[Federal Register Volume 77, Number 79 (Tuesday, April 24, 2012)]
[Rules and Regulations]
[Pages 24409-24415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9837]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 410, 411, 416, 419, 489, and 495

[CMS-1525-CN2]
RIN 0938-AQ26


Medicare and Medicaid Programs: Hospital Outpatient Prospective 
Payment; Ambulatory Surgical Center Payment; Hospital Value-Based 
Purchasing Program; Physician Self-Referral; and Patient Notification 
Requirements in Provider Agreements; Corrections

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

ACTION: Final rule; Correction.

-----------------------------------------------------------------------

SUMMARY: This document corrects technical errors that appeared in the 
final rule with comment period published in the Federal Register on 
November 30, 2011, entitled ``Medicare and Medicaid Programs: Hospital 
Outpatient Prospective Payment; Ambulatory Surgical Center Payment; 
Hospital Value-Based Purchasing Program; Physician Self-Referral; and 
Patient Notification Requirements in Provider Agreements'' and in the 
correction notice published in the Federal Register on January 4, 2012, 
entitled ``Medicare and Medicaid Programs: Hospital Outpatient 
Prospective Payment; Ambulatory Surgical Center Payment; Hospital 
Value-Based Purchasing Program; Physician Self-Referral; and Patient 
Notification Requirements in Provider Agreements; Corrections.''

DATES: Effective date: This document is effective on April 24, 2012.
    Applicability Date: The corrections noted in this document and 
posted on the CMS Web site are applicable to payments on or after 
January 1, 2012.

FOR FURTHER INFORMATION CONTACT: Erick Chuang, (410) 786-1816.

SUPPLEMENTARY INFORMATION:

I. Regulatory Overview

    In FR Doc. 2011-26812 of November 30, 2011 (76 FR 74122) and FR 
Doc. 2011-33751 of January 4, 2012 (77 FR 217), there were a number of 
technical errors that are identified and corrected in the ``Correction 
of Errors'' section below.
    We issued the calendar year (CY) 2012 hospital outpatient 
prospective payment system (OPPS)/ambulatory surgical center (ASC) 
final rule with comment period on November 1, 2011 (hereinafter 
referred to as the CY 2012 OPPS/ASC final rule with comment period). 
The CY 2012 OPPS/ASC final rule with comment period appeared in the 
November 30, 2011 Federal Register.
    We issued a correction notice for the CY 2012 OPPS/ASC final rule 
with comment period on December 30, 2011 (hereinafter referred to as 
the CY 2012 OPPS/ASC correction notice). The CY 2012 OPPS/ASC 
correction notice appeared in the January 4, 2012 Federal Register.
    The provisions in this correction notice are effective as if they 
had been included in the CY 2012 OPPS/ASC final rule with comment 
period and in the CY 2012 OPPS/ASC correction notice. Accordingly, the 
corrections are effective January 1, 2012.

II. Background

    In the CY 2012 OPPS/ASC final rule with comment period, we 
finalized a continuation of our policy to exclude line items that were 
eligible for payment in the claims year but did not meet the Medicare 
requirements for payment (76 FR 74141). Line items not meeting 
requirements for Medicare payment were rejected or denied during claims 
processing. It is our longstanding policy not to use line items that 
were rejected or denied for payment for modeling

[[Page 24410]]

costs under the OPPS. In reviewing the claims data used to establish 
the ambulatory payment classification (APC) median costs for the CY 
2012 OPPS/ASC final rule with comment period, we discovered that the 
trim of unpaid lines was not applied correctly. Therefore, we published 
a correction notice in the Federal Register on January 4, 2012, to 
correct our programming logic in the OPPS data process to apply the 
line item trim correctly. We also recalculated the median costs for 
each separately paid service using the claims that resulted from the 
correctly applied trim. In this correction notice, we are correcting 
the revenue code-to-cost center crosswalk in our programming logic and 
the packaging status of two drug codes.

III. Summary of Errors

A. Corrections to the Revenue Code-to-Cost Center Crosswalk

    In the CY 2012 OPPS/ASC final rule with comment period, we 
finalized a continuation of our policy to apply the hospital-specific 
cost-to-charge ratios (CCRs) 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 (76 FR 74134). This allowed us to 
estimate line-item costs for every claim in the dataset used to model 
the OPPS. In reviewing the program logic used to establish the APC 
median costs for the CY 2012 OPPS/ASC final rule with comment period, 
we discovered that this revenue code-to-cost center crosswalk contained 
incorrect mappings due to misalignments for several revenue codes, 
specifically revenue codes 790 (Extra-Corp Shock Wave Therapy), 800 
(Inpatient Dialysis), 801 (Inpatient Hemodialysis), 802 (Inpatient 
peritoneal dialysis), 803 (inpatient dialysis CAPD), 804 (Inpatient 
dialysis CCPD), and 809 (Other inp dialysis). In this correction 
notice, we are correcting the revenue code-to-cost center crosswalk in 
our program logic to accurately reflect the crosswalk available online 
at http://www.cms.gov/HospitalOutpatientPPS/03_crosswalk.asp#TopOfPage. To obtain accurate median costs, we applied 
the available CCRs to the appropriate revenue code charges to estimate 
cost and recalculated the APC median costs for each separately paid 
service. We are making no other changes to the programming described in 
the CY 2012 OPPS/ASC final rule with comment period or the subsequent 
CY 2012 OPPS/ASC correction notice, which resolved a technical error in 
our cost modeling where the line item trim for eligible unpaid lines 
was not applied correctly. Those changes to the claims dataset used to 
model the OPPS APC median costs are reflected in this correction 
notice, since the combination of the line item trim and revenue code 
crosswalk in the data process have an interactive effect on the 
calculation of the APC payments.
    The application of the correct revenue code-to-cost center 
crosswalk for the specific revenue codes resulted in changes to the APC 
median costs used to establish the relative payment weights, therefore 
affecting the CY 2012 OPPS payment rates, copayments, outlier 
threshold, and regulatory impact analysis. Due to changes in the APC 
median costs, we recalculated the budget neutral weight scaler 
discussed in section II.A.4. of the CY 2012 OPPS/ASC final rule with 
comment period (76 FR 74189) and in the CY 2012 OPPS/ASC correction 
notice when we addressed the line item trim issue. Using the updated 
unscaled relative weights, the CY 2012 budget neutrality weight scaler 
is changed from 1.3585 to 1.3597. We note that the weight scaler was 
initially corrected in the CY 2012 OPPS/ASC correction notice (77 FR 
218) from 1.3588 to 1.3585. We also note that changes associated with 
the revised APC median costs and the corrected budget neutrality weight 
scaler have no additional effect on the budget neutrality, in 
particular, those applied to the CY 2012 conversion factor. Using the 
corrected revenue code-to-cost center crosswalk in our programs, the CY 
2012 OPPS fixed-dollar outlier threshold remains at $2,025, as 
published in the CY 2012 OPPS/ASC correction notice.
    We are also correcting the CY 2012 estimated impacts. The CY 2012 
OPPS/ASC correction notice made changes to accurately apply the line 
item trim in our ratesetting process. As previously stated in this 
correction notice we are applying a corrected revenue code-to-cost 
center crosswalk. The combined corrections to the line item trim and 
revenue code-to-cost center crosswalk affects the calculation of APC 
median costs and the CY 2012 OPPS payment rates. Therefore, this 
correction notice makes minor changes to Table 59--Estimated Impact of 
the Final CY 2012 for the Hospital OPPS.
    To view the revised payment rates that result from the changed 
median costs as well as the correction to the packaging status of HCPCS 
codes J1642 and J1644, see the Addenda and supporting files that are 
posted on the CMS Web site at: http://www.cms.gov/HospitalOutpatientPPS/HORD/. All revised Addenda for this correction 
notice will be contained in a zipped folder on the Web page associated 
with this correction notice. The corrected CY 2012 table of updated 
offset amounts is posted on the OPPS Web site under ``Annual Policy 
Files'' which is found on the left side of the page. The corrected file 
of median costs is found under supporting documentation for CMS-1525-
FC.
    ASC payment rates are based on the OPPS relative payment weights 
for the majority of services that are provided at ASCs. Therefore, the 
correct application of the line item based trim and the correct 
application of the revenue code-to-cost center crosswalk for the 
revenue codes specified above have an effect on the CY 2012 ASC 
relative payment weights and ASC payment rates. Due to the changes to 
the OPPS payment weights, we had to recalculate the budget neutral ASC 
weight scalar of 0.9466 discussed in section XIII.H.2.a of the CY 2012 
OPPS/ASC final rule with comment period (76 FR 74447 to 74448). In the 
CY 2012 OPPS/ASC correction notice, we corrected the application of the 
line item based trim; using the updated scaled OPPS relative weights, 
the CY 2012 budget neutrality ASC weight scalar changed from 0.9466 to 
0.9477 (77 FR 218). In this correction notice, we corrected the 
application of the revenue code-to-cost center crosswalk for the 
revenue codes specified above; using the updated scaled OPPS relative 
weights, the CY 2012 budget neutrality ASC weight scalar changed from 
0.9477 to 0.9481. The changes associated with the revised OPPS relative 
weights and the corrected budget neutrality ASC weight scalar have no 
effect on the CY 2012 ASC conversion factor. To view the revised ASC 
payment rates that result from the revised ASC relative payment 
weights, see the ASC Addenda that are posted on the CMS Web site at: 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.html. Select ``CMS-1525-FC'' 
from the list of regulations. All revised ASC addenda for this 
correction notice are contained in the zipped folder entitled 
``Addendum AA, BB, DD1, DD2, EE--revised ASC payment rates resulting 
from upcoming Federal Register Correction Notice publication'' at the 
bottom of the page for CMS-1525-FC.

B. Correction to Packaging Status of Drug Codes

    In the CY 2012 OPPS/ASC final rule with comment period, we 
finalized a continuation of our policy to make a single packaging 
determination for a

[[Page 24411]]

drug, rather than an individual healthcare common procedure coding 
system (HCPCS) code, when a drug has multiple HCPCS codes describing 
different dosages (76 FR 74303). For the CY 2012 OPPS/ASC final rule 
with comment period, there was an error in the calculation to determine 
the packaging status of drugs with multiple HCPCS codes that describe 
different dosages. This error resulted in the per-day cost for HCPCS 
J1642 (Injection, heparin sodium (heparin lock flush), per 10 units) 
and HCPCS J1644 (Injection, heparin sodium, per 1000 units) to be in 
excess of the $75 packaging threshold and both codes were consequently 
assigned to status indicator ``K'' (separately paid). After application 
of the correct calculation to determine the per-day cost for drugs that 
have multiple HCPCS codes describing different dosages, the per day 
cost for HCPCS J1642 and J1644 was below the $75 packaging threshold. 
Therefore, we are changing the status indicator assignment for HCPCS 
codes J1642 and J1644 from ``K'' to ``N'' (packaged) for CY 2012 to 
reflect this correction. In addition, because drugs that are determined 
to be packaged in the OPPS are also packaged under the ASC payment 
system, we are changing the ASC payment indicator assignment for HCPCS 
codes J1642 and J1644 from ``K2'' to ``N1'' (packaged) for CY 2012 to 
reflect the correction detailed above.

III. Waiver of Proposed Rulemaking and the 30-Day Delay in Effective 
Date

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register to provide a period for public comment before the 
provisions of a rule take effect in accordance with section 553(b) of 
the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). However, we 
can waive this notice and comment procedure if the agency finds, for 
good cause, that the notice and comment process is impracticable, 
unnecessary, or contrary to the public interest, and incorporates a 
statement of the finding and the reasons therefor in the notice.
    Section 553(d) of the APA ordinarily requires a 30-day delay in 
effective date of final rules after the date of their publication in 
the Federal Register. This 30-day delay in effective date can be 
waived, however, if an agency finds for good cause that the delay is 
impracticable, unnecessary, or contrary to the public interest, and the 
agency incorporates a statement of the findings and its reasons in the 
rule issued.
    The policies and payment methodologies finalized in the CY 2012 
OPPS/ASC final rule with comment period have previously been subjected 
to notice and comment procedures. This correction notice merely 
provides technical corrections to the CY 2012 OPPS/ASC final rule with 
comment period and the subsequent CY 2012 OPPS/ASC correction notice. 
The CY 2012 OPPS/ASC final rule with comment period was promulgated 
through notice and comment rulemaking. This correction notice does not 
make substantive changes to the policies or payment methodologies that 
were finalized in the final rule with comment period. For example, to 
conform the document to the final policies of the CY 2012 OPPS/ASC 
final rule with comment period, this notice makes changes to revise 
inaccurate tabular information and update payment numbers used in the 
example for calculation of an adjusted Medicare Payment. Therefore, we 
find it unnecessary to undertake further notice and comment procedures 
with respect to this correction notice. In addition, we believe it is 
important for the public to have the correct information as soon as 
possible and find no reason to delay the dissemination of it. For the 
reasons stated above, we find that both notice and comment and the 30-
day delay in effective date for this correction notice are unnecessary. 
Therefore, we find there is good cause to waive notice and comment 
procedures and the 30-day delay in effective date for this correction 
notice.

IV. Correction of Errors

A. Corrections to CY 2012 OPPS/ASC Correction Notice

    In FR Doc. 2011-33751 of January 4, 2012 (77 FR 217), make the 
following corrections:
    1. On page 218, in the first column, in the second paragraph, in 
line 12, revise ``1.3585'' to read ``1.3597''.
    2. On page 218, in the third column, in line 11, revise ``0.9477'' 
to read ``0.9481''.
    3. On page 219, in the third column, in the first instruction, 
revise ``1.3585'' to read ``1.3597''.
    4. On page 222, in the first column--
    A. In instruction 5.A, revise ``$309.46'' to read ``$309.74''.
    B. In instruction 5.B, revise ``$303.27'' to read ``$303.54''.
    C. In instruction 6.A, revise ``$244.02'' to read ``$244.24'' and 
revise ``$309.46'' to read ``$309.74''.
    5. On page 222, in the second column--
    A. In instruction 6.B, revise ``$239.14'' to read ``$239.35'' and 
revise ``$303.27'' to read ``$303.54''.
    B. In instruction 6.C, revise ``$123.78'' to read ``$123.90'' and 
revise ``$309.46'' to read ``$309.74''.
    C. In instruction 6.D, revise ``$121.31'' to read ``$121.42'' and 
revise ``$303.27'' to read ``$303.54''.
    D. In instruction 6.E, revise ``$367.80'' to read ``$368.13''.
    E. In instruction 6.F, revise ``$123.78'' to read ``$123.90'' and 
revise ``$244.02'' to read ``$244.24''.
    F. In instruction 6.G, revise ``$360.44'' to read ``$360.76'', 
``$239.14'' to read ``$239.35'', and ``$121.31'' to read ``$121.42''.
    G. In instruction 7.A, revise ``$61.90'' to read ``$61.95''.
    6. On page 222, in the third column--
    A. In instruction 7.B, revise ``$309.46'' to read ``$309.74''.
    B. In instruction 9.A, revise ``0.9477'' to read ``0.9481''.
    C. In instruction 9.B, revise ``0.9477'' to read ``0.9481''.
    7. On pages 223 through 226, revise Table 59--Estimated Impact of 
the Final CY 2012 Changes for the Hospital Outpatient Prospective 
Payment System to read as follows:
BILLING CODE 4120-01-P


[[Page 24412]]

[GRAPHIC] [TIFF OMITTED] TR24AP12.003


[[Page 24413]]


[GRAPHIC] [TIFF OMITTED] TR24AP12.004


[[Page 24414]]


[GRAPHIC] [TIFF OMITTED] TR24AP12.005


[[Page 24415]]


[GRAPHIC] [TIFF OMITTED] TR24AP12.006

BILLING CODE 4120-01-C
    8. On page 226, in the first column, in instruction 11, revise 
``0.9477'' to read ``0.9481''.
    B. Corrections to the Final Rule with Comment Period
    In FR Doc. 2011-26812 of November 30, 2011 (76 FR 74122), make the 
following corrections:
    1. On page 74303, in third column, end of the first paragraph, 
remove the last two sentences in the paragraph that begins at the 
bottom of the second column.
    2. On page 74303, in third column, in the last paragraph, delete 
the following portion of the first sentence: ``With the exception of 
the changed status indicators for HCPCS J1642 and J1644,'' and 
capitalize the first letter of the new sentence.
    3. On page 74304, in the third column of the table, in the data 
cells associated with J1642 and J1644, revise ``K'' to read ``N''.


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

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

    Dated: April 18, 2012.
Jennifer Cannistra,
Executive Secretary to the Department.
[FR Doc. 2012-9837 Filed 4-23-12; 8:45 am]
BILLING CODE 4120-01-P