of ASCs, the administrative burden associated
with
[[Page 60623]]
such an activity, the form that such a submission could take
considering existing Medicare requirements for other types of
facilities and the scope of ASC services, the expected accuracy of such
cost information, and any other issues or concerns of interest to the
public on this topic.
Finally, we noted that section 109(b) of the MIEA-TRHCA (Pub. L.
109-432) gives the Secretary the authority to implement ASC quality
measure reporting and to reduce the payment update for ASCs that fail
to report those required measures. We restated our belief that
promoting high quality care in the ASC setting through quality
reporting is highly desirable and fully in line with our efforts under
other payment systems. For the reasons discussed in section XVI.G. of
this final rule with comment period, we did not require ASC quality
data reporting for CY 2010, but our intention is to implement ASC
quality reporting in a future rulemaking.
Comment: Commenters' expressed varied opinions regarding the
feasibility of requiring ASCs to submit cost data to the Secretary.
MedPAC's comments on CMS' solicitation in the CY 2010 OPPS/ASC proposed
rule (74 FR 35391) stated that, although ASCs are generally small
facilities that may have limited resources for collecting cost data,
other small providers submit cost reports to CMS and, therefore, MedPAC
did not believe that the resources involved in submitting cost data
would be an insurmountable obstacle for ASCs. Further, MedPAC suggested
that the scale of cost reporting for ASCs would be limited to the
information that analysts would need to assess the adequacy of Medicare
payments and evaluate the ASC update and may be satisfied by
implementing either a streamlined cost report or a random survey. If a
survey method is used, MedPAC recommended that CMS require ASCs to
respond in order to ensure adequate data.
Other commenters, mostly those representing hospitals, believed
that in light of the MedPAC recommendation that ASCs be required to
submit cost data, ASCs should be required to do so even though ASC cost
data are not used to set or revise the payment rates. They suggested
that collection of ASC cost data could be accomplished through
implementing an ASC cost reporting system or through the periodic
collection of ASC cost data at the procedure level. On the other hand,
some commenters (predominantly commenters who represented ASCs) opposed
a requirement that ASCs submit cost data to CMS. The commenters
believed that a requirement to submit cost data would be both
unnecessary and administratively burdensome for ASCs. Further, some
commenters stated that requiring ASCs to submit cost data that would
not be used to update or set payment rates would very likely result in
submissions of data that would not be reliable.
In its comment on the statement in the proposed rule (74 FR 35391)
that CMS has the authority under section 109(b) of the MIEA-TRHCA (Pub.
L. 109-432) to implement ASC quality measure reporting, MedPAC noted
that CMS was not required to implement that reporting as MedPAC
recommended in its March 2009 Report to Congress. MedPAC expressed
concern about CMS' proposal to delay implementation of ASC quality
measurement reporting and argued it should be technically feasible for
ASCs to report in CY 2010 on at least the five quality measures that
were developed by the ASC industry-sponsored ASC Quality Collaboration
and endorsed by the National Quality Forum. Briefly, these five
facility-level measures are: patient being burned; patient fall in the
ASC; errors related to wrong surgery, wrong patient, wrong side, wrong
site or wrong implant; timing of prophylactic intravenous antibiotic;
and hospital transfer/admission upon discharge from the ASC. MedPAC
believed that ASCs could report these five measures without undue
administrative burden and that CMS should require ASCs to report these
measures without further delay.
Many other commenters also urged CMS to implement ASC quality
reporting as soon as possible and reported that ASCs are anxious to
begin the process. The commenters believed that CMS should ensure the
availability of fair and accurate quality data from ASCs in order to
promote transparency and allow beneficiaries to make meaningful
comparisons across outpatient surgical settings. Some commenters
believed that ASCs should be required to report quality data because
ASCs should be held to the same accountability standards as hospitals
with respect to the quality of care they deliver and that the ASC
quality measures should be consistent, and where possible, identical to
the measures reported by HOPDs.
Response: We thank all of the commenters for their thoughts
regarding the feasibility and value of requiring ASCs to submit cost
data that could be used to evaluate the adequacy of the Medicare ASC
payment rates. We will keep the commenters' perspectives about
collecting cost information from ASCs in mind as we further consider
the adequacy of the Medicare ASC payment rates.
We also appreciate the commenters' thoughtful remarks and
suggestions regarding ASC quality reporting. We will be mindful of the
opinions and information shared in the public comments as we move
toward implementation of ASC quality reporting.
H. Revision to Terms of Agreements for Hospital-Operated ASCs
1. Background
The August 5, 1982 ASC final rule (47 FR 34082) established the
initial Medicare ASC payment system and implementing Federal
regulations under 42 CFR part 416. Under Sec. 416.26 of our
regulations, ASCs operated by hospitals, like other ASCs, must meet the
applicable conditions for coverage and enter into an agreement with CMS
in which CMS accepts the ASC as qualified to furnish ambulatory
surgical services. Sections 416.30(a) through (g) of our regulations
specify terms of agreement for ASCs. Section 416.30(f) specifies the
following additional terms of agreement for an ASC operated by a
hospital--
The agreement is made effective on the first day of the
next Medicare cost reporting period of the hospital that operates the
ASC;
The ASC participates and is paid only as an ASC, without
the option of converting to or being paid as a hospital outpatient
department, unless CMS determines there is good cause to do otherwise;
and
Costs incurred by the ASC are treated as a nonreimbursable
cost center on the hospital's Medicare cost report.
In addition, Sec. 416.35 provides guidance regarding the
termination of ASC agreements with CMS. Voluntary terminations are
those initiated by an ASC and as specified in Sec. 416.35, an ASC may
terminate its agreement either by sending written notice to CMS or by
ceasing to furnish services to the community.
Although some sections of part 416 of the regulations governing
ASCs have been revised since they were established in 1982, most
recently for CY 2008 with the adoption of the revised ASC payment
system, Sec. Sec. 416.30(a) through 416.30(g) have not been changed or
updated. At the time Sec. Sec. 416.30 and 416.35 were promulgated,
Medicare paid for hospital outpatient services on a reasonable cost
basis. In contrast, Medicare initially paid ASCs for a small number of
surgical procedures at one of only four prospective rates that were
[[Page 60624]]
developed for the ASC payment system using cost data obtained from
surveys of ASCs. Since then, Medicare has adopted a prospective payment
system for HOPDs (the OPPS), the ASC list of covered surgical
procedures and payment rates have been updated a number of times, and,
beginning in CY 2008, the revised ASC payment system was introduced.
Under the revised ASC payment system, Medicare greatly increased
the number and types of surgical procedures that are eligible for
payment in ASCs. As a result, many more of the same surgical procedures
may be paid under the OPPS and ASC payment system, with the specific
payment determined by whether the service is provided by a hospital or
an ASC. Further, under the current, revised payment methodology, ASC
payment rates have a direct relationship to the relative payment
weights under the OPPS for the same services. Today, hospital
outpatient and ASC surgical procedures are paid based on the relative
weights adopted for the OPPS, and the difference between payments under
the two systems is largely a reflection of the differences in capital
and operating costs attributable to being an ASC or being an HOPD.
Another change that has taken place since the establishment of the
Medicare ASC payment system and the implementing regulations at Sec.
416.30 has been our effort to simplify the Medicare regulations to
reduce the burden on providers and suppliers. As discussed in the
August 1, 2002 IPPS final rule (67 FR 50084 through 50090), as part of
that effort, we revised the provider-based status regulations at Sec.
413.65 that outline the requirements for a determination that a
facility or an organization has provider-based status as a department
or entity of a hospital (main provider). The provider-based status
rules generally apply to situations where there is a financial
incentive for a facility or organization to claim affiliation with a
main provider. The provider-based status rules establish criteria for a
facility or organization to demonstrate that it is integrated with the
main provider for payment purposes. We do not make provider-based
status determinations for certain facilities, listed under Sec.
413.65(a)(1)(ii) of the regulations, because the outcome of the
determination (that is, whether a facility, unit, or department is
found to be freestanding or provider-based) would not affect the
methodology used to make Medicare or Medicaid payment, the scope of
benefits available to a Medicare beneficiary in or at the facility, or
the deductible or coinsurance liability of a Medicare beneficiary in or
at the facility. According to Sec. 413.65(a)(1)(ii), we do not make
provider-based determinations for ASCs or other suppliers that have
active supplier agreements with Medicare because services provided in
such entities are paid under other fee schedules, specifically in the
case of ASCs regardless of whether the ASC is operated by a hospital.
In the August 1, 2002 IPPS final rule (67 FR 50084 through 50090),
we revised the provider-based status rules where the main providers
were no longer required to submit an attestation to CMS to demonstrate
that their provider-based departments or entities met the provider-
based status rules. However, the provider-based department or entity of
a main provider must still meet the provider-based status rules in
Sec. 413.65 in order for the main provider to bill for services
performed in the provider-based department or entity.
2. Change to the Terms of Agreements for ASCs Operated by Hospitals
In the CY 2010 OPPS/ASC proposed rule (74 FR 35392), in order to
further streamline our regulations to reduce the administrative burden
on providers and suppliers, we proposed to revise existing Sec.
416.30(f)(2) to remove the language requiring a hospital-operated ASC
to satisfy CMS that there is good cause for its request to become a
provider-based department of a hospital prior to being recognized as
such. Specifically, we proposed to remove the language, ``without the
option of converting to or being paid as a hospital outpatient
department, unless CMS determines there is good cause to do
otherwise.'' We believe that this proposed revision to the requirements
that apply to hospital-operated ASCs is consistent with our earlier
regulation simplification activities related to the provider-based
status rules under Sec. 413.65. We believe that we would reduce the
administrative burden on hospitals and ASCs that terminate their
supplier agreements with Medicare and bring the requirements into
closer alignment with the provider-based status rules for other
facilities or organizations that wish to be integrated with the main
provider for payment purposes. While an ASC participating in Medicare
would continue to be paid only as an ASC, an ASC would also continue to
be able to voluntarily terminate its agreements in accordance with
Sec. 416.35. Thus, if an ASC chooses to voluntarily terminate its
agreement as an ASC and a main provider wants to consider the surgical
facility a provider-based department of that main provider, the
facility must meet the provider-based status rules under Sec. 413.65.
We did not receive any public comments on our proposal to revise
Sec. 416.30(f)(2) to remove the language, ``without the option of
converting to or being paid as a hospital outpatient department, unless
CMS determines there is good cause to do otherwise.'' Therefore, we are
adopting as final our proposed revision of Sec. 416.30(f)(2), without
modification.
I. Calculation of the ASC Conversion Factor and ASC Payment Rates
1. Background
In the August 2, 2007 final rule (72 FR 42493), we established our
policy to base ASC relative payment weights and payment rates under the
revised ASC payment system on APC groups and relative payment weights.
Consistent with that policy and the requirement at section
1833(i)(2)(D)(ii) of the Act that the revised payment system be
implemented so that it would be budget neutral, the initial ASC
conversion factor (CY 2008) was calculated so that estimated total
Medicare payments under the revised ASC payment system in the first
year would be budget neutral to estimated total Medicare payments under
the prior (CY 2007) ASC payment system. That is, application of the ASC
conversion factor was designed to result in aggregate Medicare
expenditures under the revised ASC payment system in CY 2008 equal to
aggregate Medicare expenditures that would have occurred in CY 2008 in
the absence of the revised system, taking into consideration the cap on
ASC payments in CY 2007 as required under section 1833(i)(2)(E) of the
Act (72 FR 42521 through 42522).
We note that we consider the term ``expenditures'' in the context
of the budget neutrality requirement under section 1833(i)(2)(D)(ii) of
the Act to mean expenditures from the Medicare Part B Trust Fund. We do
not consider expenditures to include beneficiary coinsurance and
copayments. This distinction was important for the CY 2008 ASC budget
neutrality model that considered payments across hospital outpatient,
ASC, and MPFS payment systems. However, because coinsurance is almost
always 20 percent for ASC services, this interpretation of expenditures
has minimal impact for subsequent budget neutrality adjustments
calculated within the revised ASC payment system.
In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66857
through 66858), we set out a step-by-step illustration of the final
budget
[[Page 60625]]
neutrality adjustment calculation based on the methodology finalized in
the August 2, 2007 final rule (72 FR 42521 through 42531) and as
applied to updated data available for the CY 2008 OPPS/ASC final rule
with comment period. The application of that methodology to the data
available for the CY 2008 OPPS/ASC final rule with comment period
resulted in a budget neutrality adjustment of 0.65.
For CY 2008, we adopted the OPPS relative payment weights as the
ASC relative payment weights for most services and, consistent with the
final policy, we calculated the CY 2008 ASC payment rates by
multiplying the ASC relative payment weights by the final CY 2008 ASC
conversion factor of $41.401. For covered office-based surgical
procedures and covered ancillary radiology services, the established
policy is to set the relative payment weights so that the national
unadjusted ASC payment rate does not exceed the MPFS unadjusted
nonfacility PE RVU amount. Further, as discussed in the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66841 through 66847), we also
adopted alternative ratesetting methodologies for specific types of
services (for example, device-intensive procedures).
As discussed in the August 2, 2007 final rule (72 FR 42518) and as
codified under Sec. 416.172(c) of the regulations, the revised ASC
payment system accounts for geographic wage variation when calculating
individual ASC payments by applying the pre-floor and pre-reclassified
hospital wage indices to the labor-related share, which is 50 percent
of the ASC payment amount. Beginning in CY 2008, CMS accounted for
geographic wage variation in labor cost when calculating individual ASC
payments by applying the pre-floor and pre-reclassified hospital wage
index values that CMS calculates for payment, using updated Core Based
Statistical Areas (CBSAs) issued by the Office of Management and Budget
in June 2003. The reclassification provision provided at section
1886(d)(10) of the Act is specific to hospitals. We believe the use of
the most recent available raw pre-floor and pre-reclassified hospital
wage indices results in the most appropriate adjustment to the labor
portion of ASC costs. In addition, use of the unadjusted hospital wage
data avoids further reductions in certain rural statewide wage index
values that result from reclassification. We continue to believe that
the unadjusted hospital wage indices, which are updated yearly and are
used by many other Medicare payment systems, appropriately account for
geographic variation in labor costs for ASCs.
Comment: Several commenters recommended that CMS adopt for the ASC
payment system the same wage index values used for hospital payment
under the OPPS. They believed that applying different wage indices in
the ASC payment system than are used in the OPPS is inequitable
because, in many market areas, ASCs compete directly with hospitals for
employees with skills and functions that are applicable in both
settings. The commenters believed that, in all but a few instances, the
adjusted wage index values used in the OPPS would be higher than the
current wage index values used in the ASC payment system. Specifically,
the commenters believed the adjustments that are applied to the wage
indices used in the OPPS system also should be applied to the ASC wage
indices. The adjustments that commenters requested be applied to the
wage index values used in the ASC payment system are: an imputed
statewide rural wage index for States with no counties outside of an
urban area; a mechanism to prevent urban areas from having indices
below the statewide rural wage index; a mechanism to prevent the wage
index of urban areas that cross state lines from falling below the
State-specific rural floor; and an adjustment for counties where a
significant proportion of residents commute to other counties for work.
Response: We continue to believe that the unadjusted hospital wage
indices, which are updated yearly and are used by almost all Medicare
payment systems, appropriately account for geographic variance in labor
costs for ASCs. The post-reclassification wage indices for 1886(d)
hospitals include many statutory adjustments specific to 1886(d)
hospitals and some regulatory adjustments for 1886(d) hospitals
including, but not limited to, the areas requested by commenters: an
imputed statewide rural wage index for States with no counties outside
of an urban area; a ``rural floor'' mechanism to prevent urban areas
from having indices below the statewide rural wage index; a mechanism
to prevent the wage index of urban areas that cross state lines from
falling below the State-specific rural floor; and an adjustment for
counties where a significant proportion of residents commute to other
counties. Because many of these adjustments are specified in statute
for 1886(d) hospitals, we believe it is appropriate to apply these
adjustments to 1886(d) hospitals. The OPPS adopts the post-
reclassification wage indices (adjusted hospital wage indices) because
the majority of participating hospitals are section 1886(d) hospitals
and, in these hospitals, the exact same personnel staff the ancillary
departments of the hospital that simultaneously treat both inpatients
and outpatients. For payments systems for other providers and suppliers
for which there is no specific statutory provision for adjustments to
the wage index values, CMS calculates and employs unadjusted hospital
wage indices that reflect the reported cost of hospital labor in each
area. Specifically, CMS uses some form of the unadjusted hospital wage
indices to pay long-term care, psychiatric, and inpatient
rehabilitation hospitals for inpatient care, as well as skilled nursing
facilities, hospice programs, home health agencies, and ESRD
facilities. CMS historically has only applied the adjusted, post-
reclassification hospital wage indices to pay section 1886(d) hospitals
for both inpatient and outpatient services for the reasons noted above.
It is our policy to treat ASCs as we do all other providers and
suppliers using hospital wage index values.
Further, adopting the post-reclassification hospital wage indices
with rural floor and associated statewide budget neutrality adjustment
would not increase overall ASC payment because we apply a budget
neutrality adjustment for changes in the wage indices to the conversion
factor. Therefore, any anticipated increases in aggregate ASC payment
created by adopting the post-reclassification wage indices would lead
to a comparable downward adjustment to the conversion factor to ensure
that the only increase in payments to ASCs are those allowed by the
update factor. We discuss our budget neutrality adjustment for changes
to the wage indices below in section XV.I.2.b. of this final rule with
comment period.
2. Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2010 and Future
Years
We update the ASC relative payment weights each year using the
national OPPS relative payment weights (and MPFS nonfacility PE RVU
amounts, as applicable) for that same calendar year and uniformly scale
the ASC relative payment weights for each update year to make them
budget neutral (72 FR 42531 through 42532). In the CY 2010 OPPS/ASC
proposed rule (74 FR 35393), consistent with our established policy, we
proposed to scale the CY 2010 relative payment weights for ASCs
according to the following method. Holding ASC utilization and the mix
of
[[Page 60626]]
services constant from CY 2008, for CY 2010, we proposed to compare the
total payment weight using the CY 2009 ASC relative payment weights
under the 50/50 blend (of the CY 2007 payment rate and the ASC payment
rate calculated under the ASC standard ratesetting methodology) with
the total payment weight using the CY 2010 ASC relative payment weights
under the 25/75 blend (of the CY 2007 ASC payment rate and the ASC
payment rate calculated under the ASC standard ratesetting methodology)
to take into account the changes in the OPPS relative payment weights
between CY 2009 and CY 2010. We proposed to use the ratio of CY 2009 to
CY 2010 total payment weight (the weight scaler) to scale the ASC
relative payment weights for CY 2010. The proposed CY 2010 ASC scaler
was 0.9514 and scaling would apply to the ASC relative payment weights
of the covered surgical procedures and covered ancillary radiology
services for which the ASC payment rates are based on OPPS relative
payment weights.
Scaling would not apply in the case of ASC payment for separately
payable covered ancillary services that have a predetermined national
payment amount (that is, their national ASC payment amounts are not
based on OPPS relative payment weights), such as drugs and biologicals
that are separately paid or services that are contractor-priced or paid
at reasonable cost in ASCs. Any service with a predetermined national
payment amount would be included in the ASC budget neutrality
comparison, but scaling of the ASC relative payment weights would not
apply to those services. The ASC payment weights for those services
without predetermined national payment amounts (that is, those services
with national payment amounts that would be based on OPPS relative
payment weights if a payment limitation did not apply) would be scaled
to eliminate any difference in the total payment weight between the
current year and the update year.
The proposed weight scaler used to model CY 2010 ASC fully
implemented payment rates in order to reflect our estimated of rates if
there was no transition was equal to 0.9329. We applied this scaler to
the payment weights subject to scaling, in order to estimate the ASC
payment rates for CY 2010 without the transition, for purposes of the
ASC impact analysis discussed in section XXI.C. of the CY 2010 OPPS/ASC
proposed rule (74 FR 35418).
For any given year's ratesetting, we typically use the most recent
full calendar year of claims data to model budget neutrality
adjustments. When we developed the CY 2010 OPPS/ASC proposed rule, we
had available 98 percent of CY 2008 ASC claims data. In the CY 2010
OPPS/ASC proposed rule (74 FR 35393), we reported that we had 95
percent of the CY 2008 ASC claims data available to model proposed
revisions to the CY 2010 ASC payment system, but we have since
confirmed that we had a slightly higher percentage available at that
time. For this final rule with comment period, we have close to 100
percent of all claims for CY 2008. CY 2010 is the first year that the
claims data used for ratesetting include new covered surgical
procedures and covered ancillary services under the revised ASC payment
system. Because we had almost all of the CY 2008 claims data available
when we calculated the conversion factor and budget neutrality
adjustments for our proposed rule, for the final CY 2010 budget
neutrality adjustments, we did not expect there would be significant
changes in our calculated budget neutrality adjustments (the weight
scaler or wage adjustment) that could be attributable to more
utilization available from additional claims data for this CY 2010
OPPS/ASC final rule with comment period.
To create an analytic file to support calculation of the weight
scaler and budget neutrality adjustment for the wage index (discussed
below), we summarized available CY 2008 ASC claims by provider and by
HCPCS code. We created a unique supplier identifier solely for the
purpose of identifying unique ASCs within the CY 2008 claims data. We
used the supplier zip code reported on the claim to associate State,
county, and CBSA with each ASC. This file, available to the public as a
supporting data file for the CY 2010 OPPS/ASC proposed rule, is posted
on the CMS Web site at: http://www.cms.hhs.gov/ASCPayment/01_Overview.asp#TopOfPage.
Comment: Many commenters again expressed their opposition to
scaling the ASC relative payment weights. Many of the commenters on the
CY 2010 proposed rule offered the same views as the public commenters
on the CY 2009 OPPS/ASC final rule with comment period, the year when
CMS first applied the scaling policy that was finalized in the August
2, 2007 final rule. The commenters expressed many concerns, including
that scaling is contrary to the intent of using the cost-based OPPS
relative payment weights as the bases for determining the relative
payments for the same services in ASCs and that scaling would continue
to erode the payment relationship between the OPPS and ASC payment
system. Further, the commenters stated that increasing the difference
between ASC and OPPS payments is in direct conflict with the goal of
ensuring that patients have continued access to surgical care in the
lowest priced setting appropriate to their clinical needs. They
asserted that, although scaling is intended to maintain budget
neutrality within the ASC payment system, it is instead creating
increasingly large payment differentials between the ASC and OPPS
payments for the same services, without evidence of growing differences
in capital and operating costs between the two settings.
The commenters argued that CMS is not required to scale the ASC
relative weights and that it should use its authority to suspend the
application of scaling the ASC relative weights for CY 2010. They noted
that CMS established at Sec. 416.171(e)(2) of the regulations a
process by which it may (emphasis added) make annual adjustment to the
relative payment weights, as needed (emphasis added).
The commenters also expressed their continuing disagreement with
aspects of the budget neutrality adjustment methodology used by CMS to
establish the conversion factor. They provided the results of their
comparison of actual volume and payment for services that were new to
the ASC list in CY 2008. Based upon the results of their analyses of CY
2008 claims data, the commenters concluded that the migration estimates
used by CMS to establish budget neutrality in CY 2008 were several
times higher than the actual ASC spending for newly covered procedures
and, therefore, that the resulting CY 2008 conversion factor was too
low. They believed that these findings provide a further basis for CMS
not to scale the ASC relative payment weights for CY 2010 after the
weights are scaled under the OPPS.
In addition, many of the commenters reasoned that because the ASC
payment system is based on the OPPS relative weights, the weights
should be equal in both settings and because the weights are scaled to
ensure budget neutrality under the OPPS, the weights should not be
scaled again to ensure budget neutrality under the ASC system. The
commenters believed that the CY 2010 OPPS relative payment weights
reflected real growth in the relative costs of surgical services
provided in HOPDs and that the ASC scaler should not reclaim dollars
from the ASC payment system because there also has been real cost
growth for the surgical services provided in ASCs. However, they
acknowledge that suspending
[[Page 60627]]
application of the scaler for CY 2010 would result in an aggregate
increase in ASC spending in that year.
The commenters expressed concern that other payment adjustments are
depressing the ASC payments for many procedures, including the freeze
on the ASC payment update through CY 2009 and the transition policy and
that scaling further reduces rates to inappropriately low levels.
Further, the commenters argued that scaling is forcing procedures for
which the OPPS median cost increased from CY 2009 to CY 2010 to finance
the transitional payment policies, and that the procedures the
transition was intended to aid are the procedures financing the bulk of
the scaler.
Response: Many of these comments are similar to public comments on
the proposal for the revised ASC payment system that we responded to in
the August 2, 2007 final rule (72 FR 42531 through 42533). For example,
with regard to scaling, we addressed these same concerns raised by
commenters ``that annual rescaling would cause divergence of the
relative weights between the OPPS and the revised ASC payment system
for individual procedures'' in the August 2, 2007 final rule (72 FR
42532). We refer the commenters to that discussion for our detailed
response in promulgating the scaling policy that was initially applied
in CY 2009 (72 FR 42531 through 42533). Below, we address new issues
raised by the commenters and provide a general summary of some of the
relevant responses from the August 2, 2007 final rule and the CY 2009
OPPS/ASC final rule with comment period (73 FR 68754 through 68755).
The ASC weight scaling methodology is entirely consistent with the
OPPS methodology for scaling the relative payment weights and, for the
most part, the increasing payment differentials between the ASC and
OPPS payments for the same services are not attributable to scaling ASC
relative payment weights. Considerations of differences between the
capital and operating costs of ASCs and HOPDs are not part of the ASC
standard ratesetting methodology, which relies only on maintaining the
same relativity of payments for services under the two payment systems,
as well as budget neutrality within each payment system. Furthermore,
unlike HOPDs, we do not have information about the costs of ASC
services in order to assess differences in capital and operating costs
over time between the two settings. In order to maintain budget
neutrality of the ASC payment system, we need to adjust for the effects
of changes in relative weights. The ASC payment system adopts the OPPS
relative weights as the mechanism for apportioning total payments,
after application of the update factor, among all of the services
covered by the ASC payment system. The OPPS relative weights serve the
same purpose in the OPPS. The OPPS relative weights do not represent an
estimate of absolute cost of any given procedure; rather, they reflect
our estimate of the cost of the procedure within the context of our
cost estimation methodology for the OPPS. With the exception of
services with a predetermined national payment amount, the use of a
uniform scaling factor for changes in total weight between years in the
ASC payment system does not alter the relativity of the OPPS payment
weights as used in the ASC payment system. Differences in the
relativity between the ASC relative payment weights and the OPPS
relative payment weights are not driven by the application of the
uniform scaling factor. The ASC weight scaling methodology is entirely
consistent with the OPPS weight scaling methodology and the weights
serve the same purpose in both systems, to apportion total budget
neutral payment allowed under the update.
We do not believe that the application of the scaler will lead to
beneficiary access problems. We believe that the fully implemented
relative weights will be representative of relative costs across all
ASC services and that payments will support the continued provision of
high quality surgical procedures to Medicare beneficiaries in the most
appropriate settings. We also expect that, over time, ASCs will provide
an increased breadth of services. Appropriate beneficiary access to
services in appropriate care settings is always an important concern
and we will continue to monitor access under the revised ASC payment
system.
As stated in the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68754), with respect to the use of ``as needed'' in the text of
Sec. 416.171(e)(2) that commenters have interpreted to mean that CMS
has the authority to suspend scaling the relative payment weights if it
determines there is not a need to do so, the phrase does not mean that
CMS will determine whether or not to adjust for budget neutrality.
Rather, it means that CMS adjusts the relative payment weights as
needed to ensure budget neutrality and, as acknowledged by the
commenters on the CY 2010 OPPS/ASC proposed rule, if we were not to
scale the ASC relative payment weights, we estimate that the CY 2010
revisions would not be budget neutral.
We agree that there are differences between the service volume
estimates CMS used to establish budget neutrality based on CY 2006
claims data and those reflected in the CY 2008 claims data. In the
final regulations implementing the revised ASC payment system, we made
our best actuarial estimate to ensure budget neutrality. We did not
intend to revisit the actuarial budget neutrality regardless of whether
or not it could be determined that there was a difference between
actual experience and our underlying data assumptions and regardless of
whether or not any difference that could be determined resulted in
increased or decreased expenditures under the revised ASC payment
system.
Establishing budget neutrality under the OPPS does not result in
budget neutrality under the revised ASC payment system; it is only to
maintain budget neutrality under the OPPS. Scaling the ASC relative
payment weights is an integral and separate process for maintaining
budget neutrality under the ASC prospective payment system. Scaling is
the budget neutrality adjustment that ensures that changes in the
relative weights do not, in and of themselves, change aggregate payment
to ASCs. It ensures a specific amount of payment for ASCs in any given
year. Without scaling, total ASC payment could increase or decrease
relative to changes in hospital outpatient payment.
Although the commenters believed that scaling prevents increases in
ASC spending that may be appropriate because ASC costs have increased
over time, increases in cost in a prospective payment system are
handled by the update factor. In a budget neutral system, we remove the
independent effects of increases or decreases in payments as a result
of changes in the relative payment weights or the wage indices and
constrain increases to the allowed update factor. Therefore, changes in
aggregate ASC expenditures related to payment rates should be
determined by the update to the ASC conversion factor, the CPI-U.
Regarding commenters' concern that other payment adjustments,
including the freeze on ASC payment updates and the transitional
payment policy, are depressing the ASC payments for many procedures and
that scaling has a disproportionate effect on some covered surgical
procedures, we note that the statute set a zero percent update for CY
2008 and CY 2009. We implemented the 4-year transitional payment policy
in response to public comments that persuaded us that ASCs would
benefit from more gradual implementation of the revised ASC payment
rates, especially for historically high volume
[[Page 60628]]
procedures because the prior rates for those procedures were
disproportionately high compared to the prior rates for other ASC
procedures. As explained in the August 2, 2007 final rule (72 FR
42542), a major effect of the revised ASC payment system is
redistribution of payments across all ASC procedures. Historically, the
highest volume ASC procedures had payment rates that were close to the
payments in HOPDs and, as such, accounted for most of the total
Medicare payments to ASCs. As a result, payments for many of those high
volume services are the most adversely affected under the revised
payment system as the relative weights across all ASC procedures become
more closely aligned with those of the OPPS. We appreciate the
commenters' concern that scaling is forcing procedures for which the
OPPS median cost increased from CY 2009 to CY 2010 to finance the
transitional payment policies, and that the procedures the transition
was intended to aid are the procedures financing the bulk of the
scaler. However, as already noted, the ASC payment system adopts the
relativity of the OPPS weights, not the actual median costs or payments
for OPPS services. It is fully consistent that a budget neutrality
adjustment for differences in aggregate payment weight, specifically
scaling, would change the amount of payment under the ASC payment
system relative to the OPPS median cost and to the previous year's
payment under the ASC payment system for the same service. It is
critical that the amount of payment allowed under the ASC payment
system, after application of the update factor, distributes the
appropriate proportional payment amount to each service. The same
statement is true for commenters' concerns that scaling is reducing
payment for services explicitly designated as receiving a transition
payment. Scaling ensures that the changes in the relative weights do
not, in and of themselves, change aggregate payment to ASCs. The
calculation of the transition weight over a fully implemented weight
for any procedures paid in CY 2007 under the previous ASC payment
system changes the relativity of the weight of those services relative
to other services newly covered by the revised ASC payment system. This
clearly changes the proportional resources distributed to services
subject to the transition compared to what would be distributed under a
fully implemented system. However, entitlement to a transition weight
under a budget neutral system does not guarantee a specific amount of
payment in absolute dollar terms. A service that experienced an
increase in the OPPS relative weight may very well experience a decline
in payment relative to the previous year's actual payment rate because
the scaling necessary to maintain equal weight in the system is greater
than the proportional increase in the OPPS relative weight portion of
the transition weight. Again, this outcome is fully consistent with
implementation of a budget neutral prospective payment system with a
specific update factor.
For this final rule with comment period, we used our proposed
methodology described above to calculate the scaler adjustment using
updated ASC claims data. The final CY 2010 scaler adjustment for the
third year of the transition is 0.9567. This scaler adjustment is
necessary to budget neutralize the difference in aggregate ASC payments
calculated using the CY 2009 ASC transitional (50/50 blend) relative
payment weights and the CY 2010 ASC transitional (75/25 blend) relative
payment weights. We calculated the difference in aggregate payments due
to the change in relative payment weights (including drugs and
biologicals) holding constant the ASC conversion factor, the most
recent CY 2008 ASC utilization from our claims data, and the CY 2009
wage index values. For this final CY 2010 calculation, we used the CY
2009 ASC conversion factor updated by the CY 2010 CPI-U, which is 1.2
percent.
After consideration of the public comments we received, we are
finalizing our CY 2010 ASC relative payment weight scaling methodology,
without modification. The final CY 2010 ASC payment weight scaler is
0.9567.
b. Updating the ASC Conversion Factor
Under the OPPS, we typically apply a budget neutrality adjustment
for provider-level changes, most notably a change in the wage index
values for the upcoming year, to the conversion factor. In the CY 2010
OPPS/ASC proposed rule (74 FR 35393), consistent with our final ASC
payment policy, for the CY 2010 ASC payment system, we proposed to
calculate and apply the pre-floor and pre-reclassified hospital wage
indices that are used for ASC payment adjustment to the ASC conversion
factor, just as the OPPS wage index adjustment is calculated and
applied to the OPPS conversion factor (73 FR 41539). For CY 2010, we
calculated this proposed adjustment for the ASC payment system by using
the most recent CY 2008 claims data available and estimating the
difference in total payment that would be created by introducing the CY
2010 pre-floor and pre-reclassified hospital wage indices.
Specifically, holding CY 2008 ASC utilization and service-mix and CY
2010 national payment rates after application of the weight scaler
constant, we calculated the total adjusted payment using the CY 2009
pre-floor and pre-reclassified hospital wage indices and the total
adjusted payment using the proposed CY 2010 pre-floor and pre-
reclassified hospital wage indices. We used the 50-percent labor-
related share for both total adjusted payment calculations. We then
compared the total adjusted payment calculated with the CY 2009 pre-
floor and pre-reclassified hospital wage indices to the total adjusted
payment calculated with the proposed CY 2010 pre-floor and pre-
reclassified hospital wage indices and applied the resulting ratio of
0.9996 (the proposed CY 2010 ASC wage index budget neutrality
adjustment) to the CY 2009 ASC conversion factor to calculate the
proposed CY 2010 ASC conversion factor.
Section 1833(i)(2)(C) of the Act requires that, if the Secretary
has not updated the ASC payment amounts in a calendar year, the payment
amounts shall be increased by the percentage increase in the CPI-U as
estimated by the Secretary for the 12-month period ending with the
midpoint of the year involved. However, section 1833(i)(2)(C)(iv) of
the Act required that the increase of ASC payment amounts for CYs 2008
and 2009 equal zero percent. As discussed in the August 2, 2007 final
rule, we adopted a final policy to update the ASC conversion factor
using the CPI-U in order to adjust ASC payment rates for CY 2010 and
subsequent years (72 FR 42518 through 42519 and Sec. 416.171(a)(2)).
In the CY 2010 OPPS/ASC proposed rule (74 FR 35394), we proposed to
implement the annual updates through an adjustment to the ASC
conversion factor beginning in CY 2010 when the statutory requirement
for a zero update no longer applies.
For our proposed rule, for the 12-month period ending with the
midpoint of CY 2010, the Secretary estimated that the CPI-U is 0.6
percent. Therefore, we proposed to apply to the ASC conversion factor a
0.6 percent increase for CY 2010.
Thus, for CY 2010, we proposed to adjust the CY 2009 ASC conversion
factor ($41.393) by the wage adjustment for budget neutrality of 0.9996
and the update of 0.6 percent, which resulted in a proposed CY 2010 ASC
conversion factor of $41.625.
Comment: Many commenters requested that CMS adopt the hospital
[[Page 60629]]
market basket to update the ASC payment system. They explained that not
only is the CPI-U lower than the hospital market basket but it is not
appropriate for updating health care providers because, unlike the
hospital market basket which analyzes hospital spending, the CPI-U is
designed to capture household spending. The commenters stated that in
the most recent years, the CPI-U has been dominated by energy and
housing costs rather than healthcare provider spending. Further, the
commenters stated that CMS' use of the midyear CPI-U percent change is
problematic because other federal agencies, such as the Bureau of Labor
Statistics and the Congressional Budget Office, use an end-of-year
timeframe. They believed that a negative consequence of the midyear
timing for CMS' forecasted CPI-U percent change is that the CPI-U used
to update the ASC payment system cannot be validated directly with an
independent source.
The commenters argued that the difference between the ASC and OPPS
conversion factors is not due to real differences in the growth of
costs of goods and services furnished by ASCs and HOPDs and should not
be perpetuated. The commenters asserted that CMS clearly has the
authority to use an alternative update mechanism, and believed CMS
should adopt a more appropriate update for the ASC payment system to
prevent further increases in differential between the ASC and OPPS
conversion factors.
Response: We understand the commenters' concerns regarding the
update to the conversion factor for CY 2010, but note that we did not
propose to change the conversion factor update methodology. We refer
readers to the discussion in the August 2, 2007 final rule on this
issue (72 FR 42518 through 42519).
After consideration of the public comments we received, we are
applying our established methodology for determining the final CY 2010
ASC conversion factor. Using more complete CY 2008 data for this final
rule with comment period than was available for the proposed rule, we
calculated a wage index budget neutrality adjustment of 0.9996 and the
updated CPI-U projected for the midpoint of CY 2010 is 1.2 percent. The
final ASC conversion factor of $41.873 is the product of the CY 2009
conversion factor of $41.393 multiplied by 0.9996 and the 1.2 percent
CPI-U.
3. Display of ASC Payment Rates
Addenda AA and BB to this CY 2010 OPPS/ASC final rule with comment
period display the updated ASC payment rates for CY 2010 for covered
surgical procedures and covered ancillary services, respectively. These
addenda contain several types of information related to the CY 2010
payment rates. Specifically, in Addendum AA, a ``Y'' in the column
titled ``Subject to Multiple Procedure Discounting'' indicates that the
surgical procedure would be subject to the multiple procedure payment
reduction policy. As discussed in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66829 through 66830), most covered surgical
procedures are subject to a 50-percent reduction in the ASC payment for
the lower-paying procedure when more than one procedure is performed in
a single operative session. Display of the comment indicator ``CH'' in
the column titled ``Comment Indicator'' indicates a final change in
payment policy for the item or service, including identifying
discontinued HCPCS codes, designating items or services newly payable
under the ASC payment system, and identifying items or services with
changes in the ASC payment indicator for CY 2010. Display of the
commenter indicator ``NI'' in the column titled ``Comment Indicator''
indicates that the code is new (or substantially revised) and that the
payment indicator assignment is an interim assignment that is open to
comment on this final rule with comment period.
The values displayed in the column titled ``CY 2010 Third Year
Transition Payment Weight'' are the relative payment weights for each
of the listed services for CY 2010, the third year of the 4-year
transition period. The CY 2010 ASC payment rates for the covered
surgical procedures subject to transitional payment (payment indicators
``A2'' and ``H8'' in Addendum AA) are based on a blend of 25 percent of
the CY 2007 ASC payment rate for the procedure and 75 percent of the CY
2010 ASC rate calculated under the ASC standard ratesetting methodology
before scaling for budget neutrality. The payment weights for all
covered surgical procedures and covered ancillary services whose ASC
payment rates are based on OPPS relative payment weights are scaled for
budget neutrality. Thus, scaling was not applied to the device portion
of the device-intensive procedures, services that are paid at the MPFS
nonfacility PE RVU amount, separately payable covered ancillary
services that have a predetermined national payment amount, such as
drugs and biologicals that are separately paid under the OPPS, or
services that are contractor-priced or paid at reasonable cost in ASCs.
To derive the CY 2010 national unadjusted payment rate displayed in
the ``CY 2010 Third Year Transition Payment'' column, each ASC payment
weight in the ``CY 2010 Third Year Transition Payment Weight'' column
is multiplied by the final CY 2010 ASC conversion factor of $41.873.
The conversion factor includes a budget neutrality adjustment for
changes in the wage index values and the CPI-U percentage increase.
In Addendum BB, there are no relative payment weights displayed in
the ``CY 2010 Third Year Transition Payment Weight'' column for items
and services with predetermined national payment amounts, such as
separately payable drugs and biologicals. The ``CY 2010 Third Year
Transition Payment'' column displays the final CY 2010 national
unadjusted ASC payment rates for all items and services. The CY 2010
ASC payment rates listed in the Addendum AA for separately payable
drugs and biologicals are based on ASP data used for payment in
physicians' offices in October 2009.
For informational purposes only, we also have posted on the CMS Web
site the fully transitioned ASC payment rates for CY 2010. These rates
do not represent what the payment rates would be once the transition is
over, only what the CY 2010 rates would be if there were no transition.
The Web site address is: https://www.cms.hhs.gov/ASCPayment/ ASCPayment/.
We did not receive any public comments regarding the continuation
of our policy to provide CY 2010 ASC payment information as detailed in
Addenda AA and BB. Therefore, Addenda AA and BB to this final rule with
comment period display the updated ASC payment rates for CY 2010 for
covered surgical procedures and covered ancillary services,
respectively, and provide additional information related to the CY 2010
rates.
XVI. Reporting Quality Data for Annual Payment Rate Updates
A. Background
1. Overview
CMS has implemented quality measure reporting programs for multiple
settings of care. These programs promote higher quality, more efficient
health care for Medicare beneficiaries. The quality data reporting
program for hospital outpatient care, known as the Hospital Outpatient
Quality Data Reporting Program (HOP QDRP), has been generally modeled
after the program for hospital inpatient services,
[[Page 60630]]
the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU)
program. Both of these quality reporting programs for hospital
services, as well as the program for physicians and other eligible
professionals, known as the Physician Quality Reporting Initiative
(PQRI), have financial incentives for reporting of quality data to CMS.
CMS has also implemented quality reporting programs for home health
agencies and skilled nursing facilities that are based on conditions of
participation, and an end-stage renal disease quality reporting program
that is based on conditions for coverage.
2. Hospital Outpatient Quality Data Reporting Under Section 109(a) of
Pub. L. 109-432
Section 109(a) of the MIEA-TRHCA (Pub. L. 109-432) amended section
1833(t) of the Act by adding a new subsection (17) that affects the
payment rate update applicable to OPPS payments for services furnished
by hospitals in outpatient settings on or after January 1, 2009.
Section 1833(t)(17)(A) of the Act, which applies to hospitals as
defined under section 1886(d)(1)(B) of the Act, states that subsection
(d) hospitals that fail to report data required for the quality
measures selected by the Secretary in the form and manner required by
the Secretary under section 1833(t)(17)(B) of the Act will receive a
2.0 percentage point reduction to their annual payment update factor.
Section 1833(t)(17)(B) of the Act requires that hospitals submit
quality data in a form and manner, and at a time, that the Secretary
specifies. Section 1833(t)(17)(C)(i) of the Act requires the Secretary
to develop measures appropriate for the measurement of the quality of
care (including medication errors) furnished by hospitals in outpatient
settings, that these measures reflect consensus among affected parties
and, to the extent feasible and practicable, that these measures
include measures set forth by one or more national consensus building
entities.
The National Quality Forum (NQF) is a voluntary consensus standard-
setting organization that is composed of a diverse representation of
consumer, purchaser, provider, academic, clinical, and other health
care stakeholder organizations. NQF was established to standardize
health care quality measurement and reporting through its consensus
development process. We generally prefer to adopt NQF-endorsed measures
for CMS quality reporting programs. However, we believe that consensus
among affected parties also can be reflected by other means, including:
consensus achieved during the measure development process; consensus
shown through broad acceptance and use of measures; and consensus
through public comment. We also note that section 1833(t)(17) of the
Act does not require that each measure we adopt for the HOP QDRP be
endorsed by a national consensus building entity, or by the NQF
specifically.
Section 1833(t)(17)(C)(ii) of the Act authorizes the Secretary to
select measures for the HOP QDRP that are the same as (or a subset of)
the measures for which data are required to be submitted under section
1886(b)(3)(B)(viii) of the Act (the RHQDAPU program). Section
1833(t)(17)(D) of the Act gives the Secretary the authority to replace
measures or indicators as appropriate, such as when all hospitals are
effectively in compliance or when the measures or indicators have been
subsequently shown not to represent the best clinical practice. Section
1833(t)(17)(E) of the Act requires the Secretary to establish
procedures for making data submitted under the HOP QDRP available to
the public. Such procedures must include giving hospitals the
opportunity to review their data before these data are released to the
public.
As we stated in the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68758 through 68759), we continue to believe that it is most
appropriate and desirable to adopt measures that specifically apply to
the hospital outpatient setting for the HOP QDRP. In other words, we do
not believe that we should simply, without further analysis, adopt the
RHQDAPU program measures as the measures for the HOP QDRP. Nonetheless,
we note that section 1833(t)(17)(C)(ii) of the Act allows the Secretary
to ``[select] measures that are the same as (or a subset of) the
measures for which data are required to be submitted'' under the
RHQDAPU program.
3. Reporting ASC Quality Data for Annual Payment Update
Section 109(b) of the MIEA-TRHCA amended section 1833(i) of the Act
by redesignating clause (iv) as clause (v) and adding new clause (iv)
to paragraph (2)(D) and adding paragraph (7). These amendments may
affect ASC payments for services furnished in ASC settings on or after
January 1, 2009. Section 1833(i)(2)(D)(iv) of the Act authorizes the
Secretary to implement the revised payment system for services
furnished in ASCs (established under section 1833(i)(2)(D) of the Act),
``so as to provide for a reduction in any annual update for failure to
report on quality measures.''
Section 1833(i)(7)(A) of the Act states that the Secretary may
provide that any ASC that fails to report data required for the quality
measures selected by the Secretary in the form and manner required by
the Secretary under section 1833(i)(7) of the Act will incur a
reduction in any annual payment update of 2.0 percentage points.
Section 1833(i)(7)(A) of the Act also specifies that a reduction for
one year cannot be taken into account in computing the ASC update for a
subsequent calendar year.
Section 1833(i)(7)(B) of the Act provides that, ``[e]xcept as the
Secretary may otherwise provide,'' the hospital outpatient quality data
provisions of sections 1833(t)(17)(B) through (E) of the Act,
summarized above, shall apply to ASCs. We did not implement an ASC
quality reporting program for CY 2008 (72 FR 66875) or for CY 2009 (73
FR 68779).
We refer readers to section XVI.H. of this final rule with comment
period for a discussion of our decision to implement ASC quality data
reporting in a later rulemaking.
4. HOP QDRP Quality Measures for the CY 2009 Payment Determination
For the CY 2009 annual payment update, we required HOP QDRP
reporting using seven quality measures--five Emergency Department (ED)
AMI measures and two Perioperative Care measures. These measures
address care provided to a large number of adult patients in hospital
outpatient settings, across a diverse set of conditions, and were
selected for the initial set of HOP QDRP measures based on their
relevance as a set to all HOPDs.
Specifically, in order for hospitals to receive the full OPPS
payment update for services furnished in CY 2009, in the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66860), we required that
subsection (d) hospitals paid under the OPPS submit data on the
following seven measures for hospital outpatient services furnished on
or after April 1, 2008: (1) ED-AMI-1: Aspirin at Arrival; (2) ED-AMI-2:
Median Time to Fibrinolysis; (3) ED-AMI-3: Fibrinolytic Therapy
Received within 30 Minutes of Arrival; (4) ED-AMI-4: Median Time to
Electrocardiogram (ECG); (5) ED-AMI-5: Median Time to Transfer for
Primary PCI; (6) PQRI 20: Perioperative Care--Timing of
Antibiotic Prophylaxis; and (7) PQRI 21: Perioperative Care--
Selection of Perioperative Antibiotic.
[[Page 60631]]
5. HOP QDRP Quality Measures for the CY 2010 Payment Determination
a. Background
In the CY 2009 OPPS/ASC final rule with comment period, for the CY
2010 payment update, we required continued submission of data on the
existing seven measures discussed above (73 FR 68761), and adopted four
imaging measures (73 FR 68766). For CY 2010, we changed the measure
designations for the existing seven measures, including a change to an
``OP-X'' format in order to maintain a consistent sequential
designation system that we could expand as we add additional measures.
The four imaging measures that we adopted beginning with the CY
2010 payment determination (OP-8: MRI Lumbar Spine for Low Back Pain,
OP-9: Mammography Follow-up Rates, OP-10: Abdomen CT--Use of Contrast
Material, and OP-11: Thorax CT--Use of Contrast Material) are claims-
based measures that CMS will calculate using Medicare Part B claims
data without imposing upon hospitals the burden of additional chart
abstraction. For purposes of the CY 2010 payment determination, we will
calculate these measures using CY 2008 Medicare administrative claims
data.
In the CY 2009 OPPS/ASC proposed rule, OP-10 had two submeasures
listed: OP-10a: CT Abdomen--Use of contrast material excluding calculi
of the kidneys, ureter, and/or urinary tract, and OP-10b: CT Abdomen--
Use of contrast material for diagnosis of calculi in the kidneys,
ureter, and or urinary tract. In the CY 2009 OPPS/ASC final rule with
comment period (73 FR 68766), we finalized OP-10: Abdomen CT--Use of
Contrast Material. To clarify, we are calculating OP-10 excluding
patients with renal disease. This exclusion is described in greater
detail in the Specifications Manual for Hospital Outpatient Department
Quality Measures (HOPD Specifications Manual) located at the QualityNet
Web site (http://www.QualityNet.org).
The complete set of measures to be used for the CY 2010 payment
determination is set out below, and is shown with the CY 2010 measure
designations as well as their ED-AMI and PQRI designations:
------------------------------------------------------------------------
HOP QDRP measurement set to be used for CY 2010
payment determination CY 2009 designation
------------------------------------------------------------------------
OP-1: Median Time to Fibrinolysis............... ED-AMI-2.
OP-2: Fibrinolytic Therapy Received Within 30 ED-AMI-3.
Minutes.
OP-3: Median Time to Transfer to Another ED-AMI-5.
Facility for Acute Coronary Intervention.
OP-4: Aspirin at Arrival........................ ED-AMI-1.
OP-5: Median Time to ECG........................ ED-AMI-4.
OP-6: Timing of Antibiotic Prophylaxis.......... PQRI 20.
OP-7: Prophylactic Antibiotic Selection for PQRI 21.
Surgical Patients.
OP-8: MRI Lumbar Spine for Low Back Pain........ NA.
OP-9: Mammography Follow-up Rates............... NA.
OP-10: Abdomen CT--Use of Contrast Material..... NA.
OP-11: Thorax CT--Use of Contrast Material...... NA.
------------------------------------------------------------------------
b. Maintenance of Technical Specifications for Quality Measures
Technical specifications for each HOP QDRP measure are listed in
the HOPD Specifications Manual, which is posted on the CMS QualityNet
Web site at http://www.QualityNet.org. We maintain the technical
specifications for the measures by updating this HOPD Specifications
Manual and include detailed instructions and calculation algorithms for
hospitals to use when collecting and submitting data on required
measures.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR
68766), we established a subregulatory process for updates to the
technical specifications that we use to calculate HOP QDRP measures.
This process is used when changes to the measure specifications are
necessary due to changes in scientific evidence or in the measure as
endorsed by the consensus entity. Changes of this nature may not
coincide with the timing of our regulatory actions, but nevertheless
require inclusion in the measure specifications so that the HOP QDRP
measures are calculated based on the most up-to-date scientific and
consensus standards. We indicated that notification of changes to the
measure specifications on the QualityNet Web site, http://www.QualityNet.org, and in the HOPD Specifications Manual that occurred
as a result of changes in scientific evidence or national consensus
would occur no less than 3 months before any changes become effective
for purposes of reporting under the HOP QDRP.
The HOPD Specifications Manual is released every 6 months and
addenda are released as necessary, providing at least 3 months of
advance notice for nonsubstantive changes such as changes to ICD-9,
CPT, NUBC, and HCPCS codes, and at least 6 months notice for
substantive changes to data elements that would require significant
systems changes.
Comment: A few commenters indicated that they agreed with the
maintenance of the outpatient measure technical specifications in a
manner consistent with the inpatient measure technical specifications.
They agreed that providing a 3-month notification period for code
updates is sufficient. One commenter also agreed the OP-X designations
along with short measure names are appropriate. Commenters indicated
that CMS should ensure that the subregulatory process that it uses to
update the technical specifications for HOP QDRP measures is regular
and transparent.
Response: We thank the commenters for their support of the
subregulatory manual update process and timeframes. We will continue to
make such updates on a regular semi-annual basis with addenda as
necessary, and to issue notifications of updates via the QualityNet Web
site, http://www.QualityNet.org, in order to maintain the transparency
of the process. The HOPD Specifications Manual will continue to be
released regularly and addenda will continue to be issued as necessary,
providing at least 3 months of advance notice for nonsubstantive
changes such as changes to ICD-9, CPT, NUBC, and HCPCS codes, and at
least 6 months notice for substantive changes to data elements that
would require significant systems changes.
c. Publication of HOP QDRP Data
Section 1833(t)(17)(E) of the Act requires that the Secretary
establish procedures to make data collected under the HOP QDRP program
available to the public. CMS also requires hospitals to complete and
submit a registration form (``participation form'') in order to
participate in the HOP QDRP. With submission of this form,
participating
[[Page 60632]]
hospitals agree that they will allow CMS to publicly report the quality
measures, including those that CMS calculates using Medicare claims, as
required by the Act and the HOP QDRP.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR
68778), we established that for CY 2010, hospitals sharing the same CMS
Certification Number (CCN, previously known as the Medicare Provider
Number (MPN)) must combine data collection and submission across their
multiple campuses for the clinical measures for public reporting
purposes. We finalized the policy that, under the HOP QDRP, we will
publish quality data by the corresponding CCN. This approach is
consistent with the approach taken under the RHQDAPU program. In that
final rule with comment period, we also stated that we intend to
indicate instances where data from two or more hospitals are combined
to form the publicly reported measures on the Web site.
We discuss our CY 2010 policy regarding publication of HOP QDRP
data in section XVI.F. of this final rule with comment period.
B. Quality Measures for the CY 2011 Payment Determination
1. Considerations in Expanding and Updating Quality Measures Under the
HOP QDRP
In general, when selecting measures for the HOP QDRP program, we
take into account several considerations and goals. These include: (a)
Expanding the types of measures beyond process of care measures to
include an increased number of outcome measures, efficiency measures,
and patients' experience-of-care measures; (b) expanding the scope of
hospital services to which the measures apply; (c) considering the
burden on hospitals in collecting chart-abstracted data; (d)
harmonizing the measures used in the HOP QDRP program with other CMS
quality programs to align incentives and promote coordinated efforts to
improve quality; (e) seeking to use measures based on alternative
sources of data that do not require chart abstraction or that utilize
data already being reported by many hospitals, such as data that
hospitals report to clinical data registries, or all-payer claims data
bases; and (f) weighing the relevance and utility of the measures
compared to the burden on hospitals in submitting data under the HOP
QDRP program. Specifically, we give priority to quality measures that
assess performance on: (a) Conditions that result in the greatest
mortality and morbidity in the Medicare population; (b) conditions that
are high volume and high cost for the Medicare program; and (c)
conditions for which wide cost and treatment variations have been
reported, despite established clinical guidelines. We have used and
continue to use these criteria to guide our decisions regarding what
measures to add to the HOP QDRP measure set.
Comment: Many commenters indicated that, although CMS is not
required to adopt only measures that are endorsed by NQF, CMS should
continue to rely on NQF evaluations to guide selection of measures, and
to seek NQF approval for measures considered and adopted for the HOP
QDRP in order to maintain consistency in the selection processes for
quality measures across physician and hospital services. Many
commenters indicated that they prefer that measures adopted for HOP
QDRP first go through the rigorous, consensus-based assessment
processes of both the NQF and HQA, and that given the number of NQF-
endorsed and HQA-adopted measures currently available for use, it is
both feasible and practicable for CMS to choose only NQF-endorsed and
HQA-adopted measures. Other commenters indicated that although a
consensus-based process may have been employed by CMS or CMS
contractors to develop measures, it does not equal the rigor or broad
stakeholder input of NQF endorsement and HQA adoption.
Response: Section 1833(t)(17)(C)(i) of the Act requires the
Secretary to ``develop measures that the Secretary determines to be
appropriate for the measurement of the quality of care (including
medication errors) furnished by hospitals in outpatient settings and
that reflect consensus among affected parties and, to the extent
feasible and practicable, shall include measures set forth by one or
more national consensus building entities.'' This provision does not
require that the measures we adopt for the HOP QDRP be endorsed by any
particular entity, and we believe that consensus among affected parties
can be reflected by means other than endorsement by a national
consensus building entity, including consensus achieved during the
measure development process, consensus shown through broad acceptance
and use of measures, and consensus through public comment.
Nevertheless, we have stated on numerous occasions that we prefer to
adopt quality measures that have been endorsed by the NQF because the
NQF uses a formal consensus development process and has been recognized
as a voluntary consensus standards-setting organization as defined by
the National Technology Transfer and Advancement Act of 1995 (NTTAA)
and Office of Management and Budget Circular A 119 (see http://www.qualityforum.org/Measuring_Performance/Consensus_Development_Process.aspx). We are unaware of any other organizations that qualify
as an NTTAA consensus organization for the endorsement of quality
measures. However, when we propose and adopt quality measures, we take
into consideration the measures adopted by the HQA as well as an array
of input from the public. We appreciate HQA's integral efforts to
improve hospital quality of care by supporting CMS' public reporting
programs.
Comment: Some commenters expressed concern regarding the accuracy
of measures that rely solely on administrative (that is, claims) data
and requested that CMS not consider these types of measures in the
future. Several commenters questioned the value of measures based
solely on claims data/administrative data for public reporting and pay-
for-performance in terms of their capacity to improve care delivered to
Medicare beneficiaries.
Response: We do not agree with these commenters' statements. We
believe that claims data/administrative data are an appropriate data
source upon which quality measures selected by the Secretary may be
based. We note that many NQF-endorsed evidence-based quality measures
that have been found appropriate for public reporting and quality
improvement rely upon claims and administrative data as a data source.
Furthermore, the use of claims-based measures reduces reliance upon
chart abstraction and its associated burden for quality measurement.
Comment: Commenters submitted the following suggested measure
selection criteria for the HOP QDRP:
Potential for quality improvement;
Processes measured are related to improved patient
outcomes;
Processes measured occur closer in time to patient
outcomes of interest;
Outcome measures are related to modifiable processes that
affect patient outcomes;
Minimal unintended adverse consequences;
Alignment with national priorities as described in the NQF
NPP project;
Amenable to collection via alternative mechanisms such as
electronic health records (EHRs), registries, and claims;
Harmonizes with measures used for reporting programs in
similar settings;
Attributable to the facility rather than a prescribing
physician;
Data collection should not increase hospital operational
burden; and
Fully tested in a variety of outpatient settings.
[[Page 60633]]
Response: We thank the commenters for these suggestions, and we
note that these suggestions were not submitted in reference to specific
measures. In section XVI.B.1. of this final rule with comment period,
we have set out the criteria that we use to guide our decisions
regarding what measures to add to the HOP QDRP measure set. We
determine the suitability of potential measures using consensus
development processes, including, when appropriate, relying upon the
NQF's voluntary consensus standards in addition to our rulemaking in
determining the suitability of quality measures.
In the CY 2009 OPPS/ASC final rule with comment period, we adopted
four claims-based quality measures that do not require a hospital to
submit chart-abstracted clinical data. This supports our goal of
expanding the measures for the HOP QDRP while minimizing the burden
upon hospitals and, in particular, without significantly increasing the
chart abstraction burden. In addition to claims-based measures, we are
considering registries \1\ and EHRs as alternative ways to collect data
from hospitals. Many hospitals submit data to and participate in
existing registries. In addition, registries often capture outcome
information and provide ongoing quality improvement feedback to
registry participants. Instead of requiring hospitals to submit the
same data to CMS that they are already submitting to registries, we
could collect the data directly from the registries with the permission
of the hospital, thereby enabling us to expand the HOP QDRP measure set
without increasing the burden of data collection for those hospitals
participating in the registries. The data that we would receive from
registries would be used to calculate quality measures required under
the HOP QDRP, and would be publicly reported like other HOP QDRP
quality measures, encouraging improvements in the quality of care. In
the CY 2010 OPPS/ASC proposed rule (74 FR 35397), we invited public
comment on such an approach.
---------------------------------------------------------------------------
\1\ A registry is a collection of clinical data for purposes of
assessing clinical performance, quality of care, and opportunities
for quality improvement.
---------------------------------------------------------------------------
Comment: Many commenters expressed concern about the potential use
of registries as a source of data for the HOP QDRP. Many commenters
indicated that the fees imposed by registries would be prohibitive for
smaller hospitals and rural hospitals. Regarding registry-based data
submission for the HOP QDRP, CMS was urged to do the following:
Develop and test alternatives for hospitals choosing to
submit data directly to CMS in lieu of participating in a registry
(that is, chart abstraction, CART tool);
Determine and articulate a process for validating data
submitted through registries for completeness and accuracy;
Determine and articulate a process to transmit registry-
based data to the national data warehouse in a secure fashion and
without violating HIPAA or other rules;
Explore and determine the willingness and ability of the
ORYX vendors to submit data for those hospitals not participating in a
registry; and
Require standardized, externally verifiable sampling for
the measures.
Response: We are interested in minimizing the burden associated
with quality measurement. If hospitals are participating in registries
and submit the same data to those registries that they would otherwise
have to submit for measures that are part of the HOP QDRP, we believe
that the registry-based data would be an efficient alternative source
from which to collect the data, and that this would prevent the
hospital from having to report the same data twice. Many hospitals are
currently participating in a number of registries that collect data on
quality measures that are topics of interest to us. However, we
acknowledge the commenters' concerns regarding the cost associated with
participation in certain registries that may make this alternative
mechanism for data submission less feasible for some hospitals, and the
need for standardized validation strategies for registry-based data. We
will take these considerations into account when considering registry-
based measure submission options for this and other reporting programs
in the future.
Comment: Some commenters strongly supported the use of registries
as an alternative source of data for the HOP QRDP. These commenters
stated that registries provide a substantial advantage over chart-
abstracted data because registries provide regular feedback reports to
participating hospitals on their performance, further minimize the
reporting burden for physicians and facilities because registry-based
data could be used for more than one reporting program, and aggregate
clinical data from a provider's entire patient population and enable
these data to be analyzed and tracked over time for adherence to
evidence-based medicine and health outcomes. Commenters encouraged CMS
to continue to explore this mechanism and to develop the infrastructure
standards needed to accurately capture such data as soon as
practicable.
Response: We thank these commenters for their encouragement and
will continue to investigate the feasibility of such an approach to the
HOP QDRP and other quality data reporting programs.
Comment: One commenter recommended that CMS request legislative
authority to base payments on pay-for-performance so that a portion of
payments will depend on providers' performance on the selected quality
measures, not simply on whether they report the specified data to CMS.
This commenter also expressed support for CMS' efforts to collect data
on measures of hospital quality as a valuable step toward pay-for-
performance.
Response: We thank the commenter for sharing this suggestion for
future program direction and for supporting current program operations.
In the CY 2009 OPPS/ASC final rule with comment period, we also
stated our intention to explore mechanisms for data submission using
EHRs (73 FR 68769). Establishing such a system will require
interoperability between EHRs and CMS data collection systems,
additional infrastructure development on the part of hospitals and CMS,
and the adoption of standards for the capturing, formatting, and
transmission of data elements that make up the measures. However, once
these activities are accomplished, the adoption of measures that rely
on data obtained directly from EHRs will enable us to expand the HOP
QDRP measure set with less cost and burden to hospitals.
Comment: Some commenters strongly supported the use of EHRs and
other health information technology (IT). These commenters believed
that such technology has the ability to capture, store, and readily
report the types of clinical data not available from medical claims
data, such as diagnostic laboratory test results and prescription drug
dispensing data. Commenters commended CMS for encouraging the
development and adoption of uniform data content and information
technology standards across the health care industry that will support
automated data collection and reporting of clinical data from EHR
systems. These commenters believed that such efforts would streamline
hospital data submission procedures and enable providers to view real-
time measurement results to initiate their own improvement
interventions in a more timely and efficient manner.
[[Page 60634]]
Response: We appreciate these supportive comments regarding EHR-
based data collection as an alternative data source for quality
measures. We agree that EHR-based data submission may provide an
alternative means of submitting quality data that would benefit
hospitals by reducing their chart abstraction burden. We also agree
that such systems may enable providers to implement more timely
improvement efforts. Although we encourage adoption of EHRs, we also
acknowledge the challenges that must be met both by hospitals and CMS
to establish the infrastructure and interoperability necessary to
collect data on quality measures via EHRs. We will continue to work
collaboratively with health IT standard-setting and consensus
development organizations to ensure that quality measures can be
collected in a standardized manner.
Comment: Many commenters were concerned about the ability of EHRs
to accurately capture the data required for meaningful and accurate
quality measures for the HOP QDRP. Commenters indicated that,
currently, all of the necessary information for measuring performance
against essential metrics of quality (such as exclusion and inclusion
criteria and contraindications) is not codified within EHRs, and that
the need for such information will still require medical record review
because the information cannot be adequately found in EHRs. Other
commenters indicated that current products feature inconsistent
communication standards and may pose privacy concerns. Several
commenters indicated that small rural hospitals may not be able to
enhance their health IT infrastructure to support EHR-based reporting.
Several commenters supported one-way transmission of specific data
elements from EHRs, but would not support providing access to the whole
EHR to abstract clinical information for quality measures. Commenters
encouraged CMS to consider postponing new measure implementation for CY
2012 until new measures can be verified to be structured for EHR data
collection, especially given impending challenges of ICD-10
implementation.
Response: We do not agree with the commenters' belief that quality
data produced from EHRs is not likely to accurately capture data
elements needed for quality measurement. The data collected from the
EHR would essentially be the same data that hospitals would otherwise
have to manually abstract from a medical chart. These data are what we
currently use for quality measure reporting. We acknowledge that
additional programming work may be needed in order to enable current
EHR systems to collect and submit quality measure data. We are
currently working with the Healthcare Information Technology Standards
Panel (HITSP), a public-private partnership working to establish health
IT interoperability standards under contract to the HHS Office of the
National Coordinator on Health IT (ONC), to standardize the
specifications of data elements used in several measure sets so that
they may be collected and reported via EHRs. Standardization of the
specifications allows software to convert clinical data of different
types into a form that can be analyzed for quality measurement. We
encourage collaboration among standard-setting organizations and
measure developers on the creation of standards for electronic
collection of data elements for other quality measures as well,
particularly those used in our quality data reporting programs.
With regard to the commenters' concern about having to provide
access to the entire EHR, we would only require that the hospital
provide access to those data elements in the EHRs that are needed to
calculate the measures. We also acknowledge the burden faced by
hospitals in implementing multiple technological changes, including the
ICD-10 coding system. We will carefully consider any additional burden
that may be imposed by adopting additional measures for the HOP QDRP
and will continue to consider other feasible alternatives to data
collection such as registries.
Comment: Several commenters encouraged the collection of all-payer
or multiple-payer claims information in order to calculate measures for
the HOP QDRP as it would provide a more complete picture of care to
consumers. Commenters also encouraged CMS to ensure the validity of any
third party data used in the development or calculation of measures for
public reporting.
Response: We thank the commenters for their encouragement of the
collection of all-payer claims data, and we agree that all-payer claims
data would enable us to provide consumers with more comprehensive
claims-based quality measures that provide a comprehensive picture of
the quality of care provided by a hospital. We currently collect other
all-payer data where feasible for the hospital quality data reporting
programs, and currently this is feasible for chart-abstracted data
elements. It has been our policy to collect all-payer chart-abstracted
data since the inception of both inpatient (RHQDAPU program) and
outpatient (HOP QDRP) quality data reporting. While we currently do not
have the infrastructure in place to accept all-payer claims data, we
intend to work with stakeholders to identify options, processes, and
opportunities to collect all-payer claims data to supplement the
Medicare claims data we currently use in many of our reporting
programs.
Comment: Several commenters indicated that CMS should only concern
itself with obtaining information and outcomes for Medicare
beneficiaries, and should not collect information regarding patients
for whom other payers are responsible.
Response: For the HOP QDRP, section 1833(t)(17)(C)(i) of the Act
requires the Secretary to develop measures appropriate for the
measurement of the quality of care (including medication errors)
furnished by hospitals in outpatient settings. The collection and
publication of quality measures based on all-payer data captures
variations in the care delivered by a hospital to different populations
and payers, and therefore allows us to obtain comprehensive information
regarding the quality of care provided to its beneficiaries. Therefore,
we are collecting all-payer data elements to calculate the chart-
abstracted measures adopted into the HOP QDRP. We wish to eventually
provide a similarly comprehensive picture of the quality of care
provided by HOPDs with respect to the claims-based measures adopted
into the HOP QDRP.
2. Retirement of HOP QDRP Quality Measures
In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule, we proposed a
process for immediate retirement of RHQDAPU program measures based on
evidence that the continued use of the measure as specified raises
patient safety concerns (74 FR 24168). As we explained in that proposed
rule, in situations such as the one prompting immediate retirement of
the AMI-6 measure from the RHQDAPU program in December 2008, we do not
believe that it would be appropriate to wait for the annual rulemaking
cycle to retire a measure. This proposal was later finalized for the
RHQDAPU program in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR
43863). We proposed to adopt this same immediate retirement policy for
the HOP QDRP (74 FR 35397). Specifically, in the CY 2010 OPPS/ASC
proposed rule, we proposed that if we receive evidence that continued
collection of a measure that has been adopted for the HOP QDRP raises
patient safety concerns, we would
[[Page 60635]]
promptly retire the measure and notify hospitals and the public of the
retirement of the measure and the reasons for its retirement through
the usual means by which we communicate with hospitals, including but
not limited to hospital e-mail blasts and the QualityNet Web site. We
also proposed to confirm the retirement of the measure in the next OPPS
rulemaking. In other circumstances, where we do not believe that
continued use of a measure raises specific patient safety concerns, we
stated that we intend to use the regular rulemaking process to retire a
measure.
We invited public comment on this proposal allowing for immediate
retirement of a HOP QDRP measure following evidence of a patient safety
concern followed by confirmation in the next rulemaking cycle.
Comment: Several commenters applauded the proposal to immediately
retire a HOP QDRP measure if CMS receives evidence that the continued
collection of a measure raises patient safety concerns. They encouraged
CMS to establish consistent and transparent processes that address
changes in evidence-based guidelines more quickly and to establish
channels to exchange this type of information between the agency and
measure developers. The commenters also encouraged CMS to retire
measures under the following conditions:
A measure is no longer consistent with current clinical
guidelines;
Another indicator exists that better, or more accurately,
assesses good quality care;
Redundancy of measurement on a given topic or process; and
The burden associated with data collection and reporting a
measure outweighs the benefit of public reporting;
Response: We thank the commenters for their support for the
proposed policy of prompt retirement when potential patient harm could
result from the continued collection of a measure, and are finalizing
our policy in this final rule with comment period. With respect to the
suggestions we received, these criteria reflect examples of conditions
that may warrant retirement via notice and comment rulemaking as
opposed to prompt retirement because continued collection of the
measure does not raise patient safety concerns. Another example of a
nonurgent circumstance where we would use the rulemaking process to
retire a measure would be when a measure is ``topped out.'' While we
did not solicit public comments on criteria for retirement under
circumstances other than potential patient harm, we will consider these
suggestions as we consider whether to propose to retire measures in
nonurgent circumstances.
After consideration of the public comments we received, we are
finalizing our proposal to promptly retire measures under circumstances
in which we receive evidence that continued collection of a measure
that has been adopted for the HOP QDRP raises patient safety concerns,
to notify hospitals and the public of the retirement of the measure and
the reasons for its retirement through the usual means by which we
communicate with hospitals, including, but not limited to, hospital e-
mail blasts and the QualityNet Web site, and to confirm the retirement
of measures retired in this manner in the next rulemaking cycle.
3. HOP QDRP Quality Measures for the CY 2011 Payment Determination
For the CY 2011 payment determination, in the CY 2010 OPPS/ASC
proposed rule (74 FR 35397), we proposed to continue requiring that
hospitals submit data on the existing 11 HOP QDRP measures. These
measures continue to address areas of topical importance regarding the
quality of care provided in HOPDs, and reflect consensus among affected
parties. Seven of these 11 measures are chart-abstracted measures in
two areas of importance that are also measured for the inpatient
setting: AMI care and surgical care. The remaining four measures
address imaging efficiency in HOPDs.
For the CY 2011 payment determination, we proposed not to add any
new HOP QDRP measures. Although we considered adding a number of chart-
abstracted measures, we are sensitive to the burden upon HOPDs
associated with chart abstraction and believe that adopting such
measures at this time would not be consistent with our stated goal to
minimize the collection burden associated with quality measurement. We
will continue to assess whether we can collect data on additional
quality measures through mechanisms other than chart abstraction, such
as from Medicare administrative claims data and EHRs.
We invited public comment on our proposal to retain the existing 11
HOP QDRP measures and to not adopt additional measures for the CY 2011
payment determination.
Comment: Most commenters were pleased that CMS recognizes the
burden that data collection and reporting places on facilities and did
not propose to add new measures to the HOP QDRP measurement set for the
CY 2011 payment determination. In particular, some hospitals indicated
that they have only one staff member performing chart abstraction for
both the inpatient and outpatient quality data reporting programs, and
that the burden of adding measures has a great impact under such
circumstances.
Response: We thank the commenters for expressing their support for
this proposal. We will continue to carefully weigh the burden
associated with adding chart-abstracted measures to quality reporting
programs such as the HOP QDRP against the benefit of adding such
measures in the future.
We also received specific comments, discussed below, on some of the
measures we proposed to retain.
OP-3: Median Time To Transfer to Another Facility for
Acute Coronary Intervention
Comment: One commenter recommended that CMS consider measuring the
overall median time to percutaneous coronary intervention (PCI) in
transferred patients because this captures the entire process of care
and will encourage collaboration between transferring and receiving ST-
segment elevation myocardial infarction (STEMI) centers.
Response: We thank the commenter for this suggestion. The current
measure is meant to be one of accountability for the initial
(transferring) facility rather than for both the transferring and
receiving facility. Therefore, the outpatient measure that is currently
in place (OP-3) focuses on the measurable time of arrival to time of
physical departure from the first hospital, which is an important
component of the total time to reperfusion. A modification to the
measure as suggested would not currently be feasible to implement as it
would require capturing information from medical records at two
separate facilities.
OP-4: Aspirin at Arrival & OP-5: Median Time to ECG
Comment: One commenter recommended that CMS consider excluding
``Chest Pain NEC'' from the list of eligible cases for these two
measures because many of these cases are not ``probable cardiac chest
pain'' as is the intent of the measures. This commenter also
recommended only using the working diagnosis in the ``final
impression,'' rather than working diagnoses used throughout the ED
documentation forms, and recommended excluding patients in observation
status, as patients believed to have ``probable cardiac chest pain'' or
AMI will likely not be kept under observation status. The commenter
believed implementing these
[[Page 60636]]
recommendations will eliminate many cases that these measures did not
intend to capture. Another commenter noted that OP-4 has the potential
to become ``topped out'' as the program matures.
Response: We will consider these suggestions as part of maintenance
of the technical specifications for the measure. We also will evaluate
the performance of OP-4 over time as we do with other measures that
have been adopted for public reporting programs.
Imaging Efficiency Measures Generally
Comment: Several commenters objected to CMS continuing to include
the four imaging efficiency measures in the HOP QDRP. Many of these
commenters objected because none of the four measures have been adopted
by the HQA. Other commenters acknowledged that OP-8 and OP-11 are NQF-
endorsed, and also acknowledged that NQF endorsement is not required,
but recommended that CMS obtain endorsement for OP-9 and OP-10 in order
to establish their credibility. Some commenters opined that the two
non-NQF endorsed Imaging Efficiency measures, OP-9 and OP-10, are
inappropriate for the HOP QDRP and could cause patient harm. One
commenter cautioned that, because the protocols for reporting contrast
media on claims have varied over the years, CMS should be aware that
the use of contrast media may not be reliably documented in claims.
Response: Many of the concerns raised by the commenters about the
imaging efficiency measures were also raised at the time the imaging
measures were proposed. We responded to these concerns when we adopted
the measures (74 FR 68762 through 68766). We stated that the measures
meet the statutory definition of reflecting consensus among affected
parties through their consensus-based development, and that the
measures address important patient safety concerns related to exposure
to unnecessary radiation and contrast materials. We also stated that
the Secretary is not required to limit measures considered for
selection to only those adopted by the HQA or to those that have been
NQF-endorsed. We anticipate submitting OP-9 and OP-10 for NQF
endorsement, along with national performance information and other
supporting information, when an appropriate call for measures occurs.
We note the cautionary advice regarding the varying requirements for
reporting contrast media on claims. However, the OP-10 and OP-11
measures rely on procedure codes rather than on specific material codes
to determine whether a with-contrast procedure or without-contrast
procedure was performed. In other words, these measures only consider
whether contrast media was appropriately used during diagnostic imaging
procedures, regardless of type.
OP-8: MRI Lumbar Spine for Low Back Pain
Comment: Some commenters indicated that complete details of a
patient treatment plan and history such as conservative therapy for the
previous 60 days would often be unavailable to an imaging provider or
outpatient center. Other commenters indicated that this measure would
be appropriate for the PQRI program.
Response: While a HOPD may not have complete information about a
patient's treatment plan and history, such as conservative therapy,
HOPDs are in a position to consult and directly communicate with
ordering physicians and the radiologists employed by the HOPD. HOPDs
can also educate hospital medical staff and community physicians on the
appropriate use of MRI for low back pain. We thank the commenters for
suggesting that OP-8 may be appropriate for the PQRI program, and will
consider this suggestion. We agree that the basis for the measure may
be appropriately applied at the ordering physician level. However, we
note that the measure has been endorsed by the NQF as appropriate for
facility-level measurement.
OP-9: Mammography Follow-up Rates
Comment: Some commenters objected to this measure because they
believed that there is a lack of consensus as to what the appropriate
recall rate should be, and that there is no established link between
providers' recall rates and patient outcomes. Many commenters expressed
concern that the measure implies that high follow-up rates are
undesirable, leading to decreased access to these tests, and an
increase in undiagnosed early cases of cancer. Other commenters
supported this measure, stating that mammography is a life saving tool
that is currently underutilized. In addition, some commenters suggested
revisions that they believed would improve the current measure. These
suggestions include:
Extending the call back period to 3 months to allow
adequate time for a patient to return;
Counting breast MRI within 3 months of a screening
examination as a call back;
Revising the measure to be a proportion of screening
mammograms interpreted as positive, or where the radiologist has
recommended further evaluation.
Response: We do not believe that HOPDs should refuse access to
mammograms when appropriate follow-up study is needed. We also do not
believe that the measure encourages HOPDs to do so. The measure allows
identification of facilities with abnormally high rates of ``call-
backs'' from indeterminate or inadequate screening studies. We will
evaluate the commenters' suggestions for improvements to the measure
specifications as part of the maintenance process for the measure.
OP-10: Abdomen CT--Use of Contrast Material
Comment: Some commenters indicated that there is a lack of evidence
in the literature to determine the appropriate use of contrast material
for these patients, and, thus, there is no accepted best practice. In
addition, some commenters asserted that, because the measure contains a
number of patient exclusions, the applicable patient population is
unclear. Other commenters approved of the decision to exclude renal
disease patients from this measure.
Response: We have incorporated existing clinical guidelines for
appropriate use of combined imaging studies (with and without contrast)
into the imaging efficiency measures. Nevertheless, imaging efficiency
measures are not intended to define absolutes and should not be
interpreted to mean that combined studies would never be considered
appropriate. We believe that the measures will promote more careful
consideration in individual cases as to whether, in the particular
circumstance, a combined study is necessary and thus enhance the
efficient use of combined studies. We also anticipate that the
variation that exists will lessen and approaches to the use of combined
studies will become more standardized.
By implementing the denominator exclusions, we seek to more clearly
define the applicable patient population for the quality measure. We
thank the commenters that supported the exclusion of renal disease
patients from the denominator of this measure.
OP-11: Thorax CT--Use of Contrast Material
Comment: One commenter objected to the inclusion of this measure,
stating that current guidelines indicate that it is acceptable to
perform a with-contrast
[[Page 60637]]
study followed by a without-contrast study as clinically indicated.
Response: We agree that, if clinically indicated, such dual studies
are appropriate. As with the OP-10 measure, the intent of the OP-11
measure is not to reduce the use of contrast studies or dual studies to
zero, but to identify facilities utilizing dual study protocols in the
majority of cases when not clinically appropriate.
After consideration of the public comments we received, we have
decided to adopt as final our proposal to retain the existing 11 HOP
QDRP measures without adding new measures to the measure set for the CY
2011 payment determination. The measure set that will be used for the
CY 2011 payment determination is displayed below.
HOP QDRP Measurement Set To Be Used for the CY 2011 Payment
Determination
------------------------------------------------------------------------
-------------------------------------------------------------------------
OP-1: Median Time to Fibrinolysis
OP-2: Fibrinolytic Therapy Received Within 30 Minutes
OP-3: Median Time to Transfer to Another Facility for Acute Coronary
Intervention
OP-4: Aspirin at Arrival
OP-5: Median Time to ECG
OP-6: Timing of Antibiotic Prophylaxis
OP-7: Prophylactic Antibiotic Selection for Surgical Patients
OP-8: MRI Lumbar Spine for Low Back Pain
OP-9: Mammography Follow-up Rates
OP-10: Abdomen CT--Use of Contrast Material
OP-11: Thorax CT--Use of Contrast Material
------------------------------------------------------------------------
C. Possible Quality Measures Under Consideration for CY 2012 and
Subsequent Years
In previous years' rulemakings, we have provided lists of quality
measures that are under consideration for future adoption into the HOP
QRDP measurement set. In the CY 2010 OPPS/ASC proposed rule (74 FR
35398), we set out a list of measures under consideration for the CY
2012 payment determination and subsequent years. That list is displayed
below.
Quality Measures Under Consideration for CY 2012 and Subsequent Years' Payment Determinations
----------------------------------------------------------------------------------------------------------------
Topic No. Measure Potential data sources
----------------------------------------------------------------------------------------------------------------
Cancer............................... 1 Adjuvant Chemotherapy Is Considered or Registry.
Administered Within 4 Months of
Surgery to Patients Under Age 80 With
AJCC III Colon Cancer.
The measure specifications are similar
to PQRI 72 found at the PQRI
manual Web site: http://www.cms.hhs.gov/apps/ama/license.asp?file=/PQRI/downloads/2009PQRIQualityMeasureSpecificationsManualandReleaseNotes.zip.
==========
2 Adjuvant Hormonal Therapy for Patients Claims, Registry.
with Breast Cancer.
....... The measure specifications are similar
to PQRI 71 found at the PQRI
manual Web site: http://www.cms.hhs.gov/apps/ama/license.asp?file=/PQRI/downloads/2009PQRIQualityMeasureSpecificationsManualandReleaseNotes.zip.
==========
3 Needle Biopsy To Establish Diagnosis of Claims, Registry.
Cancer Precedes Surgical Excision/
Resection.
....... The measure specifications can be found
at: http://www.qualityforum.org/pdf/reports/Cancer_Nonmember_Report.pdf.
======================================
ED Throughput........................ 4 Median Time From ED Arrival to ED Chart, EHR.
Departure for Discharged ED Patients.
....... The measure specifications can be found
at http://www.qualitynet.org/ in
Appendix P of the specifications
manual under Hospital--Outpatient.
======================================
Diabetes............................. 5 Low Density Lipoprotein Control in Type Claims, EHR.
1 or 2 Diabetes Mellitus.
....... The measure specifications are similar
to PQRI 2 found at the PQRI
manual Web site: http://www.cms.hhs.gov/apps/ama/license.asp?file=/PQRI/downloads/2009PQRIQualityMeasureSpecificationsManualandReleaseNotes.zip.
--------------------------------------------------========================
6 Urine protein screening or medical Claims, EHR.
attention for nephrology during at
least one office visit within last
year for patient with diabetes
mellitus.
The measure specifications are similar
to PQRI 119 found at the
PQRI manual Web site: http://www.cms.hhs.gov/apps/ama/license.asp?file=/PQRI/downloads/2009PQRIQualityMeasureSpecificationsManualandReleaseNotes.zip p.
==========
7 Eligible diabetes patients with Claims, EHR.
documentation of an eye exam or
referral for an eye exam within the
last 24 months.
[[Page 60638]]
....... The measure specifications are similar
to PQRI 117 found at the
PQRI manual Web site: http://www.cms.hhs.gov/apps/ama/license.asp?file=/PQRI/downloads/2009PQRIQualityMeasureSpecificationsManualandReleaseNotes.zip p.
--------------------------------------------------========================
8 Patients who received at least one Claims, EHR.
complete foot exam (visual inspection,
sensory examination with monofilament
and pulse exam within the last 12
months.
....... The measure specifications are similar
to PQRI 126 found at the
PQRI manual Web site: http://www.cms.hhs.gov/apps/ama/license.asp?file=/PQRI/downloads/2009PQRIQualityMeasureSpecificationsManualandReleaseNotes.zip p.
======================================
Medication Reconciliation............ 9 Medication Reconciliation.............. Claims, EHR.
The measure specifications are similar
to PQRI 46 found at the PQRI
manual Web site: http://www.cms.hhs.gov/apps/ama/license.asp?file=/PQRI/downloads/2009PQRIQualityMeasureSpecificationsManualandReleaseNotes.zip.
======================================
Immunization......................... 10 Pneumococcal Vaccination Status-- Chart, EHR.
Overall Rate.
....... The measure specifications are
available at http://www.qualityforum.org/pdf/reports/Immunization/4%2029%20Immunizations_Nonmembers.pdf.
11 Influenza Vaccination Status--Overall Chart, EHR.
Rate.
....... The measure specifications are
available at http://www.qualityforum.org/pdf/reports/Immunization/4%2029%20Immunizations_Nonmembers.pdf.
======================================
Imaging Efficiency................... 12 SPECT MPI and Stress Echocardiography Claims.
for Preoperative Evaluation for Low-
Risk Non-Cardiac Surgery Risk
Assessment.
....... The measure specifications can be found
at http://www.imagingmeasures.com/.
==========
13 Use of Stress Echocardiography or SPECT Claims.
MPI Post-Revascularization Coronary
Artery Bypass Graft.
....... The measure specifications can be found
at http://www.imagingmeasures.com/.
--------------------------------------------------========================
14 Use of Computed Tomography in Emergency Claims.
Department for Headache.
....... The measure specifications can be found
at http://www.imagingmeasures.com/.
--------------------------------------------------========================
15 Simultaneous Use of Brain Computed Claims.
Tomography and Sinus Computed
Tomography.
....... The measure specifications can be found
at http://www.imagingmeasures.com/.
======================================
Surgery.............................. 16 Appropriate surgical site hair removal. Chart, EHR.
....... The measure specifications are similar
to Surgical Care Improvement Project
Infection (SCIP)-6 which can be found
at http://www.qualitynet.org/ under
Hospital--Inpatient.
----------------------------------------------------------------------------------------------------------------
We invited public comment on these quality measures and topics that
we may consider proposing to adopt beginning with the CY 2012 payment
determination. We also sought suggestions and rationales to support the
adoption of measures and topics for the HOP QDRP which do not appear in
the table above.
Cancer (Potential Measures 1, 2, and 3)
Comment: A number of commenters supported the cancer measures
because: (1) They align with national priorities and CMS priority
condition areas; (2) they provide insight into an area of care that is
very relevant to the consumer; and (3) the measure set seems to address
health care provided across settings. One commenter indicated that CMS
should more clearly state whether CMS or the HOPD will collect
information on chemotherapy within the 4-month timeframe stated in the
measure, and how this information will be collected. Some commenters
stated that, because some of the cancer measures are registry-based
measures, the added costs of implementing measures that require paying
a fee to a nongovernmental entity would hinder small rural hospitals
from being able to report data. Other commenters indicated that a
process for validating registry-based data should be proposed prior to
implementing quality measures based on registry data.
Response: We agree with the commenters who supported the cancer
measures. We acknowledge that receiving data from registries presents
additional issues, but believe that in circumstances where substantial
timeframes are involved, registries may
[[Page 60639]]
provide the best data collection mechanism. We will take these comments
into consideration in deciding whether to propose these measures in the
future for the HOP QDRP, and would specify the form and manner for data
submission required should we, in the future, adopt these measures.
Emergency Department Throughput (Potential Measure 4)
Comment: A few commenters expressed strong support for the ED
throughput Measure 4 (Median Time from ED Arrival to ED Departure for
Discharged ED Patients) and recommended its inclusion in the HOP QDRP.
Some commenters stated that a measure assessing delays in patient care
is important as providers experience a growth in demand for ED
services. Commenters saw the measure as making significant
contributions to reducing overcrowding, and in turn increasing the
quality of care delivered, particularly when public reporting occurs.
Response: We thank these commenters for their supportive
statements. We agree with the commenters that this measure addresses
the issue of timely emergency department care and delays which have an
adverse impact on quality of care due to overcrowding.
Comment: One commenter indicated that the ED throughput measure is
overly burdensome for hospitals to collect as it will require an
arrival time to be noted for each patient, whether the patient is on
observation, and will require sampling over 300 records per quarter.
Other commenters indicated that, as currently structured, the measure
includes the time spent receiving care in the ED in addition to the
time spent waiting in the ED. These commenters indicated that the time
spent receiving care in the ED should not be counted against the
hospital, as it does not represent a delay in care. The commenters
stated that, for patients discharged back into the community, and not
admitted or transferred to another facility, there is no wait time in
the ED after the patient has received the appropriate care. The
commenters noted that, for these patients, any time spent waiting in
the ED occurs before they see a provider. The commenters suggested that
CMS modify the measure so that it reflects only the time spent waiting
in the ED to see a provider. One commenter questioned whether the
measure actually measures quality because fast care is not necessarily
better care. Another commenter indicated that it could not locate the
specifications for this measure.
Response: We do not agree that the measure, as currently specified,
would be overly burdensome to collect, because hospitals routinely
collect the key information needed to calculate the median time (ED
arrival date and time and ED departure date and time) for each
emergency department patient. The current measure is an NQF-endorsed
measure of quality, and feasibility of collection was among the
considerations for its endorsement. Revising the measure in the manner
suggested by the commenters to exclude active treatment times would be
impractical, as it would impose a severe burden for hospitals to
accurately track and collect the time spent in the ED not receiving
care. We do not agree with the comment that prolonged ED throughput is
solely due to time elapsed between arrival and first contact with a
provider. The measure specifications are currently available in
Appendix P of the HOPD Specifications Manual (versions 2.1b and 3.0)
which is posted on the QualityNet Web site (http://www.qualitynet.org/
).
Diabetes (Potential Measures 5, 6, 7, and 8)
Comment: A few commenters indicated that they believed the three
diabetes measures would be better suited to measure the quality of care
in physician offices or physician-based clinics rather than in HOPDs.
Other commenters indicated that, if finalized, CMS should consider HOPD
participation in a disease management registry, or recognition and/or
certification in disease management, as substitutes for the requirement
of submitting diabetes-related quality measures to the CMS for the HOP
QDRP. One commenter indicated that, for the LDL Control measure, CMS
should account for the fact that some patients may not reach the goal
but their risk may be mitigated by high HDL. One commenter indicated
that the timeframe for the eye examination should be 24 months if there
is no retinopathy and 12 months if retinopathy is known to be present.
Response: We agree on the suitability of such measures for the
physician office setting and note that these measures are currently
part of the PQRI program. We would anticipate that these measures would
be appropriate for reporting by those HOPDs that function as a primary
care provider. We would not view participation in a registry or disease
management program certification/recognition as a substitute for
reporting quality measures for the HOP QDRP because it would not allow
us to achieve the goal of providing comparative quality information on
HOPDs to Medicare beneficiaries. These measures are currently being
specified for the HOPD setting, and we will consider the suggestions
for enhancements submitted by commenters.
Medication Reconciliation (Potential Measure 9)
Comment: A few commenters supported the medication reconciliation
measure but urged CMS to clarify its expectation of medication
reconciliation in the ED. Some commenters indicated that, although
medication reconciliation measures were recently NQF-endorsed,
implementing a quality measure in multiple outpatient settings may
result in more medication errors, and recommended that the measure be
implemented in primary care settings.
Response: We are interested in medication reconciliation in all
settings of care because medication errors may result in serious
avoidable complications, and receiving the appropriate medications
throughout the continuum of care may prevent the onset or worsening of
serious medical conditions. Thus, the reduction of medication errors
would contribute to overall improvements in patient outcomes and
quality of life and would reduce mortality and hospital readmissions.
We would expect that, prior to administration of or prescription of
drugs in an ED setting, a patient's current medications, drug
allergies, current acute condition, and chronic conditions would be
assessed to the extent possible in order to prevent adverse drug-drug
interactions and drug-disease interactions. We will take these comments
into consideration in determining whether to propose this measure for
the HOP QDRP in the future.
Immunization (Potential Measures 10 and 11)
Comment: One commenter stated that the influenza and pneumococcal
vaccination measures will contribute to ED overcrowding, and that the
measures are not appropriate for the HOPD setting as administering
influenza and pneumococcal vaccinations are not part of routine
emergency care protocols like administering a tetanus vaccine would be
for wound care. The commenter believed that the measures will work
against the ED throughput measures and would be more appropriate for
physician offices and community public health departments.
[[Page 60640]]
Response: These measures are currently being specified for HOPDs
and are not intended for EDs. These measures are intended to apply to
the facility under circumstances where the HOPD serves as a primary
care provider. We will consider these comments in deciding whether to
propose this measure for the HOP QDRP.
Imaging Efficiency--SPECT MPI and Stress Echocardiography
(Potential Measures 12 and 13)
Comment: Some commenters indicated that the two measures on SPECT
MPI and Stress Echocardiography should not be considered for the
following reasons:
Lack of benchmarks;
Preoperative or postoperative period difficult for
provider of test to track;
Lack of medical history makes it difficult for a provider
to determine if a test is appropriate for a patient;
Not clear how the purpose of test (preoperative
evaluation) is captured in Medicare claims; and
Medicare claims provide an incomplete picture of facility
performance.
In addition, for Measure 13 (Use of Stress Echocardiography or
SPECT MPI Post-Revascularization Coronary Artery Bypass Graft (CABG)),
the commenters indicated that the measure's long time span of a 5-year
period post-CABG hinders its usability as the information will be
unavailable for a number of years and will be irrelevant by the time it
becomes available.
Response: These measures are currently under development, and we
will take these comments into consideration as the measures are
developed further.
Comment: Some commenters applauded CMS' effort to obtain consensus
among affected parties as evidenced by hosting of a public comment
period during the measure development process, and supported Measure 12
(SPECT MPI and Stress Echocardiography for Preoperative Evaluation of
Low Risk Non-Cardiac Surgery) and Measure 13. However, these commenters
also recommended stratification of the measures by imaging procedure.
Response: We appreciate the supportive comments regarding our
consensus-based measure development process. We will consider these
suggestions for these measures as we continue measure development.
Imaging Efficiency--Computed Tomography (Potential Measures 14
and 15)
Comment: For both measures, several commenters indicated that the
measures target important areas where overuse of diagnostic imaging may
be detrimental to patient care, and the measures appear valid and
usable. However, the commenters believed that because the measures are
based on Medicare claims, they would provide an incomplete picture of
facility performance. One commenter suggested excluding ``sign of
meningeal irritation (stiff neck)'' from Measure 14 (Use of Computed
Tomography in Emergency Department for Headache).
Response: Both of these measures are under development, and both
address overutilization of CT scans in the outpatient setting which
have implications for patient safety due to radiation exposure. The
goal of these measures is not to reduce outpatient diagnostic CT
imaging in these circumstances to zero, but to encourage its use only
in circumstances where it is clinically indicated. Though all-payer
claims are not currently included in these measures, due to the high
volume of these services in the Medicare population relative to other
populations, we believe that calculation of these measures based on
Medicare claims only will target performance improvement where it is
most needed: in the population that is at high risk for inappropriate
imaging studies. We appreciate the supportive comments, and will
consider these suggestions in the continuing development of these
measures.
Surgery (Potential Measure 16)
Comment: Some commenters indicated that Measure 16 (Appropriate
surgical site hair removal) is an unnecessary measure, as performance
on the measure in the inpatient setting is already in the high 90
percent range for the Nation. One commenter also indicated that SCIP
officials may retire the measure because it is ``topped out'' and no
longer distinguishes between high performers and low performers. Other
commenters suggested that CMS not use this measure for quality
reporting or, at the very least, exclude cases for which there is no
supporting evidence that the use of razors results in lesser quality of
care, and cases in which razors would prevent wound bandages from
falling off, thus decreasing the chance of infection.
Response: While hospitals may perform highly on this measure in the
inpatient setting, we currently do not know if this is the case for the
outpatient setting. We will take these comments into consideration in
determining whether to propose this measure for the HOP QDRP in the
future.
Other Suggested Measures or Measurement Areas
Comment: Commenters suggested several measures or measurement areas
for CMS to consider for future development and adoption. The
suggestions include:
Heart Failure: ACE or ARB for LVSD (NQF 0137);
Pneumonia: Empiric antibiotic for CAP (NQF 0096);
Diabetes: Hemoglobin A1c poor control in type 1 or 2
diabetes mellitus (NQF 0059);
Outcome-based measures;
Radiation therapy administered within 1 year of diagnosis
for women under 70 receiving breast conserving surgery for breast
cancer;
Patient centeredness;
Total lipid treatment;
ED throughput;
Orthopedic procedures;
Diagnostic Mammography Positive Predictive Value;
Screening Mammography Positive Predictive Value;
Cancer Detection Rate (CDR);
Abnormal Interpretation Rate;
Emergency Department AMI mortality;
Emergency Department-related nonmortality outcome measures
(that is, NQF Sepsis measures);
Overall cardiac care;
Use and overuse of Cardiac CT;
Percutaneous Cardiac Interventions (``PCI'');
Care transitions/care coordination;
AMI-2: Aspirin prescribed at discharge;
AMI-5: Beta Blocker prescribed at discharge;
HF-1: Discharge instructions;
PN-3b: Blood culture performed before first antibiotic
received in hospital;
COPD management;
NQF-endorsed ASC quality measures;
Rate of surgical infections in outpatient surgery centers;
and
Rate of infection outbreaks related to contaminated
scopes, syringes, and other medical equipment.
Response: We thank the commenters for these suggestions for quality
measures and measurement areas for the HOP QDRP, and we will consider
them for the future. Some of the topics are reflected in the current
list of measures and topics for future consideration.
[[Page 60641]]
Some of the specific measures suggested were considered in the past for
the HOP QDRP but, upon evaluation, were either found not to be
appropriate measures for HOPD services or were found to be overly
burdensome. Other measures and measure topics on this list are
currently under consideration as future areas of measurement for
inpatient quality measure reporting, and we will examine the
appropriateness of these measures for the HOP QDRP as well.
D. Payment Reduction for Hospitals That Fail To Meet the HOP QDRP
Requirements for the CY 2010 Payment Update
1. Background
Section 1833(t)(17)(A) of the Act, which applies to hospitals as
defined under section 1886(d)(1)(B) of the Act, requires that hospitals
that fail to report data required for the quality measures selected by
the Secretary, in the form and manner required by the Secretary under
section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point
reduction to their OPD fee schedule increase factor, that is, the
annual payment update factor. Section 1833(t)(17)(A)(ii) of the Act
specifies that any reduction would apply only to the payment year
involved and would not be taken into account in computing the
applicable OPD fee schedule increase factor for a subsequent payment
year.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68769
through 68772), we discussed how the payment reduction for failure to
meet the administrative, data collection, and data submission
requirements of the HOP QDRP affected the CY 2009 payment update
applicable to OPPS payments for HOPD services furnished by the
hospitals defined under section 1886(d)(1)(B) of the Act to which the
program applies. The application of a reduced OPD fee schedule increase
factor results in reduced national unadjusted payment rates that apply
to certain outpatient items and services provided by hospitals that are
required to report outpatient quality data and that fail to meet the
HOP QDRP requirements. All other hospitals paid under the OPPS receive
the full OPPS payment update without the reduction.
The national unadjusted payment rates for many services paid under
the OPPS equal the product of the OPPS conversion factor and the scaled
relative weight for the APC to which the service is assigned. The OPPS
conversion factor, which is updated annually by the OPD fee schedule
increase factor, is used to calculate the OPPS payment rate for
services with the following status indicators (listed in Addendum B to
this final rule with comment period): ``P,'' ``Q1,'' ``Q2,'' ``Q3,''
``R,'' ``S,'' ``T,'' ``V,'' ``U,'' or ``X.'' In the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68770), we adopted a policy that
payment for all services assigned these status indicators would be
subject to the reduction of the national unadjusted payment rates for
applicable hospitals, with the exception of services assigned to New
Technology APCs, assigned status indicator ``S'' or ``T,'' and
brachytherapy sources, assigned status indicator ``U,'' which were paid
at charges adjusted to cost in CY 2009. We excluded services assigned
to New Technology APCs from the list of services subject to the reduced
national unadjusted payment rates because the OPD fee schedule increase
factor is not used to update the payment rates for these APCs.
In addition, section 1833(t)(16)(C) of the Act, as amended by
section 142 of Public Law 110-275, specifically required that
brachytherapy sources be paid during CY 2009 on the basis of charges
adjusted to cost, rather than under the standard OPPS methodology.
Therefore, the reduced conversion factor also was not applicable to CY
2009 payment for brachytherapy sources because payment would not be
based on the OPPS conversion factor and, consequently, the payment
rates for these services were not updated by the OPD fee schedule
increase factor. However, in accordance with section 1833(t)(16)(C) of
the Act, as amended by section 142 of Public Law 110-275, payment for
brachytherapy sources at charges adjusted to cost is set to expire on
January 1, 2010. For CY 2010, in the CY 2010 OPPS/ASC proposed rule (74
FR 35399), we proposed to pay prospectively for brachytherapy sources.
Therefore, we proposed that the CY 2010 payment for brachytherapy
sources would be based on the conversion factor and the quality
reporting reduction policy would be applicable to brachytherapy
sources, which are assigned status indicator ``U.''
We did not receive any public comments on our proposal to apply the
reporting reduction to payment for brachytherapy sources, effective for
services furnished on and after January 1, 2010. Therefore, we are
finalizing our CY 2010 proposal, without modification, to apply the
reduction to payment for brachytherapy sources to hospitals that fail
to meet the quality data reporting requirements of the HOP QDRP for the
CY 2010 OPD fee schedule increase factor.
The OPD fee schedule increase factor, or market basket update, is
an input into the OPPS conversion factor, which is used to calculate
OPPS payment rates. To implement the requirement to reduce the market
basket update for hospitals that fail to meet reporting requirements,
in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68770
through 68771), we calculated two conversion factors: a full market
basket conversion factor (that is, the full conversion factor), and a
reduced market basket conversion factor (that is, the reduced
conversion factor). We then calculated a reduction ratio by dividing
the reduced conversion factor by the full conversion factor. We refer
to this reduction ratio as the ``reporting ratio'' to indicate that it
applies to payment for hospitals that fail to meet their reporting
requirements. Applying this reporting ratio to the OPPS payment amounts
results in reduced national unadjusted payment rates that are
mathematically equivalent to the reduced national unadjusted payment
rates that would result if we multiplied the scaled OPPS relative
weights by the reduced conversion factor. To determine the reduced
national unadjusted payment rates that applied to hospitals that failed
to meet their quality reporting requirements for the CY 2009 OPPS, we
multiplied the final full national unadjusted payment rate in Addendum
B to the CY 2009 OPPS/ASC final rule with comment period by the CY 2009
OPPS final reporting ratio of 0.981 (73 FR 68771).
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68771
through 68772), we established a policy that the Medicare beneficiary's
minimum unadjusted copayment and national unadjusted copayment for a
service to which a reduced national unadjusted payment rate applies
would each equal the product of the reporting ratio and the national
unadjusted copayment or the minimum unadjusted copayment, as
applicable, for the service. We applied the reporting ratio to both the
minimum unadjusted copayment and national unadjusted copayment for
those hospitals that received the payment reduction for failure to meet
the HOP QDRP reporting requirements. This application of the reporting
ratio to the national unadjusted and minimum unadjusted copayments was
calculated according to Sec. 419.41 of the regulations, prior to any
adjustment for hospitals' failure to meet the quality reporting
standards according to Sec. 419.43(h). Beneficiaries and secondary
payers thereby share in the reduction of payments to these hospitals.
In the CY 2009 OPPS/ASC final rule with comment period (73 FR
68772), we
[[Page 60642]]
established the policy that all other applicable adjustments to the
OPPS national unadjusted payment rates apply in those cases when the
OPD fee schedule increase factor is reduced for hospitals that fail to
meet the requirements of the HOP QDRP. For example, the following
standard adjustments apply to the reduced national unadjusted payment
rates: the wage index adjustment; the multiple procedure adjustment;
the interrupted procedure adjustment; the rural sole community hospital
adjustment; and the adjustment for devices furnished with full or
partial credit or without cost. We believe that these adjustments
continue to be equally applicable to payments for hospitals that do not
meet the HOP QDRP requirements. Similarly, outlier payments will
continue to be made when the criteria are met. For hospitals that fail
to meet the quality data reporting requirements, the hospitals' costs
are compared to the reduced payments for purposes of outlier
eligibility and payment calculation. This policy conforms to current
practice under the IPPS. For a complete discussion of the OPPS outlier
calculation and eligibility criteria, we refer readers to section II.F.
of this CY 2010 OPPS/ASC final rule with comment period.
2. Reporting Ratio Application and Associated Adjustment Policy for CY
2010
In the CY 2010 OPPS/ASC proposed rule (74 FR 35400), we proposed to
continue our established policy of applying the reduction of the OPD
fee schedule increase factor through the use of a reporting ratio for
those hospitals that fail to meet the HOP QDRP requirements for the
full CY 2010 annual payment update factor. For the CY 2010 OPPS, the
proposed reporting ratio was 0.980, calculated by dividing the reduced
conversion factor of $66.118 by the full conversion factor of $67.439.
The final CY 2010 OPPS reporting ratio is 0.980, calculated by dividing
the reduced conversion factor of $66.086 by the full conversion factor
of $67.406. We proposed to continue to apply the reporting ratio to all
services calculated using the OPPS conversion factor. For the CY 2010
OPPS, we proposed to apply the reporting ratio, when applicable, to all
HCPCS codes to which we have assigned status indicators ``P,'' ``Q1,''
``Q2,'' ``Q3,'' ``R,'' ``S,'' ``T,'' ``V,'' or ``X'' and, effective for
services furnished on or after January 1, 2010, to also apply it to the
HCPCS codes for brachytherapy sources, to which we have assigned status
indicator ``U.'' Under our established policy, we would continue to
exclude services paid under New Technology APCs. We proposed to
continue to apply the reporting ratio to the national unadjusted
payment rates and the minimum unadjusted and national unadjusted
copayment rates of all applicable services for those hospitals that
fail to meet the HOP QDRP reporting requirements. We also proposed to
continue to apply all other applicable standard adjustments to the OPPS
national unadjusted payment rates for hospitals that fail to meet the
requirements of the HOP QDRP. Similarly, we proposed to continue to
calculate OPPS outlier eligibility and outlier payment based on the
reduced payment rates for those hospitals that fail to meet the
reporting requirements.
We did not receive any public comments on our CY 2010 proposal to
apply the HOP QDRP reduction in the manner described in the paragraph
above and, therefore, are finalizing our proposal, without
modification. For the CY 2010 OPPS, we are applying a reporting ratio
of 0.980 to the national unadjusted payments, minimum unadjusted
copayments, and national unadjusted copayments for all applicable
services reported by those hospitals failing to meet the HOP QDRP
reporting requirements. This reporting ratio applies to lines with
HCPCS codes assigned status indicators ``P,'' ``Q1,'' ``Q2,'' ``Q3,''
``R,'' ``S,'' ``T,'' ``U,'' ``V,'' or ``X,'' excluding services paid
under New Technology APCs. All other applicable standard adjustments to
the OPPS national unadjusted payment rates will continue to apply. This
includes the OPPS outlier eligibility and payment calculations, which
are determined using the reduced payment rates.
E. Requirements for HOPD Quality Data Reporting for CY 2011 and
Subsequent Years
In order to participate in the HOP QDRP, hospitals must meet
administrative, data collection and submission, and data validation
requirements (if applicable). Hospitals that do not meet the
requirements of the HOP QDRP, as well as hospitals not participating in
the program and hospitals that withdraw from the program, will not
receive the full OPPS payment rate update. Instead, in accordance with
section 1833(t)(17)(A) of the Act, those hospitals will receive a
reduction of 2.0 percentage points in their updates for the applicable
payment year.
For payment determinations affecting the CY 2011 payment update, in
the CY 2010 OPPS/ASC proposed rule (74 FR 35400), we proposed to
implement the requirements listed below. Most of these requirements are
the same as the requirements we implemented for the CY 2010 payment
determination, with some proposed modifications.
1. Administrative Requirements
To participate in the HOP QDRP, several administrative steps must
be completed. These steps require the hospital to:
Identify a QualityNet administrator who follows the
registration process located on the QualityNet Web site (http://www.QualityNet.org) and submits the information to the appropriate CMS-
designated contractor. All CMS-designated contractors will be
identified on the QualityNet Web site. The same person may be the
QualityNet administrator for both the RHQDAPU program and the HOP QDRP.
From our experience, we believe that the QualityNet administrator
typically fulfills a variety of tasks related to the hospital's ability
to participate in the HOP QDRP, such as: creating, approving, editing
and/or terminating QualityNet user accounts within the organization;
monitoring QualityNet usage to maintain proper security and
confidentiality measures; and serving as a point of contact for
information regarding QualityNet and the HOP QDRP.
In the past, we have required not only that the hospital designate
a QualityNet administrator for purposes of registering the hospital to
participate in the HOP QDRP, but also that the hospital continually
maintain a QualityNet administrator for as long as the hospital
participates in the program. We have become aware that the required
maintenance of the QualityNet administrator is creating an undue
technical burden for some hospitals and that, in some cases, is
preventing the hospital from meeting all of the HOP QDRP requirements.
Therefore, we proposed to no longer require that a hospital maintain
current designation of a QualityNet administrator. We invited public
comment on this proposed change. Nevertheless, we strongly urged
hospitals to maintain current designation of a QualityNet
administrator, regardless of whether the hospital submits data directly
to the CMS-designated contractor or uses a vendor for transmission of
data.
Comment: Many commenters agreed with CMS' proposal to remove the
requirement to maintain current designation of a QualityNet
administrator. Some of these commenters expressed their belief that it
is in a hospital's best interest to
[[Page 60643]]
maintain a QualityNet administrator if possible. One commenter greatly
appreciated the proposal to no longer require hospitals to maintain a
QualityNet administrator to oversee the collection of HOP QDRP data
because of the undue technical burden, particularly for hospitals in
rural areas. This commenter believed that giving hospitals the option
will lead to better quality data collection by lessening this burden on
certain rural hospitals.
Response: We thank these commenters for their support; we agree
that removing this program requirement will relieve a technical burden
especially for some small or rural hospitals. However, due to
information systems security requirements, we have now determined that
we are prohibited from removing the requirement for a QualityNet
Security Administrator at this time. We remind hospitals that are
submitting their own data without the use of a vendor that the hospital
must have at least one active QualityNet account with the appropriate
role assigned in order to submit data. We note that those hospitals
with QualityNet accounts (Security Administrator and non-Security
Administrator) that are in danger of lapsing receive multiple e-mail
notifications that contain reminders that they must sign in or the
account will be deactivated.
After consideration of the public comments we received, due to
systems requirements, we are not adopting our proposal to no longer
require that a hospital maintain current designation of a QualityNet
Administrator. Instead, hospitals must continue to maintain a
QualityNet Security Administrator as part of the HOP QDRP requirements.
Register with QualityNet, regardless of the method used
for data submission.
Complete and submit an online participation form if this
form (or a paper Notice of Participation form) has not been previously
completed, if a hospital has previously withdrawn, or if the hospital
acquires a new CCN. For HOP QDRP decisions affecting the CY 2011
payment determination, hospitals that share the same CCN must complete
a single online participation form. In the CY 2009 OPPS/ASC final rule
with comment period (73 FR 68772), we implemented an online
registration form and eliminated the paper form. At this time, the
participation form for the HOP QDRP is separate from the RHQDAPU
program and completing a form for each program is required. Agreeing to
participate includes acknowledging that the data submitted to the CMS-
designated contractor will be submitted to CMS and may also be shared
with one or more other CMS contractors that support the implementation
of the HOP QDRP and be publicly reported.
Under our current requirements, the deadline for submitting the
participation form is 30 days following receipt of a CCN form from CMS
(73 FR 68772). In the CY 2010 OPPS/ASC proposed rule (74 FR 35400), we
proposed to change this requirement as follows:
Hospitals with Medicare acceptance dates on or after January 1,
2010: For the CY 2011 payment update, we proposed that any hospital
that has a Medicare acceptance date on or after January 1, 2010
(including a new hospital and hospitals that have merged) must submit a
completed participation form no later than 180 days from the date
identified as its Medicare acceptance date on the CMS Online System
Certification and Reporting (OSCAR) system. Hospitals typically receive
a package notifying them of their new CCN after they receive their
Medicare acceptance date. The Medicare acceptance date is the earliest
date that a hospital can receive Medicare payment for the services that
it furnishes. Completing the participation form includes supplying the
name and address of each hospital campus that shares the same CCN.
The use of the Medicare acceptance date as beginning the timeline
for HOP QDRP participation will allow CMS to monitor more effectively
hospital compliance with the requirement to complete a participation
form because a hospital's Medicare acceptance date is readily available
to CMS through its data systems. In addition, providing an extended
time period to register for the program will allow newly functioning
hospitals sufficient time to get their operations up and running before
having to collect and submit quality data. We invited public comment on
these proposed changes.
Hospitals with Medicare acceptance dates before January 1, 2010,
that want to participate or withdraw: For the CY 2011 payment update,
we proposed that any hospital that has a Medicare acceptance date on or
before December 31, 2009 that wants to withdraw from participation in
the CY 2011 HOP QDRP or that is not currently participating in the HOP
QDRP and wishes to participate in the CY 2011 HOP QDRP must submit a
participation form by March 31, 2010. We proposed a deadline of March
31, 2010, because we believe it will give hospitals sufficient time to
decide whether they wish to participate in the HOP QDRP, as well as put
into place the necessary staff and resources to timely report data for
first quarter CY 2010 services. This requirement applies to all
hospitals whether or not the hospital has billed for payment under the
OPPS. We invited public comment on these proposed changes.
Comment: Several commenters agreed with CMS' proposal to provide
additional time for hospitals to submit an HOP QDRP participation form.
One commenter believed that, for hospitals with Medicare acceptance
dates prior to January 2010, a 3-month window ending March 31, 2010, is
reasonable in which to make a decision regarding participation.
Response: We thank the commenters for their support.
Comment: One commenter stated that, based on its experience with
hospital mergers, the surviving facility does not typically receive a
new CCN and asked that the requirement that merged facilities submit a
new participation form be confirmed.
Response: Annual payment update decisions are made for a hospital's
CCN. If a hospital's CCN does not change in a merger situation and the
hospital is currently participating in the HOP QDRP, the hospital with
that CCN would continue to be subject to HOP QDRP requirements, so a
new participation form would not be required. However, the
participation form requests that hospitals submit National Provider
Identifier (NPI) information for any facilities connected to the
hospital that bill under the hospital's CCN. The hospital may want to
update its participation form to include any facilities added due to a
merger, but there is no HOP QDRP requirement to do so at this time. If
the hospital's CCN did not change in a merger situation and it was not
participating in the HOP QDRP and now wishes to do so, or was
participating and now wishes to withdraw, it must comply with the March
31, 2010 timeframe for completing a participation form.
After consideration of the public comments we received, we are
adopting as final our proposed administrative requirements with one
exception. We are not adopting our proposal to no longer require that a
hospital maintain current designation of a QualityNet Administrator.
Instead, hospitals must continue to maintain a QualityNet Security
Administrator as part of HOP QDRP requirements.
[[Page 60644]]
2. Data Collection and Submission Requirements
a. General Data Collection and Submission Requirements
In the CY 2010 OPPS/ASC proposed rule (74 FR 35401), we proposed
that, to be eligible for the full CY 2011 OPPS payment update,
hospitals must:
Submit data: Hospitals that are participating in the HOP
QDRP must submit data for each applicable quarter by the deadline
posted on the QualityNet Web site; there must be no lapse in data
submission. For the CY 2011 annual payment update, the applicable
quarters will be as follows: 3rd quarter CY 2009, 4th quarter CY 2009,
1st quarter CY 2010, and 2nd quarter CY 2010. Hospitals that did not
participate in the CY 2010 HOP QDRP, but would like to participate in
the CY 2011 HOP QDRP, and that have a Medicare acceptance date on the
OSCAR system before January 1, 2010, must begin data submission for 1st
quarter CY 2010 services using the CY 2011 measure set that we are
finalizing in this final rule with comment period. For those hospitals
with Medicare acceptance dates on or after January 1, 2010, data
submission must begin with the first full quarter following the
submission of a completed online participation form. For the four
claims-based measures, we will calculate the measures using the
hospital's Medicare claims data. For the CY 2011 payment update, we
will utilize paid Medicare fee-for-service (FFS) claims submitted prior
to January 1, 2010, to calculate these four measures.
Sampling and Case Thresholds: It will not be necessary for a
hospital to submit data for all eligible cases for some measures if
sufficient eligible case thresholds are met. Instead, for those
measures where a hospital has a sufficiently large number of cases, it
can sample cases and submit data for these sampled cases rather than
submitting data from all eligible cases. This sampling scheme which
includes the minimum number of cases based upon case volume will be set
out in the HOPD Specifications Manual at least 4 months in advance of
the required data collection. Hospitals must meet the sampling
requirements for required quality measures each reporting quarter.
In addition, in order to reduce the burden on hospitals that treat
a low number of patients but otherwise meet the submission requirements
for a particular quality measure, hospitals that have five or fewer
claims (both Medicare and non-Medicare) for any measure included in a
measure topic in a quarter will not be required to submit patient level
data for the entire measure topic for that quarter. Even if hospitals
are not required to submit patient level data because they have five or
fewer claims (both Medicare and non-Medicare) for any measure included
in a measure topic in a quarter, they may voluntarily do so.
Hospitals must submit all required data according to the data
submission schedule that will be available on the QualityNet Web site
(https://www.QualityNet.org). This Web site meets or exceeds all
current Health Insurance Portability and Accountability Act
requirements. Submission deadlines will, in general, be four months
after the last day of each calendar quarter. Thus, for example, the
submission deadline for data for services furnished during the first
quarter of CY 2010 (January-March 2010) will be on or around August 1,
2010. The actual submission deadlines will be posted on the http://www.QualityNet.org Web site.
Hospitals must submit data to the OPPS Clinical Warehouse using
either the CMS Abstraction and Reporting Tool for Outpatient Department
(CART-OPD) measures or the tool of a third-party vendor that meets the
measure specification requirements for data transmission to QualityNet.
Hospitals must submit quality data through My QualityNet, the
secure portion of the QualityNet Web site, to the OPPS Clinical
Warehouse. The OPPS Clinical Warehouse, which is maintained by a CMS-
designated contractor, will submit the OPPS Clinical Warehouse data to
CMS. OPPS Clinical Warehouse data are not currently considered to be
Quality Improvement Organization (QIO) data; rather, we consider such
data to be CMS data. However, it is possible that the information in
the OPPS Clinical Warehouse may at some point become QIO information.
If this occurs, these data would also become protected under the
stringent QIO confidentiality regulations in 42 CFR part 480.
Hospitals must collect HOP QDRP data from outpatient episodes of
care to which the required measures apply. For the purposes of the HOP
QDRP, an outpatient ``episode of care'' is defined as care provided to
a patient who has not been admitted as an inpatient, but who is
registered on the hospital's medical records as an outpatient and
receives services (rather than supplies alone) directly from the
hospital. Every effort will be made to ensure that data elements common
to both inpatient and outpatient settings are defined consistently for
purposes of quality reporting (such as ``time of arrival'').
Hospitals are to submit required quality data using the CCN under
which the care was furnished.
To be accepted into the OPPS Clinical Warehouse, data submissions,
at a minimum, must be timely, complete, and accurate. Data submissions
are considered to be ``timely'' when data are successfully accepted
into the OPPS Clinical Warehouse on or before the reporting deadline. A
``complete'' submission is determined based on whether the data satisfy
the sampling criteria that are published and maintained in the HOPD
Specifications Manual, and must correspond to both the aggregate number
of cases submitted by a hospital and the number of Medicare claims the
hospital submits for payment. We are aware of ``data lags'' that occur
due to when hospitals submit claims, then cancel and correct those
claims; efforts will be made to take such events into account that can
change the aggregate Medicare case counts. To be considered
``accurate,'' submissions must pass validation, if applicable.
CMS strongly recommends that hospitals review OPPS Clinical
Warehouse feedback reports and the HOP QDRP Provider Participation
Reports that are accessible through their QualityNet accounts. These
reports enable hospitals to verify whether the data they or their
vendor submitted was accepted into the OPPS Clinical Warehouse and the
date/time that such acceptance occurred. We also note that irrespective
of whether a hospital submits data to the OPPS Clinical Warehouse
itself or uses a vendor to complete the submissions, the hospital is
responsible for ensuring that HOP QDRP requirements are met.
Finally, although not required, hospitals may submit, on a
voluntary basis, the aggregate numbers of outpatient episodes of care
which are eligible for submission under the HOP QDRP and sample size
counts. These aggregated numbers of outpatient episodes represent the
number of outpatient episodes of care in the universe of all possible
cases eligible for data reporting under the HOP QDRP. We do not wish to
require this submission at this time because we continue to see
evidence that some hospitals would not be able to meet this
requirement. However, as it is vital for quality data reporting for
hospitals to be able to determine their population sizes, we believe it
is highly beneficial for hospitals to develop systems that can
determine whether or not they have furnished services or billed for
five or fewer cases for a particular measure topic on a quarterly
basis. CMS strongly
[[Page 60645]]
recommends that all hospitals work to develop systems that can
accurately determine their population and sample sizes for purposes of
quality reporting.
In the future, we plan to use the aggregate population and sample
size data to assess data submission completeness and adherence to
sampling requirements for Medicare and non-Medicare patients.
For the reporting of aggregate numbers of outpatient episodes of
care and sample size counts, we proposed that the deadlines for this
reporting will be the same as they are for the reporting of quality
measures, and these deadlines will be posted on the data submission
schedule that will be available on the QualityNet Web site.
We invited public comment on these proposed changes.
Comment: One commenter appreciated CMS' clear and concise
definition of an outpatient episode of care. Another commenter asked
for a clear definition of what constitutes an outpatient setting.
Response: We thank the first commenter for its support for our
definition of an outpatient episode of care. This definition is drawn
from the CMS Claims Processing Manual. Chapter 1, Section 50.3.1 of the
CMS Claims Processing Manual (issued 06-23-09; Effective Date: 07-01-
09) states ``Outpatient' means a person who has not been admitted as an
inpatient but who is registered on the hospital or critical access
hospital (CAH) records as an outpatient and receives services (rather
than supplies alone) directly from the hospital or CAH.'' Thus, based
upon the definition of outpatient, an outpatient setting would be a
health care setting where a person is registered on the hospital or CAH
records as an outpatient and receives services from the hospital or
CAH. Under the HOP QDRP, hospitals are defined as including all the
facilities connected to a hospital that are operating and billing for
OPPS services under the same CCN. We note that the above definition
does not restrict the outpatient setting to the hospital or CAH itself.
Comment: Several commenters stated that many of the program's
processes were specified in detail for the first time and that this
specificity was appreciated, as it is helpful for hospitals to have
clear direction on both the requirements and the process of the
program.
Response: We thank the commenters for their feedback.
Comment: One commenter supported CMS' proposal that all hospitals
sharing the same CCN be required to combine data across multiple
campuses for all clinical data submissions. The commenter believed
reporting by CCN is appropriate to align clinical and financial
reporting. This commenter also supported this proposal because this
approach is similar to the approach being taken by the RHQDAPU program
and noted that consistency between administrative aspects of the two
programs is appreciated. One commenter stated that while in situations
where a new facility is opened or remains under the same ownership, the
statement that hospitals are to submit required quality data using the
CCN under which the care was furnished is true. However, the commenter
believed that, for mergers, there will be a tremendous resource burden
placed on the hospital and measure vendor if abstracted data must be
separated according to the CCN that applied to the hospital at the time
the care was furnished. This commenter stated that because data are
submitted and published for public view on a quarterly basis, there is
tremendous concern that the public could select a hospital for patient
care based on data that does not represent a full quarter. The
commenter recommended that if a merger does not occur at the very
beginning/end of a quarter, the data be combined for both facilities
under the parent/surviving facility CCN because the child or absorbed
facility, under its old CCN, no longer exists once the merger occurs.
Response: We thank the commenters that supported our proposal to
have quality measure data reported by the CCN that applies to the
hospital at the time the care is furnished. We understand that there
could be issues regarding burden and completeness of data reporting in
the case of mergers. We point out that hospitals operating under
separate CCNs participating in the HOP QDRP would be collecting quality
measure data separately prior to a merger, and that the data could be
kept separate after the merger. Regarding the issue of incomplete data,
we acknowledge that the surviving hospital would have less data for the
quarter in which the merger took place than if the absorbed hospital's
data were included, but the surviving hospital will have all the data
for care furnished under its CCN. Because the CCN is the financial and
certification identifier for hospitals and is the identifier used by
the HOP QDRP to monitor completeness of data reporting, we believe it
is important that all quality measure data be reported under the CCN
that was in place when the care was delivered. We urge hospitals and
vendors to have data reporting systems sufficiently robust to be able
to efficiently handle data by the CCN under which the care was
delivered.
Comment: One commenter strongly agreed that hospitals with five or
fewer claims (Medicare and non-Medicare) for a specific measure should
not be required to submit patient-level data for the entire measure
topic while being allowed to report data voluntarily, but believed that
the allowable time period to not report data was a year. Another
commenter urged CMS to modify this provision so that it would apply to
hospitals with five or fewer Medicare claims, not five or fewer claims
across all payers.
Response: We thank the first commenter for supporting our policy
not to require hospitals with five or fewer claims for a specific
measure to submit data while allowing these hospitals to report data
voluntarily. However, we are clarifying that hospitals that have five
or fewer claims (both Medicare and non-Medicare) for any measure
included in a measure topic in a quarter will not be required to submit
patient-level data for the entire measure topic only for that quarter.
With respect to the second commenter's suggestion that we modify
our policy to apply to five or fewer Medicare claims (rather than five
or fewer Medicare and non Medicare claims), we selected more than 5
cases per quarter (more than 20 cases per year) as the minimum
threshold to ensure that the vast majority of hospitals with sufficient
caseload would be required to submit data, while easing the burden on
hospitals whose patient counts were too small to reliably predict
hospital performance. Because we collect quality measure data on both
Medicare and non-Medicare patients, we believe it is appropriate to set
our case thresholds using the population for which we are collecting
data, which includes both Medicare and non-Medicare patients.
Comment: One commenter questioned the proposal under which
hospitals that have five or fewer claims (both Medicare and non-
Medicare) for any measure included in a measure topic in a quarter will
not be required to submit patient-level data for the entire measure
topic for that quarter. The commenter stated that one of the goals of
the CMS quality improvement programs is to improve the care given to
Medicare beneficiaries and that, by allowing hospitals with five or
fewer cases in a quarter to not report, the very hospitals that need
improvement the most may be missed. The commenter also believed
[[Page 60646]]
that the burden of reporting is minor for hospitals that would abstract
five or fewer charts as this would take less than 30 minutes in most
cases, which would not be much of a burden over a 3-month period.
Response: We agree with the commenter that abstracting five charts
over a quarter would not be overly burdensome. In implementing the
reporting of quality measure data where there are five or fewer cases
in a quarter, we are also addressing the reported excessive burden
associated with determining the individual cases and submitting the
data for those hospitals with small case numbers for a measure. We
continue to strive to collect quality of care data while limiting
burden. We acknowledge that it is possible that quality of care
concerns may exist with hospitals with small case numbers for a
particular quality measure. We note that quality of care is also
monitored through other mechanisms, including, but not limited to, the
Medicare beneficiary complaint process through QIOs and the survey and
certification process.
Comment: One commenter agreed that data abstraction processes for
outpatient services are sufficiently different from inpatient services
as to require the hospital to spend time creating processes to ensure
that they capture the accurate population and abstracted data. One
commenter agreed with keeping the submission deadline for population
and sampling counts the same as the deadline for case-level data, and
stated that last minute updates to the population occur because of
coding changes. The commenter also stated that synchronizing the
deadlines aided hospitals in capturing the most accurate information
possible. One commenter agreed with CMS' proposal to keep the
submission of population and sampling counts voluntary, and noted that
this can be very time consuming for hospitals.
Response: We thank these commenters for confirming our views on the
ability of some hospitals to meet a requirement to submit population
and sampling data at this time. We reiterate that it is vital, for
quality data reporting, that hospitals are able to determine their
population sizes and that all hospitals work to develop systems that
can accurately determine their population and sample sizes for purposes
of quality reporting.
Comment: One commenter urged immediate adoption of an effective
mechanism that allows hospitals and their vendors to resubmit quality
measure data if an error is discovered and emphasized that the point of
public reporting is to put accurate and useful information into the
hands of the public and this is facilitated by allowing known reporting
mistakes to be corrected.
Response: We agree with the commenter that publicly reporting
accurate and useful information is important and that a mechanism or
process for correcting errors should be implemented. While a proposal
addressing this concern was not included in this current rulemaking, we
will consider ways to address this concern in a future rulemaking.
Comment: One commenter disagreed with CMS' approach that sampling
requirements should apply based on both Medicare and non-Medicare cases
and believed that CMS should focus only on the population of patients
for which the agency is responsible.
Response: We believe the commenter is arguing that we should not
apply sampling criteria to non-Medicare claims and should focus only on
Medicare claims. As we collect quality measure data on both Medicare
and non-Medicare patients, we believe it is appropriate to set our
sampling criteria so that they apply to the same population, which
includes both Medicare and non-Medicare patients.
Comment: One commenter supported the concept of sampling and the
development of eligible thresholds and recommended that CMS distribute
sampling criteria when new measures are implemented (that is, any
measures proposed in a calendar year should include the sampling
criteria as part of the OPPS/ASC proposed rule).
Response: We thank the commenter for this suggestion and will
consider it in future planning. We note that sampling criteria are
included in each release of the HOPD Specifications Manual.
After consideration of the public comments we received, we are
adopting as final our proposals regarding HOP QDRP data collection and
submission requirements for the CY 2011 payment determination.
b. Extraordinary Circumstance Extension or Waiver for Reporting Quality
Data
In our experience, there have been times when hospitals have been
unable to submit required quality data due to extraordinary
circumstances that are not within their control. It is our goal to not
penalize hospitals for such circumstances and we do not want to unduly
increase their burden during these times. Therefore, in the CY 2010
OPPS/ASC proposed rule (74 FR 35402), we proposed a process for
hospitals to request and for CMS to grant extensions or waivers with
respect to the reporting of required quality data when there are
extraordinary circumstances beyond the control of the hospital.
Under the proposed process, in the event of extraordinary
circumstances not within the control of the hospital, for the hospital
to receive consideration for an extension or waiver of the requirement
to submit quality data for one or more quarters, a hospital must--
(1) Submit to CMS a request form that will be made available on the
QualityNet Web site. The following information should be noted on the
form:
Hospital CCN;
Hospital Name;
CEO and any other designated personnel contact
information, including name, e-mail address, telephone number, and
mailing address (must include a physical address, a post office box
address is not acceptable);
Identified reason for requesting an extension or waiver;
Hospital's reason for requesting an extension or waiver;
Evidence of the impact of the extraordinary circumstances,
including but not limited to photographs, newspaper and other media
articles; and
A date when the hospital will again be able to submit HOP
QDRP data, and a justification for the proposed date.
The request form must be signed by the hospital's CEO. A request
form must be submitted within 30 days of the date that the
extraordinary circumstance occurred.
Following receipt of such a request, CMS will--
(1) Provide a written acknowledgement using the contact information
provided in the request, to the CEO and any additional designated
hospital personnel, notifying them that the hospital's request has been
received; and
(2) Provide a formal response to the CEO and any additional
designated hospital personnel using the contact information provided in
the request notifying them of our decision.
We invited public comment on these proposed procedures for
requesting an extraordinary circumstance extension or waiver of the
requirement to submit quality data for one or more quarters.
Comment: Several commenters expressed their appreciation for CMS'
recognition that hospitals facing certain extraordinary circumstances
should be granted an extension or waiver. The commenters believed that,
while decisions on granting an extension or waiver would best be made
on a case-by-case basis depending on each hospital's unique situation,
they
[[Page 60647]]
suggested that CMS adopt some general criteria to apply when it
determines whether such extensions or waivers would be granted. The
commenters also expressed concern that it might not be feasible for a
hospital to file a request form for an extraordinary circumstances
waiver within 30 days of such an event and urged a creative and
flexible approach to working with hospitals in these situations to
ensure that an undue burden is not placed on hospitals during a time of
hardship.
Response: We will consider these comments as we further develop
program procedures for extraordinary circumstance extensions or
waivers. We are mindful that many hospitals operating in these adverse
situations cannot access the Internet or mail service. We note that we
currently use a variety of means to communicate with hospitals in these
circumstances, including using our HOP QDRP support contractor and both
national and State hospital associations, and will continue to do so.
Regarding the ability to file a request form for an extraordinary
circumstances waiver within 30 days of such an event, we believe that
30 days is sufficient in the vast majority of circumstances. However,
we agree that additional time may be warranted in some extreme
circumstances.
After consideration of the public comments we received, we are
adopting our proposals regarding extraordinary circumstance extensions
or waivers for the reporting of quality data under the HOP QDRP, with a
modification that the request form must be submitted within 45 calendar
days of the date that the extraordinary circumstance occurred, rather
than the 30 days we proposed.
3. HOP QDRP Validation Requirements
In the CY 2009 OPPS/ASC final rule with comment period (73 FR
68776), we announced a voluntary test validation program, the results
of which would not affect the CY 2010 payment update for any hospital.
Due to resource constraints, we were not able to implement this test
validation plan.
a. Data Validation Requirements for CY 2011
Validation, as discussed in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66871), is intended to provide assurance of the
accuracy of the hospital abstracted data. For the CY 2011 payment
determination, in the CY 2010 OPPS/ASC proposed rule (74 FR 35402), we
proposed to implement a validation program that will require hospitals
to supply requested medical documentation to a CMS contractor for
purposes of being validated. However, the results of the validation
will not affect the CY 2011 payment update for any hospital. We believe
that it is important for hospitals to have some experience and
knowledge of the HOP QDRP validation process before payment
determinations are made based upon validation results. We proposed to
implement a validation program that will both limit burden upon
hospitals, especially small hospitals, as well as provide feedback to
all hospitals on validation performance.
Specifically, we proposed to select a random sample of 7,300 cases
from all cases successfully submitted to the OPPS Clinical Warehouse by
all participating hospitals for the relevant time period described
below and validate those data. Based upon the quality data submitted
for the CY 2009 payment update and our methodology for drawing the
sample, we estimate that the sample will include up to 20 cases per
participating hospital; the same number of cases sampled on an annual
basis for validation under the RHQDAPU program. A sample size of 7,300
was chosen because it will enable us to detect a relative difference of
10 percent in the measured overall accuracy rate with a 95 percent
(two-tailed) confidence interval and should provide sufficient data to
conduct post-hoc stratified analyses that provide meaningful feedback.
These figures are based upon a power analysis assuming a population
measure mismatch rate of five percent with the outcomes being either a
match or a mismatch between what the hospital submitted versus what was
determined by validation. We intend to supply feedback on the
validation results to all hospitals.
We proposed to request medical documentation from hospitals for
April 1, 2009 through March 31, 2010 episodes of care, which will allow
us to gather one full year of submitted data for validation purposes.
Once we have completed the random selection, a designated CMS
contractor will use certified mail to request that each selected
hospital send to the CMS contractor supporting medical record
documentation that corresponds to each selected episode of care. Each
hospital must submit this documentation to the designated CMS
contractor within 45 calendar days of the date of the request (as
documented on the request letter). If the hospital fails to comply
within 30 days of the initial medical documentation request, the
designated CMS contractor will send a second certified letter to the
hospital reminding the hospital that the requested documentation must
be received within 45 calendar days following the date of the initial
request. If the hospital still fails to comply, a ``zero'' score will
be assigned to each data element for each selected case and the case
will fail for all measures in the same topic (for example, OP-6 and OP-
7 measures for a surgical care case).
Once the CMS contractor receives the requested medical
documentation, the CMS contractor will independently reabstract the
same quality measure data elements that the hospital previously
abstracted and submitted and compare the two sets of data to determine
whether they match. Specifically, the CMS contractor will conduct a
measures level validation by calculating each measure within a
submitted record using the independently reabstracted data and then
comparing this to the measure reported by the hospital; a percent
agreement will then be calculated.
As we stated above, the results of the validation will not affect a
hospital's CY 2011 annual payment update because we want to give
hospitals time to gain experience with the medical documentation
requests and the validation process before these results are used in
payment determinations. However, hospitals must supply the medical
documentation for each requested case; failure to provide this
documentation may result in a 2.0 percentage point reduction in a
hospital's CY 2011 annual payment update.
Comment: Many commenters expressed their support for a validation
approach where they could receive feedback on their validation results
without having their payment affected for the CY 2011 payment update.
Several commenters applauded the approach, stating that hospitals will
benefit from the program as they continue to gain experience with
outpatient quality reporting. One of these commenters specifically
agreed with requiring hospitals to submit charts for validation for the
CY 2011 payment determination. One commenter expressed support for a
12-month validation period in CY 2011. One commenter expressed support
for a different validation process than the one in use for FY 2010
under the inpatient RHQDAPU program.
Response: We thank these commenters and appreciate their support.
We agree that it is important that hospitals gain experience with
validation for HOP QDRP data collection prior to using validation
results to make payment determinations. We also believe that hospitals
will benefit from the results of our proposed validation plan, both by
[[Page 60648]]
reviewing results on selected individual cases as well as the aggregate
results.
Comment: One commenter stated that hospitals must incur the
additional burden of paying to copy and ship medical records to CMS
because this funding was not incorporated into the outpatient project.
Response: The issue of costs for copying and shipping medical
records to CMS was not discussed in the CY 2010 OPPS/ASC proposed rule,
and we are currently considering our policy approach regarding this
issue. We are aware that these costs are not insignificant.
Comment: One commenter believed that it is unrealistic to conduct
validation and calculate reliable measures from collected HOP QDRP
quality measure data because there have been so many changes in the
abstraction instructions over the past year. The commenter argued that
validation should not be part of the determination for payment
decisions until the entire measure set is tested and proven to be
reliable and valid. Another commenter stated that the two statements
``the results of the validation will not affect a hospital's CY 2011
annual payment update'' and ``failure to provide this documentation may
result in a 2.0 percentage point reduction in the hospital's CY 2011
payment update'' were inconsistent.
Response: We agree that there have been issues with the HOP QDRP
data, including changes in abstraction instructions over the past year.
However, we believe that the validation approach that we have proposed
addresses these concerns. For CY 2011 payment determinations, we have
proposed to conduct validation on April 1, 2009 to March 31, 2010
episodes of care reported to the OPPS Clinical Warehouse; this is one
year after the initial data reported, which was for April 1, 2008 to
June 30, 2008 episodes of care. With one exception, most of the
significant changes in abstraction instructions during the program's
life were incorporated by April 1, 2009. The exception, the exclusion
of cancelled surgery cases from the Surgical measures, went into effect
with July 1, 2009 episodes of care. We intend to determine whether a
selected Surgical Care measure case was cancelled based upon the
submitted medical documentation rather than drop April 1, 2009 to June
30, 2009 cases from selection in order to maintain a 12-month sampling
frame for validation. We intend to either drop any selected April to
June 2009 cancelled surgery cases or otherwise account for this factor.
While it would be optimal to use the preliminary results of the
validation effort for CY 2011 in the final design of the validation
process for the CY 2012 payment determinations, due to resource
constraints, we will not obtain the results of the CY 2011 validation
before we must put forth our proposal for CY 2012. We do intend to
conduct further analyses of collected HOP QDRP data and will utilize
these results in developing our CY 2012 proposals.
Regarding our statement that the results of this validation will
not affect a hospital's annual payment update, we wish to clarify that
when we referred to ``results,'' we meant the results of the validation
process where what is independently abstracted from a hospital's
submitted documentation is compared to what the hospital self-reported.
Therefore, while the validation ``results'' will not affect a
hospital's CY 2011 payment update factor, to ensure that we receive an
adequate supply of records for our test validation, a hospital must
submit required medical record documentation for the selected cases and
if it fails to do so, that failure would affect its CY 2011 payment
update factor.
Comment: Several commenters supported CMS' proposal to document the
validation medical record request process. Specifically, the commenters
supported CMS' plans to send two certified letter requests for medical
records for data validation in case the hospital does not respond to
the first request. The commenters suggested that phone calls be placed
to hospitals that do not respond to the first letter to ensure that
every effort is made to communicate the request to the appropriate
staff; and suggested that this phone call should be placed to the
QualityNet Administrator for those hospitals that have a person serving
in this role. One commenter suggested that a telephone call to the
hospital chief executive officer be made before assigning a ``zero''
score for validation, as there may be circumstances in which the CEO is
unaware of an insufficient response to a request for records.
Response: We thank the commenters and agree that certified letters
provide hospitals with multiple written documented notification and
reminder attempts; we believe that this alone is sufficient
notification. However, we note that the planned contractor for this
work as standard practice attempts to call hospitals at least three
times about 30 calendar days after it sends the initial medical record
request. As a practice, we intend to continue attempting to call
hospitals at least three times around the 30th calendar day following
the initial request, in addition to sending written certified letters.
We believe that these attempted calls at different time periods around
the 30th calendar day following the initial request demonstrate our
commitment to notify hospitals of medical record requests using
multiple communication modes.
Comment: One commenter expressed concern that a random sampling of
7,300 cases is not sufficient to provide hospitals meaningful feedback
on the accuracy of their data collection and recommended that CMS
select a larger number of cases over a longer period of time. The
commenter also suggested that individual feedback on validation results
be provided to those hospitals that submit records for this initial
validation process.
Response: The major purpose of our proposed sampling scheme for CY
2011 payment determinations is to provide aggregate level feedback to
hospitals on data elements abstracted and to validate the quality
measure data collected while limiting hospital burden. However, we do
intend to provide individual feedback on validation results to those
hospitals that submit records for this initial validation effort.
Regarding the suggestion to select cases over a longer time period, we
have selected the April 1, 2009 to March 31, 2010 timeframe because
this time period provides the most recent 12-month period possible. We
believe that it is important to use the most recent data possible while
maintaining at least a full year's worth of data. We have not included
any data from the April 1, 2008 to March 31, 2009 time period because
we believe that this will minimize the use for validation purposes of
HOP QDRP data that may be unreliable because of changes in data
abstraction guidelines that occurred, or because it was collected in
the early stages of the program when hospitals were still developing
HOP QDRP data collection systems. We believe that hospitals will be
able to gain meaningful information from aggregate results produced
under our validation sampling scheme, although we agree that it would
be more useful to select an increased number of cases. Selecting an
increased number of cases is not possible with present resource
constraints and we note that this approach would increase hospital
burden.
Comment: Several commenters disagreed with randomly selecting only
a subset of hospitals for validation because they believe that all
hospitals should be held to the same threshold/expectation. One
commenter believed that ``random validation'' would not produce
accurate results, and another
[[Page 60649]]
commenter expressed concern that the proposed validation approach is
not robust enough given the ever increasing scope of measures included
in the measure set.
Response: We appreciate the concern that these commenters express
for treating all hospitals similarly, both in costs and benefits of the
validation process and for maintaining hospital performance in regard
to data validation.
Under the HOP QDRP, all hospitals are responsible for meeting
reliability levels for submitted abstracted data. Because hospitals
will not know in advance whether they will be selected for validation
and because selection will be random, we believe that hospitals will
have sufficient incentive to maintain data quality.
Comment: Several commenters suggested that CMS build safeguards
into the sampling process to ensure that no more than 20 patient cases
are selected from each hospital.
Response: We appreciate the commenters' concerns about the number
of cases selected under the proposed sampling design. However, it is
highly unlikely, given the number of hospitals and the cases submitted,
that any hospital will have more than 20 cases selected. In addition,
building in a threshold for the number of cases selected would take
away the ``random'' element of the sampling process.
Comment: One commenter suggested that rather than randomly
selecting hospitals each year, CMS adopt a validation process that
results in those hospitals not selected in one year having a greater
likelihood of being selected in the next/future years.
Response: While we did not propose this approach in our validation
plan for CY 2011, in the CY 2010 OPPS/ASC proposed rule (74 FR 35403
through 35404), we discussed additional data validation conditions
under consideration for CY 2012 and subsequent years, including the use
of targeting criteria. Examples of possible targeting criteria include
considering whether a hospital had not been previously selected for
validation for 2 or more consecutive years.
Comment: One commenter urged CMS to set strict timelines so that
the public has access to data that have undergone the test validation
process as soon as possible by publicly reporting validated 2nd and 3rd
quarter 2009 data no later than June 2010.
Response: We agree that it is important to make validated data
publicly available as soon as possible and will make every effort to do
so. However, with present resource constraints, it is not possible to
meet the commenter's suggested timeline.
Comment: One commenter urged that State QIOs be supportive not only
during the validation appeals process, but proactively during data
collection and reporting.
Response: The HOP QDRP was implemented separately from the QIO
program and State QIOs have not been involved with the HOP QDRP to
date. State QIOs, however, are involved in the RHQDAPU program. We note
that QIOs are available for quality of care concerns for individual
Medicare cases and that their purview includes the outpatient setting.
Comment: One commenter preferred a validation approach that would
select five cases per quarter stratified by measure/topic for all
hospitals. The commenter argued that such an approach provides
hospitals an opportunity to focus on mismatches by measure set.
Response: We interpret the commenter's statement to mean that the
commenter prefers to have five cases that are stratified by measure/
topic be selected each quarter for all hospitals so that information on
each hospital's individual abstraction accuracy can be assessed by
measure/topic. We acknowledge the commenter's belief that such an
approach would continually improve data abstraction, but we believe
that the improved reliability under the proposed validation process
coupled with the reduction of overall hospital burden associated with
validation participation will outweigh the potential benefits of
validating a smaller number of records for all hospitals. Regardless of
whether a hospital was included in any validation selection, we intend
to provide aggregate validation information to all hospitals that
submit quality measure data.
Comment: Several commenters preferred that CMS give continued
attention to individual data element level analysis for validation for
a variety of reasons, including: Increasing the denominator and
minimizing the impact of a small number of errors; and looking at the
individual data elements with a threshold based on sample size. Some of
these commenters doubted CMS' statement that higher accuracy rates are
possible using the proposed measure level match approach versus a data
element level approach and believed that the proposed approach appeared
to place hospitals at high risk for not receiving the full CY 2012
payment update. The commenters recommended a period or process where
any changes in the validation process be tested without penalty against
any payment update prior to broad implementation.
Response: We agree that there should be continued attention to the
data element level as the individual data elements are used to
calculate quality measures. We proposed a measure level match approach
to replace the data element match approach because of what we have
observed in the RHQDAPU program for inpatient quality measure data
reporting. The intent of the measure match approach is to minimize the
impact of errors for noncritical data elements. As we explain in more
detail below, we are not finalizing our validation proposal for CY
2012. Instead, we will be conducting further analyses on collected HOP
QDRP data and considering all public comments we received on validation
before we propose a validation process for the CY 2012 payment
determination.
We agree that hospitals should be allowed to gain some experience
with validation under the HOP QDRP before we consider such results
toward payment determinations, and we are doing so through our
validation approach for the CY 2011 payment determination.
Comment: Many commenters agreed with the adoption of a measure
score match for validation instead of a data element matching approach.
Several commenters believed that it is appropriate to focus on the
hospital's measure rate, as opposed to individual data elements,
because the measure rate captures the information that is truly
important to patient care. The commenters observed that, for data
validation in the RHQDAPU (inpatient reporting) program, there have
been several instances in which a mismatch between single data elements
unrelated to the quality of care provided by a hospital, such as the
patient's birth date, have caused hospitals to fail validation and that
validating the hospital's measure rate should eliminate these
unfortunate incidents.
Response: We thank these commenters for their support. The proposed
validation process focuses on validating whether hospital abstracted
data results in accurate measure rates and measure denominator counts.
We will continue to use the data elements to calculate the measure
values and, subsequently, the validation scores.
Comment: One commenter urged CMS to extend the turnaround time for
chart selection to 60 days and believed that hospitals should have the
option to submit validation cases electronically rather than printed
copies because this would avoid shipping delays and allow faster
turnaround time.
[[Page 60650]]
Response: We understand the commenter's concern about the deadline
for hospitals to submit requested medical records. However, extending
this time period increases the amount of time between when services are
furnished, initial hospital data are submitted, data are validated,
and, ultimately, when the results can be compiled for program purposes.
We will consider accepting electronic submission of validation cases
using compact disc and electronic health record submission in future
years. We must consider both the cost to accept and review these
submissions and the added benefit to the hospitals using electronic
methods to store medical record information.
After consideration of the public comments we received, we are
adopting as final, without modification, our proposals for validation
for the CY 2011 payment determination.
b. Data Validation Approach for CY 2012 and Subsequent Years
Similar to our proposal for the FY 2012 RHQDAPU program (74 FR
24178), in the CY 2010 OPPS/ASC proposed rule (74 FR 35403), we
proposed to validate data from 800 randomly selected hospitals
(approximately 20 percent of all participating HOP QDRP hospitals) each
year, beginning with the CY 2012 payment determination. We note that
because the 800 hospitals will be selected randomly, every HOP QDRP-
participating hospital will be eligible each year for validation
selection. For each selected hospital, we proposed to randomly validate
per year up to 48 patient episodes of care (12 per quarter) from the
total number of cases that the hospital successfully submitted to the
OPPS Clinical Warehouse. However, if a selected hospital has submitted
less than 12 cases in one or more quarters, only those cases available
will be validated. For each selected episode of care, a designated CMS
contractor will request that the hospital submit the supporting medical
record documentation that corresponds to the episode. We will not be
selecting cases stratified by measure or topic; our interest is whether
the data submitted by hospitals accurately reflect the care delivered
and documented in the medical record, not what the accuracy is by
measure or whether there are differences by measure or topic. We
proposed to sample data for April 1, 2010 to March 31, 2011 services
because this will provide a full year of the most recent data possible
to use for purposes of completing the validation in time to make the CY
2012 payment determination.
For the CY 2012 and subsequent years' payment determinations, we
proposed to use the validation methodology proposed for the CY 2011
payment update with validation being done for each selected hospital.
Specifically, we would conduct a measures level validation by
calculating each measure within a submitted record using the
independently reabstracted data and then comparing this to the measure
reported by the hospital; a percent agreement will then be calculated.
To receive the full OPPS payment update, we proposed that hospitals
must attain at least a 90 percent reliability score, based upon our
validation process, for the designated time period. We will use the
lower bound of a two-tailed 95 percent confidence interval to estimate
the validation score. If the calculated upper limit is above the
required 90 percent reliability threshold, we will consider a
hospital's data to be ``validated'' for payment purposes. We believe
that hospitals will be able to attain higher accuracy rates based on
the proposed measure level match approach versus a data element level
approach; therefore, we proposed to implement a higher threshold for
accuracy than we currently use (and are using) for validation purposes
under the RHQDAPU program. We believe that a hospital will be able to
achieve a higher accuracy rate under this validation process because we
are not calculating whether each data element matches. Instead, we are
determining whether or not the reabstracted measure result (for
example, was aspirin given at arrival as part of an episode of care
that was properly included in the reported data) matches the measure
result that was submitted by the hospital. In other words, we are more
interested in whether the measure as a whole has been accurately
reported than we are in whether each data element that makes up the
measure has been accurately reported. Thus, we are focusing on whether
the quality measure as a whole that a hospital reports matches what is
in the medical record as determined by our re-abstraction. The reason
we proposed to implement a measure level match for the HOP QDRP, rather
than a data element match, is that in our experience with the RHQDAPU
program, hospitals sometimes receive low validation scores due to data
element mismatching and not because the care furnished did not match
what was documented in the medical record.
We believe that validating a larger number of cases per hospital,
but only for 800 randomly selected hospitals, and validating these
cases at the measure level (rather than at the data element level) has
several benefits. We believe that this approach is suitable for the HOP
QDRP because it will: produce a more reliable estimate of whether a
hospital's submitted data have been abstracted accurately; provide more
statistically reliable estimates of the quality of care delivered in
each selected hospital as well as at a national level; and reduce
overall hospital burden because most hospitals will not be selected to
undergo validation each year.
We solicited public comments on this proposed validation
methodology. The public comments we received and our responses are
discussed below.
Comment: Several commenters stated that CMS' proposed process for
validating hospitals' quality data beginning with CY 2012 holds promise
as a reasonable approach to ensure the accuracy of the quality data and
improves upon the deficiencies in the current inpatient program
validation process.
Response: We agree with the commenters that the proposed new
validation process beginning with CY 2012 is an improved approach, and
we thank these commenters for their support. However, we have decided
that we want to further evaluate and refine the approach and have
decided to not finalize a validation approach for CY 2012 in this final
rule with comment period. We intend to put forth a proposal for a CY
2012 HOP QDRP validation process in the CY 2011 OPPS/ASC proposed rule.
Comment: One commenter supported the proposed validation process
for CY 2012 and subsequent years; however, this commenter believed that
the data from the CY 2011 test year should be reviewed to ensure the
process is functioning as it was intended and that CMS should make
modifications to the process if necessary.
Response: We thank the commenter for supporting our proposed
validation process. We agree that it would be helpful to review the
data from the CY 2011 test year to evaluate the extent to which the
process is functioning as it was intended and to use the results to
assist us in determining whether to propose modifications to the
validation process for CY 2012 and subsequent years. However, due to
resource constraints, we will not receive the results of the CY 2011
validation before we must put forth a proposed validation plan for CY
2012. Instead, we will be conducting further analyses on collected HOP
QDRP data and intend to utilize these results as well as all comments
we
[[Page 60651]]
received in developing our CY 2012 proposals.
Comment: Several commenters recommended that if validation is
limited to randomly selected hospitals each year, a hospital that is
selected in one year should be excluded from the selection process for
some period, which could be an indeterminate number of subsequent
years, the following year, or the next 2 years, or, alternatively, CMS
could limit the number of times during a 5-year period a hospital could
be randomly selected. Many of these commenters suggested that such an
exemption could apply to all hospitals that pass validation, those that
pass with high reliability scores, or all hospitals regardless if they
pass. Some of these commenters based their suggestions on limiting
burden to hospitals and/or rewarding hospitals for participation or for
achieving a high reliability or accuracy score. Some commenters
believed that exempting a hospital from subsequent validation for some
time period for high reliability scores would encourage hospitals to
ensure that their data are as accurate as possible and would increase
data quality.
Response: We understand the commenters' desire to limit hospital
burden on a guaranteed basis and/or to reward hospitals for
performance. However, we do not agree that exempting hospitals from
validation because they were selected in a previous year or achieved a
high reliability score will encourage increased data quality or that it
should be a ``reward'' for meeting a program requirement. It is our
belief that any guaranteed exclusion from participating in the
validation process also has the potential to undermine a hospital's
incentive to maintain data quality.
Comment: One commenter asserted that random selection of hospitals
for validation will reduce the hospitals' focus on accuracy because
hospitals will have the chance of not being chosen in a given year.
Response: We understand and appreciate the commenter's concern for
data accuracy. We believe that each hospital having a chance at
selection for validation each year will provide incentive to hospitals
to maintain data quality.
Comment: Several commenters made suggestions regarding the sampling
scheme for validation. One commenter suggested a random selection of
fewer hospitals while increasing the number of records selected and
that a random selection of hospitals be done quarterly to reduce the
demands on any one hospital while increasing CMS' ability to monitor
performance throughout the industry. One commenter supported a random
sample of 200 hospitals per quarter with a minimum number of 20 charts
reviewed with hospitals not to be selected for validation any more
frequently than one time per year. Another commenter agreed with having
a separate random selection process for small and rural hospitals that
have five or less cases per condition each quarter.
Response: We chose 800 as the number of hospitals we would select
for validation each year because this comprises about 25 percent of the
total number of HOP QDRP participating hospitals and will provide us
with enough data to be statistically assured that we have obtained a
representative sample of all hospital data. Regarding randomly sampling
hospitals quarterly, we have increased the sample size to gain
increased statistical reliability for individual hospital data;
lowering the number of cases per hospital or sampling different
hospitals each quarter would not enable us to achieve the same result.
We agree with the commenters that stratifying sampling by quarter is a
possible approach and will consider this as we develop our proposal for
a validation process for the CY 2012 payment determination.
Regarding having a separate random selection process for small and
rural hospitals that have five or less cases per condition each
quarter, we did not propose to stratify by hospital size or by a
threshold number of cases per condition. However, we will strongly
consider this approach when we develop our CY 2012 validation proposal.
Comment: One commenter supported the random sampling of 800
hospitals (which would require selected hospitals to submit supporting
medical records for 48 randomly selected patient episodes of care (12
per quarter)) if the sampling methodology to select the 800 hospitals
considers the proportion of rural to urban hospitals. This commenter
also believed that this sample must take into account the large number
of hospitals that have sample sizes that are too small to make
justified decisions based on gathered data. One commenter argued that
random validation on a larger number of cases per hospital is excessive
for small PPS hospitals.
Response: We agree that hospital size and urban/rural status are
important considerations regarding burden and representation of
hospital type in any sampling scheme utilized for validation and view
these as possible characteristics to stratify sampling of hospitals for
CY 2012 and subsequent year's validation. We intend to consider these
factors as we further evaluate any proposed validation methodology for
CY 2012. Regarding the commenter's belief that this sample must take
into account the large number of hospitals that have sample sizes that
are too small to make justified decisions based on gathered data, we
interpret this statement to mean that the commenter believes these
hospitals would not have a sufficient number of cases for us to
reliably determine that the hospitals have submitted valid data. We
will further assess the numbers of cases submitted by hospitals and, as
discussed here in this final rule with comment period, we will be
considering whether we should refine our proposed validation
methodology to take into account hospital size or a threshold number of
case counts in any proposed sampling scheme.
Comment: Several commenters argued that the 90 percent reliability
proposal is too stringent for the first year of data validation. Many
of these commenters suggested that CMS establish a lower reliability
threshold (for example, 70 percent, 75 percent, or 80 percent).
Commenters suggesting a 75 percent reliability threshold for the HOP
QDRP noted that a 75 percent threshold will be used in the RHQDAPU
program for FY 2012 when that program adopts a similar validation
approach. One commenter recommended that CMS use data and experience
from the CY 2011 test year to determine what an appropriate threshold
should be, and until that is determined, the threshold should be the
same as the 75 percent threshold that will be required in the inpatient
setting for FY 2012. One commenter believed that more analysis of
validation results is necessary before establishing the threshold at 90
percent.
Response: After consideration of the public comments regarding the
90-percent threshold, we agree with these commenters that this level is
too stringent for the first year of validation where the results may
affect a hospital's annual payment update. We appreciate the suggestion
that the experience from the CY 2011 test year should be utilized to
determine an appropriate rate. However, due to resource constraints, we
will not be able to determine any results of the CY 2011 validation
prior to proposing and finalizing validation requirements for the CY
2012 payment update factor. However, we will be analyzing collected HOP
QDRP data and will take any analyses we complete, as well as the public
comments we have received on this proposal, into account as we develop
a new proposed
[[Page 60652]]
validation process for CY 2012 and subsequent years.
Comment: One commenter suggested that no hospital be penalized in
terms of its payment update if it fails the validation requirement for
a single quarter.
Response: We interpret this comment to apply to the proposed
validation methodology for CY 2012 and subsequent years because the
results of the proposed CY 2011 validation methodology will not affect
the CY 2011 payment determination. We did not address whether a
hospital would be penalized in terms of its payment update if it fails
the validation requirement for a single quarter in the CY 2010 OPPS/ASC
proposed rule with comment period. We will take the commenter's
suggestion regarding this aspect of validation into consideration as we
develop our new proposal for validation for CY 2012 and subsequent
years.
We appreciate all the public comments we received regarding the
validation process we proposed for CY 2012 and subsequent years and
will take them into account as we develop our validation proposals for
these years.
c. Additional Data Validation Conditions Under Consideration for CY
2012 and Subsequent Years
In the CY 2010 OPPS/ASC proposed rule (74 FR 35403), we stated that
we are considering building upon what we proposed as a validation
approach for CY 2012 and subsequent years. We are considering, in
addition to selecting a random sample of hospitals for validation
purposes, selecting targeted hospitals based on criteria designed to
measure whether the data they have reported raises a concern regarding
data accuracy. Because little data have been collected under the HOP
QDRP at this point, we are considering this approach for possible use
beginning with the CY 2012 payment determination. Examples of targeting
criteria could include:
Abnormal data patterns identified such as consistently
high HOP QDRP measure denominator exclusion rates resulting in
unexpectedly low denominator counts;
Whether a hospital had previously failed validation; and/
or
Whether a hospital had not been previously selected for
validation for 2 or more consecutive years.
Another example of a possible targeting criterion would involve
some combination of the some or all of the criteria discussed above.
We solicited public comments on whether these criteria, or another
approach, should be applied in future years. We especially solicited
suggestions for additional criteria that could be used to target
hospitals for validation.
Comment: One commenter opposed the targeting criteria that might
supplement random validation as the commenter opposed random validation
and instead preferred that all hospitals have cases selected for
validation.
Response: We appreciate the commenter's desire for us to validate
data from all hospitals. However, we believe that the increased
reliability that will be achieved by increasing the number of cases
that we validate per selected hospital, coupled with the overall
reduction of burden on hospitals that our proposed validation
methodology will achieve, outweighs any potential benefit from
requiring all HOP QDRP participating hospitals to undergo validation
each year of a small number of cases. We chose the sample size of 800
hospitals because this comprises about 25 percent of the total number
of HOP QDRP participating hospitals and will provide us with sufficient
data to be statistically assured that we have obtained a representative
sample of all hospital data.
Comment: One commenter recommended that CMS use similar statistical
processes to those used by the Joint Commission to identify outliers in
scoring, as well as low denominators compared to population sizes, as
these are processes that many hospitals already know.
Response: We thank the commenter for its suggestions, and we will
take them into account for our validation proposals for CY 2012.
We greatly appreciate all the public comments we received regarding
the validation process proposed for CY 2012. However, as we stated
above, we are not finalizing a validation process for CY 2012 at this
time. We will take all of the comments we received into account when we
develop our validation proposals for CY 2012.
F. 2010 Publication of HOP QDRP Data
In the CY 2009 OPPS/ASC final rule with comment period, we stated
our intention to make the information collected under the HOP QDRP
available to the public in 2010 (74 FR 68778). In the CY 2008 OPPS/ASC
final rule with comment period, we stated that ``[i]nformation from
non-validated data, including the initial reporting period (April-June
2008) will not be posted'' (72 FR 66874). However, section
1833(t)(17)(E) of the Act requires that the Secretary establish
procedures to make data collected under the HOP QDRP available to the
public, and does not require that such data be validated before it is
made public. Moreover, under existing procedures for the RHQDAPU
program, data submitted by hospitals are publicly reported regardless
of whether those data are successfully validated for payment
determination purposes. For these reasons, in the CY 2010 OPPS/ASC
proposed rule (74 FR 35404), we proposed to make data collected for
quarters beginning with the third quarter of CY 2008 (July-September
2008) under the HOP QDRP publicly available, regardless of whether
those data have been validated for payment determination purposes. We
invited public comment on this proposal.
Comment: Many commenters opposed the public reporting of
unvalidated HOP QDRP data. The commenters stated that these data would
not be accurate and may mislead the public. The commenters also argued
that because data for the inpatient reporting program were validated
before they were publicly posted, the outpatient data should be as
well. The commenters stated that making these data available on
Hospital Compare and in the downloadable public use file accompanying a
Hospital Compare release may lead to inappropriate use of the data in
research and policy deliberations, and may result in inaccurate
portrayals of the data on various other Web sites that currently
utilize Hospital Compare data. The commenters argued that public
reporting of unvalidated data may cause confusion among consumers
utilizing these data on different Web sites. The commenters were
concerned that it is not known now how the non-validated data compare
to the validated data. The commenters argued that because data for
cases from quarters earlier than the second quarter of 2009 will not
have been validated, HOP QDRP data should not be publicly reported
prior to this time period.
Response: The validation process for both the RHQDAPU program and
the HOP QDRP pertains only to chart-abstracted measures. Validation
under these programs for the purposes of payment determination seeks to
validate the accurate application of the abstraction rules described in
the HOPD Specifications Manual when data are abstracted from medical
records and submitted to CMS. Neither the HOP QDRP nor the RHQDAPU
program has any validation process for claims data. Thus, the context
of our discussion of the public reporting of unvalidated HOP QDRP data
in previous rulemakings, our proposal in the CY 2010 OPPS/ASC proposed
rule, and our discussion of
[[Page 60653]]
public comments we received regarding whether to post unvalidated data
and which quarters of data would be appropriate to post on Hospital
Compare pertain only to chart-abstracted measures.
We note that the Secretary is required under section 1833(t)(17)(E)
of the Act to establish procedures to make the data submitted under the
HOP QDRP available to the public, and we intend to use generally the
same procedures that we currently use for the RHQDAPU program. In the
RHQDAPU program, we currently publicly report the data as they have
been submitted by the hospitals, and we report these data regardless of
whether the hospital passed validation. Also, no changes are made to
quality data that have been submitted by hospitals that fail validation
in the inpatient RHQDAPU program. However, for the RHQDAPU program, we
have suppressed data from display on Hospital Compare in circumstances
where we have become aware of inaccuracies in the calculation of the
measure rates due to systematic issues with the data submitted. We
believe that the finalized methodological improvements in the
validation process for the CY 2011 HOP QDRP will allow CMS to better
assess the overall accuracy of the chart-abstracted data that are
submitted by hospitals to CMS. We also believe that our approach will
encourage hospitals to optimize their chart abstraction processes and
improve the accuracy of their data because it is data that hospitals
are responsible for that are ultimately posted on Hospital Compare.
Although we appreciate the concerns raised about the public
reporting of unvalidated data, prior to public reporting hospitals are
given an opportunity to preview the results to be reported.
Additionally, should our consumer testing suggest a different approach
to public reporting, or should our validation process for CY2011 reveal
a low reliability of self-reported data, we will reconsider our
approach for future public reporting.
Comment: Many commenters were opposed to the publication of data
beginning with 3rd quarter 2008 services because, during part of that
period: (1) Some antibiotics needed to be updated in the specifications
but these updates were not present at that time; (2) some procedures
needed to be removed from the specifications but these exclusions were
not present at that time; and (3) canceled procedures were not able to
be excluded from the calculation of certain measures reported at that
time. Because these changes were later put into effect, many commenters
suggested suppressing earlier quarters of data, and beginning public
reporting with the 1st quarter of 2009 data when these changes had been
made, and the data specifications were stabilized.
Response: The issues raised by the commenters apply only to the
chart-abstracted HOP QDRP surgical care measures OP-6 and OP-7. We have
considered the issues raised by the commenters, and because there was
an issue with surgeries that were cancelled prior to incision that was
not resolved in the specifications until July 1, 2009, we have decided
not to report either of the surgery-related process measures (OP-6 &
OP-7) for any quarter before the 3rd quarter of 2009.
Comment: Some commenters expressed concern that the 1 year to 2
year time lag in the public reporting of administrative claims-based
measures would not be useful to the public.
Response: In the CY 2009 OPPS/ASC final rule with comment period we
adopted the 4 claims based imaging efficiency measures for the CY 2010
payment determination and indicated that we would calculate the claims-
based imaging efficiency measures for that payment determination using
CY 2008 claims (73 FR 68761-68763). We recognize that the time lag for
the claims-based measures is a concern, but because of claims
submission and claims processing timeframes, this time lag ensures that
the most complete and accurate paid claims are used in the measure
calculations. Part of the time lag is also due to the time needed for
data extraction, data processing, calculation of the measures for the
payment determination and subsequent public reporting, quality
assurance processes, and the Hospital Compare preview and update
schedule. We intend to publicly report the claim-based measures as soon
as possible, and the earliest we anticipate being able to make these
claims-based measures available to the public is June 2010.
Comment: Some commenters commended CMS for its efforts to publicly
report hospital outpatient measures on Hospital Compare in 2010, and
encouraged CMS to continue to engage multi[hyphen]stakeholder groups in
testing and preparing the measures for display on Hospital Compare, as
is done with inpatient measures.
Response: We appreciate the supportive comments regarding public
reporting of hospital outpatient measures on Hospital Compare in 2010.
We began stakeholder and consumer focus group testing of the HOPD
measures in the Fall of 2009. We will continue to engage in consumer
testing and obtain stakeholder input regarding public reporting of HOP
QDRP measures.
Comment: Commenters made numerous suggestions for enhancing the
public reporting of HOP QDRP data including:
Reporting comparative hospital outpatient (OP) and
ambulatory surgical center (ASC) quality information on surgical
services.
Providing a mechanism for providers to raise concerns with
information to be posted prior to its publication.
Including a provider narrative section allowing the
providers to advise consumers of any concerns regarding reliability or
accuracy of information presented.
Including information on facility accreditation status,
state licensure and Medicare certification.
Creating clear and explicit names and explanations for the
measures geared toward consumers.
Grouping like measures by condition and distinguishing
them by care setting.
Communicating efficiency measures in a manner that clearly
interprets the differences among providers, and explains how consumers
should integrate this information into decision making.
Conducting consumer testing and multi-stakeholder vetting
of changes in the Hospital Compare architecture, navigation, display
and language.
Considering how best to display hospital outpatient data
in the context of current and anticipated future public reporting
efforts for ASCs.
Adding an identifier to the CCN to enable the reporting
and display of data for individual hospitals rather than combining
results from two or more hospitals sharing the same CCN.
Displaying measures in a way that allows greater range and
detail in categorizations.
Response: We thank the commenters for these suggestions and will
consider them as we further develop our procedures for the public
reporting of HOP QDRP quality data.
After consideration of the public comments we received, we have
decided to finalize our proposal to publicly report HOP QDRP data on
Hospital Compare in 2010 with some modifications in the periods of time
to be reported. For measures OP-1 through OP-5, we will publicly report
data periods beginning with the 3rd quarter of 2008. For measures OP-6
and OP-7, we will publicly report data periods beginning with the 3rd
quarter of 2009. For measures OP-8 through OP-11, we will report CY
2010 payment
[[Page 60654]]
determination calculations using CY 2008 claims.
As we noted in section XVI.A.5.c. of this final rule with comment
period, in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68778), we established that, for CY 2010, hospitals sharing the same
CCN must combine data collection and submission across their multiple
campuses for the clinical measures for public reporting purposes and
that we will publish quality data by CCN under the HOP QDRP. This
approach is consistent with the approach taken under the RHQDAPU
program. In that final rule with comment period, we also stated that we
intend to indicate instances where data from two or more hospitals are
combined to form the publicly reported measures on the Web site.
Comment: One commenter suggested that combining the results from
two or more hospitals that share the same CCN is misleading and will
not allow consumers and health care payers to assess and use the
information, reducing the effectiveness of Hospital Compare. This
commenter stated that hospitals should be required to report at the
unit of the hospital rather than the CCN. Another commenter suggested
that CMS add an identifier to the CCN in order to enable the reporting
and display of data of quality measure data for individual hospitals
rather than combining results from two or more hospitals that share the
same CCN.
Response: We believe that we should publicly report combined data
from hospitals with the same CCN because it is important to align
clinical reporting with financial reporting. We proposed to report data
by CCN for several reasons. First, the unit affected by the OPPS annual
update and that must meet all HOP QDRP requirements is the CCN, not an
individual hospital or facility that falls under that CCN. Second,
hospitals are obligated to comply with applicable survey and
certification requirements by CCN, and not by any other individual
facility identifier. Third, the additional Medicare identifier for
facilities, the National Provider Identifier (NPI), is not a uniform
identifier. Fourth, reporting by CCN aligns the reporting of quality of
care data with the reporting of financial data. For these reasons, we
consider the CCN to be representative of the entire hospital entity for
purposes of public reporting under the HOP QDRP. However, as resources
permit, we will evaluate whether the benefits the commenter believes
would flow from its approach outweigh the reasons outlined above for
using the current CCN and whether this suggestion is feasible.
After consideration of the public comments, we have decided to
finalize our proposal to publicly report HOP QDRP data on Hospital
Compare starting as early as 2010 with some modifications in the
periods of time to be reported. Should our consumer testing suggest a
different approach to public reporting, or should our validation
process for CY 2011 reveal a low reliability of self-reported data, we
will reconsider our approach for future public reporting. For measures
OP-1 through OP-5, we will publicly report data periods beginning with
the 3rd quarter of 2008. For measures OP-6 and OP-7, we will publicly
report data periods beginning with the 3rd quarter of 2009. For
measures OP-8 through OP-11, we will report 2010 payment determination
calculations using calendar year 2008 claims.
G. HOP QDRP Reconsideration and Appeals Procedures
When the RHQDAPU program was initially implemented, it did not
include a reconsideration process for hospitals. Subsequently, we
received many requests for reconsideration of those payment decisions
and, as a result, established a process by which participating
hospitals would submit requests for reconsideration. We anticipated
similar concerns with the HOP QDRP and, therefore, in the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66875), we stated our intent
to implement for the HOP QDRP a reconsideration process modeled after
the reconsideration process we implemented for the RHQDAPU program. In
the CY 2009 OPPS/ASC final rule with comment period (73 FR 68779), we
adopted a mandatory reconsideration process that will apply to the CY
2010 payment decisions. In the CY 2010 OPPS/ASC proposed rule (74 FR
35404), we proposed to continue this process for the CY 2011 payment
update. Under this proposed process, the hospitals must--
(1) Submit to CMS, via QualityNet, a Reconsideration Request form
that will be made available on the QualityNet Web site; this form must
be submitted by February 3, 2011, and must contain the following
information:
Hospital CCN.
Hospital Name.
CMS-identified reason for failure (as provided in any CMS
notification of failure to the hospital).
Hospital basis for requesting reconsideration. This must
identify the hospital's specific reason(s) for believing it met the HOP
QDRP requirements and should receive a full annual payment update.
CEO and any additional designated hospital personnel
contact information, including name, e-mail address, telephone number,
and mailing address (must include physical address, not just a post
office box).
A copy of all materials that the hospital submitted in
order to receive the full payment update for CY 2011. Such material
would include, but may not be limited to, the applicable Notice of
Participation form or completed online registration form, and quality
measure data that the hospital submitted via QualityNet.
The request must be signed by the hospital's CEO.
(2) Following receipt of a request for reconsideration, CMS will--
Provide an e-mail acknowledgement, using the contact
information provided in the reconsideration request, to the CEO and any
additional designated hospital personnel notifying them that the
hospital's request has been received.
Provide a formal response to the hospital CEO and any
additional designated hospital personnel, using the contact information
provided in the reconsideration request, notifying the hospital of the
outcome of the reconsideration process.
If a hospital is dissatisfied with the result of a HOP QDRP
reconsideration decision, the hospital may file an appeal under 42 CFR
part 405, subpart R (PRRB appeal).
Comment: Several commenters supported the proposed hospital
reconsideration and appeals process. Some commenters suggested
establishing a timeline for CMS to respond to reconsiderations and
appeals. One of these commenters suggested a timeline for CMS to
respond so that hospitals can better plan in the event the payment rate
update is reduced by 2 percentage points. One commenter urged that the
full payment rate update not be reduced for hospitals until the
reconsideration and appeals process is complete. One commenter believed
that this mandatory reconsideration and appeals process should be a
permanent component to the quality reporting program and, therefore,
not proposed or renewed each calendar year.
Response: We thank these commenters for their support of a hospital
reconsideration and appeals process. We plan to complete any CY 2010
reconsideration reviews and communicate the results of these
determinations within 60 to 90 days following the date we receive the
[[Page 60655]]
request for reconsideration. While we recognize the commenter's concern
about possibly withholding the full payment rate update before the
reconsideration and appeals process is complete, we need to consider
that if we waited to reduce the payment, the agency could encounter
issues with recouping funds that were improperly paid to a hospital
that did not meet the HOP QDRP requirements.
Regarding making the reconsideration and appeals process a
permanent component to the quality reporting program and, therefore,
not proposing or renewing it each calendar year, we have customarily
proposed most of the HOP QDRP requirements and procedures, even those
we propose to continue with only minor modifications, through the
annual rulemaking process in order to afford the public additional
opportunities to comment on them. In the case of the reconsideration
and appeals procedures, each year we also propose the date by which
hospitals must requests for reconsiderations (for the CY 2011 payment
update, these requests must be submitted by February 3, 2011).
After consideration of the public comments we received, we are
adopting as final the proposed HOP QDRP reconsideration and appeals
procedures for CY 2010.
H. Reporting of ASC Quality Data
As discussed above, section 109(b) of the MIEA-TRHCA amended
section 1833(i) of the Act by redesignating clause (iv) as clause (v)
and adding new clause (iv) to paragraph (2)(D) and new paragraph (7) to
the Act. These amendments authorize the Secretary to require ASCs to
submit data on quality measures and to reduce the annual payment update
in a year by 2.0 percentage points for ASCs that fail to do so. These
provisions permit, but do not require, the Secretary to require ASCs to
submit such data and to reduce any annual increase for noncompliant
ASCs.
In the CY 2008 OPPS/ASC final rule with comment period (72 FR
66875) and in the CY 2009 OPPS/ASC final rule with comment period (73
FR 68780), we indicated that we intended to implement the provisions of
section 109(b) of the MIEA-TRHCA in a future rulemaking. While
promoting high quality care in the ASC setting through quality
reporting is highly desirable and fully in line with our efforts under
other payment systems, the transition to the revised payment system in
CY 2008 posed significant challenges to ASCs, and we determined that it
would be most appropriate to allow time for ASCs to gain some
experience with the revised payment system before introducing other new
requirements. Further, by implementing quality reporting under the OPPS
prior to establishing quality reporting for ASCs, CMS would gain
experience with quality measurement in the ambulatory setting in order
to identify the most appropriate measures for quality reporting in ASCs
prior to the introduction of the requirement in ASCs. Finally, we are
sensitive to the potential burden on ASCs associated with chart
abstraction and believe that adopting such measures at this time is in
contrast with our desire to minimize collection burden, particularly
when measures may be reported via EHRs in the future.
We continue to believe that promoting high quality care in the ASC
setting through quality reporting is highly desirable and fully in line
with our efforts under other payment systems. However, we continue to
have the concerns outlined above for CY 2010 and, therefore, in the CY
2010 OPPS/ASC proposed rule (74 FR 35405), we stated that we intend to
implement the provisions of section 109(b) of the MIEA-TRHCA in a
future rulemaking. We invited public comment on this deferral of
quality data reporting for ASCs and invited suggestions for quality
measures geared toward the services provided by ASCs. We again sought
public comment on potential reporting mechanisms for ASC quality data,
including electronic submission of these data.
Comment: Several commenters agreed with CMS' proposal and reasons
for deferring quality data reporting for ASCs. Some commenters
supported the CMS rationale for the proposed approach, that is,
enabling ASCs to gain experience with the recently launched payment
system and permitting CMS to gain experience in the HOPD setting before
implementing quality data reporting requirements for ASCs. Several
commenters supported CMS' decision to move with caution in expanding
quality data reporting to the ASC setting and appreciated CMS'
sensitivity to administrative burdens faced by ASCs. Commenters stated
that it would be beneficial to allow extra time in order to assess
implementation challenges and identify appropriate measures. These
commenters also indicated that issues such as preventability, risk
adjustment, unintended consequences, coding accuracy, burden, and
effect on overall health care costs need to be carefully examined
before starting a reporting program for a new setting. Other commenters
indicated it would be better to wait until ICD-10 implementation to
begin measurement in a new setting in order to allow for more accurate
coding and measurement and POA coding. One commenter agreed with the
continued delay in implementing a quality data reporting program for
ASCs based upon CMS' rationale set forth in the proposed rule and
suggested that CMS discuss implementation of the requirements,
including when ASC reporting will occur and the potential effects on
ASC staff. One commenter argued that requiring ASCs to conduct quality
data reporting is unnecessary because quality improvement is a key
requirement for ASCs to obtain and maintain accreditation and such
reporting would result in additional costs to ASC operations.
Response: We thank these commenters for acknowledging the many
operational issues that must be addressed prior to implementing a
quality data reporting program for ASCs and supporting our decision to
defer ASC quality reporting to a future time. However, with regard to
the commenter's suggestion that an ASC quality data reporting program
is unnecessary in light of ASC quality improvement accreditation
requirements, we believe that quality measure data reporting for ASCs
would provide consumers with quality of care information for this type
of health care provider as well as support our quality improvement
efforts. Therefore, notwithstanding the current issues that have led to
our determination to implement an ASC quality reporting program in a
future rulemaking, we believe it is important and necessary to require
ASCs to submit quality data.
Comment: Numerous commenters advocated that CMS move forward with
an ASC quality data reporting program as soon as possible. Many
commenters indicated that the collection and reporting of quality data
is a common practice for ASC facilities, and that the industry is eager
to make quality data available to consumers in a manner that allows
direct comparisons between equivalent surgical care delivered in HOPDs
and ASCs, particularly as the percentage of outpatient surgical
services being provided in ASC settings has grown. Some commenters
urged CMS to implement a quality data reporting system for ASCs for CY
2010. One commenter was concerned about the continued delay in quality
measurement for the rapidly growing ASC setting and indicated that by
now it should be technically feasible for ASCs to report on at least
the set of five quality measures that were developed
[[Page 60656]]
by the industry-sponsored ASC Quality Collaboration. Several commenters
argued that any quality data reporting system implemented would not
create significant administrative burden on ASCs. Some of these
commenters recommended the use of administrative claims as a means for
quality reporting as both chart abstraction and Internet-based
reporting would impose major disadvantages for ASCs, most of which are
classified as small businesses. Some commenters suggested beginning
with a set of six ASC quality measures that have already been
developed. Commenters also suggested that CMS consider claims-based
reporting for ASCs, which would eliminate the chart abstraction burden,
would capitalize on existing data collection infrastructure, and would
be most feasible for the industry at this time. Another commenter
indicated that specialty-specific measures for ASCs should be
implemented in such a reporting program in order to ensure broad
opportunity for participation, including those ASCs that specialize in
a few services or procedures. One commenter indicated that at least 35
States collect data on ASCs.
Response: We agree that it would be beneficial for consumers to be
able to compare the quality of surgical care across HOPDs and ASCs.
Currently, in addition to the reasons we outlined in the proposed rule,
we do not have the resources needed to implement a quality data
reporting program for ASCs. We are aware of the set of five quality
measures that were developed by the ASC Quality Collaboration as well
as six NQF-endorsed quality measures. While some of the measures may be
feasible to collect using claims data, others (such as the patient
safety-related measures) may not be meaningful to report unless all
patients treated were captured, and hence all-payer claims were
collected to generate the measures. We will evaluate the suggested
measures for ASC quality data reporting, as well as the feasibility of
claims-based measure reporting for ASCs and the need for specialty-
specific measures for ASCs in the future.
Comment: One commenter encouraged CMS to focus on electronic
submission of data for quality reporting once it has been determined to
move forward with the ASC quality program. One commenter recommended
that any ASC reporting program build on the public reporting programs
in place for the inpatient and outpatient settings and that the
measures reported in the ASC setting be consistent and, where possible,
identical to the outpatient department program as the consistency will
minimize confusion, simplify data collection, and assure greater
comparability across sectors.
Response: We thank the commenters for these suggestions. We will
consider them in the planning process for ASC quality measure data
reporting.
After consideration of the public comments we received, we are
finalizing our proposal to implement quality measure reporting in the
ASC setting in a future rulemaking. We continue to believe that
promoting high quality care in the ASC setting through quality data
reporting is highly desirable and fully in line with our efforts under
other payment systems.
I. Electronic Health Records
As stated above, CMS is actively seeking alternatives to manual
chart abstraction for the collection of quality measures for its
quality data reporting programs. Among these alternatives are claims-
based measure calculation, collection of data from systematic
registries widely used by hospitals, and electronic submission of
quality measures using EHRs. In the CY 2009 OPPS/ASC final rule with
comment period, we discussed public commenters' suggestions that we
adopt measures that can be collected via EHRs (73 FR 68769). We agree
with the commenters about the importance of actively working to move to
a system of data collection based on submission from EHRs. We have been
engaged with health IT standard-setting organizations to promote the
adoption of the necessary standards regarding data capture to
facilitate data collection via EHRs, and have been collaborating with
such organizations on standards for a number of quality measures. We
encourage hospitals to take steps toward the adoption of EHRs that will
allow for reporting of clinical quality data from the EHR directly to a
CMS data repository. We also encourage hospitals that are implementing,
upgrading, or developing EHR systems to ensure that such systems
conform to standards adopted by HHS. In the CY 2010 OPPS/ASC proposed
rule (74 FR 35405), we invited public comment on the future direction
of EHR-based quality measure submission with respect to the HOP QDRP.
Comment: One commenter strongly encouraged CMS to consider aligning
the HOP QDRP with the ONC measures for ``meaningful use,'' and to
provide clarity on those measures that appear to be similar to those
identified as measures for meaningful use, such as the OPPS CY 2011
``OP-4: Aspirin at Arrival'' and the meaningful use matrix measure for
CY 2011, ``Improve quality, safety, efficiency, and reduce health
disparities: Percentage patients at high-risk for cardiac events on
aspirin prophylaxis [OP].''
Response: The measure matrix referenced by the commenter is a list
of criteria developed by the Health IT Policy Council, an advisory
committee to ONC, for consideration by the Department as it develops
the initial criteria for determining whether an eligible hospital or
eligible professional is a meaningful user of certified EHR technology.
Eligible hospitals and eligible professionals who demonstrate that they
meaningfully use certified EHR technology will be eligible for payment
incentives under Medicare, as authorized under the HITECH Act. To be
considered a meaningful user of the certified EHR technology, section
1886(n)(3)(A)(iii) of the Act, as added by section 4102(a) of the
HITECH Act, requires that eligible hospitals submit to CMS, using
certified EHR technology, the clinical quality measures and such other
measures selected by the Secretary. Section 1886(n)(3)(B)(iii) of the
Act provides that in selecting these reporting measures, the Secretary
shall seek to avoid redundant or duplicative reporting with the
reporting otherwise required, including reporting under RHQDAPU. CMS
will establish the initial meaningful use criteria in future
rulemaking, including the selection of quality measures for hospital
reporting purposes under this separate incentive program. Some of the
clinical quality measures included on the Health IT Policy Council's
matrix are similar to measures adopted into the HOP QDRP. As we stated
in the ``considerations for measurement'' section of this final rule
with comment period, because we seek to harmonize applicable measures
across settings, and many of the measures for the HOP QDRP that apply
to HOPDs have been adapted from the RHQDAPU program, some of the
measures that appear on the Health IT Policy Council's matrix are
similar to measures adopted into the RHQDAPU program. We thank the
commenters and will take these comments into consideration as we
consider the future direction of EHR-based quality measure submission
with respect to the HOP QDRP.
XVII. Healthcare-Associated Conditions
A. Background
1. Preventable Medical Errors and Hospital-Acquired Conditions (HACs)
Under the IPPS
As noted in its landmark 1999 report ``To Err is Human: Building a
Safer Health System,'' the Institute of Medicine found that medical
errors are
[[Page 60657]]
a leading cause of morbidity and mortality in the United States. Total
national costs of these errors due to lost productivity, disability,
and health care costs were estimated at $17 billion to $29 billion.\2\
As one approach to combating healthcare-associated conditions, in 2005,
Congress authorized CMS to adjust Medicare IPPS hospital payments to
encourage the prevention of these conditions. Section 1886(d)(4)(D) of
the Act (as added by section 5001(c) of the Deficit Reduction Act (DRA)
of 2005, Pub. L. 109-171) required the Secretary to select by October
1, 2007, at least two conditions that are: (1) High cost, high volume,
or both; (2) assigned to a higher paying diagnosis-related group (DRG)
when present as a secondary diagnosis; and (3) could reasonably have
been prevented through the application of evidence-based guidelines.
CMS has titled this initiative ``Hospital-Acquired Conditions (HAC) and
Present on Admission (POA) Indicator Reporting.'' Since October 1,
2008, Medicare no longer assigns a hospital inpatient discharge to a
higher paying Medicare Severity Diagnosis-Related Group (MS-DRG) if a
selected HAC is not present on admission. That is, if there is an HAC,
the case is paid as though the secondary diagnosis was not present.
However, if any nonselected complications or comorbidities appear on
the claim, the claim will be paid at the higher MS-DRG rate; to cause a
lower MS-DRG payment, all complications or comorbidities on the claim
must be selected conditions for the HAC payment provision. Since
October 1, 2007, CMS has required hospitals to submit information on
Medicare hospital inpatient claims specifying whether diagnoses were
POA.
---------------------------------------------------------------------------
\2\ Institute of Medicine: To Err Is Human: Building a Safer
Health System, November 1999. Available at: http://www.iom.edu/Object.File/Master/4/117/ToErr-8pager.pdf.
---------------------------------------------------------------------------
2. Expanding the Principles of the IPPS HACs Payment Provision to the
OPPS
In the CY 2009 OPPS/ASC proposed rule and final rule with comment
period (73 FR 41547 and 68781, respectively), we discussed whether the
principle of Medicare not paying more for preventable HACs during
inpatient stays paid under the IPPS could be applied more broadly to
other Medicare payment systems in other settings for conditions that
occur or result from health care delivered in those settings. We also
acknowledged that implementation of this concept would be different for
each setting, as each Medicare payment system is unique. As we have
used in past rulemaking and general notices, in the following
discussion in this final rule with comment period, we refer to
conditions that occur in the hospital inpatient setting as ``hospital-
acquired conditions (HACs),'' to conditions that occur in HOPDs as
``hospital outpatient healthcare-associated conditions (HOP-HACs),''
and to conditions that result from care in settings other than the
hospital inpatient and HOPD settings as ``healthcare-associated
conditions.''
In both the CY 2009 OPPS/ASC proposed rule and final rule with
comment period, we specifically presented our rationale for considering
the HOPD as a possible appropriate setting for Medicare to extend to
the OPPS the concept of not paying more for preventable healthcare-
associated conditions that occur as a result of care provided during a
hospital encounter. For example, hospitals provide a broad array of
services in their HOPDs that may overlap or precede the inpatient
activities of the hospital, including many surgical procedures and
diagnostic tests that are commonly performed on both hospital
inpatients and outpatients. Similarly, individuals who are eventually
admitted as hospital inpatients often initiate their hospital encounter
in the HOPD, where they receive care during clinic or emergency
department visits or observation care that precede their inpatient
hospital admission. In addition, like the IPPS, the OPPS is also
subject to the ``pay-for-reporting'' provision that affects the
hospital outpatient annual payment update by the authority of section
1833(t)(17) of the Act (as amended by section 109(a) of Pub. L. 109-432
(MIEA-TRHCA)). (We refer readers to section XVI. of this final rule
with comment period for a discussion of the HOP QDRP provisions for
hospitals that fail to meet the reporting requirements established for
the hospital outpatient payment update.)
The risks of preventable medical errors leading to the occurrence
of healthcare-associated conditions are likely to be high in outpatient
settings, given the large number of encounters and exposures that occur
in these settings. Approximately 530,000 preventable drug-related
injuries are estimated to occur each year among Medicare beneficiaries
in outpatient clinics.\3\ These statistics clearly point to the
significant magnitude of the problem of healthcare-associated
conditions in outpatient settings. Recent trends have shown a shift in
services from the inpatient setting to the HOPD, and we expect the
occurrence of healthcare-associated conditions stemming from outpatient
care to grow directly as a result of this shift in sites of service.
---------------------------------------------------------------------------
\3\ Asplen, P., Wolcott, J., Bootman, J.L., Cronenwett, L.R.
(editors): Preventing Medication Errors: Quality Chasm Series, The
National Academy Press, 2007. Available at: http://www.nap.edu/catalog.php?record_id=11623.
---------------------------------------------------------------------------
For the CY 2009 OPPS, we did not adopt any new Medicare policy in
our discussion of healthcare-associated conditions as they relate to
the OPPS. Instead, in the CY 2009 OPPS/ASC proposed rule, we solicited
public comments on options and considerations, including the statutory
authority related to expanding the IPPS HAC provision to the OPPS. Our
discussion addressed the following areas:
Criteria for possible candidate OPPS conditions;
Collaboration process;
Potential OPPS HOP-HACs, including object left in during
surgery; air embolism; blood incompatibility; and falls and trauma,
including fractures, dislocations, intracranial injuries, crushing
injuries, and burns; and
OPPS infrastructure and payment for encounters resulting
in healthcare-associated conditions, including the necessity of POA
reporting for hospital outpatient services, methods for risk
stratification, and potential methods for adjusting hospital payment.
3. Discussion in the CY 2009 OPPS/ASC Final Rule With Comment Period
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68784
through 68787), we responded to the public comments we received on
healthcare-associated conditions in the context of the OPPS. Several
commenters fully supported expanding the IPPS HAC policy to other
settings such as HOPDs and ASCs, but many commenters stated that CMS
should not implement a related policy in other settings without gaining
implementation experience with the IPPS HACs. A number of commenters
addressed concerns regarding some of the potential specific HOP-HACs
discussed in the CY 2009 OPPS/ASC proposed rule (73 FR 41549), and some
commenters suggested other conditions that should be considered or
identified those that should not be considered. Many commenters stated
that the attribution of HOP-HACs in the HOPD setting is difficult and
stated that there was a need to develop risk adjustment techniques to
account for differences in patient severity of illness or other patient
characteristics. Many commenters asserted that the POA
[[Page 60658]]
indicators may need to be modified for use in the HOPD or ASC setting.
Some commenters suggested that a ``present on encounter'' indicator or
another form of incorporation of preexisting conditions into an
episode-of-care might be more useful than a POA indicator. Several
commenters believed that, without changes to the existing OPPS payment
structure, there would be no straightforward methodology for adjusting
hospital payment.
While we acknowledged these challenges in the CY 2009 OPPS/ASC
final rule with comment period (73 FR 68787), we noted that we view
addressing the ongoing problem of preventable healthcare-associated
conditions in outpatient settings, including the HOPD, as a key value-
based purchasing strategy to sharpen the focus on such improvements
beyond hospital inpatient care to those settings where the majority of
Medicare beneficiaries receive most of their health care services. We
also noted that we looked forward to continuing to work with
stakeholders to improve the quality, safety, and value of health care
provided to Medicare beneficiaries, beginning with a joint IPPS/OPPS
listening session.
B. Public Comments and Recommendations on Issues Regarding Healthcare-
Associated Conditions From the Joint IPPS/OPPS Listening Session
Subsequent to the issuance of the CY 2009 OPPS/ASC final rule with
comment period, we held a joint Hospital-Acquired Conditions and
Hospital Outpatient Healthcare-Associated Conditions Listening Session
on December 18, 2008. (The listening session was announced in a notice
published in the Federal Register on October 30, 2008 (73 FR 64618).)
During the listening session, we provided an overview of the HAC
program under the IPPS and our previous discussions of extending the
underlying concepts to the HOPD, including OPPS infrastructure concerns
such as the lack of a POA indicator and the need to address current
ICD-9-CM POA reporting guidelines, attribution of conditions in the
HOPD, and payment adjustment considerations. In addition to the initial
candidate HOP-HACs that we had previously identified based on their
adoption under the IPPS, we discussed other potential HOP-HACs, such as
medication errors, conditions related to complications of hospital
outpatient surgery or other procedures, and infections related to HOPD
care. A transcript of the listening session is available on the CMS Web
site at: http://www.cms.hhs.gov/HospitalAcqCond/07_EducationalResources.asp#TopOfPage.
Of the many public comments presented orally at the listening
session or submitted in writing, approximately one-half commented on
expansion of the IPPS HAC payment provision to other settings. Some
commenters were in favor of an expansion to the HOPD and other
settings. Many commenters requested that CMS delay any expansion,
citing the short duration of experience with HACs and POA indicator
reporting for inpatient hospitalizations and the need to evaluate the
current program prior to its expansion to other settings.
We appreciate these commenters' perspectives and note that now that
we have early data on the HAC program, in the near future we plan to
evaluate the impact of the HAC payment provision through a joint
program evaluation with CDC, AHRQ, and the Office of Public Health and
Science.
Many commenters pointed to the need to define the boundaries of an
episode-of-care for healthcare-associated conditions in the HOPD and
other settings in order to define when, how, and to whom an expanded
policy would apply. These commenters also noted that hospital
outpatients have frequently received care from numerous practitioners
and providers over an extended period of time and the hospitals' or
clinics' role would be supportive, rather than prescriptive, with
respect to that patient care. They requested that CMS develop a
comprehensive and accurate definition of an episode-of-care in order to
appropriately attribute responsibility and the additional costs
associated with HOP-HACs.
We have previously acknowledged that short-term consideration of
HOP-HACs would necessarily be limited to conditions that occur during
and result from care provided in a single hospital outpatient encounter
because a broader definition of an episode-of-care has not yet been
developed.
Many commenters believed that detailed information should be
gathered and analyzed from the IPPS POA indicator reporting experience
before an expansion of the HAC payment provision and POA indicator
reporting to the HOPD. Other commenters pointed out that the initial
four conditions under consideration for HOPDs based on their adoption
under the IPPS would likely require emergency admission for treatment
of the event. Though secondary to an initial encounter in the HOPD,
they indicated that these conditions would be coded as POA for the IPPS
according to current reporting guidelines and would not be captured as
HOP-HACs. Several commenters stated that, in the HOPD, it would be
particularly important to make an assessment over an entire episode-of-
care; thus, POA might be better defined in terms of ``present on
encounter'' for this purpose. Other commenters pointed to the need for
the development of new codes and determinations of when the codes
should apply in order to capture POA conditions under the OPPS, an
activity that would potentially significantly increase hospitals'
administrative burden. Some commenters suggested waiting to expand the
HAC payment provision to other settings until implementation of the
ICD-10 classification system, which would provide more precise coding
to identify preexisting conditions.
We have acknowledged a number of these challenges already, and we
will continue to consider these reporting issues as we refine our views
regarding potential HOP-HACs.
Many commenters highlighted that patients receiving hospital
outpatient care may receive care in multiple departments of the
hospital, both during a single outpatient encounter and longitudinally
over many outpatient encounters of relatively short duration. These
commenters stated that, because of these common patterns of care, the
timely identification of HOP-HACs and their provider attribution would
be particularly challenging. In addition, the commenters pointed out
that patient factors may play a role in the development of potential
HOP-HACs, such as adverse drug events. Several of these commenters
suggested targeting the HOP-HAC policy to specific APCs, specific HCPCS
codes, or specific HOPD settings, such as the emergency department. In
the CY 2009 OPPS/ASC proposed rule and final rule with comment period
(73 FR 41549 through 41550 and 68785 through 68787, respectively), we
discussed the challenge of provider attribution under the OPPS,
particularly for conditions that may develop over time and involve
multiple encounters and other care settings. We understand the
importance of this issue and will continue to be cognizant of it in
future policy development.
Several commenters asserted that CMS should consider risk
adjustment models that incorporate population risk adjustments to avoid
creating barriers to access for more complex patients or to avoid
unduly placing providers treating more complex patients at higher risk
for payment consequences due to HOP-HACs. A number of commenters
endorsed the use of rate-based measures
[[Page 60659]]
of conditions on a provider-specific level so that the level of
preventability of specific clinical conditions could be determined and
compared. Several commenters stated that, under the best of
circumstances, falls may not be ``reasonably preventable,''
particularly in the HOPD. Many commenters also believed that adverse
drug events would require further definition in order to appropriately
address medication errors that were not directly under the control of
the hospital providing the treatment of the medication-related problem
and were, therefore, not ``reasonably preventable.'' Similarly, some
commenters stated that it would be difficult to appropriately attribute
metabolic derangements in the HOPD to the hospital treating the
resulting clinical problem.
We appreciate these public comments and will use our collaborative
process with CDC, AHRQ, and the Office of Public Health and Science to
help define potential HOP-HACs that are clinically meaningful for
patient safety, as well as attributable to care furnished by providers.
Numerous commenters urged CMS to generally proceed with care, to
promote the use of evidence-based guidelines and care coordination, and
to ensure that any HOP-HAC program is aligned with other CMS quality
programs. Many commenters believed that the challenges involved might
be better addressed operationally within a full-scale value-based
purchasing program. We appreciate these suggestions and will consider
them as we advance policies that will ensure paying for the highest
quality, safest, and most effective health care for Medicare
beneficiaries.
C. CY 2010 Approach to Healthcare-Associated Conditions Under the OPPS
For CY 2010, we did not propose to expand the principles behind the
IPPS HAC payment provision to the OPPS through a HOP-HAC program (74 FR
35407). We stated that we continue to believe that it may be
appropriate to expand the principles of the IPPS HAC payment provision
to the OPPS in the future. However, we acknowledged that, at this time,
there are many operational challenges to such an expansion that will
require further consideration and infrastructure development. We
appreciate the input and guidance provided by the many public
commenters to date on how to approach these challenges. Most
stakeholders have strongly encouraged CMS to evaluate the impact of the
IPPS HAC payment provision before further considering any expansion to
other settings. We explained that we are evaluating the impact of the
HAC and POA indicator reporting initiative on Medicare payment and that
we plan to consider any relevant findings as part of our future
decision making regarding any expansion of the HAC payment provision to
other settings. We welcomed additional suggestions and comments from
stakeholders on potential HOP-HACs as additional information becomes
available and health care delivery continues to evolve.
Comment: Several commenters commended CMS for considering an
extension of the current IPPS HAC policy to other care settings and
payment systems, including the OPPS. These commenters suggested that it
would be reasonable to begin with patient safety-related conditions
such as an object left in during surgery, air embolism, blood
incompatibility, falls and trauma, including fractures, dislocations,
intracranial injuries, crushing injuries, and burns.
However, the majority of commenters supported CMS' position in not
proposing to expand the IPPS HAC payment provision to the OPPS at this
time. They agreed with the plan to consider any relevant findings from
the agency's evaluation of the impact of the HAC and POA indicator
reporting initiatives (74 FR 35407) as part of CMS' future decision-
making regarding expansion of the IPPS HAC policy to other settings.
Several commenters reiterated their concerns related to technical
challenges in expanding the IPPS HAC program to the OPPS, with
particular emphasis on the need to develop a type of POA coding for
hospital outpatient services and the fact that current POA guidelines
designate conditions that develop during an outpatient encounter, such
as clinic and emergency department visits, observation services, or
outpatient surgery, as POA for hospital inpatient reporting. Other
commenters encouraged CMS to develop a comprehensive definition of an
episode-of-care, with the potential for inclusion of related care
settings to appropriately attribute accountability. Some commenters
urged CMS to evaluate the role of ICD-10 classification in the HAC
program and to consider postponing implementation of HOP-HACs until the
adoption of ICD-10. A number of commenters recommended that CMS focus
on areas of patient safety in a future HOP-HACs program, including
outpatient surgery and outpatient procedures that are correlated with
the potential for injury and medication errors. Finally, several
commenters encouraged CMS to ensure that any future HOP-HAC program
provides an incentive for care coordination, aligns with other CMS
quality initiatives, and has no detrimental effect on patient access to
care.
Response: We appreciate the thoughtful and detailed suggestions
from commenters. We will continue to consider the concerns and
suggestions from commenters as we evaluate the impact of the HAC and
POA indicator reporting initiative and as part of our future decision
making regarding any expansion of the HAC payment provision to other
settings.
XVIII. Files Available to the Public Via the Internet
A. Information in Addenda Related to the CY 2010 Hospital OPPS
Addenda A and B to this final rule with comment period provide
various data pertaining to the CY 2010 payment for items and services
under the OPPS. Addendum A, which includes a list of all APCs payable
under the OPPS, and Addendum B, which includes a list of all active
HCPCS codes with their CY 2010 OPPS payment status and comment
indicators, are available to the public by clicking ``Hospital
Outpatient Regulations and Notices'' on the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/.
For the convenience of the public, we also are including on the CMS
Web site a table that displays the HCPCS code data in Addendum B sorted
by APC assignment, identified as Addendum C.
Addendum D1 defines the payment status indicators that are used in
Addenda A and B. Addendum D2 defines the comment indicators that are
used in Addendum B. Addendum E lists the HCPCS codes that are only
payable to hospitals as inpatient procedures and are not payable under
the OPPS. Addendum L contains the out-migration wage adjustment for CY
2010. Addendum M lists the HCPCS codes that are members of a composite
APC and identifies the composite APC to which each is assigned. This
addendum also identifies the status indicator for the HCPCS code and a
comment indicator if there is a change in the code's status with regard
to its membership in the composite APC. Each of the HCPCS codes
included in Addendum M has a single procedure payment APC, listed in
Addendum B, to which it is assigned when the criteria for assignment to
the composite APC are not met. When the criteria for payment of the
code through the composite APC are met, one unit of the composite APC
payment is paid, thereby providing packaged payment for all services
that are assigned to the composite APC
[[Page 60660]]
according to the specific I/OCE logic that applies to the APC. We refer
readers to the discussion of composite APCs in section II.A.2.e. of
this final rule with comment period for a complete description of the
composite APCs.
These addenda and other supporting OPPS data files are available on
the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/.
B. Information in Addenda Related to the CY 2010 ASC Payment System
Addenda AA and BB to this final rule with comment period provide
various data pertaining to the CY 2010 payment for the covered surgical
procedures and covered ancillary services for which ASCs may receive
separate payment. Addendum AA lists the CY 2010 ASC covered surgical
procedures, their payment indicators, and their payment rates. Addendum
BB displays the CY 2010 ASC covered ancillary services, their payment
indicators, and their payment rates. All ASC relative payment weights
and payment rates for CY 2010 are a result of applying the revised ASC
payment system methodology established in the final rule for the
revised ASC payment system published in the Federal Register on August
2, 2007 (72 FR 42470 through 42548) to the CY 2010 OPPS and MPFS
ratesetting information.
Addendum DD1 defines the payment indicators that are used in
Addenda AA and BB. Addendum DD2 defines the comment indicators that are
used in Addenda AA and BB.
Addendum EE (available only on the CMS Web site) lists the surgical
procedures that are excluded from Medicare payment if furnished in
ASCs. The excluded procedures listed in Addendum EE are surgical
procedures that are assigned to the OPPS inpatient list, are not
covered by Medicare, are reported using a CPT unlisted code, or have
been determined to pose a significant safety risk or are expected to
require an overnight stay when performed in ASCs.
These addenda and other supporting ASC data files are included on
the CMS Web site at: http://www.cms.hhs.gov/ASCPayment/. The MPFS data
files are located at: http://www.cms.hhs.gov/PhysicianFeeSched/.
The links to all of the FY 2010 IPPS wage index-related tables
(that are used for the CY 2010 OPPS) that were published in the FY 2010
IPPS/LTCH PPS final rule (74 FR 44032 through 44125) are accessible on
the CMS Web site at: http://www.cms.hhs.gov/AcuteInpatientPPS/WIFN.
XIX. Collection of Information Requirements
A. Legislative Requirement for Solicitation of Comments
Under the Paperwork Reduction Act of 1995, we are required to
provide 30-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
The CY 2010 OPPS/ASC proposed rule and this final rule with comment
period do not specify any information collection requirements through
regulatory text. However, in the proposed rule and in this final rule
with comment period, we make reference to associated information
collection requirements that are not discussed in the regulation text
contained in this document. The following is a discussion of those
requirements, for which we solicited public comment in the CY 2010
OPPS/ASC proposed rule (74 FR 35232).
B. Associated Information Collections Not Specified in Regulatory Text
1. Hospital Outpatient Quality Data Reporting Program (HOP QDRP)
As previously stated in section XVI. of this final rule with
comment period, the quality data reporting program for hospital
outpatient care, known as the Hospital Outpatient Quality Data
Reporting Program (HOP QDRP), has been generally modeled after the
quality data reporting program for hospital inpatient services, the
Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU)
program. Section 109(a) of the MIEA-TRHCA (Pub. L. 109-432) amended
section 1833(t) of the Act by adding a new subsection (17) that affects
the payment rate update applicable to OPPS payments for services
furnished by hospitals in outpatient settings on or after January 1,
2009. Section 1833(t)(17)(A) of the Act, which applies to hospitals as
defined under section 1886(d)(1)(B) of the Act, states that subsection
(d) hospitals that fail to report data required for the quality
measures selected by the Secretary in the form and manner required by
the Secretary under section 1833(t)(17)(B) of the Act will receive a
2.0 percentage point reduction to their annual payment update factor.
Section 1833(t)(17)(B) of the Act requires that hospitals submit
quality data in a form and manner, and at a time, that the Secretary
specifies. Section 1833(t)(17)(C)(i) of the Act requires the Secretary
to develop measures appropriate for the measurement of the quality of
care (including medication errors) furnished by hospitals in outpatient
settings, that these measures reflect consensus among affected parties
and, to the extent feasible and practicable, that these measures
include measures set forth by one or more national consensus building
entities.
2. HOP QDRP Quality Measures for the CY 2010 and CY 2011 Payment
Determinations
In the CY 2009 final rule with comment period (73 FR 68766), we
adopted 4 claims-based imaging measures for use in CY 2010, bringing
the total number to 11 measures. For the CY 2010 payment update, we are
requiring hospitals to submit data related to the seven data abstracted
measures; we will calculate the claims-based measures using
administrative paid claims data and do not require additional hospital
data submissions. Similarly, as we proposed, we are using the same 11
measures and the same data submission requirements related to the seven
data abstracted measures for CY 2011 payment determinations.
------------------------------------------------------------------------
HOP QDRP measurement set to be used for CY 2010 and CY 2011 payment
determination
-------------------------------------------------------------------------
OP-1: Median Time to Fibrinolysis
OP-2: Fibrinolytic Therapy Received Within 30 Minutes
OP-3: Median Time to Transfer to Another Facility for Acute Coronary
Intervention
OP-4: Aspirin at Arrival
[[Page 60661]]
OP-5: Median Time to ECG
OP-6: Timing of Antibiotic Prophylaxis
OP-7: Prophylactic Antibiotic Selection for Surgical Patients
OP-8: MRI Lumbar Spine for Low Back Pain
OP-9: Mammography Follow-up Rates
OP-10: Abdomen CT--Use of Contrast Material
OP-11: Thorax CT--Use of Contrast Material
------------------------------------------------------------------------
As part of the data submission process pertaining to the 11
measures listed above, hospitals must also complete and submit a notice
of participation in the HOP QDRP. By submitting this document,
hospitals agree that they will allow CMS to publicly report the quality
measures as required by the HOP QDRP.
The burden associated with this section is the time and effort
associated with completing the notice of participation as well as
collecting and submitting the data on the seven data abstracted
measures. We estimate that there will be approximately 3,500
respondents per year. For hospitals to collect and submit the
information on the required measures, we estimate it will take 30
minutes per sampled case. We estimate there will be a total of
1,800,000 cases per year, approximately 514 cases per respondent. The
estimated annual burden associated with the aforementioned submission
requirements is 900,000 hours ((1,800,000 cases/year) x (0.5 hours/
case)).
We did not receive any public comments on the burden associated
with these information collection requirements.
3. HOP QDRP Validation Requirements
In addition to requirements for submitting of quality data,
hospitals must also comply with the requirements for data validation in
CY 2011. As specified in detail in section XVI.E. of this final rule
with comment period, for the CY 2011 payment determination, as we
proposed, we are implementing a validation program that will require
hospitals to supply requested medical documentation to a CMS contractor
for purposes of validating those data. However, the results of the
validation will not affect the CY 2011 payment update for any hospital,
although the payment update may be affected if a hospital fails to
submit the requested data. We believe that it is important for
hospitals to have some experience and knowledge of the HOP QDRP
validation process before payment determinations are made based upon
validation results. As we proposed, we are implementing a validation
program that will both limit burden upon hospitals, especially small
hospitals, as well as provide feedback to all hospitals on validation
performance. We are requesting medical documentation from hospitals for
April 1, 2009 through March 31, 2010 episodes of care, which, with a
modification for two of the quality measures, will allow us to gather
one full year of submitted data for validation purposes.
The burden associated with the CY 2011 requirement is the time and
effort necessary to submit validation data to a CMS contractor. We
estimate that it will take each hospital approximately 38 minutes to
comply with these data submission requirements. To comply with the
requirements, we estimate each hospital must submit between 2 to 3
cases on average for review. We estimate that 3,200 hospitals will need
to comply with these requirements in order for us to collect a total of
7,300 charts across all sampled hospitals. The estimated annual burden
associated with the data validation process for CY 2011 is 2,026 hours.
Similar to our policy for the FY 2012 RHQDAPU program (74 FR 43884
through 43889), we proposed (74 FR 35403) to validate data from 800
randomly selected hospitals each year under the HOP QDRP, beginning
with the CY 2012 payment determination. We note that, because the 800
hospitals will be selected randomly, every HOP QDRP-participating
hospital will be eligible each year for validation selection. For each
selected hospital, we will randomly validate per year up to 48 patient
episodes of care (12 per quarter) from the total number of cases that
the hospital successfully submitted to the OPPS Clinical Warehouse
during the applicable time period. However, if a selected hospital has
submitted less than 12 cases in one or more quarters, only those cases
available will be validated. However, we did not adopt that proposal in
this final rule with comment period. Instead, we indicated that we
would take into account results of further analyses of collected data,
as well as public comments we received on our proposal and propose a
validation process for the CY 2012 payment rate update in next year's
rulemaking process.
The burden associated with the proposed CY 2012 requirement, if we
adopt it next year is the time and effort necessary to submit
validation data to a CMS contractor. We estimate that it will take each
of the 800 sampled hospitals approximately 12 hours to comply with
these data submission requirements. To comply with the requirements, we
estimate each hospital must submit 48 cases for the affected year for
review. We estimate that 800 hospitals must comply with these
requirements to submit a total of 38,400 charts across all sampled
hospitals. The estimated annual burden associated with the data
validation process for CY 2012 and subsequent years is 9,600 hours.
We discuss public comments on this information collection
requirement in section XVI.E.3.b. of this final rule with comment
period.
4. HOP QDRP Reconsideration and Appeals Procedures
In the CY 2009 OPPS/ASC final rule with comment period (73 FR
68779), we adopted a mandatory reconsideration process that will apply
to the CY 2010 payment decisions. As we proposed in the CY 2010 OPPS/
ASC proposed rule, we will continue this process for the CY 2011
payment update. Under this process, the hospitals must meet all of the
requirements specified in section XVI.G. of this final rule with
comment period. We did not assign burden to the aforementioned
information collection requirements in the CY 2010 OPPS/ASC proposed
rule because we believed the associated information collection
requirements were exempt under 5 CFR 1320.4 (that is, information
collected subsequent to an administrative action is not subject to the
PRA). However, upon further review, in this final rule with comment
period, we are assigning burden to the reconsideration and appeals
procedures. The burden associated with the reconsideration and appeals
procedures is the time and effort necessary to gather the required
information and submit it to CMS. The required information, as
specified in section XVI.G. of this final rule with comment period,
involves the submission of a completed reconsideration request form
that is
[[Page 60662]]
signed by the hospital's chief financial officer. We estimate that 25
hospitals will avail themselves of the reconsideration and appeals
procedures on an annual basis. We estimate that it will take each
hospital approximately 40 minutes to gather the required information,
complete the required reconsideration request form, obtain the
signiture of the chief financial officer, and forward the documentation
to CMS. The total annual estimated burden associated with these
requirements is 1,000 minutes.
We did not receive any public comments on these information
collection requirements.
5. Additional Topics
While we are seeking OMB approval for the information collection
requirements associated with the HOP QDRP and the data validation
processes, in the CY 2010 OPPS/ASC proposed rule (74 FR 35232), we also
sought public comment on several issues that have the potential to
ultimately affect the burden associated with HOP QDRP and the data
validation processes. Specifically, that proposed rule listed the
possible quality measures under consideration for CY 2012 and
subsequent years. We also solicited public comments to explore the use
of registries to comply with the HOP QDRP submission requirements, the
use of EHRs as a data submission tool, the use of a standardized
process for the retirement of HOP QDRP quality measures, the use of an
extraordinary circumstance extension or waiver for reporting quality
data, and the implementation of additional data validation conditions.
We discussed the comments we received on these issues in section XVI.
of the preamble of this final rule with comment period.
XX. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this final rule
with comment period, and, when we proceed with a subsequent
document(s), we will respond to those comments in the preamble to that
document(s).
XXI. Regulatory Impact Analysis
A. Overall Impact
We have examined the impacts of this final rule with comment period
as required by Executive Order 12866 (September 1993, Regulatory
Planning and Review), the Regulatory Flexibility Act (RFA) (September
19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act,
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive
Order 13132 on Federalism, and the Congressional Review Act (5 U.S.C.
804(2)).
1. Executive Order 12866
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for major rules that have economically
significant effects ($100 million or more in any 1 year) or adversely
affect in a material way the economy, a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local, or tribal government or communities (58 FR
51741).
We estimate that the effects of the OPPS provisions that are being
implemented in this final rule with comment period will result in
expenditures exceeding $100 million in any 1 year. We estimate the
total increase (from changes in this final rule with comment period as
well as enrollment, utilization, and case-mix changes) in expenditures
under the OPPS for CY 2010 compared to CY 2009 to be approximately $1.9
billion. Because this final rule with comment period for the OPPS is
``economically significant'' as measured by the $100 million threshold
and also a major rule under the Congressional Review Act, we have
prepared a regulatory impact analysis that, to the best of our ability,
presents the costs and benefits of this rulemaking. Table 73 of this
final rule with comment period displays the redistributional impact of
the CY 2010 changes on OPPS payment to various groups of hospitals.
We estimate that the effects of the ASC provisions that are being
implemented in this final rule with comment period for the ASC payment
system will not exceed $100 million in any 1 year and, therefore, are
not economically significant. We estimate the total increase (from
changes in this final rule with comment period as well as enrollment,
utilization, and case-mix changes) in expenditures under the ASC
payment system for CY 2010 compared to CY 2009 to be approximately $80
million. However, because this final rule with comment period for the
ASC payment system substantially affects ASCs, we have prepared a
regulatory impact analysis of changes to the ASC payment system that,
to the best of our ability, presents the costs and benefits of this
rulemaking. Table 75 and Table 76 of this final rule with comment
period display the redistributional impact of the CY 2010 changes on
ASC payment, grouped by specialty area and then by procedures with the
greatest ASC expenditures, respectively.
2. Regulatory Flexibility Act (RFA)
The RFA requires agencies to analyze options for regulatory relief
of small businesses if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Many hospitals, other providers, ASCs, and
other suppliers are considered to be small entities, either by being
nonprofit organizations or by meeting the Small Business Administration
(SBA) definition of a small business (hospitals having revenues of
$34.5 million or less in any 1 year and ASCs having revenues of $10
million or less in any 1 year). (For details on the latest standards
for health care providers, we refer readers the SBA's Web site at:
http://sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf (refer to the 620000 series).)
For purposes of the RFA, we have determined that many hospitals and
most ASCs would be considered small entities according to the SBA size
standards. Individuals and States are not included in the definition of
a small entity. Therefore, the Secretary has determined that this final
rule with comment period will have a significant impact on a
substantial number of small entities. Because we acknowledge that many
of the affected entities are small entities, the analyses presented
throughout this final rule with comment period constitute our
regulatory flexibility analysis. Therefore, in the CY 2010 OPPS/ASC
proposed rule (74 FR 35410), we solicited public comments on our
estimates and analyses of the impact of the proposed rule on those
small entities.
3. Small Rural Hospitals
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 603 of the RFA. With
the exception of hospitals located in certain New England
[[Page 60663]]
counties, for purposes of section 1102(b) of the Act, we now define a
small rural hospital as a hospital that is located outside an urban
area and has fewer than 100 beds. Section 601(g) of the Social Security
Amendments of 1983 (Pub. L. 98-21) designated hospitals in certain New
England counties as belonging to the adjacent urban areas. Thus, for
OPPS purposes, we continue to classify these hospitals as urban
hospitals. We believe that the changes to the OPPS in this final rule
with comment period will affect both a substantial number of rural
hospitals as well as other classes of hospitals and that the effects on
some may be significant. Also, the changes to the ASC payment system in
this final rule with comment period will affect rural ASCs. Therefore,
the Secretary has determined that this final rule with comment period
will have a significant impact on the operations of a substantial
number of small rural hospitals.
4. Unfunded Mandates
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. That threshold
level is currently approximately $133 million. This final rule with
comment period will not mandate any requirements for State, local, or
tribal governments, nor will it affect private sector costs.
5. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct costs on State and local
governments, preempts State law, or otherwise has Federalism
implications.
We have examined the OPPS and ASC provisions included in this final
rule with comment period in accordance with Executive Order 13132,
Federalism, and have determined that they will not have a substantial
direct effect on State, local or tribal governments, preempt State law,
or otherwise have a Federalism implication. As reflected in Table 73
below, we estimate that OPPS payments to governmental hospitals
(including State and local governmental hospitals) will increase by 1.8
percent under this final rule with comment period. While we do not know
the number of ASCs with government ownership, we anticipate that it is
small. We believe that the provisions related to payments to ASCs in CY
2010 will not affect payments to any ASCs owned by government entities.
The following analysis, in conjunction with the remainder of this
document, demonstrates that this final rule with comment period is
consistent with the regulatory philosophy and principles identified in
Executive Order 12866, the RFA, and section 1102(b) of the Act.
This final rule with comment period will affect payments to a
substantial number of small rural hospitals and a small number of rural
ASCs, as well as other classes of hospitals and ASCs, and some effects
may be significant.
B. Effects of OPPS Changes in This Final Rule With Comment Period
We are making several changes to the OPPS that are required by the
statute. We are required under section 1833(t)(3)(C)(ii) of the Act to
update annually the conversion factor used to determine the APC payment
rates. We also are required under section 1833(t)(9)(A) of the Act to
revise, not less often than annually, the wage index and other
adjustments, including pass-through payments and outlier payments. In
addition, we must review the clinical integrity of payment groups and
weights at least annually. Accordingly, in this final rule with comment
period, we are updating the conversion factor and the wage index
adjustment for hospital outpatient services furnished beginning January
1, 2010, as we discuss in sections II.B. and II.C., respectively, of
this final rule with comment period. We also are revising the relative
APC payment weights using claims data for services furnished from
January 1, 2008, through December 31, 2008, and updated cost report
information. We are continuing the current payment adjustment for rural
SCHs, including EACHs. Finally, we list the 6 drugs and biologicals in
Table 30 of this final rule with comment period that we are removing
from pass-through payment status for CY 2010.
Under this final rule with comment period, we estimate that the
update change to the conversion factor and other adjustments as
provided by the statute will increase total OPPS payments by 2.1
percent in CY 2010. The changes to the APC weights, the changes to the
wage indices, and the continuation of a payment adjustment for rural
SCHs, including EACHs, will not increase OPPS payments because these
changes to the OPPS are budget neutral. However, these updates do
change the distribution of payments within the budget neutral system as
shown in Table 73 below and described in more detail in this section.
We also estimate that the total change in payments between CY 2010 and
CY 2009, considering all payments, including changes in estimated total
outlier payments and expiration of additional money for specified wages
indices outside of budget neutrality, will increase total OPPS payments
by 1.9 percent.
1. Alternatives Considered
Alternatives to the changes we are making and the reasons that we
have chosen the options are discussed throughout this final rule with
comment period. Some of the major issues discussed in this final rule
with comment period and the options considered are discussed below.
a. Alternatives Considered for Pass-Through Payment for Implantable
Biologicals
We are finalizing our proposal to change the way we evaluate
transitional pass-through applications for implantable biologicals and
the way we pay for implantable biologicals newly eligible for
transitional pass-through status beginning in CY 2010. As discussed in
detail in section V.A.4. of this final rule with comment period, we are
finalizing a policy that the pass-through evaluation process and pass-
through payment methodology for implantable biologicals that are
surgically inserted or implanted (through a surgical incision or a
natural orifice) and that are newly approved for pass-through payment
beginning on or after January 1, 2010, be the device pass-through
process and payment methodology only. As a result, implantable
biologicals that are surgically inserted or implanted (through a
surgical incision or a natural orifice) will no longer be eligible to
submit biological pass-through applications and to receive biological
pass-through payment at ASP+6 percent. Rather, implantable biologicals
that are eligible for device pass-through payment will be paid based on
the charges-adjusted-to-cost methodology used for all pass-through
device categories.
We considered three alternatives for the pass-through evaluation
process and payment methodology for implantable biologicals that are
surgically inserted or implanted (through a surgical incision or a
natural orifice), as indicated in the CY 2010 OPPS/ASC proposed rule
(74 FR 35411). The first alternative we considered was to make no
change to the current pass-through evaluation process and payment
methodology for
[[Page 60664]]
implantable biologicals that are surgically inserted or implanted. We
did not select this alternative because this approach would continue
the separate pass-through evaluation processes and payment
methodologies for implantable biologicals and implantable nonbiological
devices that are sometimes used for the same clinical indications, and
where the implantable biologicals are often FDA-approved as devices.
Moreover, under our current policy, implantable biologicals could
potentially have two periods of pass-through payment, one as a
biological and one as a device. We believe that it is most appropriate
for a product to be eligible for a single period of OPPS pass-through
payment, rather than a period of device pass-through payment and a
period of drug or biological pass-through payment.
The second alternative we considered was to add a criterion
requiring the demonstration of substantial clinical improvement to the
biological pass-through evaluation process in order for a biological to
be approved for pass-through payment. This alternative would provide
pass-through payment only for those biologicals that demonstrate
clinical superiority, consistent with the pass-through evaluation
process for devices, and ensure that a product could receive only one
period of pass-through payment. We did not choose this alternative
because this approach would continue the different pass-through payment
methods for implantable biological and nonbiological devices. Pass-
through payment for biologicals is made at ASP+6 percent as required
for drug and biological pass-through payment, while pass-through
devices are paid at charges adjusted to cost. Therefore, this second
alternative would result in continued inconsistent pass-through payment
methodologies for biological and nonbiological devices that may
substitute for one another.
The third alternative we considered and the one we are adopting for
CY 2010 is to provide that, beginning in CY 2010, the pass-through
evaluation process and pass-through payment methodology for implantable
biologicals that are surgically inserted or implanted (through a
surgical incision or a natural orifice) be the device pass-through
process and payment methodology only. As we discuss in section V.A.4.
of this final rule with comment period, after consideration of the
public comments we received on the proposed rule, we are adopting this
alternative because we believe that a consistent pass-through payment
policy is to evaluate all such devices, both biological and
nonbiological, under the device pass-through process. We believe that
implantable biologicals that function as and may be substitutes for
implantable devices are most similar to devices because of their
required surgical insertion or implantation, and that it would be
appropriate to evaluate them as devices because they share significant
clinical similarity with implantable nonbiological devices.
b. Alternatives Considered for Payment of the Acquisition and Pharmacy
Overhead Costs of Drugs and Biologicals That Do Not Have Pass-Through
Status
For CY 2010, we are finalizing a transition payment for separately
payable drugs and biologicals at ASP+4 percent, which will continue to
represent combined payment for both the acquisition and pharmacy
overhead costs of separately payable drugs and biologicals. As
discussed in detail in section V.B.3. of this final rule with comment
period, we are redistributing $200 million total of packaged drug cost
($150 million of the pharmacy overhead cost currently attributed to
coded packaged drugs and biologicals with an ASP and $50 million of the
estimated pharmacy overhead cost currently attributed to uncoded
packaged drugs and biologicals) to separately payable drugs and
biologicals to provide an adjustment for the pharmacy overhead costs of
these separately payable products. As a result, we are proportionally
reducing the cost of packaged drugs and biologicals that is included in
the separate payment for procedural APCs to offset the $200 million
adjustment to provide payment for separately payable drugs and
biologicals at ASP+4 percent. We received favorable public comments on
our proposal to redistribute cost within drugs and biologicals to
adjust payment for separately payable drugs and biologicals. The public
commenters also agreed that our estimated total cost for all drugs and
biologicals in our claims data is accurate. Therefore, we are
redistributing a portion of pharmacy overhead cost in the CY 2010 final
rule claims data from some packaged drugs and biologicals to separately
payable drugs and biologicals. A redistribution within drug cost
maintains the estimated total cost of drugs and biologicals under the
OPPS.
We considered three alternatives for payment of the acquisition and
pharmacy overhead costs of drugs and biologicals that do not have pass-
through status for CY 2010. The first alternative we considered was to
continue our standard policy of comparing the estimated aggregate cost
of separately payable drugs and biologicals in our claims data to the
estimated aggregate ASP dollars for separately payable drugs and
biologicals, using the ASP as a proxy for average acquisition cost, to
calculate the estimated percent of ASP that would serve as the proxy
for the combined acquisition and pharmacy overhead costs of separately
payable drugs and biologicals (70 FR 68642). Under this standard
methodology, using July 2009 ASP information and updated final rule
costs derived from CY 2008 OPPS claims data, we estimated the combined
acquisition and pharmacy overhead costs of separately payable drugs and
biologicals to be ASP-3 percent. We also determined the combined
acquisition and pharmacy overhead costs of coded packaged drugs and
biologicals with an ASP to be 258 percent of ASP. As discussed in
section V.B.3. of this final rule with comment period, we did not
choose this alternative because we believe that this analysis indicates
that our standard drug payment methodology has the potential to
``compress'' the calculated costs of separately payable drugs and
biologicals and inflate the calculated costs of packaged drugs and
biologicals to some degree. Further, we recognize that the attribution
of pharmacy overhead costs to packaged or separately payable drugs and
biologicals through our standard drug payment methodology of a combined
payment for acquisition and pharmacy overhead costs also depends on the
determination of separate or packaged payment for all drugs and
biologicals each year based on our annual drug packaging threshold.
Changes to the packaging threshold and the packaged status of drugs or
biologicals may result in changes to the estimated combined acquisition
and pharmacy overhead costs of drugs and biologicals that do not
reflect actual changes in hospital pharmacy overhead cost for those
products.
The second alternative we considered was to adopt the February 2009
APC Panel recommendation to accept the pharmacy stakeholders'
recommended methodology for payment of drugs and biologicals that do
not have pass-through status. This recommended methodology would
establish ASP+6 percent as the cost of packaged drugs and biologicals,
including all pharmacy overhead costs; establish ASP+6 percent as the
acquisition cost of separately payable drugs and biologicals with some
overhead cost included; and reallocate the residual cost of packaged
drugs and biologicals currently reflected in the claims data across
three categories of
[[Page 60665]]
pharmacy overhead cost that would then be paid separately for each
administration of separately payable drugs and biologicals in CY 2010.
The pharmacy stakeholders recommended that we pay the pharmacy overhead
amount specific to the overhead category to which a drug or biological
is assigned, in addition to the ASP+6 percent payment for the
separately payable drug or biological, each time a separately payable
drug or biological is administered. We refer readers to section V.B.3.
of this final rule with comment period for a more detailed discussion
of the pharmacy stakeholders' recommended methodology. We did not
choose this alternative because we do not believe that ASP+6 percent
would pay appropriately for the acquisition and pharmacy overhead costs
of packaged drugs. We believe the amount of redistribution of pharmacy
overhead costs from packaged to separately payable drugs and
biologicals incorporated in the recommendation of the pharmacy
stakeholders would be too great. In addition, we do not believe that it
would be appropriate to establish separate payment for pharmacy
overhead costs, thereby unbundling payment for the acquisition and
overhead costs of separately payable drugs and biologicals when
hospitals report a single charge for these products that represents
both types of costs. For these reasons, we are not accepting the APC
Panel recommendation to adopt the pharmacy stakeholders' recommended
methodology.
The third alternative we considered and the one we selected for CY
2010 is to make a transition payment for nonpass-through separately
payable drugs and biologicals at ASP+4 percent, which will continue to
represent a combined payment for both the acquisition costs of
separately payable drugs and biologicals and the pharmacy overhead
costs applicable to these products. We also are reducing the cost of
packaged drugs and biologicals that is included in the payment for
procedural APCs to offset the $200 million adjustment to payment for
separately payable drugs and biologicals. The $200 million consists of
$150 million (one-third of the pharmacy overhead cost) from the cost of
coded packaged drugs and biologicals with an ASP and $50 million from
the uncoded packaged drug and biological cost. To model this policy for
the CY 2010 final rule with comment period, we reduced the cost of
coded packaged drugs and biologicals with an ASP by 24 percent (based
on final rule data; the reduction was 27 percent based on proposed rule
data) and the cost of uncoded packaged drugs and biologicals by 8
percent when we calculated the median costs of the CY 2010 procedural
APCs. We chose this transition alternative because we believe that it
provides an appropriate redistribution of pharmacy overhead costs
associated with drugs and biologicals and is consistent with the
principles of a prospective payment system.
c. Alternatives Considered for the Physician Supervision of Hospital
Outpatient Services
We are revising or further defining several policies related to the
physician supervision of services in the HOPD for CY 2010. We refer
readers to section XII.D. of this final rule with comment period for
the full discussion of these policies. Specifically, for the CY 2010
OPPS, we are revising our existing policy that requires direct
supervision to be provided by a physician to allow, when statutorily
permitted under the Social Security Act, specified nonphysician
practitioners to supervise the hospital outpatient therapeutic services
that they are able to personally perform within their State scope of
practice and hospital-granted privileges. We note that section
144(a)(1) of Public Law 100-275 imposes strict requirements for the
direct physician supervision of PR, CR, and ICR services and gives us
no flexibility to modify the requirement beyond direct physician
supervision by a doctor of medicine or a doctor of osteopathy. We also
are establishing a policy for hospital outpatient therapeutic services
furnished in the main hospital buildings or in on-campus provider-based
departments (PBDs) that ``direct supervision'' means that the
supervisory practitioner must be on the same campus and immediately
available to furnish assistance and direction throughout the
performance of the procedure. In addition, we are establishing in
regulations a policy that applies the MPFS physician supervision
requirements for diagnostic tests to all hospital outpatient diagnostic
tests performed directly by the hospital or under arrangement.
We considered three alternatives for the physician supervision of
hospital outpatient services for CY 2010 in the CY 2010 OPPS/ASC
proposed rule (74 FR 35412 through 35413). The first alternative we
considered was to make no changes to the existing supervision policies
for hospital outpatient therapeutic and diagnostic services and to
provide no new policy guidance in this area. This approach would
require hospitals to ensure that only physicians supervise services
that may currently be ordered or performed by nonphysician
practitioners within their State scope of practice and hospital-granted
privileges. Hospitals would not receive payment for outpatient services
for which they were unable to provide supervision by a physician. In
addition, there could continue to be confusion regarding what ``direct
supervision'' means for services provided in an area of the hospital
that may not be a PBD of the hospital. Lastly, there would be potential
for misunderstanding regarding the appropriate level of physician
supervision required for hospital outpatient diagnostic services
without a clearly stated policy, codified in regulations, that would
apply the same level of physician supervision to all hospital
outpatient diagnostic services, whether provided directly or under
arrangement, as applies to those services currently furnished in
physicians' offices and independent diagnostic testing facilities. We
did not choose this alternative because we believe that it is important
to address the issues outlined above, including areas of potential
confusion or limited current policy guidance, to ensure that hospitals
are able to comply with the hospital outpatient supervision
requirements while providing access to care for Medicare beneficiaries.
The second alternative we considered was to permit specified
nonphysician practitioners to supervise the hospital outpatient
therapeutic services that they are able to personally perform within
their State scope of practice and hospital-granted privileges, but to
make no changes that would provide clearer statements of policy
regarding other concerns raised by hospitals regarding physician
supervision for hospital outpatient therapeutic and diagnostic
services. We did not choose this alternative because we believe it is
important to clearly specify the policies that apply to the supervision
of both therapeutic and diagnostic services in all hospital outpatient
settings in order to ensure the safety and effectiveness of hospital
outpatient services furnished to Medicare beneficiaries.
The third alternative we considered and the one we selected for CY
2010 was to revise our existing policy to permit specified nonphysician
practitioners, when statutorily permitted in the Social Security Act,
to supervise the services that they are able to personally perform
within their State scope of practice and hospital-granted privileges;
to establish a specific definition of ``direct supervision'' for
hospital outpatient therapeutic services
[[Page 60666]]
furnished in the hospital or in on-campus PBDs that was consistent for
services furnished by the hospital on-campus; and to apply the MPFS
supervision requirements for diagnostic tests to all hospital
outpatient diagnostic tests provided directly by the hospital or under
arrangement. We selected this alternative because we believe that it is
appropriate that, unless the Act imposes strict requirements for the
direct supervision of certain services, such as PR, CR, and ICR
services, a licensed nonphysician practitioner who may bill and be paid
by Medicare for the practitioner's professional services should be able
to supervise the therapeutic services that he or she may personally
perform within his or her State scope of practice and hospital-granted
privileges. Furthermore, we believe that it is necessary and
appropriate to establish consistent and operationally feasible policies
regarding the supervision requirements for hospital outpatient
therapeutic and diagnostic services in order to ensure safe and
effective health care services for Medicare beneficiaries. We refer
readers to section XII.D. of this final rule with comment period for a
complete discussion of the final physician supervision policies.
2. Limitations of Our Analysis
The distributional impacts presented here are the projected effects
of the CY 2010 policy changes on various hospital groups. We post on
the CMS Web site our hospital-specific estimated payments for CY 2010
with the other supporting documentation for this final rule with
comment period. To view the hospital-specific estimates, we refer
readers to the CMS Web site at: http://www.cms.hhs.gov/HospitalOutpatientPPS/. Select ``regulations and notices'' from the
left side of the page and then select ``CMS-1414-P'' from the list of
regulations and notices. The hospital-specific file layout and the
hospital-specific file are listed with the other supporting
documentation for this final rule with comment period. We show
hospital-specific data only for hospitals whose claims were used for
modeling the impacts shown in Table 73 below. We do not show hospital-
specific impacts for hospitals whose claims we were unable to use. We
refer readers to section II.A.2. of this final rule with comment period
for a discussion of the hospitals whose claims we do not use for
ratesetting and impact purposes.
We estimate the effects of the individual policy changes by
estimating payments per service, while holding all other payment
policies constant. We use the best data available, but do not attempt
to predict behavioral responses to our policy changes. In addition, we
do not make adjustments for future changes in variables such as service
volume, service mix, or number of encounters. As we have done in
previous rules, in the CY 2010 OPPS/ASC proposed rule (74 FR 35413), we
solicited public comment and information about the anticipated effects
of our proposed changes on providers and our methodology for estimating
them.
We received many public comments on the proposed changes to payment
policies and to proposed payment rates for the CY 2010 OPPS. We have
summarized these public comments and provided our responses to them in
other sections of this final rule with comment period as part of our
discussions of the specific topics to which the comments pertained. We
did not receive any public comments on our methodology for estimating
the anticipated effects of our proposed changes on providers or other
parties.
3. Estimated Effects of This Final Rule With Comment Period on
Hospitals
Table 73 below shows the estimated impact of this final rule with
comment period on hospitals. Historically, the first line of the impact
table, which estimates the change in payments to all hospitals, has
always included cancer and children's hospitals, which are held
harmless to their pre-BBA payment-to-cost ratio. We also are including
CMHCs in the first line that includes all providers because we included
CMHCs in our weight scaler estimate.
We present separate impacts for CMHCs in Table 73 because CMHCs are
paid under only two APCs for services under the OPPS: APC 0172 (Level 1
Partial Hospitalization (3 services)) and APC 0173 (Level II Partial
Hospitalization (4 or more services)). We note that CMHS are also a
different provider type. We discuss the impact on CMHCs in section
XXI.B.4. of this final rule with comment period.
The estimated increase in the total payments made under the OPPS is
limited by the increase to the conversion factor set under the
methodology in the statute. The distributional impacts presented do not
include assumptions about changes in volume and service mix. The
enactment of Public Law 108-173 on December 8, 2003, provided for the
additional payment outside of the budget neutrality requirement for
wage indices for specific hospitals reclassified under section 508.
Public Law 108-173 extended section 508 reclassifications through
September 30, 2008. Section 124 of Public Law 110-275 further extended
section 508 reclassifications through September 30, 2009. The amounts
attributable to these reclassifications are incorporated into the CY
2009 estimates in Table 73.
Table 73 shows the estimated redistribution of hospital and CMHC
payments among providers as a result of APC reconfiguration and
recalibration; wage indices; the combined impact of the APC
recalibration, wage effects, and the market basket update to the
conversion factor; and, finally, estimated redistribution considering
all payments for CY 2010 relative to all payments for CY 2009,
including the impact of changes in the outlier threshold, expiring
section 508 wage indices, and changes to the pass-through payment
estimate. We did not model an explicit budget neutrality adjustment for
the rural adjustment for SCHs because we are not making any changes to
the policy for CY 2010. Because the updates to the conversion factor,
including the update of the market basket and the subtraction of
additional money dedicated to pass-through payment for CY 2010, are
applied uniformly across services, observed redistributions of payments
in the impact table for hospitals largely depend on the mix of services
furnished by a hospital (for example, how the APCs for the hospital's
most frequently furnished services will change), and the impact of the
wage index changes on the hospital. However, total payments made under
this system and the extent to which this final rule with comment period
will redistribute money during implementation also will depend on
changes in volume, practice patterns, and the mix of services billed
between CY 2009 and CY 2010 by various groups of hospitals, which CMS
cannot forecast.
Overall, the final OPPS rates for CY 2010 will have a positive
effect for providers paid under the OPPS, resulting in a 1.9 percent
estimated increase in Medicare payments. Removing cancer and children's
hospitals, because their payments are held harmless to the pre-BBA
ratio between payment and cost, and CMHCs suggests that these changes
also will result in a 1.9 percent estimated increase in Medicare
payments to all other hospitals.
To illustrate the impact of the final CY 2010 changes, our analysis
begins with a baseline simulation model that uses the final CY 2009
weights, the FY 2009 final post-reclassification IPPS wage indices, and
the final CY 2009 conversion factor. Column 2 in Table 73
[[Page 60667]]
shows the independent effect of the changes resulting from the
reclassification of services among APC groups and the recalibration of
APC weights, based on 12 months of CY 2008 OPPS hospital claims data
and the most recent cost report data. We modeled the effect of the APC
recalibration changes for CY 2010 by varying only the weights (the
final CY 2009 weights versus the final CY 2010 weights calculated using
the service mix and volume in the CY 2008 claims used for this final
rule with comment period) and calculating the percent difference in
weight. Column 2 also reflects the effect of the changes resulting from
the APC reclassification and recalibration changes and any changes in
multiple procedure discount patterns or conditional packaging that
occur as a result of the changes in the relative magnitude of payment
weights.
Column 3 reflects the independent effects of the updated wage
indices, including the application of budget neutrality for the rural
floor policy on a statewide basis. We did not model a budget neutrality
adjustment for the rural adjustment for SCHs because we are making no
changes to the policy for CY 2010. We modeled the independent effect of
updating the wage indices by varying only the wage indices, holding APC
relative weights, service mix, and the rural adjustment constant and
using the CY 2010 scaled weights and a CY 2009 conversion factor that
included a budget neutrality adjustment for the effect of changing the
wage indices between CY 2009 and CY 2010.
Column 4 demonstrates the combined ``budget neutral'' impact of APC
recalibration (that is, Column 2), the wage index update (that is,
Column 3), as well as the impact of updating the conversion factor with
the market basket update. We modeled the independent effect of the
budget neutrality adjustments and the market basket update by using the
weights and wage indices for each year, and using a CY 2009 conversion
factor that included the market basket update and a budget neutrality
adjustment for differences in wage indices.
Finally, Column 5 depicts the full impact of the CY 2010 policies
on each hospital group by including the effect of all the changes for
CY 2010 (including the APC reconfiguration and recalibration shown in
Column 2) and comparing them to all estimated payments in CY 2009
(these CY 2009 estimated payments include the payments resulting from
the non-budget neutral increases to wage indices under section 508 of
Pub. L. 108-173 as extended by Pub. L. 110-275). Column 5 shows the
combined budget neutral effects of Columns 2 through 4, plus the impact
of the change to the fixed-dollar outlier threshold from $1,800 to
$2,175; the impact of the expiration of section 508 reclassifications;
the change in the HOP QDRP payment reduction for the small number of
hospitals in our impact model that failed to meet the reporting
requirements; and the impact of increasing the estimate of the
percentage of total OPPS payments dedicated to transitional pass-
through payments. We discuss our CY 2010 change to the outlier
threshold in section II.F. of this final rule with comment period. Of
the 85 hospitals that failed to meet the HOP QDRP reporting
requirements for the full CY 2009 update (and assumed, for modeling
purposes, to be the same number for CY 2010), we included 28 in our
model because they had both CY 2008 claims data and recent cost report
data. We estimate that the cumulative effect of all changes for CY 2010
will increase payments to all providers by 1.9 percent for CY 2010. We
modeled the independent effect of all changes in Column 5 using the
final weights for CY 2009 and the final weights for CY 2010. We used
the final conversion factor for CY 2009 of $66.059 and the final CY
2010 conversion factor of $67.406. Column 5 also contains simulated
outlier payments for each year. We used the charge inflation factor
used in the FY 2010 IPPS/RY 2010 LTCH PPS final rule of 6.86 percent
(1.0686) to increase individual costs on the CY 2008 claims, and we
used the most recent overall CCR in the July 2009 Outpatient Provider-
Specific File (OPSF) (74 FR 44010). Using the CY 2008 claims and a 6.86
percent charge inflation factor, we currently estimate that outlier
payments for CY 2009, using a multiple threshold of 1.75 and a fixed-
dollar threshold of $1,800, will be approximately 1.03 percent of total
payments. Outlier payments of 1.03 percent are incorporated in the CY
2009 comparison in Column 5. We used the same set of claims and a
charge inflation factor of 14.18 percent (1.1418) and the CCRs in the
July 2009 OPSF, with an adjustment of 0.9880 to reflect relative
changes in cost and charge inflation between CY 2008 and CY 2010, to
model the CY 2010 outliers at 1.0 percent of total payments using a
multiple threshold of 1.75 and a fixed-dollar threshold of $2,175.
Column 1: Total Number of Hospitals
The first line in Column 1 in Table 73 shows the total number of
providers (4,222), including cancer and children's hospitals and CMHCs
for which we were able to use CY 2008 hospital outpatient claims to
model CY 2009 and CY 2010 payments, by classes of hospitals. We
excluded all hospitals for which we could not accurately estimate CY
2009 or CY 2010 payment and entities that are not paid under the OPPS.
The latter entities include CAHs, all-inclusive hospitals, and
hospitals located in Guam, the U.S. Virgin Islands, Northern Mariana
Islands, American Samoa, and the State of Maryland. This process is
discussed in greater detail in section II.A. of this final rule with
comment period. At this time, we are unable to calculate a
disproportionate share (DSH) variable for hospitals not participating
in the IPPS. Hospitals for which we do not have a DSH variable are
grouped separately and generally include freestanding psychiatric
hospitals, rehabilitation hospitals, and long-term care hospitals. We
show the total number (3,942) of OPPS hospitals, excluding the hold-
harmless cancer and children's hospitals and CMHCs, on the second line
of the table. We excluded cancer and children's hospitals because
section 1833(t)(7)(D) of the Act permanently holds harmless cancer
hospitals and children's hospitals to a proportion of their pre-BBA
payment relative to their pre-BBA costs and, therefore, we removed them
from our impact analyses. We show the isolated impact on 221 CMHCs in
the last row of the impact table and discuss that impact separately
below.
Column 2: APC Changes Due to Reassignment and Recalibration
This column shows the combined effects of the reconfiguration,
recalibration, and other policies (such as setting payment for
separately payable drugs and biologicals at ASP+4 percent with an
accompanying reduction in the amount of cost associated with packaged
drugs and biologicals, payment for brachytherapy sources based on
median unit cost, and changes in payment for PHP services. Overall, we
estimate that changes in APC reassignment and recalibration across all
services paid under the OPPS will increase payments to urban hospitals
by 0.1 percent. We estimate that both large and other urban hospitals
will see an increase of 0.1 percent, all attributable to recalibration.
We estimate that urban hospitals billing fewer than 11,000 lines for
OPPS services will experience decreases of 0.2 to 1.0 percent, while
urban hospitals billing 11,000 or more lines for OPPS services will see
no change or an increase of 0.1 percent.
Overall, we estimate that rural hospitals will experience a
decrease of 0.1 percent as a result of changes to the APC structure. We
estimate that rural
[[Page 60668]]
hospitals of all bed sizes will experience no change or decreases of up
to 0.2 percent as a result of APC recalibration. We estimate that rural
hospitals that report fewer than 5,000 lines for OPPS services will
experience a decrease of 0.8 percent, while rural hospitals that report
more than 5,000 lines for OPPS services will see decreases of 0.1
percent to 0.4 percent.
Among teaching hospitals, we estimate that the largest observed
impact resulting from APC recalibration will include an increase of 0.2
percent for major teaching hospitals and a increase of 0.1 percent for
minor teaching hospitals.
Classifying hospitals by type of ownership suggests that
proprietary and governmental hospitals will see no change, and
voluntary hospitals will see an estimated increase of 0.1 percent.
Finally, we estimate that hospitals for which DSH payments are not
available will experience decreases of 2.5 to 2.7 percent that are
largely attributable to the reduction in PHP payment for APC 0172. We
estimate that most other classes of hospitals will not experience any
change from CY 2009 to CY 2010 or will experience a modest increase.
Column 3: New Wage Indices and the Effect of the Rural Adjustment
This column estimates the impact of applying the FY 2010 IPPS wage
indices for the CY 2010 OPPS. We are not changing the rural payment
adjustment for CY 2010. We estimate that the combination of updated
wage data and statewide application of rural floor budget neutrality
will redistribute payment among regions. We also updated the list of
counties qualifying for the section 505 out-migration adjustment.
Overall, we estimate that urban hospitals will not experience any
change from CY 2009 to CY 2010, and that rural hospitals will
experience a decrease of 0.1 percent as a result of the updated wage
indices. However, we estimate that hospitals in rural New England
States and rural West South Central States will experience decreases of
0.9 and 0.7 percent, respectively. We estimate that urban and rural
Mountain States will experience increases of 0.6 percent.
Column 4: All Budget Neutrality Changes and Market Basket Update
We estimate that the addition of the market basket update of 2.1
percent will mitigate any negative impacts on hospital payments for CY
2010 created by the budget neutrality adjustments made in Columns 2 and
3, with the exception of hospitals not paid under the IPPS, including
freestanding psychiatric, rehabilitation, and long-term care hospitals,
that we estimate will continue to experience decreases of between -0.6
and -0.7 percent. In general, Column 4 shows that all hospitals will
experience an estimated increase of 2.1 percent, attributable to the
2.1 percent market basket increase.
Overall, we estimate that these changes will increase payments to
urban hospitals by 2.2 percent. We estimate that large urban hospitals
will experience an increase of 2.3 percent, and ``other'' urban
hospitals will experience a 2.1 percent increase.
Overall, we estimate that rural hospitals will experience a 1.9
percent increase as a result of the market basket update and other
budget neutrality adjustments. We estimate that rural hospitals that
bill less than 5,000 lines of OPPS services will experience an increase
of 1.5 percent and that rural hospitals that bill more than 5,000 lines
of OPPS services will experience increases of 1.8 to 1.9 percent.
Among teaching hospitals, we estimate that the observed impacts
resulting from the market basket update and other budget neutrality
adjustments will include an increase of 2.4 and 2.2 percent,
respectively, for major and minor teaching hospitals.
Classifying hospitals by type of ownership suggests that voluntary,
proprietary, and governmental hospitals will experience estimated
increases of 2.2 percent, 2.1 percent, and 2.0 percent, respectively.
Column 5: All Changes for CY 2010
Column 5 compares all estimated changes for CY 2010 to estimated
final payment for CY 2009, including the expiration of the
reclassifications under section 508, the change in the outlier
threshold, payment reductions for hospitals that failed to meet the HOP
QDRP reporting requirements, and the difference in pass-through
estimates that are not included in the combined percentages shown in
Column 4. This column includes estimated payment for a handful of
hospitals receiving reduced payment because they did not meet their
hospital outpatient quality measure reporting requirements; however, we
estimate that the anticipated change in payment between CY 2009 and CY
2010 for these hospitals will be negligible. Overall, we estimate that
providers will experience an increase of 1.9 percent under this final
rule with comment period in CY 2010 relative to total spending in CY
2009. The projected 1.9 percent increase for all providers in Column 5
of Table 73 reflects the 2.1 percent market basket increase, less 0.03
percent for the change in the pass-through estimate between CY 2009 and
CY 2010, less 0.03 percent for the difference in estimated outlier
payments between CY 2009 (1.03 percent) and CY 2010 (1.0 percent), and
less 0.14 percent due to the expiration of the special, non-budget
neutral wage index payments made under section 508. We estimate that
when we exclude cancer and children's hospitals (which are held
harmless to their pre-OPPS costs) and CMHCs, the increase remains at
1.9 percent.
We estimate that the combined effect of all changes for CY 2010
will increase payments to urban hospitals by 2.0 percent. We estimate
that large urban hospitals will experience a 2.1 percent increase,
while ``other'' urban hospitals will experience an increase of 1.9
percent. We estimate that urban hospitals that bill less than 5,000
lines of OPPS services will experience an increase of 1.2 percent, and
we estimate that all urban hospitals that bill more than 5,000 lines of
OPPS services will experience increases between 1.9 percent and 2.0
percent.
Overall, we estimate that rural hospitals will experience a 1.6
percent increase as a result of the combined effects of all changes for
CY 2010. We estimate that rural hospitals that bill less than 5,000
lines of OPPS services will experience an increase of 1.3 percent and
rural hospitals that bill greater than 5,000 lines of OPPS services
will experience increases ranging from 1.4 percent to 1.8 percent.
Among teaching hospitals, we estimate that the impacts resulting
from the combined effects of all changes will include an increase of
2.0 percent for major teaching hospitals and an increase of 1.9 percent
for minor teaching hospitals.
Classifying hospitals by type of ownership, we estimate that
proprietary hospitals will gain 2.0 percent, governmental hospitals
will experience an increase of 1.8 percent, and voluntary hospitals
will experience an increase of 1.9 percent.
4. Estimated Effects of This Final Rule With Comment Period on CMHCs
The last row of the impact analysis in Table 73 demonstrates the
impact on CMHCs. We modeled this impact assuming that CMHCs will
continue to provide the same number of days of PHP care, with each day
having either three services or four or more services, as seen in the
CY 2008 claims data. We excluded days with one or two services. Using
these assumptions, we estimate that there would be a 5.0 percent
decrease in payments to CMHCs due to these APC policy changes (shown in
[[Page 60669]]
Column 2). The relative weight for low intensity partial
hospitalization APC 0172 (Level 1 Partial Hospitalization (3 services))
declines between CY 2009 and CY 2010 under this final rule with comment
period. CMHCs perform a greater proportion of low intensity partial
hospitalization days than freestanding psychiatric hospitals. Table 73
demonstrates our estimate that hospitals not paid under the IPPS for
which a disproportionate patient percentage is not available (DSH Not
Available), consisting largely of freestanding psychiatric hospitals,
will experience a more moderate decline in payments of 2.7 percent.
Psychiatric hospitals provide a greater proportion of APC 0173 (Level
II Partial Hospitalization (4 or more services)) for which the relative
weight increases between CY 2009 and CY 2010 under this final rule with
comment period.
Column 3 shows that the estimated impact of adopting the CY 2010
wage index values will be no change in payments to CMHCs. We note that
all providers paid under the OPPS, including CMHCs, will receive a 2.1
percent market basket increase. Combining this market basket increase,
along with changes in APC policy for CY 2010 and the CY 2010 wage index
updates, and changes in outlier payments, we estimate that the combined
impact on CMHCs for CY 2010 will be a 3.0 percent decrease.
BILLING CODE 4120-01-P
[[Page 60670]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.046
[[Page 60671]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.047
[[Page 60672]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.048
BILLING CODE 4120-01-C
[[Page 60673]]
5. Estimated Effect of This Final Rule With Comment Period Rule on
Beneficiaries
For services for which the beneficiary pays a copayment of 20
percent of the payment rate, the beneficiary share of payment will
increase for services for which the OPPS payments will rise and will
decrease for services for which the OPPS payments will fall. For
example, for a service assigned to Level IV Needle Biopsy/Aspiration
Except Bone Marrow (APC 0037) in the CY 2009 OPPS, the national
unadjusted copayment is $228.76, and the minimum unadjusted copayment
is $178.60. For CY 2010, the national unadjusted copayment for APC 0037
will be $228.76, the same rate in effect for CY 2009. The minimum
unadjusted copayment for APC 0037 will be $208.97 or 20 percent of the
CY 2010 national unadjusted payment rate for APC 0037 of $1,044.81. The
minimum unadjusted copayment will rise because the payment rate for APC
0037 will rise for CY 2010. In all cases, the statute limits
beneficiary liability for copayment for a procedure to the hospital
inpatient deductible for the applicable year. The CY 2009 hospital
inpatient deductible is $1,068. The CY 2010 hospital inpatient
deductible is $1,100.
In order to better understand the impact of changes in copayment on
beneficiaries, we modeled the percent change in total copayment
liability using CY 2008 claims. We estimate, using the claims of the
4,222 hospitals and CMHCs on which our modeling is based, that total
beneficiary liability for copayments will decline as an overall
percentage of total payments, from 23.0 percent in CY 2009 based on
updated claims data for this final rule with comment period to 22.6
percent in CY 2010.
6. Conclusion
The changes in this final rule with comment period will affect all
classes of hospitals and CMHCs. We estimated that some classes of
hospitals will experience significant gains and others less significant
gains, but all classes of hospitals will experience positive updates in
OPPS payments in CY 2010 with one exception. We estimate that hospitals
not paid under the IPPS will see an overall decrease in payment of 0.6
to 0.8 percent because they are largely freestanding psychiatric
hospitals that bill mostly PHP services. As we discuss in substantial
detail in section X. of this final rule with comment period, payment
for APC 0172 will decline for CY 2010 and, therefore, we estimate that
payments to CMHCs and hospitals that furnish mostly PHP services will
also decline. In general, we estimate that CMHCs will experience an
overall decline of 3.0 percent in total payment due to the
recalibration of the payment rates.
Table 73 demonstrates the estimated distributional impact of the
OPPS budget neutrality requirements that will result in a 1.9 percent
increase in payments for all services paid under the OPPS in CY 2010,
after considering all changes to APC reconfiguration and recalibration,
as well as the market basket increase, wage index changes, estimated
payment for outliers, and changes to the pass-through payment estimate.
The accompanying discussion, in combination with the rest of this final
rule with comment period, constitutes a regulatory impact analysis.
7. Accounting Statement
As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 74, we have
prepared an accounting statement showing the CY 2010 estimated hospital
OPPS incurred benefit impact associated with the CY 2010 hospital
outpatient market basket update shown in this final rule with comment
period based on the baseline for the 2009 Trustees Report. All
estimated impacts are classified as transfers.
Table 74--Accounting Statement: CY 2010 Estimated Hospital OPPS Incurred
Benefit Impact Associated With the CY 2010 Hospital Outpatient Market
Basket Update
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers.... $0.5 billion.
From Whom to Whom................. Federal Government to outpatient
hospitals and other providers who
received payment under the hospital
OPPS.
Total......................... $0.5 billion.
------------------------------------------------------------------------
C. Effects of ASC Payment System Changes in This Final Rule With
Comment Period Rule
On August 2, 2007, we published in the Federal Register the final
rule for the revised ASC payment system, effective January 1, 2008 (72
FR 42470). In that final rule, we adopted the methodologies to set
payment rates for covered ASC services to implement the revised payment
system so that it would be designed to result in budget neutrality as
required by section 626 of Public Law 108-173; established that the
OPPS relative payment weights would be the basis for payment and that
we would update the system annually as part of the OPPS rulemaking
cycle; and provided that the revised ASC payment rates would be phased-
in over 4 years. During the 4-year transition to full implementation of
the ASC payment rates, payments for surgical procedures paid in ASCs in
CY 2007 are made using a blend of the CY 2007 ASC payment rate and the
ASC payment rate calculated according to the ASC standard ratesetting
methodology for the applicable transitional year. In CY 2009, we are
paying ASCs using a 50/50 blend, in which payment is calculated by
adding 50 percent of the CY 2007 ASC rate for a surgical procedure on
the CY 2007 ASC list of covered surgical procedures and 50 percent of
the CY 2009 ASC rate calculated according to the ASC standard
ratesetting methodology for the same procedure. For CY 2010, we are
transitioning the blend to a 25/75 blend of the CY 2007 ASC rate and
the ASC payment rate calculated according to the ASC standard
ratesetting methodology. Beginning in CY 2011, we will pay ASCs for all
covered surgical procedures, including those on the CY 2007 ASC list,
at the ASC payment rates calculated according to the ASC standard
ratesetting methodology. Payment for procedures that were not included
on the ASC list of covered surgical procedures in CY 2007 is not
subject to the transitional payment methodology.
ASC payment rates are calculated by multiplying the ASC conversion
factor by the ASC relative payment weight. As discussed fully in
section XV. of this final rule with comment period, we set the CY 2010
ASC relative payment weights by scaling CY 2010 ASC relative payment
weights by the ASC scaler of 0.9567. These weights take into
consideration the 25/75 blend for the
[[Page 60674]]
third year of transitional payment for certain services. If there were
no transition, the scaler for the CY 2010 relative payment weights
would be 0.9338. The estimated effects of the updated relative payment
weights on payment rates during this transitional period are varied and
are reflected in the estimated payments displayed in Tables 75 and 78
below.
The CY 2010 ASC conversion factor was calculated by adjusting the
CY 2009 ASC conversion factor to account for changes in the pre-floor
and pre-reclassified hospital wage indices between CY 2009 and CY 2010
and by applying the CY 2010 CPI-U of a 1.2 percent increase. The CY
2010 ASC conversion factor is $41.873.
1. Alternatives Considered
Alternatives to the changes we are making and the reasons that we
have chosen the options are discussed throughout this final rule with
comment period. Some of the major ASC issues discussed in this final
rule with comment period and the options considered are discussed
below.
a. Alternatives Considered for Office-Based Procedures
According to our final policy for the revised ASC payment system,
we designate as office-based those procedures that are added to the ASC
list of covered surgical procedures in CY 2008 or later years and that
we determine are predominantly performed in physicians' offices based
on consideration of the most recent available volume and utilization
data for each individual procedure HCPCS code and/or, if appropriate,
the clinical characteristics, utilization, and volume of related HCPCS
codes. We establish payment for procedures designated as office-based
at the lesser of the MPFS nonfacility PE RVU amount or the ASC rate
developed according to the standard methodology of the revised ASC
payment system.
In developing this final rule with comment period, we reviewed the
full CY 2008 utilization data for all surgical procedures added to the
ASC list of covered surgical procedures in CY 2008 or later years and
for those procedures for which the office-based designation is
temporary in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68730 through 68733). Based on that review, and as discussed in section
XV.C.1.b. of this final rule with comment period, we are newly
designating six existing surgical procedures as office-based and making
permanent the office-based designations of four existing surgical
procedures that have temporary office-based designations in CY 2009. We
also are providing temporary office-based designations for 16 CY 2010
procedures reported with new or substantially revised CPT codes and
continuing the temporary office-based designations for 6 procedures
that were temporarily office-based in CY 2009. We considered two
alternatives in developing this policy.
The first alternative we considered was to make no change to the
procedure payment designations. This would mean that we would pay for
the 6 procedures we are designating as permanently office-based and the
16 procedures we are newly designating as temporarily office-based at
an ASC payment rate calculated according to the standard ratesetting
methodology of the revised ASC payment system and for the 10 procedures
with temporary office-based designations for 2009 according to the
office-based methodology. We did not select this alternative because
our analysis of the data and our clinical review indicated that all 10
procedures we are designating permanently office-based as well as the
22 procedures that we are designating temporarily office-based could be
considered to be predominantly performed in physicians' offices.
Consistent with our final policy adopted in the August 2, 2007 final
rule (72 FR 42509), we were concerned that making payments at the
standard ASC payment rate for the 6 procedures newly designated as
office-based and 16 new procedures designated as temporarily office-
based could create financial incentives for the procedures to shift
from physicians' offices to ASCs for reasons unrelated to clinical
decisions regarding the most appropriate setting for surgical care.
Further, consistent with our policy, we believe that when adequate data
become available to make permanent determinations about procedures with
temporary office-based designations, maintaining the temporary
designation is no longer appropriate.
The second alternative we considered and the one we selected for CY
2010 is to designate six additional procedures as office-based for CY
2010 and to make permanent the office-based designations of four of the
procedures with temporary office-based designations in CY 2009. We also
are designating 16 new procedures described by new or substantially
revised CPT codes for CY 2010 as temporarily office-based and
continuing to designate 6 procedures as temporarily office-based in CY
2010. We chose this alternative because our claims data and clinical
review indicate that these procedures could be considered to be
predominantly performed in physicians' offices. We believe that
designating these procedures as office-based, which results in the CY
2010 ASC payment rate for these procedures potentially being capped at
the CY 2010 physicians' office rate (that is, the MPFS nonfacility PE
RVU amount), if applicable, is an appropriate step to ensure that
Medicare payment policy does not create financial incentives for such
procedures to shift unnecessarily from physicians' offices to ASCs,
consistent with our final policy adopted in the August 2, 2007 final
rule.
b. Alternatives Considered for Covered Surgical Procedures
According to our final policy for the revised ASC payment system,
we designate as covered all surgical procedures that we determine would
not be expected to pose a significant risk to beneficiary safety or
would not be expected to require an overnight stay when performed on
Medicare beneficiaries in an ASC.
In developing this final rule with comment period, we reviewed the
clinical characteristics and full CY 2008 utilization data, if
applicable, for all procedures reported by Category III CPT codes
implemented July 1, 2009, and surgical procedures that were excluded
from ASC payment for CY 2009. In response to public comments received
on the CY 2009 OPPS/ASC proposed rule, we stated in the CY 2009 OPPS/
ASC final rule with comment period (73 FR 68724) that, as we developed
the CY 2010 OPPS/ASC proposed rule and final rule with comment period,
we would perform a comprehensive review of the APCs in order to
identify potentially inconsistent ASC treatment of procedures assigned
to a single APC under the OPPS. Thus, for this final rule with comment
period, we examined surgical procedures that were excluded from the CY
2009 ASC list of covered surgical procedures and the APCs to which they
were assigned under the OPPS. Based on this review, we identified 26
surgical procedures that meet the criteria for inclusion on the ASC
list of covered surgical procedures, and we are adding those procedures
to the list for CY 2010 payment, in addition to the 2 new surgical
procedures described by Category III CPT codes that were new for July
2009, and that we determined were appropriate for addition to the ASC
list. We considered two alternatives in developing this policy.
The first alternative we considered was to make no change to the
ASC list of covered surgical procedures for CY 2010. We did not choose
this alternative because our analysis of data and clinical
[[Page 60675]]
review indicated that the 28 procedures we are designating as covered
surgical procedures for CY 2010 would not be expected to pose a
significant risk to beneficiary safety in ASCs and would not be
expected to require an overnight stay. Consistent with our final
policy, we were concerned that by continuing to exclude them from the
list of ASC covered surgical procedures, we may unnecessarily limit
beneficiaries' access to the services in the most clinically
appropriate settings.
The second alternative we considered and the one we selected for CY
2010 was to designate 28 additional procedures as ASC covered surgical
procedures for CY 2010. We chose this alternative because our claims
data and clinical review indicate that these procedures would not be
expected to pose a significant risk to beneficiary safety and would not
be expected to require an overnight stay, and thus they meet the
criteria for inclusion on the list of ASC covered surgical procedures.
We believe that adding these procedures to the list of covered surgical
procedures is an appropriate step to ensure that beneficiary access to
services is not limited unnecessarily.
2. Limitations of Our Analysis
Presented here are the projected effects of the changes for CY 2010
on Medicare payment to ASCs. A key limitation of our analysis is our
inability to predict changes in ASC service mix between CY 2008 and CY
2010 with precision. We believe that the net effect on Medicare
expenditures resulting from the CY 2010 changes will be small in the
aggregate for all ASCs. However, such changes may have differential
effects across surgical specialty groups as ASCs continue to adjust to
the payment rates based on the policies of the revised ASC payment
system. We are unable to accurately project such changes at a
disaggregated level. Clearly, individual ASCs will experience changes
in payment that differ from the aggregated estimated impacts presented
below.
3. Estimated Effects of This Final Rule With Comment Period on Payments
to ASCs
Some ASCs are multispecialty facilities that perform the gamut of
surgical procedures, from excision of lesions to hernia repair to
cataract extraction; others focus on a single specialty and perform
only a limited range of surgical procedures, such as eye, digestive
system, or orthopedic procedures. The combined effect on an individual
ASC of the update to the CY 2010 payments will depend on a number of
factors, including, but not limited to, the mix of services the ASC
provides, the volume of specific services provided by the ASC, the
percentage of its patients who are Medicare beneficiaries, and the
extent to which an ASC provides different services in the coming year.
The following discussion presents tables that display estimates of the
impact of the CY 2010 update to the revised ASC payment system on
Medicare payments to ASCs, assuming the same mix of services as
reflected in our CY 2008 claims data. Table 75 depicts the estimated
aggregate percent change in payment by surgical specialty or ancillary
items and services group by comparing estimated CY 2009 payments to
estimated CY 2010 payments, and Table 76 shows a comparison of
estimated CY 2009 payments to estimated CY 2010 payments for procedures
that we estimate will receive the most Medicare payment in CY 2010.
Table 75 shows the estimated effects on aggregate Medicare payments
under the revised ASC payment system by surgical specialty or ancillary
items and services group. We have aggregated the surgical HCPCS codes
by specialty group, grouped all HCPCS codes for covered ancillary items
and services into a single group, and then estimated the effect on
aggregated payment for surgical specialty and ancillary items and
services groups, considering separately the CY 2010 transitional rates
and the ASC payment rates calculated according to the ASC standard
ratesetting methodology that would apply in CY 2010 if there were no
transition. The groups are sorted for display in descending order by
estimated Medicare program payment to ASCs. The following is an
explanation of the information presented in Table 75.
Column 1--Surgical Specialty or Ancillary Items and
Services Group indicates the surgical specialty into which ASC
procedures are grouped or the ancillary items and services group which
includes all HCPCS codes for covered ancillary items and services. To
group surgical procedures by surgical specialty, we used the CPT code
range definitions and Level II HCPCS codes and Category III CPT codes,
as appropriate, to account for all surgical procedures to which the
Medicare program payments are attributed.
Column 2--Estimated ASC Payments were calculated using CY
2008 ASC utilization (the most recent full year of ASC utilization) and
CY 2009 ASC payment rates. The surgical specialty and ancillary items
and services groups are displayed in descending order based on
estimated CY 2009 ASC payments.
Column 3--Estimated CY 2010 Percent Change With Transition
(25/75 Blend) is the aggregate percentage increase or decrease,
compared to CY 2009, in Medicare program payment to ASCs for each
surgical specialty or ancillary items and services group that is
attributable to updates to the ASC payment rates for CY 2010 under the
scaled, 25/75 blend of the CY 2007 ASC payment rates and the CY 2010
ASC payment rates calculated according to the ASC standard ratesetting
methodology.
Column 4--Estimated CY 2010 Percent Change Without
Transition (Fully Implemented) is the aggregate percentage increase or
decrease in Medicare program payment to ASCs for each surgical
specialty or ancillary items and services group that would be
attributable to updates to ASC payment rates for CY 2010 compared to CY
2009 if there were no transition period to the fully implemented
payment rates. The percentages appearing in Column 4 are presented only
as illustrative comparisons to the percentage changes under the
transition policy in Column 3. We are not eliminating or modifying the
policy for a 4-year transition that was finalized in the August 2, 2007
final rule (72 FR 42519).
As seen in Table 75, we estimate that the update to ASC rates for
CY 2010 will result in no change in aggregate payment amounts for eye
and ocular adnexa procedures and in aggregate decreases of 4 percent in
payment amounts for both digestive system and nervous system
procedures. As shown in Column 4 in the table, we estimate that if
there were no transitional payment for these three surgical specialty
groups in CY 2010, aggregate payments would decrease by 1 percent for
eye and ocular adnexa procedures and by 10 and 6 percent for digestive
and nervous system procedures, respectively.
Generally, for the surgical specialty groups that account for less
ASC utilization and spending, we estimate that the payment effects of
the CY 2010 update are positive. We estimate that ASC payments for
procedures in those surgical specialties will increase in CY 2010 with
the 25/75 transitional payment rates and, in the absence of the
transition, will increase even more. For instance, we estimate that, in
the aggregate, payment for integumentary system procedures will
increase by 13 percent under the CY 2010 rates and by 20 percent if
there were no transition. We estimate similar effects for
genitourinary, cardiovascular,
[[Page 60676]]
musculoskeletal, respiratory, hematologic and lymphatic systems, and
auditory system procedures as well.
An estimated increase in aggregate payment for the specialty group
does not mean that all procedures in the group will experience
increased payment rates. For example, the substantial estimated
increase for CY 2010 for integumentary procedures is likely due to the
significant median cost increase for APC 0137 (Level V Skin Repair)
under the OPPS. The highest volume procedure in the integumentary
surgical specialty group, described by CPT code 15823 (Blepharoplasty,
upper eyelid; with excessive skin weighting down lid), is assigned to
that APC under the OPPS. In contrast, the estimated increased payments
at the surgical specialty group level may be due to decreased payments
for some of the most frequently provided procedures in the group and
the moderating effect of the sometimes substantial payment increases
for the less frequently performed procedures within the surgical
specialty group.
Also displayed in Table 75 is a separate estimate of Medicare ASC
payments for the group of separately payable covered ancillary items
and services. We estimate that aggregate payments for these items and
services will remain the same for CY 2010. The payment estimates for
the covered surgical procedures include the costs of packaged ancillary
items and services. In prior years' rules, we did not have ASC payment
data for covered ancillary items and services because prior to CY 2008,
they were paid under other fee schedules or packaged into payment for
the covered surgical procedures. Beginning with the CY 2010 proposed
rule and this final rule with comment period, we have utilization data
for those services as well as for all of the covered surgical
procedures provided in ASCs under the revised payment system.
Table 75--Estimated Impact of the Final CY 2010 ASC Payment System on Aggregate CY 2010 Medicare Program
Payments Under the 25/75 Transition Blend and Without a Transition, by Surgical Specialty or Ancillary Items and
Services Group
----------------------------------------------------------------------------------------------------------------
Estimated CY
Estimated CY Estimated CY 2010 percent
2009 ASC 2010 percent change without
Surgical specialty group payments (in change with transition
millions) transition (fully
(25/75 blend) implemented)
----------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
----------------------------------------------------------------------------------------------------------------
Total........................................................... 3,077 1 1
Eye and ocular adnexa........................................... 1,405 0 -1
Digestive system................................................ 731 -4 -10
Nervous system.................................................. 365 -4 -5
Musculoskeletal system.......................................... 285 15 29
Genitourinary system............................................ 112 10 17
Integumentary system............................................ 106 13 20
Respiratory system.............................................. 27 24 37
Cardiovascular system........................................... 20 17 27
Ancillary items and services.................................... 15 0 -1
Auditory system................................................. 8 9 17
Hematologic & lymphatic systems................................. 3 22 40
----------------------------------------------------------------------------------------------------------------
Table 76 below shows the estimated impact of the updates to the
revised ASC payment system on aggregate ASC payments for selected
surgical procedures during CY 2010 with and without the transitional
blended rate. The table displays 30 of the procedures receiving the
greatest estimated CY 2009 aggregate Medicare payments to ASCs. The
HCPCS codes are sorted in descending order by estimated CY 2009 program
payment.
Column 1--HCPCS code.
Column 2--Short Descriptor of the HCPCS code.
Column 3--Estimated CY 2009 Allowed Charges were
calculated using CY 2008 ASC utilization (the most recent full year of
ASC utilization) and the CY 2009 ASC payment rates. The estimated CY
2009 allowed charges are expressed in millions of dollars.
Column 4--Estimated CY 2010 Percent Change with Transition
(25/75 Blend) reflects the percent differences between the estimated
ASC payment for CY 2009 and the estimated payment for CY 2010 based on
the update, incorporating a 25/75 blend of the CY 2007 ASC payment rate
and the CY 2010 ASC payment rate calculated according to the ASC
standard ratesetting methodology.
Column 5--Estimated CY 2010 Percent Change without
Transition (Fully Implemented) reflects the percent differences between
the estimated ASC payment for CY 2009 and the estimated payment for CY
2010 based on the update if there were no transition period to the
fully implemented payment rates. The percentages appearing in Column 5
are presented as a comparison to the percentage changes under the
transition policy in Column 4 for informational purposes only. We are
not eliminating or modifying the policy for the 4-year transition that
was finalized in the August 2, 2007 final rule (72 FR 42519).
As displayed in Table 76, 24 of the 30 procedures with the greatest
estimated aggregate CY 2009 Medicare payment are included in the 3
surgical specialty groups that are estimated to account for the most
Medicare payment to ASCs in CY 2009, specifically eye and ocular
adnexa, digestive system, and nervous system surgical groups.
Consistent with the estimated payment effects on the surgical specialty
groups displayed in Table 75, the estimated effects of the CY 2010
update on ASC payment for individual procedures in year 3 of the
transition shown in Table 76 are varied. Aggregate ASC payments for
many of the most frequently furnished ASC procedures will decrease as
the transitional rates more closely align the individual procedure
relative ASC payment weights with the relativity of payments under the
OPPS.
The ASC procedure for which the most Medicare payment is estimated
to be made in CY 2009 is the cataract removal procedure reported with
CPT code 66984 (Extracapsular cataract removal with insertion of
intraocular lens prosthesis (one stage procedure),
[[Page 60677]]
manual or mechanical technique (e.g., irrigation and aspiration or
phacoemulsification)). We estimate that the update to the ASC rates
will result in a negligible payment decrease for this procedure in CY
2010. The estimated payment effects on the three other eye and ocular
adnexa procedures included in Table 76 will be slightly positive or
negative, but for CPT code 66821 (Discission of secondary membranous
cataract (opacified posterior lens capsule and/or anterior hyaloid);
laser surgery (e.g., YAG laser) (one or more stages)), the estimated CY
2010 payment decrease will be 10 percent, significantly greater than
the decreases estimated for any of the other eye and ocular adnexa
procedures shown.
We estimate that the transitional payment rates for all but 1 of
the 9 digestive system procedures included in Table 76 will decrease by
5 to 8 percent in CY 2010. Those estimated decreases are consistent
with decreases in the previous 2 years under the revised ASC payment
system and are expected because, under the previous ASC payment system,
the payment rates for many high volume endoscopy procedures were almost
the same as the payments for the procedures under the OPPS.
The estimated effects of the CY 2010 update on the 9 nervous system
procedures for which the most Medicare ASC payment is estimated to be
made in CY 2009 will be variable. Our estimates indicate that the CY
2010 update will result in payment decreases of 4 percent or less for 4
of the 9 procedures and in more substantial decreases for 2 others. We
estimate that the greatest decreases will be for the add-on procedure
described by CPT code 64484 (Injection, anesthetic agent and/or
steroid, transforaminal epidural; lumbar or sacral, each additional
level) and for the procedure described by CPT code 63685 (Insertion or
replacement of spinal neurostimulator pulse generator or receiver,
direct or inductive coupling), which we estimate to have 19 and 9
percent payment decreases, respectively, in CY 2010. In contrast, the
three nervous system procedures for which we estimate positive effects
on CY 2010 payments, CPT code 63650 (Percutaneous implantation of
neurostimulator electrode array, epidural); CPT code 64721 (Neuroplasty
and/or transposition; median nerve at carpal tunnel); and CPT code
64622 (Destruction by neurolytic agent, paravertebral facet joint
nerve; lumbar or sacral, single level), are estimated to have
substantial payment increases of 10, 13, and 6 percent, respectively.
The estimated payment effects for most of the remaining procedures
listed in Table 76 will be positive. For example, the CY 2010
transitional payment rates for musculoskeletal CPT codes 29880
(Arthroscopy, knee, surgical; with meniscectomy (medial AND lateral,
including any meniscal shaving)) and 29881 (Arthroscopy, knee,
surgical; with meniscectomy (medial OR lateral, including any meniscal
shaving)) are estimated to increase 17 percent over the CY 2009
transitional payment rates. We estimate that musculoskeletal procedures
will account for a greater percentage of CY 2010 Medicare ASC spending
as we estimate that payment for procedures in that surgical specialty
group will increase under the revised payment system in CY 2010.
Table 76--Estimated Impact of the Final CY 2010 ASC Payment System on Aggregate Payments for Selected Procedures
----------------------------------------------------------------------------------------------------------------
Estimated CY
Estimated CY Estimated CY 2010 percent
2009 allowed 2010 percent change without
HCPCS code * Short descriptor charges (in change with transition
mil) transition (fully
(25/75 blend) implemented)
----------------------------------------------------------------------------------------------------------------
(1) (2)..................... (3) (4) (5)
----------------------------------------------------------------------------------------------------------------
66984................................. Cataract surg w/iol, 1 1,064 0 -2
stage.
43239................................. Upper gi endoscopy, 164 -6 -13
biopsy.
45380................................. Colonoscopy and biopsy.. 133 -5 -11
45378................................. Diagnostic colonoscopy.. 124 -5 -11
45385................................. Lesion removal 96 -5 -11
colonoscopy.
66821................................. After cataract laser 71 -10 -20
surgery.
62311................................. Inject spine l/s (cd)... 69 -4 -8
66982................................. Cataract surgery, 62 0 -2
complex.
64483................................. Inj foramen epidural l/s 57 -4 -8
15823................................. Revision of upper eyelid 35 15 21
45384................................. Lesion remove 33 -5 -11
colonoscopy.
G0105................................. Colorectal scrn; hi risk 33 -8 -17
ind.
G0121................................. Colon ca scrn not hi rsk 32 -8 -16
ind.
29881................................. Knee arthroscopy/surgery 25 16 30
63650................................. Implant neuroelectrodes. 25 10 14
43235................................. Uppr gi endoscopy, 24 2 1
diagnosis.
64721................................. Carpal tunnel surgery... 23 13 24
52000................................. Cystoscopy.............. 22 -5 -9
29880................................. Knee arthroscopy/surgery 20 17 30
63685................................. Insrt/redo spine n 18 -9 -8
generator.
29826................................. Shoulder arthroscopy/ 17 28 54
surgery.
62310................................. Inject spine c/t........ 15 -4 -8
67904................................. Repair eyelid defect.... 15 0 2
28285................................. Repair hammertoe........ 15 14 25
29827................................. Arthroscop rotator cuff 14 22 42
repr.
64622................................. Destr paravertebrl nerve 14 6 14
l/s.
64484................................. Inj foramen epidural add- 13 -19 -38
on.
43248................................. Uppr gi endoscopy/guide 12 -6 -13
wire.
64623................................. Destr paravertebral n 12 -4 -8
add-on.
[[Page 60678]]
26055................................. Incise finger tendon 12 12 21
sheath.
----------------------------------------------------------------------------------------------------------------
* Note that HCPCS codes deleted for CY 2010 are not displayed in this table.
The previous ASC payment system served as an incentive to ASCs to
focus on providing procedures for which they determined Medicare
payments would support their continued operation. We note that,
historically, the ASC payment rates for many of the most frequently
performed procedures in ASCs were similar to the OPPS payment rates for
the same procedures. Conversely, procedures with ASC payment rates that
were substantially lower than the OPPS rates have historically been
performed least often in ASCs. We believed that the revised ASC payment
system will encourage greater efficiency in ASCs and will promote
significant increases in the breadth of surgical procedures performed
in ASCs because it distributes payments across the entire spectrum of
covered surgical procedures based on a coherent system of relative
weights that are related to the clinical and facility resource
requirements of those procedures.
The CY 2008 claims data that we used to develop the CY 2010 ASC
payment system relative weights and rates reflect the first year of
utilization under the revised payment system. Although the changes in
the claims data are not large, the data reflect increased Medicare ASC
spending for procedures that were newly added to the ASC list in CY
2008. Our estimates based on CY 2008 data indicate that for CY 2010
there would be especially noticeable increases in spending for
genitourinary and cardiovascular procedures, compared to the previous
ASC payment system.
4. Estimated Effects of This Final Rule With Comment Period on
Beneficiaries
We estimate that the CY 2010 update to the ASC payment system will
be generally positive for beneficiaries with respect to the new
procedures that we are adding to the ASC list of covered surgical
procedures and for those that we are designating as office-based for CY
2010. First, except for screening colonoscopy and flexible
sigmoidoscopy procedures, the ASC coinsurance rate for all procedures
is 20 percent. This contrasts with procedures performed in HOPDs, where
the beneficiary is responsible for copayments that range from 20
percent to 40 percent of the procedure payment. Second, ASC payment
rates under the revised payment system are lower than payment rates for
the same procedures under the OPPS; therefore, the beneficiary
coinsurance amount under the ASC payment system almost always will be
less than the OPPS copayment amount for the same services. (The only
exceptions will be if the ASC coinsurance amount exceeds the inpatient
deductible. The statute requires that copayment amounts under the OPPS
not exceed the inpatient deductible.) For new procedures that we are
adding to the ASC list of covered surgical procedures in CY 2010, as
well as for procedures already included on the list, and that are
furnished in an ASC rather than the HOPD setting, the beneficiary
coinsurance amount will be less than the OPPS copayment amount.
Furthermore, the additions to the ASC list of covered surgical
procedures will provide beneficiaries access to more surgical
procedures in ASCs. Beneficiary coinsurance for services migrating from
physicians' offices to ASCs may decrease or increase under the revised
ASC payment system, depending on the particular service and the
relative payment amounts for that service in the physician's office
compared to the ASC. However, for those additional procedures that we
are designating as office-based in CY 2010, the beneficiary coinsurance
amount will be no greater than the beneficiary coinsurance in the
physician's office.
In addition, as finalized in the August 2, 2007 final rule (72 FR
42520), in CY 2010, the third year of the 4-year transition to the ASC
payment rates calculated according to the ASC standard ratesetting
methodology of the revised ASC payment system, ASC payment rates for a
number of commonly furnished ASC procedures will continue to be
reduced, resulting in lower beneficiary coinsurance amounts for these
ASC services in CY 2010.
5. Conclusion
The updates to the ASC payment system for CY 2010 will affect each
of the approximately 5,000 ASCs currently approved for participation in
the Medicare program. The effect on an individual ASC will depend on
its mix of patients, the proportion of the ASC's patients that are
Medicare beneficiaries, the degree to which the payments for the
procedures offered by the ASC are changed under the revised payment
system, and the extent to which the ASC provides a different set of
procedures in the coming year.
The CY 2010 update to the revised ASC payment system includes a
payment update of 1.2 percent that we estimate will result in a greater
amount of Medicare expenditures in CY 2010 than was estimated to be
made in CY 2009. We estimate that the update to the revised ASC payment
system, including the addition of surgical procedures to the list of
covered surgical procedures, will have a modest effect on Medicare
expenditures compared to the estimated level of Medicare expenditures
in CY 2009.
6. Accounting Statement
As required by OMB Circular A-4 (available at http://www.whitehousegov/omb/circulars/a004/a-4.pdf), in Table 77 below, we
have prepared an accounting statement showing the classification of the
expenditures associated with the statutorily authorized 1.2 percent
update to the CY 2010 revised ASC payment system, based on the
provisions of this final rule with comment period and the baseline
spending estimates for ASCs in the 2009 Medicare Trustees Report. This
table provides our best estimate of Medicare payments to suppliers as a
result of the final update to the CY 2010 ASC payment system, as
presented in this
[[Page 60679]]
final rule with comment period. All expenditures are classified as
transfers.
Table 77--Accounting Statement: Classification of Estimated Expenditures
From CY 2009 to CY 2010 as a Result of the CY 2010 Update to the Revised
ASC Payment System
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers......... $33 Million.
From Whom to Whom...................... Federal Government to Medicare
Providers and Suppliers.
--------------------------------
Total.............................. $33 Million.
------------------------------------------------------------------------
D. Effects of Requirements for Hospital Reporting of Quality Data for
Annual Hospital Payment Update
In section XVI. of the CY 2009 OPPS/ASC final rule with comment
period (73 FR 68758), we discussed our requirements for subsection (d)
hospitals to report quality data under the HOP QDRP in order to receive
the full payment update for CY 2010. In section XVI. of this final rule
with comment period, we established additional policies affecting the
CY 2010 and CY 2011 HOP QDRP. We estimate that about 83 hospitals may
not receive the full payment update in CY 2010. Most of these hospitals
are either small rural or small urban hospitals. However, at this time,
information is not available to determine the precise number of
hospitals that do not meet the requirements for the full hospital
market basket increase for CY 2010. We also estimate that 83 hospitals
may not receive the full payment update in CY 2011.
In section XVI.E.3.a. of this final rule with comment period, for
the CY 2011 payment update, as part of the validation process, we are
requiring hospitals to submit paper copies of requested medical records
to a designated contractor within the required timeframe. Failure to
submit requested documentation can result in a 2 percentage point
reduction in a hospital's update, but the failure to pass the
validation itself would not. Of the 83 hospitals that we estimate will
not receive the full payment update for CY 2011, we estimate that no
more than 20 hospitals would fail the validation documentation
submission requirement for the CY 2011 payment update.
For the CY 2011 payment update, our validation sample size is
estimated to be about 7,300 medical records. We estimate that this
requirement will cost hospitals approximately 12 cents per page for
copying and approximately $4.00 per chart for postage. We have found,
based on experience, that an average sized outpatient medical chart is
approximately 30 pages. We estimate that the total cost to the impacted
hospitals will be approximately $55,480, with a maximum expected cost
of $152 for an individual hospital based upon an expected maximum of 20
selected records; the expected minimum will be $0.00 if no records were
selected from a hospital. We believe that this cost is minimal,
compared with the 2.0 percentage point HOP QDRP component of the annual
payment update at risk. CMS does not plan to reimburse hospitals for
copying and mailing costs. This validation requirement is necessary so
that CMS has all the information it needs to validate the accuracy of
hospital submitted data abstracted from paper medical records.
In section XVI.E.3.b. of this final rule with comment period, we
did not, at this time, adopt our proposal in the CY 2010 OPPS/ASC
proposed rule (74 FR 35403) to expand the CY 2011 validation
requirement for the CY 2012 payment update. Instead, we will consider
the public comments we received on that proposal, as well as any
analyses we conduct of the CY 2011 validation process, and propose a CY
2012 validation process as a part of the CY 2011 OPPS/ASC rulemaking.
We believe that this approach will give HOP QDRP hospitals additional
experience with the validation process and allow these hospitals
sufficient time to prepare for the CY 2012 validation.
However, we noted in the CY 2010 OPPS/ASC proposed rule (74 FR
35424) that we expected our proposal to validate data submitted by 800
hospitals for purposes of the CY 2012 HOP QDRP payment determination
would not have changed the number of hospitals that fail the validation
requirement from CY 2011. For CY 2011, and under our proposal for CY
2012 in the CY 2010 OPPS/ASC proposed rule, we stated that we would
calculate the validation matches for CY 2011 (we note, however, that
the validation results will not affect the CY 2011 payment update) and
CY 2012 by assessing whether the overall measure data submitted by the
hospital matches the independently reabstracted measure data. We
believe that this methodology will make it easier for hospitals to
satisfy the validation requirement than if we calculate the percent
agreement between what the hospital submitted and what the CMS-
designated contractor independently reabstracted for each individual
data element that was submitted. In addition, for the CY 2012 payment
update, in the CY 2010 OPPS/ASC proposed rule, we proposed to validate
data for only 800 hospitals out of the approximately 3,400 HOP QDRP
participating hospitals. As a result, we believe that the effect of our
proposed validation process for CY 2012 would have been minimal in
terms of the number of hospitals that would not meet all program
requirements. In the CY 2010 OPPS/ASC proposed rule (74 FR 35424), we
stated that of the 83 hospitals that we estimated would not have
received the full payment update for CY 2012, we estimated that
approximately 20 hospitals would have failed to meet our proposed CY
2012 validation requirements.
E. Executive Order 12866
In accordance with the provisions of Executive Order 12866, this
final rule with comment period rule was reviewed by the OMB.
List of Subjects
42 CFR Part 410
Health facilities, Health professions, Laboratories, Medicare,
Rural areas, X-rays.
42 CFR Part 416
Health facilities, Health professions, Medicare, Reporting and
recordkeeping requirements.
42 CFR Part 419
Hospitals, Medicare, Reporting and recordkeeping requirements.
0
For reasons stated in the preamble of this document, the Centers for
Medicare & Medicaid Services is amending 42 CFR chapter IV as set forth
below:
PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS
0
1. The authority citation for part 410 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
0
2. Section 410.27 is amended by--
0
a. Revising the section heading.
0
b. Revising the introductory text of paragraph (a) and paragraph
(a)(1).
0
c. Revising paragraph (e).
0
d. Revising paragraph (f).
0
e. Adding new paragraph (g).
0
The revisions and additions read as follows:
Sec. 410.27 Outpatient hospital or CAH services and supplies incident
to a physician or nonphysician practitioner service: Conditions.
(a) Medicare Part B pays for hospital or CAH services and supplies
furnished
[[Page 60680]]
incident to a physician or nonphysician practitioner service to
outpatients, including drugs and biologicals that cannot be self-
administered, if--
(1) They are furnished--
(i) By or under arrangements made by the participating hospital or
CAH, except in the case of a SNF resident as provided in Sec.
411.15(p) of this chapter;
(ii) As an integral though incidental part of a physician's or
nonphysician practitioner's services;
(iii) In the hospital or CAH or in a department of the hospital or
CAH, as defined in Sec. 413.65 of this subchapter; and
(iv) Under the direct supervision of a physician or a nonphysician
practitioner as specified in paragraph (f) of this section.
Nonphysician practitioners may directly supervise services that they
may personally furnish in accordance with State law and all additional
requirements, including those specified in Sec. Sec. 410.71, 410.73,
410.74, 410.75, 410.76, and 410.77.
(A) For services furnished in the hospital or CAH or in an on-
campus outpatient department of the hospital or CAH, as defined in
Sec. 413.65 of this subchapter, ``direct supervision'' means that the
physician or nonphysician practitioner must be present on the same
campus and immediately available to furnish assistance and direction
throughout the performance of the procedure. It does not mean that the
physician or nonphysician practitioner must be present in the room when
the procedure is performed. For pulmonary rehabilitation, cardiac
rehabilitation, and intensive cardiac rehabilitation services, direct
supervision must be furnished by a doctor of medicine or osteopathy, as
specified in Sec. Sec. 410.47 and 410.49, respectively.
(B) For services furnished in an off-campus outpatient department
of the hospital or CAH, as defined in Sec. 413.65 of this subchapter,
``direct supervision'' means the physician or nonphysician practitioner
must be present in the off-campus provider-based department of the
hospital or CAH and immediately available to furnish assistance and
direction throughout the performance of the procedure. It does not mean
that the physician or nonphysician practitioner must be present in the
room when the procedure is performed. For pulmonary rehabilitation,
cardiac rehabilitation, and intensive cardiac rehabilitation services,
direct supervision must be furnished by a doctor of medicine or
osteopathy, as specified in Sec. Sec. 410.47 and 410.49, respectively.
* * * * *
(e) Services furnished by an entity other than the hospital or CAH
are subject to the limitations specified in Sec. 410.42(a).
(f) For purposes of this section, ``nonphysician practitioner''
means a clinical psychologist, licensed clinical social worker,
physician assistant, nurse practitioner, clinical nurse specialist, or
certified nurse-midwife.
(g) For purposes of this section, ``in the hospital or CAH'' means
areas in the main building(s) of the hospital or CAH that are under the
ownership, financial, and administrative control of the hospital or
CAH; that are operated as part of the hospital or CAH; and for which
the hospital or CAH bills the services furnished under the hospital's
or CAH's CMS Certification Number.
0
3. Section 410.28 is amended by revising paragraph (e) to read as
follows:
Sec. 410.28 Hospital or CAH diagnostic services furnished to
outpatients: Conditions.
* * * * *
(e) Medicare Part B makes payment under section 1833(t) of the Act
for diagnostic services furnished by or under arrangements made by the
participating hospital, only when the diagnostic services are furnished
under the appropriate level of physician supervision specified by CMS
in accordance with the definitions in Sec. 410.32(b)(3)(i),
(b)(3)(ii), and (b)(3)(iii). Under general supervision, the training of
the nonphysician personnel who actually perform the diagnostic
procedure and the maintenance of the necessary equipment and supplies
are the continuing responsibility of the facility. In addition--
(1) For services furnished directly or under arrangement in the
hospital or in an on-campus outpatient department of the hospital, as
defined in Sec. 413.65 of this subchapter, ``direct supervision''
means that the physician must be present on the same campus and
immediately available to furnish assistance and direction throughout
the performance of the procedure. It does not mean that the physician
must be present in the room when the procedure is performed. For this
purpose, the definition of ``in the hospital'' is as specified in Sec.
410.27(g).
(2) For services furnished directly or under arrangement in an off-
campus outpatient department of the hospital, as defined in Sec.
413.65 of this subchapter, ``direct supervision'' means the physician
must be present in the off-campus provider-based department of the
hospital and immediately available to furnish assistance and direction
throughout the performance of the procedure. It does not mean that the
physician must be present in the room when the procedure is performed.
(3) For services furnished under arrangement in nonhospital
locations, ``direct supervision'' means the definition specified in
Sec. 410.32(b)(3)(ii).
* * * * *
PART 416--AMBULATORY SURGICAL SERVICES
0
4. The authority citation for Part 416 continues to read as follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
0
5. Section 416.30 is amended by revising paragraph (f)(2) to read as
follows:
Sec. 416.30 Terms of the agreement with CMS.
* * * * *
(f) * * *
(2) The ASC participates and is paid only as an ASC.
* * * * *
PART 419--PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT
DEPARTMENT SERVICES
0
6. The authority citation for part 419 continues to read as follows:
Authority: Secs. 1102, 1833(t), and 1871 of the Social Security
Act (42 U.S.C. 1302, 1395(t), and 1395(hh).
0
7. Section 419.64 is amended by adding new paragraphs (a)(4)(iii) and
(a)(4)(iv), to read as follows:
Sec. 419.64 Transitional pass-through payments: Drugs and
biologicals.
(a) * * *
(4) * * *
(iii) A biological that is not surgically implanted or inserted
into the body.
(iv) A biological that is surgically implanted or inserted into the
body, for which pass-through payment as a biological is made on or
before December 31, 2009.
* * * * *
0
8. Section 419.66 is amended by revising paragraph (b)(4)(iii) to read
as follows:
Sec. 419.66 Transitional pass-through payments: Medical devices.
* * * * *
(b) * * *
(4) * * *
(iii) A material that may be used to replace human skin (for
example, a biological skin replacement material or synthetic skin
replacement material).
* * * * *
[[Page 60681]]
0
9. Section 419.70 is amended by revising the heading of paragraph
(d)(5) to read as follows:
Sec. 419.70 Transitional adjustments to limit decline in payments.
* * * * *
(d) * * *
(5) Temporary treatment for small sole community hospitals on or
after January 1, 2009 and through December 31, 2009. * * *
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: October 26, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: October 29, 2009.
Kathleen Sebelius,
Secretary.
BILLING CODE 4120-01-P
[[Page 60682]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.049
[[Page 60683]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.050
[[Page 60684]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.051
[[Page 60685]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.052
[[Page 60686]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.053
[[Page 60687]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.054
[[Page 60688]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.055
[[Page 60689]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.056
[[Page 60690]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.057
[[Page 60691]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.058
[[Page 60692]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.059
[[Page 60693]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.060
[[Page 60694]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.061
[[Page 60695]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.062
[[Page 60696]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.063
[[Page 60697]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.064
[[Page 60698]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.065
[[Page 60699]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.066
[[Page 60700]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.067
[[Page 60701]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.068
[[Page 60702]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.069
[[Page 60703]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.070
[[Page 60704]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.071
[[Page 60705]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.072
[[Page 60706]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.073
[[Page 60707]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.074
[[Page 60708]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.075
[[Page 60709]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.076
[[Page 60710]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.077
[[Page 60711]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.078
[[Page 60712]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.079
[[Page 60713]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.080
[[Page 60714]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.081
[[Page 60715]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.082
[[Page 60716]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.083
[[Page 60717]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.084
[[Page 60718]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.085
[[Page 60719]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.086
[[Page 60720]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.087
[[Page 60721]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.088
[[Page 60722]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.089
[[Page 60723]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.090
[[Page 60724]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.091
[[Page 60725]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.092
[[Page 60726]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.093
[[Page 60727]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.094
[[Page 60728]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.095
[[Page 60729]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.096
[[Page 60730]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.097
[[Page 60731]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.098
[[Page 60732]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.099
[[Page 60733]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.100
[[Page 60734]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.101
[[Page 60735]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.102
[[Page 60736]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.103
[[Page 60737]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.104
[[Page 60738]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.105
[[Page 60739]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.106
[[Page 60740]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.107
[[Page 60741]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.108
[[Page 60742]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.109
[[Page 60743]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.110
[[Page 60744]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.111
[[Page 60745]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.112
[[Page 60746]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.113
[[Page 60747]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.114
[[Page 60748]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.115
[[Page 60749]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.116
[[Page 60750]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.117
[[Page 60751]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.118
[[Page 60752]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.119
[[Page 60753]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.120
[[Page 60754]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.121
[[Page 60755]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.122
[[Page 60756]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.123
[[Page 60757]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.124
[[Page 60758]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.125
[[Page 60759]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.126
[[Page 60760]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.127
[[Page 60761]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.128
[[Page 60762]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.129
[[Page 60763]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.130
[[Page 60764]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.131
[[Page 60765]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.132
[[Page 60766]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.133
[[Page 60767]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.134
[[Page 60768]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.135
[[Page 60769]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.136
[[Page 60770]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.137
[[Page 60771]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.138
[[Page 60772]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.139
[[Page 60773]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.140
[[Page 60774]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.141
[[Page 60775]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.142
[[Page 60776]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.143
[[Page 60777]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.144
[[Page 60778]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.145
[[Page 60779]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.146
[[Page 60780]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.147
[[Page 60781]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.148
[[Page 60782]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.149
[[Page 60783]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.150
[[Page 60784]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.151
[[Page 60785]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.152
[[Page 60786]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.153
[[Page 60787]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.154
[[Page 60788]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.155
[[Page 60789]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.156
[[Page 60790]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.157
[[Page 60791]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.158
[[Page 60792]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.159
[[Page 60793]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.160
[[Page 60794]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.161
[[Page 60795]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.162
[[Page 60796]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.163
[[Page 60797]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.164
[[Page 60798]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.165
[[Page 60799]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.166
[[Page 60800]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.167
[[Page 60801]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.168
[[Page 60802]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.169
[[Page 60803]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.170
[[Page 60804]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.171
[[Page 60805]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.172
[[Page 60806]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.173
[[Page 60807]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.174
[[Page 60808]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.175
[[Page 60809]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.176
[[Page 60810]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.177
[[Page 60811]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.178
[[Page 60812]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.179
[[Page 60813]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.180
[[Page 60814]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.181
[[Page 60815]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.182
[[Page 60816]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.183
[[Page 60817]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.184
[[Page 60818]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.185
[[Page 60819]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.186
[[Page 60820]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.187
[[Page 60821]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.188
[[Page 60822]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.189
[[Page 60823]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.190
[[Page 60824]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.191
[[Page 60825]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.192
[[Page 60826]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.193
[[Page 60827]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.194
[[Page 60828]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.195
[[Page 60829]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.196
[[Page 60830]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.197
[[Page 60831]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.198
[[Page 60832]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.199
[[Page 60833]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.200
[[Page 60834]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.201
[[Page 60835]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.202
[[Page 60836]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.203
[[Page 60837]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.204
[[Page 60838]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.205
[[Page 60839]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.206
[[Page 60840]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.207
[[Page 60841]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.208
[[Page 60842]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.209
[[Page 60843]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.210
[[Page 60844]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.211
[[Page 60845]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.212
[[Page 60846]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.213
[[Page 60847]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.214
[[Page 60848]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.215
[[Page 60849]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.216
[[Page 60850]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.217
[[Page 60851]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.218
[[Page 60852]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.219
[[Page 60853]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.220
[[Page 60854]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.221
[[Page 60855]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.222
[[Page 60856]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.223
[[Page 60857]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.224
[[Page 60858]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.225
[[Page 60859]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.226
[[Page 60860]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.227
[[Page 60861]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.228
[[Page 60862]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.229
[[Page 60863]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.230
[[Page 60864]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.231
[[Page 60865]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.232
[[Page 60866]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.233
[[Page 60867]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.234
[[Page 60868]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.235
[[Page 60869]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.236
[[Page 60870]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.237
[[Page 60871]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.238
[[Page 60872]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.239
[[Page 60873]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.240
[[Page 60874]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.241
[[Page 60875]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.242
[[Page 60876]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.243
[[Page 60877]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.244
[[Page 60878]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.245
[[Page 60879]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.246
[[Page 60880]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.247
[[Page 60881]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.248
[[Page 60882]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.249
[[Page 60883]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.250
[[Page 60884]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.251
[[Page 60885]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.252
[[Page 60886]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.253
[[Page 60887]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.254
[[Page 60888]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.255
[[Page 60889]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.256
[[Page 60890]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.257
[[Page 60891]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.258
[[Page 60892]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.259
[[Page 60893]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.260
[[Page 60894]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.261
[[Page 60895]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.262
[[Page 60896]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.263
[[Page 60897]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.264
[[Page 60898]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.265
[[Page 60899]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.266
[[Page 60900]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.267
[[Page 60901]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.268
[[Page 60902]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.269
[[Page 60903]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.270
[[Page 60904]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.271
[[Page 60905]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.272
[[Page 60906]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.273
[[Page 60907]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.274
[[Page 60908]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.275
[[Page 60909]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.276
[[Page 60910]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.277
[[Page 60911]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.278
[[Page 60912]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.279
[[Page 60913]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.280
[[Page 60914]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.281
[[Page 60915]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.282
[[Page 60916]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.283
[[Page 60917]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.284
[[Page 60918]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.285
[[Page 60919]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.286
[[Page 60920]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.287
[[Page 60921]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.288
[[Page 60922]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.289
[[Page 60923]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.290
[[Page 60924]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.291
[[Page 60925]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.292
[[Page 60926]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.293
[[Page 60927]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.294
[[Page 60928]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.295
[[Page 60929]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.296
[[Page 60930]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.297
[[Page 60931]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.298
[[Page 60932]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.299
[[Page 60933]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.300
[[Page 60934]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.301
[[Page 60935]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.302
[[Page 60936]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.303
[[Page 60937]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.304
[[Page 60938]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.305
[[Page 60939]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.306
[[Page 60940]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.307
[[Page 60941]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.308
[[Page 60942]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.309
[[Page 60943]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.310
[[Page 60944]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.311
[[Page 60945]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.312
[[Page 60946]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.313
[[Page 60947]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.314
[[Page 60948]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.315
[[Page 60949]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.316
[[Page 60950]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.317
[[Page 60951]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.318
[[Page 60952]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.319
[[Page 60953]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.320
[[Page 60954]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.321
[[Page 60955]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.322
[[Page 60956]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.323
[[Page 60957]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.324
[[Page 60958]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.325
[[Page 60959]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.326
[[Page 60960]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.327
[[Page 60961]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.328
[[Page 60962]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.329
[[Page 60963]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.330
[[Page 60964]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.331
[[Page 60965]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.332
[[Page 60966]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.333
[[Page 60967]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.334
[[Page 60968]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.335
[[Page 60969]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.336
[[Page 60970]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.337
[[Page 60971]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.338
[[Page 60972]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.339
[[Page 60973]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.340
[[Page 60974]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.341
[[Page 60975]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.342
[[Page 60976]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.343
[[Page 60977]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.344
[[Page 60978]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.345
[[Page 60979]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.346
[[Page 60980]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.347
[[Page 60981]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.348
[[Page 60982]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.349
[[Page 60983]]
[GRAPHIC] [TIFF OMITTED] TR20NO09.350
[FR Doc. E9-26499 Filed 10-30-09; 4:15 pm]
BILLING CODE 4120-01-C