[Federal Register Volume 84, Number 86 (Friday, May 3, 2019)]
[Proposed Rules]
[Pages 19158-19677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08330]
[[Page 19157]]
Vol. 84
Friday,
No. 86
May 3, 2019
Part II
Book 2 of 2 Books
Pages 19157-19682
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 412, 413, and 495
Medicare Program; Hospital Inpatient Prospective Payment Systems for
Acute Care Hospitals and the Long-Term Care Hospital Prospective
Payment System and Proposed Policy Changes and Fiscal Year 2020 Rates;
Proposed Quality Reporting Requirements for Specific Providers;
Medicare and Medicaid Promoting Interoperability Programs Proposed
Requirements for Eligible Hospitals and Critical Access Hospitals;
Proposed Rule
Federal Register / Vol. 84 , No. 86 / Friday, May 3, 2019 / Proposed
Rules
[[Page 19158]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 412, 413, and 495
[CMS-1716-P]
RIN 0938-AT73
Medicare Program; Hospital Inpatient Prospective Payment Systems
for Acute Care Hospitals and the Long-Term Care Hospital Prospective
Payment System and Proposed Policy Changes and Fiscal Year 2020 Rates;
Proposed Quality Reporting Requirements for Specific Providers;
Medicare and Medicaid Promoting Interoperability Programs Proposed
Requirements for Eligible Hospitals and Critical Access Hospitals
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: We are proposing to revise the Medicare hospital inpatient
prospective payment systems (IPPS) for operating and capital-related
costs of acute care hospitals to implement changes arising from our
continuing experience with these systems for FY 2020 and to implement
certain recent legislation. We also are proposing to make changes
relating to Medicare graduate medical education (GME) for teaching
hospitals and payments to critical access hospital (CAHs). In addition,
we are proposing to provide the market basket update that would apply
to the rate-of-increase limits for certain hospitals excluded from the
IPPS that are paid on a reasonable cost basis, subject to these limits
for FY 2020. We are proposing to update the payment policies and the
annual payment rates for the Medicare prospective payment system (PPS)
for inpatient hospital services provided by long-term care hospitals
(LTCHs) for FY 2020. In this proposed rule, we are including proposals
to address wage index disparities between high and low wage index
hospitals; to provide for an alternative IPPS new technology add-on
payment pathway for certain transformative new devices; and to revise
the calculation of the IPPS new technology add-on payment. In addition,
we are requesting public comments on the substantial clinical
improvement criterion used for evaluating applications for both the
IPPS new technology add-on payment and the OPPS transitional pass-
through payment for devices, and we discuss potential revisions that we
are considering adopting as final policies related to the substantial
clinical improvement criterion for applications received beginning in
FY 2020 for IPPS (that is, for FY 2021 and later new technology add-on
payments) and beginning in CY 2020 for the OPPS.
We are proposing to establish new requirements or revise existing
requirements for quality reporting by specific Medicare providers
(acute care hospitals, PPS-exempt cancer hospitals, and LTCHs). We also
are proposing to establish new requirements and revise existing
requirements for eligible hospitals and critical access hospitals
(CAHs) participating in the Medicare and Medicaid Promoting
Interoperability Programs. We are proposing to update policies for the
Hospital Value-Based Purchasing (VBP) Program, the Hospital
Readmissions Reduction Program, and the Hospital-Acquired Condition
(HAC) Reduction Program.
DATES: To be assured consideration, comments must be received at one of
the addresses provided in the ADDRESSES section, no later than 5 p.m.
EDT on June 24, 2019.
ADDRESSES: In commenting, please refer to file code CMS-1716-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may (and we encourage you to) submit
electronic comments on this regulation to http://www.regulations.gov.
Follow the instructions under the ``submit a comment'' tab.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1716-P, 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 via
express or overnight mail to the following address ONLY: Centers for
Medicare & Medicaid Services, Department of Health and Human Services,
Attention: CMS-1716-P, Mail Stop C4-26-05, 7500 Security Boulevard,
Baltimore, MD 21244-1850.
For information on viewing public comments, we refer readers to the
beginning of the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Donald Thompson, (410) 786-4487, and
Michele Hudson, (410) 786-4487, Operating Prospective Payment, MS-DRGs,
Wage Index, New Medical Service and Technology Add-On Payments,
Hospital Geographic Reclassifications, Graduate Medical Education,
Capital Prospective Payment, Excluded Hospitals, Medicare
Disproportionate Share Hospital (DSH) Payment Adjustment, Medicare-
Dependent Small Rural Hospital (MDH) Program, Low-Volume Hospital
Payment Adjustment, and Critical Access Hospital (CAH) Issues.
Michele Hudson, (410) 786-4487, Mark Luxton, (410) 786-4530, and
Emily Lipkin, (410) 786-3633, Long-Term Care Hospital Prospective
Payment System and MS-LTC-DRG Relative Weights Issues.
Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital
Demonstration Program Issues.
Jeris Smith, (410) 786-0110, Frontier Community Health Integration
Project Demonstration Issues.
Erin Patton, (410) 786-2437, Hospital Readmissions Reduction
Program Administration Issues.
Lein Han, 410-786-0205, Hospital Readmissions Reduction Program--
Readmissions--Measures Issues.
Michael Brea, (410) 786-4961, Hospital-Acquired Condition Reduction
Program Issues.
Annese Abdullah-Mclaughlin, (410) 786-2995, Hospital-Acquired
Condition Reduction Program--Measures Issues.
Grace Snyder, (410) 786-0700 and James Poyer, (410) 786-2261,
Hospital Inpatient Quality Reporting and Hospital Value-Based
Purchasing--Program Administration, Validation, and Reconsideration
Issues.
Cindy Tourison, (410) 786-1093, Hospital Inpatient Quality
Reporting and Hospital Value-Based Purchasing--Measures Issues Except
Hospital Consumer Assessment of Healthcare Providers and Systems
Issues.
Elizabeth Goldstein, (410) 786-6665, Hospital Inpatient Quality
Reporting and Hospital Value-Based Purchasing--Hospital Consumer
Assessment of Healthcare Providers and Systems Measures Issues.
Nekeshia McInnis, (410) 786-4486 and Ronique Evans, (410) 786-1000,
PPS-Exempt Cancer Hospital Quality Reporting Issues.
Mary Pratt, (410) 786-6867, Long-Term Care Hospital Quality Data
Reporting Issues.
Elizabeth Holland, (410) 786-1309, Dylan Podson (410) 786-5031, and
Bryan Rossi (410) 786-065l, Promoting Interoperability Programs.
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Benjamin Moll, (410) 786-4390, Provider Reimbursement Review Board
Appeals Issues.
SUPPLEMENTARY INFORMATION: 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 website as soon as possible after they have been
received: http://www.regulations.gov/. Follow the search instructions
on that website to view public comments.
Electronic Access
This Federal Register document is available from the Federal
Register online database through Federal Digital System (FDsys), a
service of the U.S. Government Printing Office. This database can be
accessed via the internet at: http://www.gpo.gov/fdsys.
Tables Available Through the Internet on the CMS Website
In the past, a majority of the tables referred to throughout this
preamble and in the Addendum to the proposed rule and the final rule
were published in the Federal Register as part of the annual proposed
and final rules. However, beginning in FY 2012, the majority of the
IPPS tables and LTCH PPS tables are no longer published in the Federal
Register. Instead, these tables, generally, will be available only
through the internet. The IPPS tables for this FY 2020 proposed rule
are available through the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on the link on the left side of the
screen titled, ``FY 2020 IPPS Proposed Rule Home Page'' or ``Acute
Inpatient--Files for Download.'' The LTCH PPS tables for this FY 2020
proposed rule are available through the internet on the CMS website at:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/LongTermCareHospitalPPS/index.html under the list item for Regulation
Number CMS-1716-P. For further details on the contents of the tables
referenced in this proposed rule, we refer readers to section VI. of
the Addendum to this proposed rule.
Readers who experience any problems accessing any of the tables
that are posted on the CMS websites identified above should contact
Michael Treitel at (410) 786-4552.
Table of Contents
I. Executive Summary and Background
A. Executive Summary
B. Background Summary
C. Summary of Provisions of Recent Legislation Implemented in
This Proposed Rule
D. Summary of the Provisions of This Proposed Rule
E. Advancing Health Information Exchange
II. Proposed Changes to Medicare Severity Diagnosis-Related Group
(MS-DRG) Classifications and Relative Weights
A. Background
B. MS-DRG Reclassifications
C. Adoption of the MS-DRGs in FY 2008
D. Proposed FY 2020 MS-DRG Documentation and Coding Adjustment
E. Refinement of the MS-DRG Relative Weight Calculation
F. Proposed Changes to Specific MS-DRG Classifications
G. Recalibration of the Proposed FY 2020 MS-DRG Relative Weights
H. Proposed Add-On Payments for New Services and Technologies
for FY 2020
III. Proposed Changes to the Hospital Wage Index for Acute Care
Hospitals
A. Background
B. Worksheet S-3 Wage Data for the Proposed FY 2020 Wage Index
C. Verification of Worksheet S-3 Wage Data
D. Method for Computing the Proposed FY 2020 Unadjusted Wage
Index
E. Proposed Occupational Mix Adjustment to the Proposed FY 2020
Wage Index
F. Analysis and Implementation of the Proposed Occupational Mix
Adjustment and the Proposed FY 2020 Occupational Mix Adjusted Wage
Index
G. Proposed Application of the Rural Floor, Expired Imputed
Floor Policy, and Proposed Application of the State Frontier Floor
H. Proposed FY 2020 Wage Index Tables
I. Proposed Revisions to the Wage Index Based on Hospital
Redesignations and Reclassifications
J. Proposed Out-Migration Adjustment Based on Commuting Patterns
of Hospital Employees
K. Reclassification from Urban to Rural Under Section
1886(d)(8)(E) of the Act Implemented at 42 CFR 412.103
L. Process for Requests for Wage Index Data Corrections
M. Proposed Labor-Related Share for the FY 2020 Wage Index
N. Proposals to Address Wage Index Disparities Between High and
Low Wage Index Hospitals
IV. Other Decisions and Proposed Changes to the IPPS for Operating
Costs
A. Proposed Changes to MS-DRGs Subject to Postacute Care
Transfer and MS-DRG Special Payment Policies
B. Proposed Changes in the Inpatient Hospital Updates for FY
2020 (Sec. 412.64(d))
C. Proposed Rural Referral Centers (RRCs) Annual Updates to
Case-Mix Index and Discharge Criteria (Sec. 412.96)
D. Proposed Payment Adjustment for Low-Volume Hospitals (Sec.
412.101)
E. Proposed Indirect Medical Education (IME) Payment Adjustment
(Sec. 412.105)
F. Proposed Payment Adjustment for Medicare Disproportionate
Share Hospitals (DSHs) for FY 2020 (Sec. 412.106)
G. Hospital Readmissions Reduction Program: Proposed Updates and
Changes (Sec. Sec. 412.150 through 412.154)
H. Hospital Value-Based Purchasing (VBP) Program: Proposed
Policy Changes
I. Hospital-Acquired Condition (HAC) Reduction Program
J. Payments for Indirect and Direct Graduate Medical Education
Costs (Sec. Sec. 412.105 and 413.75 through 413.83)
K. Rural Community Hospital Demonstration Program
V. Proposed Changes to the IPPS for Capital-Related Costs
A. Overview
B. Additional Provisions
C. Proposed Annual Update for FY 2020
VI. Proposed Changes for Hospitals Excluded From the IPPS
A. Proposed Rate-of-Increase in Payments to Excluded Hospitals
for FY 2020
B. Request for Public Comments on Methodologies and Requirements
for Adjustments to Rate-of-Increase Ceiling
C. Critical Access Hospitals (CAHs)
VII. Proposed Changes to the Long-Term Care Hospital Prospective
Payment System (LTCH PPS) for FY 2019
A. Background of the LTCH PPS
B. Proposed Medicare Severity Long-Term Care Diagnosis-Related
Group (MS-LTC-DRG) Classifications and Relative Weights for FY 2020
C. Proposed Payment Adjustment for LTCH Discharges That Do Not
Meet the Applicable Discharge Payment Percentage
D. Proposed Changes to the LTCH PPS Payment Rates and Other
Proposed Changes to the LTCH PPS for FY 2020
VIII. Proposed Quality Data Reporting Requirements for Specific
Providers and Suppliers
A. Hospital Inpatient Quality Reporting (IQR) Program
B. PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program
C. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
D. Proposed Changes to the Medicare and Medicaid Promoting
Interoperability Programs
IX. MedPAC Recommendations
X. Other Required Information
A. Publicly Available Data
B. Collection of Information Requirements
C. Response to Public Comments
XI. Provider Reimbursement Review Board (PRRB) Appeals
Regulation Text
Addendum--Proposed Schedule of Standardized Amounts, Update Factors,
and Rate-of-Increase Percentages Effective With Cost Reporting Periods
Beginning on or After October 1, 2019 and Proposed Payment Rates for
LTCHs Effective With Discharges Occurring on or After October 1, 2019
I. Summary and Background
II. Proposed Changes to the Prospective Payment Rates for Hospital
Inpatient
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Operating Costs for Acute Care Hospitals for FY 2020
A. Calculation of the Proposed Adjusted Standardized Amount
B. Proposed Adjustments for Area Wage Levels and Cost-of-Living
C. Calculation of the Proposed Prospective Payment Rates
III. Proposed Changes to Payment Rates for Acute Care Hospital
Inpatient Capital-Related Costs for FY 2020
A. Determination of Proposed Federal Hospital Inpatient Capital-
Related Prospective Payment Rate Update
B. Calculation of the Proposed Inpatient Capital-Related
Prospective Payments for FY 2020
C. Capital Input Price Index
IV. Proposed Changes to Payment Rates for Excluded Hospitals: Rate-
of-Increase Percentages for FY 2020
V. Proposed Updates to the Payment Rates for the LTCH PPS for FY
2020
A. Proposed LTCH PPS Standard Federal Payment Rate for FY 2020
B. Proposed Adjustment for Area Wage Levels Under the LTCH PPS
for FY 2020
C. Proposed LTCH PPS Cost-of-Living Adjustment (COLA) for LTCHs
Located in Alaska and Hawaii
D. Proposed Adjustment for LTCH PPS High-Cost Outlier (HCO)
Cases
E. Proposed Update to the IPPS Comparable/Equivalent Amounts to
Reflect the Statutory Changes to the IPPS DSH Payment Adjustment
Methodology
F. Computing the Proposed Adjusted LTCH PPS Federal Prospective
Payments for FY 2020
VI. Tables Referenced in This Proposed Rule and Available Through
the Internet on the CMS Website
Appendix A--Economic Analyses
I. Regulatory Impact Analysis
A. Statement of Need
B. Overall Impact
C. Objectives of the IPPS and the LTCH PPS
D. Limitations of Our Analysis
E. Hospitals Included in and Excluded From the IPPS
F. Effects on Hospitals and Hospital Units Excluded From the
IPPS
G. Quantitative Effects of the Proposed Policy Changes Under the
IPPS for Operating Costs
H. Effects of Other Proposed Policy Changes
I. Effects of Proposed Changes in the Capital IPPS
J. Effects of Proposed Payment Rate Changes and Policy Changes
Under the LTCH PPS
K. Effects of Proposed Requirements for Hospital Inpatient
Quality Reporting (IQR) Program
L. Effects of Proposed Requirements for the PPS-Exempt Cancer
Hospital Quality Reporting (PCHQR) Program
M. Effects of Proposed Requirements for the Long-Term Care
Hospital Quality Reporting Program (LTCH QRP)
N. Effects of Proposed Requirements Regarding the Medicare
Promoting Interoperability Program
O. Alternatives Considered
P. Reducing Regulation and Controlling Regulatory Costs
Q. Overall Conclusion
R. Regulatory Review Costs
II. Accounting Statements and Tables
A. Acute Care Hospitals
B. LTCHs
III. Regulatory Flexibility Act (RFA) Analysis
IV. Impact on Small Rural Hospitals
V. Unfunded Mandate Reform Act (UMRA) Analysis
VI. Executive Order 13175
VII. Executive Order 12866
Appendix B: Recommendation of Update Factors for Operating Cost Rates
of Payment for Inpatient Hospital Services
I. Background
II. Proposed Inpatient Hospital Update for FY 2020
A. Proposed FY 2020 Inpatient Hospital Update
B. Proposed Update for SCHs and MDHs for FY 2020
C. Proposed FY 2020 Puerto Rico Hospital Update
D. Proposed Update for Hospitals Excluded From the IPPS
E. Proposed Update for LTCHs for FY 2020
III. Secretary's Recommendation
IV. MedPAC Recommendation for Assessing Payment Adequacy and
Updating Payments in Traditional Medicare
I. Executive Summary and Background
A. Executive Summary
1. Purpose and Legal Authority
This proposed rule would make payment and policy changes under the
Medicare inpatient prospective payment systems (IPPS) for operating and
capital-related costs of acute care hospitals as well as for certain
hospitals and hospital units excluded from the IPPS. In addition, it
would make payment and policy changes for inpatient hospital services
provided by long-term care hospitals (LTCHs) under the long-term care
hospital prospective payment system (LTCH PPS). This proposed rule also
would make policy changes to programs associated with Medicare IPPS
hospitals, IPPS-excluded hospitals, and LTCHs. In this proposed rule,
we are including proposals to address wage index disparities between
high and low wage index hospitals; to provide for an alternative IPPS
new technology add-on payment pathway for certain transformative new
devices; and to revise the calculation of the IPPS new technology add-
on payment. In addition, we are requesting public comments on the
substantial clinical improvement criterion for evaluating applications
for both the IPPS new technology add-on payment and the OPPS
transitional pass-through payment for devices, and we discuss potential
revisions that we are considering adopting as final policies related to
the substantial clinical improvement criterion for FY 2020 for IPPS and
CY 2020 for the OPPS.
We are proposing to establish new requirements and revise existing
requirements for quality reporting by specific providers (acute care
hospitals, PPS-exempt cancer hospitals, and LTCHs) that are
participating in Medicare. We also are proposing to establish new
requirements and revise existing requirements for eligible hospitals
and CAHs participating in the Medicare and Medicaid Promoting
Interoperability Programs. We are proposing to update policies for the
Hospital Value-Based Purchasing (VBP) Program, the Hospital
Readmissions Reduction Program, and the Hospital-Acquired Condition
(HAC) Reduction Program.
Under various statutory authorities, we are proposing to make
changes to the Medicare IPPS, to the LTCH PPS, and to other related
payment methodologies and programs for FY 2020 and subsequent fiscal
years. These statutory authorities include, but are not limited to, the
following:
Section 1886(d) of the Social Security Act (the Act),
which sets forth a system of payment for the operating costs of acute
care hospital inpatient stays under Medicare Part A (Hospital
Insurance) based on prospectively set rates. Section 1886(g) of the Act
requires that, instead of paying for capital-related costs of inpatient
hospital services on a reasonable cost basis, the Secretary use a
prospective payment system (PPS).
Section 1886(d)(1)(B) of the Act, which specifies that
certain hospitals and hospital units are excluded from the IPPS. These
hospitals and units are: Rehabilitation hospitals and units; LTCHs;
psychiatric hospitals and units; children's hospitals; cancer
hospitals; extended neoplastic disease care hospitals, and hospitals
located outside the 50 States, the District of Columbia, and Puerto
Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the
Northern Mariana Islands, and American Samoa). Religious nonmedical
health care institutions (RNHCIs) are also excluded from the IPPS.
Sections 123(a) and (c) of the BBRA (Pub. L. 106-113) and
section 307(b)(1) of the BIPA (Pub. L. 106-554) (as codified under
section 1886(m)(1) of the Act), which provide for the development and
implementation of a prospective payment system for payment for
inpatient hospital services of LTCHs described in section
1886(d)(1)(B)(iv) of the Act.
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Sections 1814(l), 1820, and 1834(g) of the Act, which
specify that payments are made to critical access hospitals (CAHs)
(that is, rural hospitals or facilities that meet certain statutory
requirements) for inpatient and outpatient services and that these
payments are generally based on 101 percent of reasonable cost.
Section 1866(k) of the Act, which establishes a quality
reporting program for hospitals described in section 1886(d)(1)(B)(v)
of the Act, referred to as ``PPS-exempt cancer hospitals.''
Section 1886(a)(4) of the Act, which specifies that costs
of approved educational activities are excluded from the operating
costs of inpatient hospital services. Hospitals with approved graduate
medical education (GME) programs are paid for the direct costs of GME
in accordance with section 1886(h) of the Act.
Section 1886(b)(3)(B)(viii) of the Act, which requires the
Secretary to reduce the applicable percentage increase that would
otherwise apply to the standardized amount applicable to a subsection
(d) hospital for discharges occurring in a fiscal year if the hospital
does not submit data on measures in a form and manner, and at a time,
specified by the Secretary.
Section 1886(o) of the Act, which requires the Secretary
to establish a Hospital Value-Based Purchasing (VBP) Program, under
which value-based incentive payments are made in a fiscal year to
hospitals meeting performance standards established for a performance
period for such fiscal year.
Section 1886(p) of the Act, which establishes a Hospital-
Acquired Condition (HAC) Reduction Program, under which payments to
applicable hospitals are adjusted to provide an incentive to reduce
hospital-acquired conditions.
Section 1886(q) of the Act, as amended by section 15002 of
the 21st Century Cures Act, which establishes the Hospital Readmissions
Reduction Program. Under the program, payments for discharges from an
applicable hospital as defined under section 1886(d) of the Act will be
reduced to account for certain excess readmissions. Section 15002 of
the 21st Century Cures Act requires the Secretary to compare hospitals
with respect to the number of their Medicare-Medicaid dual-eligible
beneficiaries (dual-eligibles) in determining the extent of excess
readmissions.
Section 1886(r) of the Act, as added by section 3133 of
the Affordable Care Act, which provides for a reduction to
disproportionate share hospital (DSH) payments under section
1886(d)(5)(F) of the Act and for a new uncompensated care payment to
eligible hospitals. Specifically, section 1886(r) of the Act requires
that, for fiscal year 2014 and each subsequent fiscal year, subsection
(d) hospitals that would otherwise receive a DSH payment made under
section 1886(d)(5)(F) of the Act will receive two separate payments:
(1) 25 percent of the amount they previously would have received under
section 1886(d)(5)(F) of the Act for DSH (``the empirically justified
amount''), and (2) an additional payment for the DSH hospital's
proportion of uncompensated care, determined as the product of three
factors. These three factors are: (1) 75 percent of the payments that
would otherwise be made under section 1886(d)(5)(F) of the Act; (2) 1
minus the percent change in the percent of individuals who are
uninsured; and (3) a hospital's uncompensated care amount relative to
the uncompensated care amount of all DSH hospitals expressed as a
percentage.
Section 1886(m)(6) of the Act, as added by section
1206(a)(1) of the Pathway for Sustainable Growth Rate (SGR) Reform Act
of 2013 (Pub. L. 113-67) and amended by section 51005(a) of the
Bipartisan Budget Act of 2018 (Pub. L. 115-123), which provided for the
establishment of site neutral payment rate criteria under the LTCH PPS,
with implementation beginning in FY 2016, and provides for a 4-year
transitional blended payment rate for discharges occurring in LTCH cost
reporting periods beginning in FYs 2016 through 2019. Section 51005(b)
of the Bipartisan Budget Act of 2018 amended section 1886(m)(6)(B) by
adding new clause (iv), which specifies that the IPPS comparable amount
defined in clause (ii)(I) shall be reduced by 4.6 percent for FYs 2018
through 2026.
Section 1886(m)(5)(D)(iv) of the Act, as added by section
1206(c) of the Pathway for Sustainable Growth Rate (SGR) Reform Act of
2013 (Pub. L. 113-67), which provides for the establishment of a
functional status quality measure in the LTCH QRP for change in
mobility among inpatients requiring ventilator support.
Section 1899B of the Act, as added by section 2(a) of the
Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT
Act) (Pub. L. 113-185), which provides for the establishment of
standardized data reporting for certain post-acute care providers,
including LTCHs.
2. Summary of the Major Provisions
Below we provide a summary of the major provisions in this proposed
rule. In general, these major provisions are being proposed as part of
the annual update to the payment policies and payment rates, consistent
with the applicable statutory provisions. A general summary of the
proposed changes in this proposed rule is presented in section I.D. of
the preamble of this proposed rule.
a. Proposed MS-DRG Documentation and Coding Adjustment
Section 631 of the American Taxpayer Relief Act of 2012 (ATRA, Pub.
L. 112-240) amended section 7(b)(1)(B) of Public Law 110-90 to require
the Secretary to make a recoupment adjustment to the standardized
amount of Medicare payments to acute care hospitals to account for
changes in MS-DRG documentation and coding that do not reflect real
changes in case-mix, totaling $11 billion over a 4-year period of FYs
2014, 2015, 2016, and 2017. The FY 2014 through FY 2017 adjustments
represented the amount of the increase in aggregate payments as a
result of not completing the prospective adjustment authorized under
section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the
ATRA, this amount could not have been recovered under Public Law 110
90. Section 414 of the Medicare Access and CHIP Reauthorization Act of
2015 (MACRA) (Pub. L. 114-10) replaced the single positive adjustment
we intended to make in FY 2018 with a 0.5 percent positive adjustment
to the standardized amount of Medicare payments to acute care hospitals
for FYs 2018 through 2023. (The FY 2018 adjustment was subsequently
adjusted to 0.4588 percent by section 15005 of the 21st Century Cures
Act.) Therefore, for FY 2020, we are proposing to make an adjustment of
+ 0.5 percent to the standardized amount.
b. Request for Information on the New Technology Add-On Payment and
Transitional Device Pass-Through Payment Substantial Clinical
Improvement Criterion and Discussion of Potential Revisions to the New
Technology Add-On Payment and Transitional Device Pass-Through Payment
Substantial Clinical Improvement Criterion
The substantial clinical improvement criterion that is used to
evaluate a technology that is the subject of an application for the new
technology add-on payment under the IPPS or an application for the
transitional pass-through payment for additional costs of innovative
devices under the OPPS is the subject of the request for information
and the discussion of potential revisions included in this proposed
rule.
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We understand that greater clarity regarding what would
substantiate the requirements of this criterion would help the public,
including innovators, better understand how CMS evaluates new
technology applications for add-on payments and provide greater
predictability about which applications will meet the criterion for
substantial clinical improvement. We are considering potential
revisions to the substantial clinical improvement criterion under the
IPPS new technology add-on payment policy and the OPPS transitional
pass-through payment policy for devices policy, and are seeking public
comments on the type of additional detail and guidance that the public
and applicants for new technology add-on payments would find useful.
The comments we receive in response to those general questions will
inform future rulemaking after the FY 2020 IPPS/LTCH PPS final rule.
This request for public comments is intended to be broad in scope and
provide a foundation for potential rulemaking in future years.
In addition to this broad request for public comments for potential
rulemaking in future years, in order to respond to stakeholder feedback
requesting greater understanding of CMS' approach to evaluating
substantial clinical improvement, we are soliciting public comments on
specific changes or clarifications to the IPPS and OPPS substantial
clinical improvement criterion that CMS might consider making in the FY
2020 IPPS/LTCH PPS final rule for applications received beginning in FY
2020 for the IPPS and CY 2020 for the OPPS to provide greater clarity
and predictability.
c. Proposed Alternative Inpatient New Technology Add-On Payment Pathway
for Transformative New Devices
After consideration of the issues discussed in section III.H.8. of
the preamble of this proposed rule relating to the Food and Drug
Administration's (FDA's) expedited programs, and consistent with the
Administration's commitment to addressing barriers to health care
innovation and ensuring that Medicare beneficiaries have access to
critical and life-saving new cures and technologies that improve
beneficiary health outcomes, we concluded that it would be appropriate
to develop an alternative pathway for the inpatient new technology add-
on payment for transformative medical devices. In situations where a
new medical device is part of the FDA's Breakthrough Devices Program
and has received FDA marketing authorization (that is, the device has
received pre-market approval (PMA); 510(k) clearance; or the granting
of a De Novo classification request), we are proposing an alternative
inpatient new technology add-on payment pathway to facilitate access to
this technology for Medicare beneficiaries.
Specifically, we are proposing that, for applications received for
IPPS new technology add-on payments for FY 2021 and subsequent fiscal
years, if a medical device is part of the FDA's Breakthrough Devices
Program and received FDA marketing authorization, such a device would
be considered new and not substantially similar to an existing
technology for purposes of new technology add-on payment under the
IPPS. In light of the criteria applied under the FDA's Breakthrough
Devices Program, and because the technology may not have a sufficient
evidence base to demonstrate substantial clinical improvement at the
time of FDA marketing authorization, we also are proposing that the
medical device would not need to meet the requirement under 42 CFR
412.87(b)(1) that it represent an advance that substantially improves,
relative to technologies previously available, the diagnosis or
treatment of Medicare beneficiaries.
d. Proposed Revision of the Calculation of the Inpatient Hospital New
Technology Add-On Payment
The current calculation of the new technology add-on payment is
based on the cost to hospitals for the new medical service or
technology. Under Sec. 412.88, if the costs of the discharge
(determined by applying cost-to-charge ratios (CCRs) as described in
Sec. 412.84(h)) exceed the full DRG payment (including payments for
IME and DSH, but excluding outlier payments), Medicare will make an
add-on payment equal to the lesser of: (1) 50 percent of the costs of
the new medical service or technology; or (2) 50 percent of the amount
by which the costs of the case exceed the standard DRG payment. Unless
the discharge qualifies for an outlier payment, the additional Medicare
payment is limited to the full MS-DRG payment plus 50 percent of the
estimated costs of the new technology or medical service.
After consideration of the concerns raised by commenters and other
stakeholders, we agree that there may be merit to the recommendations
to increase the maximum add-on amount, and that capping the add-on
payment amount at 50 percent could, in some cases, no longer provide a
sufficient incentive for the use of new technology. To address this
issue, we believe it would be appropriate to modify the current payment
mechanism to increase the amount of the maximum add-on payment amount
to 65 percent. Therefore, we are proposing that, beginning with
discharges occurring on or after October 1, 2019, if the costs of a
discharge involving a new medical service or technology exceed the full
DRG payment (including payments for IME and DSH, but excluding outlier
payments), Medicare would make an add-on payment equal to the lesser
of: (1) 65 percent of the costs of the new medical service or
technology; or (2) 65 percent of the amount by which the costs of the
case exceed the standard DRG payment.
e. Proposals To Address Wage Index Disparities Between High and Low
Wage Index Hospitals
In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20372), we
invited the public to submit further comments, suggestions, and
recommendations for regulatory and policy changes to the Medicare wage
index. Many of the responses received from this request for information
(RFI) reflect a common concern that the current wage index system
perpetuates and exacerbates the disparities between high and low wage
index hospitals. Many respondents also expressed concern that the
calculation of the rural floor has allowed a limited number of States
to manipulate the wage index system to achieve higher wages for many
urban hospitals in those States at the expense of hospitals in other
States, which also contributes to wage index disparities.
To help mitigate these wage index disparities, including those
resulting from the inclusion of hospitals with rural reclassifications
under 42 CFR 412.103 in the rural floor, we are proposing to reduce the
disparity between high and low wage index hospitals by increasing the
wage index values for certain hospitals with low wage index values and
decreasing the wage index values for certain hospitals with high wage
index values for budget neutrality purposes, as well as changing the
calculation of the rural floor. We also are proposing a transition for
hospitals experiencing significant decreases in their wage index values
as a result of these proposed changes. We are proposing to make these
changes in a budget neutral manner.
In this proposed rule, we are proposing to increase the wage index
for hospitals with a wage index value below the 25th percentile wage
index value for a fiscal year by half the difference between the
otherwise applicable final wage index value for a year for that
hospital and the 25th percentile wage index value for that year across
all hospitals. Furthermore, we are
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proposing that this policy would be effective for at least 4 years,
beginning in FY 2020, in order to allow employee compensation increases
implemented by these hospitals sufficient time to be reflected in the
wage index calculation. Under our proposal, in order to offset the
estimated increase in IPPS payments to hospitals with wage index values
below the 25th percentile wage index value, we are proposing to
decrease the wage index values for certain hospitals with high wage
index values (that is, hospitals with wage index values above the 75th
percentile wage index value), but preserve the rank order among those
values.
In addition, we are proposing to remove urban to rural
reclassifications from the calculation of the rural floor, such that,
beginning in FY 2020, the rural floor would be calculated without
including the wage data of hospitals that have reclassified as rural
under section 1886(d)(8)(E) of the Act (as implemented in the
regulations at Sec. 412.103). Also, for the purposes of applying the
provisions of section 1886(d)(8)(C)(iii) of the Act, we are proposing
to remove urban to rural reclassifications from the calculation of
``the wage index for rural areas in the State in which the county is
located'' as referred to in the statute.
Lastly, for FY 2020, we are proposing to place a 5-percent cap on
any decrease in a hospital's wage index from the hospital's final wage
index in FY 2019. We are proposing to apply a budget neutrality
adjustment to the standardized amount so that our proposed transition
for hospitals that could be negatively impacted is implemented in a
budget neutral manner.
f. Proposed DSH Payment Adjustment and Additional Payment for
Uncompensated Care
Section 3133 of the Affordable Care Act modified the Medicare
disproportionate share hospital (DSH) payment methodology beginning in
FY 2014. Under section 1886(r) of the Act, which was added by section
3133 of the Affordable Care Act, starting in FY 2014, DSHs receive 25
percent of the amount they previously would have received under the
statutory formula for Medicare DSH payments in section 1886(d)(5)(F) of
the Act. The remaining amount, equal to 75 percent of the amount that
otherwise would have been paid as Medicare DSH payments, is paid as
additional payments after the amount is reduced for changes in the
percentage of individuals that are uninsured. Each Medicare DSH will
receive an additional payment based on its share of the total amount of
uncompensated care for all Medicare DSHs for a given time period.
In this FY 2020 IPPS/LTCH PPS proposed rule, we are proposing to
update our estimates of the three factors used to determine
uncompensated care payments for FY 2020. We are proposing to continue
to use uninsured estimates produced by CMS' Office of the Actuary
(OACT) as part of the development of the National Health Expenditure
Accounts (NHEA) in the calculation of Factor 2. We also are proposing
to use a single year of data on uncompensated care costs from Worksheet
S-10 for FY 2015 to determine Factor 3 for FY 2020. We also are seeking
public comments on whether we should, due to changes in the reporting
instructions that became effective for FY 2017, alternatively use a
single year of Worksheet S-10 data from the FY 2017 cost reports,
instead of the FY 2015 Worksheet S-10 data, to calculate Factor 3 for
FY 2020. In addition, we are proposing to continue to use only data
regarding low-income insured days for FY 2013 to determine the amount
of uncompensated care payments for Puerto Rico hospitals, and Indian
Health Service and Tribal hospitals. We are not proposing specific
Factor 3 polices for all-inclusive rate providers for FY 2020. In this
proposed rule, we also are proposing to continue to use the following
established policies: (1) For providers with multiple cost reports,
beginning in the same fiscal year, to use the longest cost report and
annualize Medicaid data and uncompensated care data if a hospital's
cost report does not equal 12 months of data; (2) in the rare case
where a provider has multiple cost reports beginning in the same fiscal
year, but one report also spans the entirety of the following fiscal
year, such that the hospital has no cost report for that fiscal year,
to use the cost report that spans both fiscal years for the latter
fiscal year; and (3) to apply statistical trim methodologies to
potentially aberrant cost-to-charge ratios (CCRs) and potentially
aberrant uncompensated care costs reported on the Worksheet S-10.
g. Proposed Changes to the LTCH PPS
In this proposed rule, we set forth proposed changes to the LTCH
PPS Federal payment rates, factors, and other payment rate policies
under the LTCH PPS for FY 2020. We also are proposing the payment
adjustment for LTCH discharges when the LTCH does not meet the
applicable discharge payment percentage and a proposed reinstatement
process, as required by section 1886(m)(6)(C) of the Act. An LTCH would
be subject to this payment adjustment if, for cost reporting periods
beginning in FY 2020 and subsequent fiscal years, the LTCH's percentage
of Medicare discharges that meet the criteria for exclusion from the
site neutral payment rate (that is, discharges paid the LTCH PPS
standard Federal payment rate) of its total number of Medicare FFS
discharges paid under the LTCH PPS during the cost reporting period is
not at least 50 percent.
h. Reduction of Hospital Payments for Excess Readmissions
We are proposing to make changes to policies for the Hospital
Readmissions Reduction Program, which was established under section
1886(q) of the Act, as amended by section 15002 of the 21st Century
Cures Act. The Hospital Readmissions Reduction Program requires a
reduction to a hospital's base operating DRG payment to account for
excess readmissions of selected applicable conditions. For FY 2017 and
subsequent years, the reduction is based on a hospital's risk-adjusted
readmission rate during a 3-year period for acute myocardial infarction
(AMI), heart failure (HF), pneumonia, chronic obstructive pulmonary
disease (COPD), elective primary total hip arthroplasty/total knee
arthroplasty (THA/TKA), and coronary artery bypass graft (CABG)
surgery. In this proposed rule, we are proposing the following
policies: (1) A measure removal policy that aligns with the removal
factor policies previously adopted in other quality reporting and
quality payment programs; (2) an update to the Program's definition of
``dual-eligible'' beginning with the FY 2021 program year to allow for
a 1-month lookback period in data sourced from the State Medicare
Modernization Act (MMA) files to determine dual-eligible status for
beneficiaries who die in the month of discharge; (3) a subregulatory
process to address any potential future nonsubstantive changes to the
payment adjustment factor components; and (4) an update to the
Program's regulations at 42 CFR 412.152 and 412.154 to reflect proposed
policies and to codify additional previously finalized policies.
i. Hospital Value-Based Purchasing (VBP) Program
Section 1886(o) of the Act requires the Secretary to establish a
Hospital VBP Program under which value-based incentive payments are
made in a fiscal year to hospitals based on their performance on
measures established for a performance period for such fiscal year. In
this proposed rule, we are proposing that the Hospital VBP
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Program will use the same data used by the HAC Reduction Program for
purposes of calculating the Centers for Disease Control and Prevention
(CDC) National Health Safety Network (NHSN) Healthcare-Associated
Infection (HAI) measures beginning with CY 2020 data collection, when
the Hospital IQR Program will no longer collect data on those measures,
and will rely on HAC Reduction Program validation to ensure the
accuracy of CDC NHSN HAI measure data used in the Hospital VBP Program.
We also are newly establishing certain performance standards.
j. Hospital-Acquired Condition (HAC) Reduction Program
Section 1886(p) of the Act establishes an incentive to hospitals to
reduce the incidence of hospital-acquired conditions by requiring the
Secretary to make an adjustment to payments to applicable hospitals
effective for discharges beginning on October 1, 2014. This 1-percent
payment reduction applies to hospitals that rank in the worst-
performing quartile (25 percent) of all applicable hospitals, relative
to the national average, of conditions acquired during the applicable
period and on all of the hospital's discharges for the specified fiscal
year. As part of our agency-wide Patients over Paperwork and Meaningful
Measures Initiatives, discussed in section I.A.2. of the FY 2019 IPPS/
LTCH PPS final rule (83 FR 41147 and 41148), we are proposing to: (1)
Adopt a measure removal policy that aligns with the removal factor
policies previously adopted in other quality reporting and quality
payment programs; (2) clarify administrative policies for validation of
the CDC NHSN HAI measures; (3) adopt the data collection periods for
the FY 2022 program year; and (4) update 42 CFR 412.172(f) to reflect
policies finalized in the FY 2019 IPPS/LTCH PPS final rule.
k. Hospital Inpatient Quality Reporting (IQR) Program
Under section 1886(b)(3)(B)(viii) of the Act, subsection (d)
hospitals are required to report data on measures selected by the
Secretary for a fiscal year in order to receive the full annual
percentage increase that would otherwise apply to the standardized
amount applicable to discharges occurring in that fiscal year.
In this proposed rule, we are proposing to make several changes. We
are proposing to: (1) Adopt two opioid-related eCQMs (Safe Use of
Opioids--Concurrent Prescribing eCQM (NQF #3316e) and Hospital Harm--
Opioid-Related Adverse Events eCQM) beginning with the CY 2021
reporting period/FY 2023 payment determination; (2) adopt the Hybrid
Hospital-Wide All-Cause Readmission (Hybrid HWR) measure (NQF #2879) in
a stepwise fashion, beginning with two voluntary reporting periods
which would run from July 1, 2021 through June 30, 2022, and from July
1, 2022 through June 30, 2023, before requiring reporting of the
measure for the reporting period that would run from July 1, 2023
through June 30, 2024, impacting the FY 2026 payment determination and
for subsequent years; and (3) remove the Claims-Based Hospital-Wide
All-Cause Unplanned Readmission Measure (NQF #1789) (HWR claims-only
measure) beginning with the FY 2026 payment determination. We also are
proposing reporting and submission requirements for eCQMs, including
proposals to: (1) Extend current eCQM reporting and submission
requirements for both the CY 2020 reporting period/FY 2022 payment
determination and CY 2021 reporting period/FY 2023 payment
determination; (2) change eCQM reporting and submission requirements
for the CY 2022 reporting period/FY 2024 payment determination, such
that hospitals would be required to report one, self-selected calendar
quarter of data for three self-selected eCQMs and the proposed Safe Use
of Opioids--Concurrent Prescribing eCQM (NQF #3316e), for a total of
four eCQMs; and (3) continue requiring that EHRs be certified to all
available eCQMs used in the Hospital IQR Program for the CY 2020
reporting period/FY 2022 payment determination and subsequent years.
These proposals are in alignment with proposals under the Promoting
Interoperability Program. We also are proposing reporting and
submission requirements for the Hybrid HWR measure. In addition, we are
seeking public comments on three measures for potential future
inclusion in the Hospital IQR Program.
l. Long-Term Care Hospital Quality Reporting Program (LTCH QRP)
The LTCH QRP is authorized by section 1886(m)(5) of the Act and
applies to all hospitals certified by Medicare as long-term care
hospitals (LTCHs). Under the LTCH QRP, the Secretary must reduce by 2
percentage points the annual update to the LTCH PPS standard Federal
rate for discharges for an LTCH during a fiscal year if the LTCH fails
to submit data in accordance with the LTCH QRP requirements specified
for that fiscal year. As discussed in section VIII.C. of the preamble
of this proposed rule, we are proposing to adopt two measures that meet
the requirements of section 1899B(c)(1)(E) of the Act, modify an
existing measure, and adopt new standardized patient assessment data
elements that satisfy section 1899B(b) of the Act. We also are
proposing to move the implementation date of the LTCH Continuity
Assessment Record and Evaluation Data Set (LTCH CARE Data Set or LCDS)
from April to October to align with other post-acute care programs
beginning October 1, 2020. Lastly, we are proposing updates related to
the system used for the submission of data and related regulations.
m. Medicare and Medicaid Promoting Interoperability Programs
For purposes of an increased level of stability, reducing the
burden on eligible hospitals and CAHs, and clarifying certain existing
policies, we are proposing several changes to the Medicare Promoting
Interoperability Program. Specifically, we are proposing to: (1)
Eliminate requirement that, for the FY 2020 payment adjustment year,
for an eligible hospital that has not successfully demonstrated it is a
meaningful EHR user in a prior year, the EHR reporting period in CY
2019 must end before and the eligible hospital must successfully
register for and attest to meaningful use no later than the October 1,
2019 deadline; (2) establish an EHR reporting period of a minimum of
any continuous 90-day period in CY 2021 for new and returning
participants (eligible hospitals and CAHs) in the Medicare Promoting
Interoperability Program attesting to CMS; (3) require that the
Medicare Promoting Interoperability Program measure actions must occur
within the EHR reporting period beginning with the EHR reporting period
in CY 2020; (4) revise the Query of PDMP measure to make it an optional
measure worth 5 bonus points in CY 2020, remove the exclusions
associated with this measure in CY 2020, require a yes/no response
instead of a numerator and denominator for CY 2019 and CY 2020, and
clearly state our intended policy that the measure is worth a full 5
bonus points in CY 2019 and CY 2020; (5) change the maximum points
available for the e-Prescribing measure to 10 points beginning in CY
2020, in the event we finalize the proposed changes to the Query of
PDMP measure; (6) remove the Verify Opioid Treatment Agreement measure
beginning in CY 2020 and clearly state our intended policy that this
measure is worth a full 5 bonus points in CY 2019; and (7) revise the
Support Electronic Referral Loops by Receiving and Incorporating Health
Information measure to more clearly
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capture the previously established policy regarding CEHRT use. We are
also proposing to amend our regulations to incorporate several of these
proposals.
For CQM reporting under the Medicare and Medicaid Promoting
Interoperability Programs, we are generally proposing to align our
requirements with requirements under the Hospital IQR Program.
Specifically, we are proposing to: (1) Adopt two opioid-related eCQMs
(Safe Use of Opioids--Concurrent Prescribing eCQM (NQF #3316e) and
Hospital Harm--Opioid-Related Adverse Events eCQM) beginning with the
reporting period in CY 2021; (2) extend current CQM reporting and
submission requirements for the reporting periods in CY 2020 and CY
2021; and (3) establish CQM reporting and submission requirements for
the reporting period in CY 2022, which would require all eligible
hospitals and CAHs to report on the proposed Safe Use of Opioids--
Concurrent Prescribing eCQM (NQF #3316e) beginning with the reporting
period in CY 2022.
We are seeking public comments on whether we should consider
proposing to adopt in future rulemaking the Hybrid Hospital-Wide All-
Cause Readmission (Hybrid HWR) measure beginning with the reporting
period in CY 2023, a measure which we are proposing to adopt under the
Hospital IQR Program, and we are seeking information on a variety of
issues regarding the future direction of the Medicare and Medicaid
Promoting Interoperability Programs.
3. Summary of Costs and Benefits
Proposed Adjustment for MS-DRG Documentation and Coding
Changes. Section 414 of the MACRA replaced the single positive
adjustment we intended to make in FY 2018 once the recoupment required
by section 631 of the ATRA was complete with a 0.5 percentage point
positive adjustment to the standardized amount of Medicare payments to
acute care hospitals for FYs 2018 through 2023. (The FY 2018 adjustment
was subsequently adjusted to 0.4588 percentage point by section 15005
of the 21st Century Cures Act.) For FY 2020, we are proposing to make
an adjustment of +0.5 percentage point to the standardized amount
consistent with the MACRA.
Proposed Alternative Inpatient New Technology Add-On
Payment Pathway for Transformative New Devices: In this proposed rule,
we are proposing an alternative inpatient new technology add-on payment
pathway for a new medical device that is part of the FDA Breakthrough
Devices Program and has received FDA marketing authorization, that is,
received PMA approval, 510(k) clearance, or the granting of De Novo
classification request.
Given the relatively recent introduction of FDA's Breakthrough
Devices Program, there have not been any medical devices that were part
of the Breakthrough Devices Program and received FDA marketing
authorization and for which the applicant applied for a new technology
add-on payment under the IPPS and was not approved. Therefore, it is
not possible to quantify the impact of this proposal.
Proposed Changes to the Calculation of the
Inpatient Hospital New Technology Add-On Payment: The current
calculation of the new technology add-on payment is based on the cost
to hospitals for the new medical service or technology. Under existing
Sec. 412.88, if the costs of the discharge exceed the full DRG payment
(including payments for IME and DSH, but excluding outlier payments),
Medicare makes an add-on payment equal to the lesser of: (1) 50 percent
of the estimated costs of the new technology or medical service; or (2)
50 percent of the amount by which the costs of the case exceed the
standard DRG payment. In this proposed rule, we are proposing to modify
the current payment mechanism to increase the amount of the maximum
add-on payment amount to 65 percent. Therefore, we are proposing that
if the costs of a discharge involving a new technology exceed the full
DRG payment (including payments for IME and DSH, but excluding outlier
payments), Medicare would make an add-on payment equal to the lesser
of: (1) 65 percent of the costs of the new medical service or
technology; or (2) 65 percent of the amount by which the costs of the
case exceed the standard DRG payment.
We estimate that if we finalize our proposals for the 9
technologies for which we are proposing to continue to make new
technology add-on payments in FY 2020 and if we determine that all 17
of the FY 2020 new technology add-on payment applications meet the
specified criteria for new technology add-on payments for FY 2020, this
proposal, if finalized, would increase IPPS spending by approximately
$110 million in FY 2020.
Proposed Changes to Address Wage Index Disparities Between
High and Low Wage Index Hospitals. As discussed in section III.N. of
the preamble of this proposed rule, to help mitigate wage index
disparities, including those resulting from the inclusion of hospitals
with rural reclassifications under 42 CFR 412.103 in the rural floor,
we are proposing to reduce the disparity between high and low wage
index hospitals by increasing the wage index values for certain
hospitals with low wage index values and decreasing the wage index
values of certain hospitals with high wage index values for budget
neutrality purposes, as well as changing the calculation of the rural
floor. We also are proposing a transition for hospitals experiencing
significant decreases in their wage index values as a result of these
proposed changes. We are proposing to make these changes in a budget
neutral manner.
We are proposing to apply a budget neutrality adjustment to the
standardized amount so that our proposed transition for hospitals that
could be negatively impacted is implemented in a budget neutral manner.
Proposed Medicare DSH Payment Adjustment and Additional
Payment for Uncompensated Care. For FY 2020, we are proposing to update
our estimates of the three factors used to determine uncompensated care
payments. We are proposing to continue to use uninsured estimates
produced by OACT as part of the development of the NHEA in the
calculation of Factor 2. We also are proposing to use a single year of
data on uncompensated care costs from Worksheet S-10 for FY 2015 to
determine Factor 3 for FY 2020. In addition, we are seeking public
comments on whether we should, due to changes in the reporting
instructions that became effective for FY 2017, alternatively use a
single year of Worksheet S-10 data from the FY 2017 cost reports,
instead of the FY 2015 Worksheet S-10 data, to calculate Factor 3 for
FY 2020. To determine the amount of uncompensated care for purposes of
calculating Factor 3 for Puerto Rico hospitals and Indian Health
Service and Tribal hospitals, we are proposing to continue to use only
data regarding low-income insured days for FY 2013.
We project that the amount available to distribute as payments for
uncompensated care for FY 2020 would increase by approximately $216
million, as compared to our estimate of the uncompensated care payments
that will be distributed in FY 2019. The payments have redistributive
effects, based on a hospital's uncompensated care amount relative to
the uncompensated care amount for all hospitals that are projected to
be eligible to receive Medicare DSH payments, and the calculated
payment amount is not directly tied to a hospital's number of
discharges.
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Proposed Update to the LTCH PPS Payment Rates
and Other Payment Policies. Based on the best available data for the
384 LTCHs in our database, we estimate that the proposed changes to the
payment rates and factors that we present in the preamble of and
Addendum to this proposed rule, which reflect the end of the transition
of the statutory application of the site neutral payment rate and the
proposed update to the LTCH PPS standard Federal payment rate for FY
2020, would result in an estimated increase in payments in FY 2020 of
approximately $37 million.
Proposed Changes to the Hospital Readmissions Reduction
Program. For FY 2020 and subsequent years, the reduction is based on a
hospital's risk-adjusted readmission rate during a 3-year period for
acute myocardial infarction (AMI), heart failure (HF), pneumonia,
chronic obstructive pulmonary disease (COPD), elective primary total
hip arthroplasty/total knee arthroplasty (THA/TKA), and coronary artery
bypass graft (CABG) surgery. Overall, in this proposed rule, we
estimate that 2,599 hospitals would have their base operating DRG
payments reduced by their determined proxy FY 2020 hospital-specific
readmission adjustment. As a result, we estimate that the Hospital
Readmissions Reduction Program would save approximately $550 million in
FY 2020.
Value-Based Incentive Payments Under the Hospital VBP
Program. We estimate that there would be no net financial impact to the
Hospital VBP Program for the FY 2020 program year in the aggregate
because, by law, the amount available for value-based incentive
payments under the program in a given year must be equal to the total
amount of base operating MS-DRG payment amount reductions for that
year, as estimated by the Secretary. The estimated amount of base
operating MS-DRG payment amount reductions for the FY 2020 program year
and, therefore, the estimated amount available for value-based
incentive payments for FY 2020 discharges is approximately $1.9
billion.
Proposed Changes to the HAC Reduction Program. A
hospital's Total HAC score and its ranking in comparison to other
hospitals in any given year depend on several different factors. The FY
2020 program year is the first year in which we will implement our
equal measure weights scoring methodology. Any significant impact due
to the HAC Reduction Program proposed changes for FY 2020, including
which hospitals will receive the adjustment, would depend on the actual
experience of hospitals in the Program. We also are proposing to update
the hourly wage rate associated with burden for CDC NHSN HAI validation
under the HAC Reduction Program.
Proposed Changes to the Hospital Inpatient Quality
Reporting (IQR) Program. Across 3,300 IPPS hospitals, we estimate that
our proposed changes for the Hospital IQR Program in this proposed rule
would result in changes to the information collection burden compared
to previously adopted requirements. The only proposal that would affect
the information collection burden for the Hospital IQR Program is the
proposal to adopt the Hybrid Hospital-Wide All-Cause Readmission
(Hybrid HWR) measure (NQF #2879) in a stepwise fashion, beginning with
two voluntary reporting periods which would run from July 1, 2021
through June 30, 2022, and from July 1, 2022 through June 30, 2023,
before requiring reporting of the measure for the reporting period that
would run from July 1, 2023 through June 30, 2024, impacting the FY
2026 payment determination and for subsequent years. We estimate that
the impact of this proposed change is a total collection of information
burden increase of 2,211 hours and a total cost increase of
approximately $83,266 for all participating IPPS hospitals annually.
Proposed Changes to the Medicare and Medicaid Promoting
Interoperability Programs. We believe that, overall, the proposals in
this proposed rule would reduce burden, as described in detail in
section X.B.9. of the preamble and Appendix A, section I.N. of this
proposed rule.
B. Background Summary
1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)
Section 1886(d) of the Social Security Act (the Act) sets forth a
system of payment for the operating costs of acute care hospital
inpatient stays under Medicare Part A (Hospital Insurance) based on
prospectively set rates. Section 1886(g) of the Act requires the
Secretary to use a prospective payment system (PPS) to pay for the
capital-related costs of inpatient hospital services for these
``subsection (d) hospitals.'' Under these PPSs, Medicare payment for
hospital inpatient operating and capital-related costs is made at
predetermined, specific rates for each hospital discharge. Discharges
are classified according to a list of diagnosis-related groups (DRGs).
The base payment rate is comprised of a standardized amount that is
divided into a labor-related share and a nonlabor-related share. The
labor-related share is adjusted by the wage index applicable to the
area where the hospital is located. If the hospital is located in
Alaska or Hawaii, the nonlabor-related share is adjusted by a cost-of-
living adjustment factor. This base payment rate is multiplied by the
DRG relative weight.
If the hospital treats a high percentage of certain low-income
patients, it receives a percentage add-on payment applied to the DRG-
adjusted base payment rate. This add-on payment, known as the
disproportionate share hospital (DSH) adjustment, provides for a
percentage increase in Medicare payments to hospitals that qualify
under either of two statutory formulas designed to identify hospitals
that serve a disproportionate share of low-income patients. For
qualifying hospitals, the amount of this adjustment varies based on the
outcome of the statutory calculations. The Affordable Care Act revised
the Medicare DSH payment methodology and provides for a new additional
Medicare payment beginning on October 1, 2013, that considers the
amount of uncompensated care furnished by the hospital relative to all
other qualifying hospitals.
If the hospital is training residents in an approved residency
program(s), it receives a percentage add-on payment for each case paid
under the IPPS, known as the indirect medical education (IME)
adjustment. This percentage varies, depending on the ratio of residents
to beds.
Additional payments may be made for cases that involve new
technologies or medical services that have been approved for special
add-on payments. To qualify, a new technology or medical service must
demonstrate that it is a substantial clinical improvement over
technologies or services otherwise available, and that, absent an add-
on payment, it would be inadequately paid under the regular DRG
payment.
The costs incurred by the hospital for a case are evaluated to
determine whether the hospital is eligible for an additional payment as
an outlier case. This additional payment is designed to protect the
hospital from large financial losses due to unusually expensive cases.
Any eligible outlier payment is added to the DRG-adjusted base payment
rate, plus any DSH, IME, and new technology or medical service add-on
adjustments.
Although payments to most hospitals under the IPPS are made on the
basis of the standardized amounts, some categories of hospitals are
paid in whole or in part based on their hospital-specific rate, which
is determined from their costs in a base year. For example, sole
community hospitals (SCHs)
[[Page 19167]]
receive the higher of a hospital-specific rate based on their costs in
a base year (the highest of FY 1982, FY 1987, FY 1996, or FY 2006) or
the IPPS Federal rate based on the standardized amount. SCHs are the
sole source of care in their areas. Specifically, section
1886(d)(5)(D)(iii) of the Act defines an SCH as a hospital that is
located more than 35 road miles from another hospital or that, by
reason of factors such as an isolated location, weather conditions,
travel conditions, or absence of other like hospitals (as determined by
the Secretary), is the sole source of hospital inpatient services
reasonably available to Medicare beneficiaries. In addition, certain
rural hospitals previously designated by the Secretary as essential
access community hospitals are considered SCHs.
Under current law, the Medicare-dependent, small rural hospital
(MDH) program is effective through FY 2022. Through and including FY
2006, an MDH received the higher of the Federal rate or the Federal
rate plus 50 percent of the amount by which the Federal rate was
exceeded by the higher of its FY 1982 or FY 1987 hospital-specific
rate. For discharges occurring on or after October 1, 2007, but before
October 1, 2022, an MDH receives the higher of the Federal rate or the
Federal rate plus 75 percent of the amount by which the Federal rate is
exceeded by the highest of its FY 1982, FY 1987, or FY 2002 hospital-
specific rate. MDHs are a major source of care for Medicare
beneficiaries in their areas. Section 1886(d)(5)(G)(iv) of the Act
defines an MDH as a hospital that is located in a rural area (or, as
amended by the Bipartisan Budget Act of 2018, a hospital located in a
State with no rural area that meets certain statutory criteria), has
not more than 100 beds, is not an SCH, and has a high percentage of
Medicare discharges (not less than 60 percent of its inpatient days or
discharges in its cost reporting year beginning in FY 1987 or in two of
its three most recently settled Medicare cost reporting years).
Section 1886(g) of the Act requires the Secretary to pay for the
capital-related costs of inpatient hospital services in accordance with
a prospective payment system established by the Secretary. The basic
methodology for determining capital prospective payments is set forth
in our regulations at 42 CFR 412.308 and 412.312. Under the capital
IPPS, payments are adjusted by the same DRG for the case as they are
under the operating IPPS. Capital IPPS payments are also adjusted for
IME and DSH, similar to the adjustments made under the operating IPPS.
In addition, hospitals may receive outlier payments for those cases
that have unusually high costs.
The existing regulations governing payments to hospitals under the
IPPS are located in 42 CFR part 412, subparts A through M.
2. Hospitals and Hospital Units Excluded From the IPPS
Under section 1886(d)(1)(B) of the Act, as amended, certain
hospitals and hospital units are excluded from the IPPS. These
hospitals and units are: Inpatient rehabilitation facility (IRF)
hospitals and units; long-term care hospitals (LTCHs); psychiatric
hospitals and units; children's hospitals; cancer hospitals; extended
neoplastic disease care hospitals, and hospitals located outside the 50
States, the District of Columbia, and Puerto Rico (that is, hospitals
located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands,
and American Samoa). Religious nonmedical health care institutions
(RNHCIs) are also excluded from the IPPS. Various sections of the
Balanced Budget Act of 1997 (BBA, Pub. L. 105-33), the Medicare,
Medicaid and SCHIP [State Children's Health Insurance Program] Balanced
Budget Refinement Act of 1999 (BBRA, Pub. L. 106-113), and the
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act
of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs
for IRF hospitals and units, LTCHs, and psychiatric hospitals and units
(referred to as inpatient psychiatric facilities (IPFs)). (We note that
the annual updates to the LTCH PPS are included along with the IPPS
annual update in this document. Updates to the IRF PPS and IPF PPS are
issued as separate documents.) Children's hospitals, cancer hospitals,
hospitals located outside the 50 States, the District of Columbia, and
Puerto Rico (that is, hospitals located in the U.S. Virgin Islands,
Guam, the Northern Mariana Islands, and American Samoa), and RNHCIs
continue to be paid solely under a reasonable cost-based system,
subject to a rate-of-increase ceiling on inpatient operating costs.
Similarly, extended neoplastic disease care hospitals are paid on a
reasonable cost basis, subject to a rate-of-increase ceiling on
inpatient operating costs.
The existing regulations governing payments to excluded hospitals
and hospital units are located in 42 CFR parts 412 and 413.
3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)
The Medicare prospective payment system (PPS) for LTCHs applies to
hospitals described in section 1886(d)(1)(B)(iv) of the Act, effective
for cost reporting periods beginning on or after October 1, 2002. The
LTCH PPS was established under the authority of sections 123 of the
BBRA and section 307(b) of the BIPA (as codified under section
1886(m)(1) of the Act). During the 5-year (optional) transition period,
a LTCH's payment under the PPS was based on an increasing proportion of
the LTCH Federal rate with a corresponding decreasing proportion based
on reasonable cost principles. Effective for cost reporting periods
beginning on or after October 1, 2006 through September 30, 2015 all
LTCHs were paid 100 percent of the Federal rate. Section 1206(a) of the
Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) established the
site neutral payment rate under the LTCH PPS, which made the LTCH PPS a
dual rate payment system beginning in FY 2016. Under this statute,
based on a rolling effective date that is linked to the date on which a
given LTCH's Federal FY 2016 cost reporting period begins, LTCHs are
generally paid for discharges at the site neutral payment rate unless
the discharge meets the patient criteria for payment at the LTCH PPS
standard Federal payment rate. The existing regulations governing
payment under the LTCH PPS are located in 42 CFR part 412, subpart O.
Beginning October 1, 2009, we issue the annual updates to the LTCH PPS
in the same documents that update the IPPS (73 FR 26797 through 26798).
4. Critical Access Hospitals (CAHs)
Under sections 1814(l), 1820, and 1834(g) of the Act, payments made
to critical access hospitals (CAHs) (that is, rural hospitals or
facilities that meet certain statutory requirements) for inpatient and
outpatient services are generally based on 101 percent of reasonable
cost. Reasonable cost is determined under the provisions of section
1861(v) of the Act and existing regulations under 42 CFR part 413.
5. Payments for Graduate Medical Education (GME)
Under section 1886(a)(4) of the Act, costs of approved educational
activities are excluded from the operating costs of inpatient hospital
services. Hospitals with approved graduate medical education (GME)
programs are paid for the direct costs of GME in accordance with
section 1886(h) of the Act. The amount of payment for direct GME costs
for a cost reporting period is based on the hospital's number of
residents in that period and the hospital's costs per resident in a
base year. The existing regulations governing payments to the
[[Page 19168]]
various types of hospitals are located in 42 CFR part 413.
C. Summary of Provisions of Recent Legislation That Would Be
Implemented in This Proposed Rule
1. Pathway for SGR Reform Act of 2013 (Pub. L. 113-67)
The Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) introduced
new payment rules in the LTCH PPS. Under section 1206 of this law,
discharges in cost reporting periods beginning on or after October 1,
2015, under the LTCH PPS, receive payment under a site neutral rate
unless the discharge meets certain patient-specific criteria. In this
proposed rule, we are proposing to continue to update certain policies
that implemented provisions under section 1206 of the Pathway for SGR
Reform Act.
2. Improving Medicare Post-Acute Care Transformation Act of 2014
(IMPACT Act) (Pub. L. 113-185)
The Improving Medicare Post-Acute Care Transformation Act of 2014
(IMPACT Act) (Pub. L. 113-185), enacted on October 6, 2014, made a
number of changes that affect the Long-Term Care Hospital Quality
Reporting Program (LTCH QRP). In this proposed rule, we are proposing
to continue to implement portions of section 1899B of the Act, as added
by section 2(a) of the IMPACT Act, which, in part, requires LTCHs,
among other post-acute care providers, to report standardized patient
assessment data, data on quality measures, and data on resource use and
other measures.
3. The Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L.
114-10)
Section 414 of the Medicare Access and CHIP Reauthorization Act of
2015 (MACRA, Pub. L. 114-10) specifies a 0.5 percent positive
adjustment to the standardized amount of Medicare payments to acute
care hospitals for FYs 2018 through 2023. These adjustments follow the
recoupment adjustment to the standardized amounts under section 1886(d)
of the Act based upon the Secretary's estimates for discharges
occurring from FYs 2014 through 2017 to fully offset $11 billion, in
accordance with section 631 of the ATRA. The FY 2018 adjustment was
subsequently adjusted to 0.4588 percent by section 15005 of the 21st
Century Cures Act.
4. The 21st Century Cures Act (Pub. L. 114-255)
The 21st Century Cures Act (Pub. L. 114-255), enacted on December
13, 2016, contained the following provision affecting payments under
the Hospital Readmissions Reduction Program, which we are proposing to
continue to implement in this proposed rule:
Section 15002, which amended section 1886(q)(3) of the Act
by adding subparagraphs (D) and (E), which requires the Secretary to
develop a methodology for calculating the excess readmissions
adjustment factor for the Hospital Readmissions Reduction Program based
on cohorts defined by the percentage of dual-eligible patients (that
is, patients who are eligible for both Medicare and full-benefit
Medicaid coverage) cared for by a hospital. In this proposed rule, we
are proposing to continue to implement changes to the payment
adjustment factor to assess penalties based on a hospital's
performance, relative to other hospitals treating a similar proportion
of dual-eligible patients.
D. Summary of the Provisions of This Proposed Rule
In this proposed rule, we set forth proposed payment and policy
changes to the Medicare IPPS for FY 2020 operating costs and capital-
related costs of acute care hospitals and certain hospitals and
hospital units that are excluded from IPPS. In addition, we set forth
proposed changes to the payment rates, factors, and other payment and
policy-related changes to programs associated with payment rate
policies under the LTCH PPS for FY 2020.
Below is a general summary of the changes that we are proposing to
make in this proposed rule.
1. Proposed Changes to MS-DRG Classifications and Recalibrations of
Relative Weights
In section II. of the preamble of this proposed rule, we include--
Proposed changes to MS-DRG classifications based on our
yearly review for FY 2020.
Proposed adjustment to the standardized amounts under
section 1886(d) of the Act for FY 2020 in accordance with the
amendments made to section 7(b)(1)(B) of Public Law 110-90 by section
414 of the MACRA.
Proposed recalibration of the MS-DRG relative weights.
A discussion of the proposed FY 2020 status of new
technologies approved for add-on payments for FY 2019 and a
presentation of our evaluation and analysis of the FY 2020 applicants
for add-on payments for high-cost new medical services and technologies
(including public input, as directed by Pub. L. 108-173, obtained in a
town hall meeting).
A request for public comments on the substantial clinical
improvement criterion used to evaluate applications for both the IPPS
new technology add-on payments and the OPPS transitional pass-through
payment for devices, and a discussion of potential revisions that we
are considering adopting as final policies related to the substantial
clinical improvement criterion for applications received beginning in
FY 2020 for the IPPS (that is, for FY 2021 and later new technology
add-on payments) and beginning in CY 2020 for the OPPS.
A proposed alternative IPPS new technology add-on payment
pathway for certain transformative new devices.
Proposed changes to the calculation of the IPPS new
technology add-on payment.
2. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals
In section III. of the preamble to this proposed rule, we are
proposing to make revisions to the wage index for acute care hospitals
and the annual update of the wage data. Specific issues addressed
include, but are not limited to, the following:
The proposed FY 2020 wage index update using wage data
from cost reporting periods beginning in FY 2016.
Proposals to address wage index disparities between high
and low wage index hospitals.
Calculation, analysis, and implementation of the proposed
occupational mix adjustment to the wage index for acute care hospitals
for FY 2020 based on the 2016 Occupational Mix Survey.
Proposed application of the rural floor and the frontier
State floor.
Proposed revisions to the wage index for acute care
hospitals, based on hospital redesignations and reclassifications under
sections 1886(d)(8)(B), (d)(8)(E), and (d)(10) of the Act.
Proposed change to Lugar county assignments.
Proposed adjustment to the wage index for acute care
hospitals for FY 2020 based on commuting patterns of hospital employees
who reside in a county and work in a different area with a higher wage
index.
Proposed labor-related share for the proposed FY 2020 wage
index.
3. Other Decisions and Proposed Changes to the IPPS for Operating Costs
In section IV. of the preamble of this proposed rule, we discuss
proposed changes or clarifications of a number of the provisions of the
regulations in 42
[[Page 19169]]
CFR parts 412 and 413, including the following:
Proposed changes to MS-DRGs subject to the postacute care
transfer policy and special payment policy.
Proposed changes to the inpatient hospital update for FY
2020.
Proposed conforming changes to the regulations for the
low-volume hospital payment adjustment policy.
Proposed updated national and regional case-mix values and
discharges for purposes of determining RRC status.
The statutorily required IME adjustment factor for FY
2020.
Proposed changes to the methodologies for determining
Medicare DSH payments and the additional payments for uncompensated
care.
A request for public comments on PRRB appeals related to a
hospital's Medicaid fraction in the DSH payment adjustment calculation.
Proposed changes to the policies for payment adjustments
under the Hospital Readmissions Reduction Program based on hospital
readmission measures and the process for hospital review and correction
of those rates for FY 2020.
Proposed changes to the requirements and provision of
value-based incentive payments under the Hospital Value-Based
Purchasing Program.
Proposed requirements for payment adjustments to hospitals
under the HAC Reduction Program for FY 2020.
Proposed changes related to CAHs as nonproviders for
direct GME and IME payment purposes.
Discussion of and proposals relating to the implementation
of the Rural Community Hospital Demonstration Program in FY 2020.
4. Proposed FY 2020 Policy Governing the IPPS for Capital-Related Costs
In section V. of the preamble to this proposed rule, we discuss the
proposed payment policy requirements for capital-related costs and
capital payments to hospitals for FY 2020.
5. Proposed Changes to the Payment Rates for Certain Excluded
Hospitals: Rate-of-Increase Percentages
In section VI. of the preamble of this proposed rule, we discuss--
Proposed changes to payments to certain excluded hospitals
for FY 2020.
Proposed change related to CAH payment for ambulance
services.
Proposed continued implementation of the Frontier
Community Health Integration Project (FCHIP) Demonstration.
6. Proposed Changes to the LTCH PPS
In section VII. of the preamble of this proposed rule, we set
forth--
Proposed changes to the LTCH PPS Federal payment rates,
factors, and other payment rate policies under the LTCH PPS for FY
2020.
Proposed payment adjustment for discharges of LTCHs that
do not meet the applicable discharge payment percentage.
7. Proposed Changes Relating to Quality Data Reporting for Specific
Providers and Suppliers
In section VIII. of the preamble of this proposed rule, we
address--
Proposed requirements for the Hospital Inpatient Quality
Reporting (IQR) Program.
Proposed changes to the requirements for the quality
reporting program for PPS-exempt cancer hospitals (PCHQR Program).
Proposed changes to the requirements under the LTCH
Quality Reporting Program (LTCH QRP).
Proposed changes to requirements pertaining to eligible
hospitals and CAHs participating in the Medicare and Medicaid Promoting
Interoperability Programs.
8. Provider Reimbursement Review Board Appeals
In section XI. of the preamble of this proposed rule, we discuss
the growing number of Provider Reimbursement Review Board appeals made
by providers and the action initiatives that are being implemented with
the goal to: decrease the number of appeals submitted; decrease the
number of appeals in inventory; reduce the time to resolution; and
increase customer satisfaction.
9. Determining Prospective Payment Operating and Capital Rates and
Rate-of-Increase Limits for Acute Care Hospitals
In sections II. and III. of the Addendum to this proposed rule, we
set forth the proposed changes to the amounts and factors for
determining the proposed FY 2020 prospective payment rates for
operating costs and capital-related costs for acute care hospitals. We
are proposing to establish the threshold amounts for outlier cases,
including a proposed change to the methodology for calculating those
threshold amounts for FY 2020 to incorporate a projection of outlier
payment reconciliations. In addition, in section IV. of the Addendum to
this proposed rule, we address the update factors for determining the
rate-of-increase limits for cost reporting periods beginning in FY 2020
for certain hospitals excluded from the IPPS.
10. Determining Prospective Payment Rates for LTCHs
In section V. of the Addendum to this proposed rule, we set forth
proposed changes to the amounts and factors for determining the
proposed FY 2020 LTCH PPS standard Federal payment rate and other
factors used to determine LTCH PPS payments under both the LTCH PPS
standard Federal payment rate and the site neutral payment rate in FY
2020. We are proposing to establish the adjustments for wage levels,
the labor-related share, the cost-of-living adjustment, and high-cost
outliers, including the applicable fixed-loss amounts and the LTCH
cost-to-charge ratios (CCRs) for both payment rates.
11. Impact Analysis
In Appendix A of this proposed rule, we set forth an analysis of
the impact the proposed changes would have on affected acute care
hospitals, CAHs, LTCHs, and PCHs.
12. Recommendation of Update Factors for Operating Cost Rates of
Payment for Hospital Inpatient Services
In Appendix B of this proposed rule, as required by sections
1886(e)(4) and (e)(5) of the Act, we provide our recommendations of the
appropriate percentage changes for FY 2020 for the following:
A single average standardized amount for all areas for
hospital inpatient services paid under the IPPS for operating costs of
acute care hospitals (and hospital-specific rates applicable to SCHs
and MDHs).
Target rate-of-increase limits to the allowable operating
costs of hospital inpatient services furnished by certain hospitals
excluded from the IPPS.
The LTCH PPS standard Federal payment rate and the site
neutral payment rate for hospital inpatient services provided for LTCH
PPS discharges.
13. Discussion of Medicare Payment Advisory Commission Recommendations
Under section 1805(b) of the Act, MedPAC is required to submit a
report to Congress, no later than March 15 of each year, in which
MedPAC reviews and makes recommendations on Medicare payment policies.
MedPAC's March 2019 recommendations concerning hospital inpatient
payment policies addressed the update factor for hospital inpatient
operating costs and capital-related costs for hospitals under the IPPS.
We address these
[[Page 19170]]
recommendations in Appendix B of this proposed rule. For further
information relating specifically to the MedPAC March 2019 report or to
obtain a copy of the report, contact MedPAC at (202) 220-3700 or visit
MedPAC's website at: http://www.medpac.gov.
E. Advancing Health Information Exchange
The Department of Health and Human Services (HHS) has a number of
initiatives designed to encourage and support the adoption of
interoperable health information technology and to promote nationwide
health information exchange to improve health care. The Office of the
National Coordinator for Health Information Technology (ONC) and CMS
work collaboratively to advance interoperability across settings of
care, including post-acute care.
To further interoperability in post-acute care, we developed a Data
Element Library (DEL) to serve as a publicly available centralized,
authoritative resource for standardized data elements and their
associated mappings to health IT standards. The DEL furthers CMS' goal
of data standardization and interoperability, which is also a goal of
the IMPACT Act. These interoperable data elements can reduce provider
burden by allowing the use and exchange of health care data, support
provider exchange of electronic health information for care
coordination, person-centered care, and support real-time, data driven,
clinical decision making. Standards in the Data Element Library
(https://del.cms.gov/) can be referenced on the CMS website and in the
ONC Interoperability Standards Advisory (ISA). The 2019 ISA is
available at: https://www.healthit.gov/isa.
The 21st Century Cures Act (the Cures Act) (Pub. L. 114-255,
enacted December 13, 2016) requires HHS to take new steps to enable the
electronic sharing of health information ensuring interoperability for
providers and settings across the care continuum. In an important
provision, Congress defined ``information blocking'' as practices
likely to interfere with, prevent, or materially discourage access,
exchange, or use of electronic health information, and established new
authority for HHS to discourage these practices. In March 2019, ONC and
CMS published the proposed rules, ``21st Century Cures Act:
Interoperability, Information Blocking, and the ONC Health IT
Certification Program'' (84 FR 7424 through 7610) and
``Interoperability and Patient Access'' (84 FR 7610 through 7680), to
promote secure and more immediate access to health information for
patients and health care providers through the implementation of
information blocking provisions of the Cures Act and the use of
standardized application programming interfaces (APIs) that enable
easier access to electronic health information. These two proposed
rules are open for public comments at: www.regulations.gov.
We invite providers to learn more about these important
developments and how they are likely to affect hospitals paid under the
IPPS and the LTCH PPS.
II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-
DRG) Classifications and Relative Weights
A. Background
Section 1886(d) of the Act specifies that the Secretary shall
establish a classification system (referred to as diagnosis-related
groups (DRGs)) for inpatient discharges and adjust payments under the
IPPS based on appropriate weighting factors assigned to each DRG.
Therefore, under the IPPS, Medicare pays for inpatient hospital
services on a rate per discharge basis that varies according to the DRG
to which a beneficiary's stay is assigned. The formula used to
calculate payment for a specific case multiplies an individual
hospital's payment rate per case by the weight of the DRG to which the
case is assigned. Each DRG weight represents the average resources
required to care for cases in that particular DRG, relative to the
average resources used to treat cases in all DRGs.
Section 1886(d)(4)(C) of the Act requires that the Secretary adjust
the DRG classifications and relative weights at least annually to
account for changes in resource consumption. These adjustments are made
to reflect changes in treatment patterns, technology, and any other
factors that may change the relative use of hospital resources.
B. MS-DRG Reclassifications
For general information about the MS-DRG system, including yearly
reviews and changes to the MS-DRGs, we refer readers to the previous
discussions in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR
43764 through 43766) and the FYs 2011 through 2019 IPPS/LTCH PPS final
rules (75 FR 50053 through 50055; 76 FR 51485 through 51487; 77 FR
53273; 78 FR 50512; 79 FR 49871; 80 FR 49342; 81 FR 56787 through
56872; 82 FR 38010 through 38085, and 83 FR 41158 through 41258,
respectively).
C. Adoption of the MS-DRGs in FY 2008
For information on the adoption of the MS-DRGs in FY 2008, we refer
readers to the FY 2008 IPPS final rule with comment period (72 FR 47140
through 47189).
D. Proposed FY 2020 MS-DRG Documentation and Coding Adjustment
1. Background on the Prospective MS-DRG Documentation and Coding
Adjustments for FY 2008 and FY 2009 Authorized by Public Law 110-90 and
the Recoupment or Repayment Adjustment Authorized by Section 631 of the
American Taxpayer Relief Act of 2012 (ATRA)
In the FY 2008 IPPS final rule with comment period (72 FR 47140
through 47189), we adopted the MS-DRG patient classification system for
the IPPS, effective October 1, 2007, to better recognize severity of
illness in Medicare payment rates for acute care hospitals. The
adoption of the MS-DRG system resulted in the expansion of the number
of DRGs from 538 in FY 2007 to 745 in FY 2008. By increasing the number
of MS-DRGs and more fully taking into account patient severity of
illness in Medicare payment rates for acute care hospitals, MS-DRGs
encourage hospitals to improve their documentation and coding of
patient diagnoses.
In the FY 2008 IPPS final rule with comment period (72 FR 47175
through 47186), we indicated that the adoption of the MS-DRGs had the
potential to lead to increases in aggregate payments without a
corresponding increase in actual patient severity of illness due to the
incentives for additional documentation and coding. In that final rule
with comment period, we exercised our authority under section
1886(d)(3)(A)(vi) of the Act, which authorizes us to maintain budget
neutrality by adjusting the national standardized amount, to eliminate
the estimated effect of changes in coding or classification that do not
reflect real changes in case-mix. Our actuaries estimated that
maintaining budget neutrality required an adjustment of -4.8 percentage
points to the national standardized amount. We provided for phasing in
this -4.8 percentage point adjustment over 3 years. Specifically, we
established prospective documentation and coding adjustments of -1.2
percentage points for FY 2008, -1.8 percentage points for FY 2009, and
-1.8 percentage points for FY 2010.
On September 29, 2007, Congress enacted the TMA [Transitional
Medical Assistance], Abstinence Education, and
[[Page 19171]]
QI [Qualifying Individuals] Programs Extension Act of 2007 (Pub. L.
110-90). Section 7(a) of Public Law 110-90 reduced the documentation
and coding adjustment made as a result of the MS-DRG system that we
adopted in the FY 2008 IPPS final rule with comment period to -0.6
percentage point for FY 2008 and -0.9 percentage point for FY 2009.
As discussed in prior year rulemakings, and most recently in the FY
2017 IPPS/LTCH PPS final rule (81 FR 56780 through 56782), we
implemented a series of adjustments required under sections 7(b)(1)(A)
and 7(b)(1)(B) of Public Law 110-90, based on a retrospective review of
FY 2008 and FY 2009 claims data. We completed these adjustments in FY
2013 but indicated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53274
through 53275) that delaying full implementation of the adjustment
required under section 7(b)(1)(A) of Public Law 110-90 until FY 2013
resulted in payments in FY 2010 through FY 2012 being overstated, and
that these overpayments could not be recovered under Public Law 110-90.
In addition, as discussed in prior rulemakings and most recently in
the FY 2018 IPPS/LTCH PPS final rule (82 FR 38008 through 38009),
section 631 of the ATRA amended section 7(b)(1)(B) of Public Law 110-90
to require the Secretary to make a recoupment adjustment or adjustments
totaling $11 billion by FY 2017. This adjustment represented the amount
of the increase in aggregate payments as a result of not completing the
prospective adjustment authorized under section 7(b)(1)(A) of Public
Law 110-90 until FY 2013.
2. Adjustments Made for FY 2018 and FY 2019 as Required Under Section
414 of Public Law 114-10 (MACRA) and Section 15005 of Public Law 114-
255
As stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56785),
once the recoupment required under section 631 of the ATRA was
complete, we had anticipated making a single positive adjustment in FY
2018 to offset the reductions required to recoup the $11 billion under
section 631 of the ATRA. However, section 414 of the MACRA (which was
enacted on April 16, 2015) replaced the single positive adjustment we
intended to make in FY 2018 with a 0.5 percentage point positive
adjustment for each of FYs 2018 through 2023. In the FY 2017
rulemaking, we indicated that we would address the adjustments for FY
2018 and later fiscal years in future rulemaking. Section 15005 of the
21st Century Cures Act (Pub. L. 114-255), which was enacted on December
13, 2016, amended section 7(b)(1)(B) of the TMA, as amended by section
631 of the ATRA and section 414 of the MACRA, to reduce the adjustment
for FY 2018 from a 0.5 percentage point positive adjustment to a 0.4588
percentage point positive adjustment. As we discussed in the FY 2018
rulemaking, we believe the directive under section 15005 of Public Law
114-255 is clear. Therefore, in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38009) for FY 2018, we implemented the required +0.4588
percentage point adjustment to the standardized amount. In the FY 2019
IPPS/LTCH PPS final rule (83 FR 41157), consistent with the
requirements of section 414 of the MACRA, we implemented a 0.5
percentage point positive adjustment to the standardized amount for FY
2019. We indicated that both the FY 2018 and FY 2019 adjustments were
permanent adjustments to payment rates. We also stated that we plan to
propose future adjustments required under section 414 of the MACRA for
FYs 2020 through 2023 in future rulemaking.
3. Proposed Adjustment for FY 2020
Consistent with the requirements of section 414 of the MACRA, we
are proposing to implement a 0.5 percentage point positive adjustment
to the standardized amount for FY 2020. This would constitute a
permanent adjustment to payment rates. We plan to propose future
adjustments required under section 414 of the MACRA for FYs 2021
through 2023 in future rulemaking.
E. Refinement of the MS-DRG Relative Weight Calculation
1. Background
Beginning in FY 2007, we implemented relative weights for DRGs
based on cost report data instead of charge information. We refer
readers to the FY 2007 IPPS final rule (71 FR 47882) for a detailed
discussion of our final policy for calculating the cost-based DRG
relative weights and to the FY 2008 IPPS final rule with comment period
(72 FR 47199) for information on how we blended relative weights based
on the CMS DRGs and MS-DRGs. We also refer readers to the FY 2017 IPPS/
LTCH PPS final rule (81 FR 56785 through 56787) for a detailed
discussion of the history of changes to the number of cost centers used
in calculating the DRG relative weights. Since FY 2014, we have
calculated the IPPS MS-DRG relative weights using 19 CCRs, which now
include distinct CCRs for implantable devices, MRIs, CT scans, and
cardiac catheterization.
2. Discussion of Policy for FY 2020
Consistent with our established policy, we are calculating the
proposed MS-DRG relative weights for FY 2020 using two data sources:
The MedPAR file as the claims data source and the HCRIS as the cost
report data source. We adjust the charges from the claims to costs by
applying the 19 national average CCRs developed from the cost reports.
The description of the calculation of the proposed 19 CCRs and the
proposed MS-DRG relative weights for FY 2020 is included in section
II.G. of the preamble to this FY 2020 IPPS/LTCH PPS proposed rule. As
we did with the FY 2019 IPPS/LTCH PPS final rule, for this FY 2020
proposed rule, we are providing the version of the HCRIS from which we
calculated these proposed 19 CCRs on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Click on the link on the left side of the
screen titled ``FY 2020 IPPS Proposed Rule Home Page'' or ``Acute
Inpatient Files for Download.''
F. Proposed Changes to Specific MS-DRG Classifications
1. Discussion of Changes to Coding System and Basis for Proposed FY
2020 MS-DRG Updates
a. Conversion of MS-DRGs to the International Classification of
Diseases, 10th Revision (ICD-10)
As of October 1, 2015, providers use the International
Classification of Diseases, 10th Revision (ICD-10) coding system to
report diagnoses and procedures for Medicare hospital inpatient
services under the MS-DRG system instead of the ICD-9-CM coding system,
which was used through September 30, 2015. The ICD-10 coding system
includes the International Classification of Diseases, 10th Revision,
Clinical Modification (ICD-10-CM) for diagnosis coding and the
International Classification of Diseases, 10th Revision, Procedure
Coding System (ICD-10-PCS) for inpatient hospital procedure coding, as
well as the ICD-10-CM and ICD-10-PCS Official Guidelines for Coding and
Reporting. For a detailed discussion of the conversion of the MS-DRGs
to ICD-10, we refer readers to the FY 2017 IPPS/LTCH PPS final rule (81
FR 56787 through 56789).
b. Basis for Proposed FY 2020 MS-DRG Updates
CMS has previously encouraged input from our stakeholders
concerning the annual IPPS updates when that input was made available
to us by December
[[Page 19172]]
7 of the year prior to the next annual proposed rule update. As
discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38010), as we
work with the public to examine the ICD-10 claims data used for updates
to the ICD-10 MS DRGs, we would like to examine areas where the MS-DRGs
can be improved, which will require additional time for us to review
requests from the public to make specific updates, analyze claims data,
and consider any proposed updates. Given the need for more time to
carefully evaluate requests and propose updates, we changed the
deadline to request updates to the MS-DRGs to November 1 of each year.
This will provide an additional 5 weeks for the data analysis and
review process. Interested parties had to submit any comments and
suggestions for FY 2020 by November 1, 2018, and should submit any
comments and suggestions for FY 2021 by November 1, 2019 via the CMS
MS-DRG Classification Change Request Mailbox located at:
[email protected]. The comments that were submitted
in a timely manner for FY 2020 are discussed in this section of the
preamble of this proposed rule. As we discuss in the sections that
follow, we may not be able to fully consider all of the requests that
we receive for the upcoming fiscal year. We have found that, with the
implementation of ICD-10, some types of requested changes to the MS-DRG
classifications require more extensive research to identify and analyze
all of the data that are relevant to evaluating the potential change.
We note in the discussion that follows those topics for which further
research and analysis are required, and which we will continue to
consider in connection with future rulemaking.
Following are the changes that we are proposing to the MS-DRGs for
FY 2020. We are inviting public comments on each of the MS-DRG
classification proposed changes, as well as our proposals to maintain
certain existing MS-DRG classifications discussed in this proposed
rule. In some cases, we are proposing changes to the MS-DRG
classifications based on our analysis of claims data and consultation
with our clinical advisors. In other cases, we are proposing to
maintain the existing MS-DRG classifications based on our analysis of
claims data and consultation with our clinical advisors. For this FY
2020 IPPS/LTCH PPS proposed rule, our MS-DRG analysis was based on ICD-
10 claims data from the September 2018 update of the FY 2018 MedPAR
file, which contains hospital bills received through September 30,
2018, for discharges occurring through September 30, 2018. In our
discussion of the proposed MS-DRG reclassification changes, we refer to
these claims data as the ``September 2018 update of the FY 2018 MedPAR
file.''
As explained in previous rulemaking (76 FR 51487), in deciding
whether to propose to make further modifications to the MS-DRGs for
particular circumstances brought to our attention, we consider whether
the resource consumption and clinical characteristics of the patients
with a given set of conditions are significantly different than the
remaining patients represented in the MS-DRG. We evaluate patient care
costs using average costs and lengths of stay and rely on the judgment
of our clinical advisors to determine whether patients are clinically
distinct or similar to other patients represented in the MS-DRG. In
evaluating resource costs, we consider both the absolute and percentage
differences in average costs between the cases we select for review and
the remainder of cases in the MS-DRG. We also consider variation in
costs within these groups; that is, whether observed average
differences are consistent across patients or attributable to cases
that are extreme in terms of costs or length of stay, or both. Further,
we consider the number of patients who will have a given set of
characteristics and generally prefer not to create a new MS-DRG unless
it would include a substantial number of cases.
In our examination of the claims data, we apply the following
criteria established in FY 2008 (72 FR 47169) to determine if the
creation of a new complication or comorbidity (CC) or major
complication or comorbidity (MCC) subgroup within a base MS-DRG is
warranted:
A reduction in variance of costs of at least 3 percent;
At least 5 percent of the patients in the MS-DRG fall
within the CC or MCC subgroup;
At least 500 cases are in the CC or MCC subgroup;
There is at least a 20-percent difference in average costs
between subgroups; and
There is a $2,000 difference in average costs between
subgroups.
In order to warrant creation of a CC or MCC subgroup within a base
MS-DRG, the subgroup must meet all five of the criteria.
2. Pre-MDC
a. Peripheral ECMO
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41166 through
41169), we discussed a request we received to review cases reporting
the use of extracorporeal membrane oxygenation (ECMO) in combination
with the insertion of a percutaneous short-term external heart assist
device. We also noted that a separate request to create a new ICD-10-
PCS procedure code specifically for percutaneous ECMO was discussed at
the March 6-7, 2018 ICD-10 Coordination and Maintenance Committee
Meeting for which we finalized the creation of three new procedure
codes to identify and describe different types of ECMO treatments
currently being utilized. These three new procedure codes were included
in the FY 2019 ICD-10-PCS procedure codes files (which are available
via the internet on the CMS website at: https://www.cms.gov/Medicare/Coding/ICD10/2019-ICD-10-PCS.html) and were made publicly available in
May 2018. We received recommendations from commenters on suggested MS-
DRG assignments for the two new procedure codes that uniquely identify
percutaneous (peripheral) ECMO, including assignment to MS-DRG 215
(Other Heart Assist System Implant), or to Pre-MDC MS-DRG 004
(Tracheostomy with Mechanical Ventilation >96 Hours or Principal
Diagnosis Except Face, Mouth and Neck without Major O.R. Procedure)
specifically for the new procedure code describing percutaneous veno-
venous (VV) ECMO or an alternate MS-DRG within MDC 4 (Diseases and
Disorders of the Respiratory System). In our response, we noted that
because these codes were not finalized at the time of the proposed
rule, there were no proposed MDC or MS-DRG assignments or O.R. and non-
O.R. designations for these new procedure codes and they were not
reflected in Table 6B.--New Procedure Codes (which is available via the
internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html)
associated with the FY 2019 IPPS/LTCH PPS proposed rule.
We further noted that, consistent with our annual process of
assigning new procedure codes to MDCs and MS-DRGs, and designating a
procedure as an O.R. or non-O.R. procedure, we reviewed the predecessor
procedure code assignment. For the reasons discussed in the FY 2019
IPPS/LTCH PPS final rule, our clinical advisors did not support
assigning the new procedure codes for the percutaneous (peripheral)
ECMO procedures to the same MS-DRG as the predecessor code for open
(central) ECMO in pre-MDC MS-DRG 003.
[[Page 19173]]
Effective with discharges occurring on and after October 1, 2018,
the three ECMO procedure codes and their corresponding MS-DRG
assignments are as shown in the following table.
----------------------------------------------------------------------------------------------------------------
ICD-10-PCS code Code description MS-DRG MS-DRG description
----------------------------------------------------------------------------------------------------------------
5A1522F...................... Extracorporeal Pre-MDC...................... ECMO or Tracheostomy with
Oxygenation, MS-DRG 003................... Mechanical Ventilation
Membrane, Central. >96 Hours or Principal
Diagnosis Except Face,
Mouth and Neck with Major
O.R. Procedure.
5A1522G...................... Extracorporeal MS-DRG 207................... Respiratory System
Oxygenation, Diagnosis with Ventilator
Membrane, Peripheral Support >96 Hours or
Veno-arterial. Peripheral Extracorporeal
Membrane Oxygenation
(ECMO).
MS-DRG 291................... Heart Failure and Shock
with MCC or Peripheral
Extracorporeal Membrane
Oxygenation (ECMO).
MS-DRG 296................... Cardiac Arrest,
Unexplained with MCC or
Peripheral Extracorporeal
Membrane Oxygenation
(ECMO).
MS-DRG 870................... Septicemia Or Severe
Sepsis with Mechanical
Ventilation >96 Hours Or
Peripheral Extracorporeal
Membrane Oxygenation
(ECMO).
5A1522H...................... Extracorporeal MS-DRG 207................... Respiratory System
Oxygenation, Diagnosis with Ventilator
Membrane, Peripheral Support >96 Hours or
Veno-venous. Peripheral Extracorporeal
Membrane Oxygenation
(ECMO).
MS-DRG 291................... Heart Failure and Shock
with MCC or Peripheral
Extracorporeal Membrane
Oxygenation (ECMO).
MS-DRG 296................... Cardiac Arrest,
Unexplained with MCC or
Peripheral Extracorporeal
Membrane Oxygenation
(ECMO).
MS-DRG 870................... Septicemia Or Severe
Sepsis with Mechanical
Ventilation >96 Hours Or
Peripheral Extracorporeal
Membrane Oxygenation
(ECMO).
----------------------------------------------------------------------------------------------------------------
After publication of the FY 2019 IPPS/LTCH PPS final rule, we
received comments and feedback from stakeholders expressing concern
with the MS-DRG assignments for the two new procedure codes describing
peripheral ECMO. Specifically, these stakeholders stated that: (1) The
MS-DRG assignments for ECMO should not be based on how the patient is
cannulated (open versus peripheral) because most of the costs for both
central and peripheral ECMO can be attributed to the severity of
illness of the patient; (2) there was a lack of opportunity for public
comment on the finalized MS-DRG assignments; (3) patient access to ECMO
treatment and programs is now at risk because of inadequate payment;
and (4) CMS did not appear to have access to enough patient data to
evaluate for appropriate MS-DRG assignment consideration. They also
stated that the new procedure codes do not account for an open cut-down
approach that may be performed on a peripheral vessel during a
peripheral ECMO procedure. These stakeholders recommended that,
consistent with the usual process of assigning new procedure codes to
the same MS-DRG as the predecessor code, the MS-DRG assignment for
peripheral ECMO procedures should be revised to allow assignment of
peripheral ECMO procedures to Pre-MDC MS-DRG 003 (ECMO or Tracheostomy
with Mechanical Ventilation >96 Hours or Principal Diagnosis Except
Face, Mouth and Neck with Major O.R. Procedure). They stated that this
revision would also allow for the collection of further claims data for
patients treated with ECMO and assist in determining the
appropriateness of any future modifications in MS-DRG assignment.
We also received feedback from a few stakeholders that, for some
cases involving peripheral ECMO, the current designation provides
compensation that these stakeholders believe is ``reasonable'' (for
example, for peripheral ECMO in certain patients admitted with acute
respiratory failure and sepsis). Some of these stakeholders agreed with
CMS that once claims data become available, the volume, length of stay
and cost data of claims with these new codes can be examined to
determine if modifications to MS-DRG assignment or O.R. and non-O.R.
designation are warranted. However, some of these stakeholders also
expressed concerns that the current assignments and designation do not
appropriately compensate for the resources used when peripheral ECMO is
used to treat certain patients (for example, patients who are admitted
with cardiac arrest and cardiogenic shock of known cause or patients
admitted with a different principal diagnosis or patients who develop a
diagnosis after admission that requires ECMO). These stakeholders
stated that the current MS-DRG assignments for such cases involving
peripheral ECMO do not provide sufficient payment and do not fully
consider the severity of illness of the patient and the level of
resources involved in treating such patients, such as surgical team,
general anesthesia, and other ECMO support such as specialized
monitoring.
With regard to stakeholders' concerns that we did not allow the
opportunity for public comment on the MS-DRG assignment for the three
new procedure codes that describe central and peripheral ECMO, as noted
above and as explained in the FY 2019 IPPS/LTCH PPS final rule (83 FR
41168), these new procedure codes were not finalized at the time of the
proposed rule. We note that although there were no proposed MDC or MS-
DRG assignment or O.R. and non-O.R. designations for these three new
procedure codes, we did, in fact, review and respond to comments on the
recommended MDC and MS-DRG assignments and O.R./non-O.R. designations
in the final rule (83 FR 41168 through 41169). For FY 2019, consistent
with our annual process of assigning new procedure codes to MDCs and
MS-DRGs and designating a procedure as an O.R. or non-O.R. procedure,
we reviewed the predecessor procedure code assignments. Upon completing
the review, our clinical advisors did not support assigning the two new
ICD-10-PCS procedure codes for peripheral ECMO procedures to the same
MS-DRG as the predecessor code for open (central) ECMO procedures.
Further, our clinical advisors also did not agree with designating
peripheral
[[Page 19174]]
ECMO procedures as O.R. procedures because they stated that these
procedures are less resource intensive compared to open ECMO
procedures.
As noted, our annual process for assigning new procedure codes
involves review of the predecessor procedure code's MS-DRG assignment.
However, this process does not automatically result in the new
procedure code being assigned (or proposed for assignment) to the same
MS-DRG as the predecessor code. There are several factors to consider
during this process that our clinical advisors take into account. For
example, in the absence of volume, length of stay, and cost data, they
may consider the specific service, procedure, or treatment being
described by the new procedure code, the indications, treatment
difficulty, and the resources utilized. We have continued to consider
how these and other factors may apply in the context of classifying
procedures under the ICD-10 MS-DRGs, including with regard to the
specific concerns raised by stakeholders.
In the absence of claims data for the new ICD-10-PCS procedure
codes describing peripheral ECMO, we analyzed claims data from the
September 2018 update of the FY 2018 MedPAR file for cases reporting
the predecessor ICD-10-PCS procedure code 5A15223 (Extracorporeal
membrane oxygenation, continuous) in Pre-MDC MS-DRG 003, including
those cases reporting secondary diagnosis MCC and CC conditions, that
were grouped under the ICD-10 MS-DRG Version 35 GROUPER. Our findings
are shown in the table below.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 003--All cases........................................... 14,456 29.6 $122,168
MS-DRG 003--Cases reporting procedure code 5A15223 2,086 20.2 128,168
(Extracorporeal membrane oxygenation, continuous)..............
MS-DRG 003--Cases reporting procedure code 5A15223 2,000 20.7 131,305
(Extracorporeal membrane oxygenation, continuous) with MCC.....
MS-DRG 003--Cases reporting procedure code 5A15223 79 7.6 58,231
(Extracorporeal membrane oxygenation, continuous) with CC......
----------------------------------------------------------------------------------------------------------------
The total number of cases reported in MS-DRG 003 was 14,456, with
an average length of stay of 29.6 days and average costs of $122,168.
For the cases reporting procedure code 5A15223 (Extracorporeal membrane
oxygenation, continuous), there was a total of 2,086 cases, with an
average length of stay of 20.2 days and average costs of $128,168. For
the cases reporting procedure code 5A15223 with an MCC, there was a
total of 2,000 cases, with an average length of stay of 20.7 days and
average costs of $131,305. For the cases reporting procedure code
5A15223 with a CC, there was a total of 79 cases, with an average
length of stay of 7.6 days and average costs of $58,231.
Our clinical advisors reviewed these data and noted that the
average length of stay for the cases reporting ECMO with procedure code
5A15223 of 20.2 days may not necessarily be a reliable indicator of
resources that can be attributed to ECMO treatment. Our clinical
advisors believed that a more appropriate measure of resource
consumption for ECMO would be the number of hours or days that a
patient was specifically receiving ECMO treatment, rather than the
length of hospital stay. However, they noted that this information is
not currently available in the claims data. Our clinical advisors also
stated that the average costs of $128,168 for the cases reporting ECMO
with procedure code 5A15223 are not necessarily reflective of the
resources utilized for ECMO treatment alone, as the average costs
represent a combination of factors, including the principal diagnosis,
any secondary diagnosis CC and/or MCC conditions necessitating
initiation of ECMO, and potentially any other procedures that may be
performed during the hospital stay. Our clinical advisors recognized
that patients who require ECMO treatment are severely ill and
recommended we review the claims data to identify the number
(frequency) and types of principal and secondary diagnosis CC and/or
MCC conditions that were reported among the 2,086 cases reporting
procedure code 5A15223. Our findings are shown in the following tables
for the top 10 principal diagnosis codes, followed by the top 10
secondary diagnosis MCC and secondary diagnosis CC conditions that were
reported within the claims data with procedure code 5A15223.
Top 10 Principal Diagnosis Codes Reported With Procedure Code 5A1223
[Extracorporeal membrane oxygenation, continuous]
------------------------------------------------------------------------
Number of
ICD-10-CM code Description times reported
------------------------------------------------------------------------
A41.9....................... Sepsis, unspecified 145
organism.
I21.4....................... Non-ST elevation (NSTEMI) 137
myocardial infarction.
I35.0....................... Nonrheumatic aortic 81
(valve) stenosis.
J84.112..................... Idiopathic pulmonary 68
fibrosis.
I25.110..................... Atherosclerotic heart 55
disease of native
coronary artery with
unstable angina pectoris.
J96.01...................... Acute respiratory failure 52
with hypoxia.
I21.09...................... STEMI involving other 49
coronary artery of
anterior wall.
I25.10...................... Atherosclerotic heart 48
disease of native
coronary artery w/o
angina pectoris.
I13.0....................... Hypertensive heart & 46
chronic kidney disease w
heart failure and stage 1
through stage 4 chronic
kidney disease, or
unspecified chronic
kidney disease.
I21.19...................... ST elevation (STEMI) 43
myocardial infarction
involving other coronary
artery of inferior wall.
------------------------------------------------------------------------
[[Page 19175]]
Top 10 Secondary Diagnosis MCC Conditions Reported With Procedure Code 5A1223
[Extracorporeal membrane oxygenation, continuous]
----------------------------------------------------------------------------------------------------------------
Number of Average length
ICD-10-CM code Description times reported of stay Average costs
----------------------------------------------------------------------------------------------------------------
A41.9........................... Sepsis, unspecified organism.. 322 29.7 $186,055
E43............................. Unspecified severe protein- 220 41.5 213,742
calorie malnutrition.
G93.40.......................... Encephalopathy, unspecified... 217 27.2 165,193
J18.9........................... Pneumonia, unspecified 220 23.5 150,242
organism.
J96.01.......................... Acute respiratory failure with 944 17.9 122,614
hypoxia.
J96.02.......................... Acute respiratory failure with 220 20.9 139,511
hypercapnia.
K72.00.......................... Acute and subacute hepatic 524 19 140,878
failure without coma.
N17.0........................... Acute kidney failure with 741 26.2 162,583
tubular necrosis.
R57.0........................... Cardiogenic shock............. 448 27.7 153,878
R65.21.......................... Severe sepsis with septic 504 29.7 177,992
shock.
----------------------------------------------------------------------------------------------------------------
Top 10 Secondary Diagnosis CC Conditions Reported With Procedure Code 5A1223
[Extracorporeal membrane oxygenation, continuous]
----------------------------------------------------------------------------------------------------------------
Number of Average length
ICD-10-CM code Description times reported of stay Average costs
----------------------------------------------------------------------------------------------------------------
D62............................. Acute posthemorrhagic anemia.. 1,139 21.8 $144,033
D68.9........................... Coagulation defect, 402 20.5 138,417
unspecified.
E87.0........................... Hyperosmolality and 585 26.6 162,028
hypernatremia.
E87.1........................... Hypo-osmolality and 316 26.1 151,824
hyponatremia.
E87.2........................... Acidosis...................... 937 17.3 120,881
E87.4........................... Mixed disorder of acid-base 268 26 150,257
balance.
I13.0........................... Hypertensive heart and chronic 314 18.4 121,962
kidney disease with heart
failure and stage 1 through
stage 4 chronic kidney
disease, or unspecified
chronic kidney disease.
I47.2........................... Ventricular tachycardia....... 384 17.5 123,383
J98.11.......................... Atelectasis................... 273 26.9 158,812
N17.9........................... Acute kidney failure, 757 18.5 122,180
unspecified.
----------------------------------------------------------------------------------------------------------------
These data show that the conditions reported for these patients
requiring treatment with ECMO and reported with predecessor ICD-10-PCS
procedure code 5A1223 represent a greater severity of illness, present
greater treatment difficulty, have poorer prognoses, and have a greater
need for intervention. While the data analysis was based on the
conditions reported with the predecessor ICD-10-PCS procedure code
5A1223 (Extracorporeal membrane oxygenation, continuous), our clinical
advisors believe the data may provide an indication of how cases
reporting the new procedure codes describing peripheral (percutaneous)
ECMO may be represented in future claims data with regard to
indications for treatment, a patient's severity of illness, resource
utilization, and treatment difficulty.
Based on the results of our data analysis and further review of the
cases reporting ECMO, including consideration of the stakeholders'
concerns that the MS-DRG assignments for ECMO procedures should not be
based on the method of cannulation, our clinical advisors agree that
resource consumption for both central and peripheral ECMO cases can be
primarily attributed to the severity of illness of the patient, and
that the method of cannulation is less relevant when considering the
overall resources required to treat patients on ECMO. Specifically, our
clinical advisors noted that consideration of resource consumption for
cases reporting the use of ECMO may extend well beyond the duration of
time that a patient was actively receiving ECMO treatment, which may
range anywhere from less than 24 hours to 10 days or more. As noted
above, in the absence of unique procedure codes that specify the
duration of time that a patient was receiving ECMO treatment, we cannot
ascertain from the claims data the resource use specifically
attributable to treatment with ECMO during a hospital stay. However,
when reviewing consumption of hospital resources for the cases in which
ECMO was reported during a hospital stay, the claims data clearly show
that the patients placed on ECMO typically have multiple MCC and CC
conditions. These data provide additional information on the expanding
indications for ECMO treatment as well as an indication of the
complexities and the treatment difficulty associated with these
patients. While our clinical advisors continue to believe that central
(open) ECMO may be more resource intensive and carries significant
risks for complications, including bleeding, infection, and vessel
injury because it requires an incision along the sternum (sternotomy)
and is performed for open heart surgery, they believe that the subset
of patients who require treatment with ECMO, regardless of the
cannulation method, would be similar in terms of overall hospital
resource consumption. We also note that while we do not yet have
Medicare claims data to evaluate the new peripheral ECMO procedure
codes, review of limited registry data provided by stakeholders for
patients treated with a reported peripheral ECMO procedure did not
contradict that costs for peripheral ECMO appear to be similar to the
costs of overall resources required to treat patients on ECMO
(regardless of method of cannulation) and appear to be attributable to
the severity of illness of the patient.
With regard to stakeholders who stated that the two new procedure
codes do not account for an open cut-down approach that may be
performed on a peripheral vessel during a peripheral ECMO procedure, we
note that a request and proposal to create ICD-10-PCS codes to
differentiate between peripheral vessel percutaneous and peripheral
vessel open cutdown
[[Page 19176]]
according to the indication (VA or VV) for ECMO was discussed at the
March 5-6, 2019 ICD-10 Coordination and Maintenance Committee meeting.
We refer readers to the website at: https://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html for the committee meeting materials and discussion
regarding this proposal. We also note that, in this same proposal,
another coding option to add duration values to allow the reporting of
the number of hours or the number of days a patient received ECMO
during the stay was also made available for public comment.
Upon further review and consideration of peripheral ECMO
procedures, including the indications, treatment difficulty, and the
resources utilized, for the reasons discussed above, our clinical
advisors support the assignment of the new ICD-10-PCS procedure codes
for peripheral ECMO procedures to the same MS-DRG as the predecessor
code for open (central) ECMO procedures for FY 2020. Therefore, based
on our review, including consideration of the comments and input from
our clinical advisors, we are proposing to reassign the following
procedure codes describing peripheral ECMO procedures from their
current MS-DRG assignments to Pre-MDC MS-DRG 003 (ECMO or Tracheostomy
with Mechanical Ventilation >96 Hours or Principal Diagnosis Except
Face, Mouth and Neck with Major O.R. Procedure) as shown in the table
below. If this proposal is finalized, we also would make conforming
changes to the titles for MS-DRGs 207, 291, 296, and 870 to no longer
reflect the ``or Peripheral Extracorporeal Membrane Oxygenation
(ECMO)'' terminology in the title. We note that this proposal includes
maintaining the designation of these peripheral ECMO procedures as non-
O.R. Therefore, if finalized, the procedures would be defined as non-
O.R. affecting the MS-DRG assignment for Pre-MDC MS-DRG 003.
----------------------------------------------------------------------------------------------------------------
ICD-10-PCS code Code description Current MS-DRG Proposed MS-DRG
----------------------------------------------------------------------------------------------------------------
5A1522G..................... Extracorporeal MS-DRG 207 (Respiratory Pre-MDC MS-DRG 003 (ECMO or
Oxygenation, Membrane, System Diagnosis with Tracheostomy with
Peripheral Veno- Ventilator Support >96 Mechanical Ventilation >96
arterial. Hours or Peripheral Hours or Principal
Extracorporeal Membrane Diagnosis Except Face,
Oxygenation (ECMO)). Mouth and Neck with Major
O.R. Procedure).
MS-DRG 291 (Heart Failure Pre-MDC MS-DRG 003 (ECMO or
and Shock with MCC or Tracheostomy with
Peripheral Extracorporeal Mechanical Ventilation >96
Membrane Oxygenation Hours or Principal
(ECMO)). Diagnosis Except Face,
Mouth and Neck with Major
O.R. Procedure).
MS-DRG 296 (Cardiac Arrest, Pre-MDC MS-DRG 003 (ECMO or
Unexplained with MCC or Tracheostomy with
Peripheral Extracorporeal Mechanical Ventilation >96
Membrane Oxygenation Hours or Principal
(ECMO)). Diagnosis Except Face,
Mouth and Neck with Major
O.R. Procedure).
MS-DRG 870 (Septicemia or Pre-MDC MS-DRG 003 (ECMO or
Severe Sepsis with Tracheostomy with
Mechanical Ventilation >96 Mechanical Ventilation >96
Hours or Peripheral Hours or Principal
Extracorporeal Membrane Diagnosis Except Face,
Oxygenation (ECMO)). Mouth and Neck with Major
O.R. Procedure).
5A1522H..................... Extracorporeal MS-DRG 207 (Respiratory Pre-MDC MS-DRG 003 (ECMO or
Oxygenation, Membrane, System Diagnosis with Tracheostomy with
Peripheral Veno-venous. Ventilator Support >96 Mechanical Ventilation >96
Hours or Peripheral Hours or Principal
Extracorporeal Membrane Diagnosis Except Face,
Oxygenation (ECMO)). Mouth and Neck with Major
O.R. Procedure).
MS-DRG 291 (Heart Failure Pre-MDC MS-DRG 003 (ECMO or
and Shock with MCC or Tracheostomy with
Peripheral Extracorporeal Mechanical Ventilation >96
Membrane Oxygenation Hours or Principal
(ECMO)). Diagnosis Except Face,
Mouth and Neck with Major
O.R. Procedure).
MS-DRG 296 (Cardiac Arrest, Pre-MDC MS-DRG 003 (ECMO or
Unexplained with MCC or Tracheostomy with
Peripheral Extracorporeal Mechanical Ventilation >96
Membrane Oxygenation Hours or Principal
(ECMO)). Diagnosis Except Face,
Mouth and Neck with Major
O.R. Procedure).
MS-DRG 870 (Septicemia or Pre-MDC MS-DRG 003 (ECMO or
Severe Sepsis with Tracheostomy with
Mechanical Ventilation >96 Mechanical Ventilation >96
Hours or Peripheral Hours or Principal
Extracorporeal Membrane Diagnosis Except Face,
Oxygenation (ECMO)). Mouth and Neck with Major
O.R. Procedure).
----------------------------------------------------------------------------------------------------------------
b. Allogeneic Bone Marrow Transplant
We received a request to create new MS-DRGs for cases that would
identify patients who undergo an allogeneic hematopoietic cell
transplant (HCT) procedure. The requestor asked us to split MS-DRG 014
(Allogeneic Bone Marrow Transplant) into two new MS-DRGs and assign
cases to the recommended new MS-DRGs according to the donor source,
with cases for allogeneic related matched donor source assigned to one
MS-DRG and cases for allogeneic unrelated matched donor source assigned
to the other MS-DRG. The requestor stated that by creating two new MS-
DRGs for allogeneic related and allogeneic unrelated donor source,
respectively, the MS-DRGs would more appropriately recognize the
clinical characteristics and cost differences in allogeneic HCT cases.
The requestor stated that allogeneic related and allogeneic
unrelated HCT cases are clinically different and have significantly
different donor search and cell acquisition charges. According to the
requestor, 70 percent of patients do not have a matched sibling donor
(that is, an allogeneic related matched donor) in their family. The
requestor also stated that this rate is higher for Medicare
beneficiaries. According to the requestor, the current payment for
allogeneic HCT cases is inadequate and affects patient's access to
care.
The requestor performed its own analysis and stated that it found
the average costs for HCT cases reporting revenue code 0815 (Stem cell
acquisition) alone or revenue code 0819 (Other organ acquisition) in
combination with revenue code 0815 with one of the ICD-10-PCS procedure
[[Page 19177]]
codes for allogeneic unrelated donor source were significantly higher
than the average costs for HCT cases reporting revenue code 0815 alone
or both revenue codes 0815 and 0819 in combination with one of the ICD-
10-PCS procedure codes for allogeneic related donor source. Further,
the requestor reported that, according to its analysis, the average
costs for HCT cases reporting revenue code 0815 alone or both revenue
codes 0815 and 0819 in combination with one of the ICD-10-PCS procedure
codes for unspecified allogeneic donor source were also significantly
higher than the average costs for HCT cases reporting the ICD-10-PCS
procedure codes for allogeneic related donor source. The requestor
suggested that cases reporting the unspecified donor source procedure
code are highly likely to represent unrelated donors, and recommended
that, if the two new MS-DRGs are created as suggested, the cases
reporting the procedure codes for unspecified donor source be included
in the suggested new ``unrelated donor'' MS-DRG. The requestor also
suggested that CMS apply a code edit through the inpatient Medicare
Code Editor (MCE), similar to the edit in the Integrated Outpatient
Code Editor (I/OCE) which requires reporting of revenue code 0815 on
the claim with the appropriate procedure code or the claim may be
subject to being returned to the provider.
The ICD-10-PCS procedure codes assigned to MS-DRG 014 that identify
related, unrelated and unspecified donor source for an allogeneic HCT
are shown in the following table.
------------------------------------------------------------------------
ICD-10-PCS code Code description
------------------------------------------------------------------------
30230G2............................. Transfusion of allogeneic related
bone marrow into peripheral vein,
open approach.
30230G3............................. Transfusion of allogeneic
unrelated bone marrow into
peripheral vein, open approach.
30230G4............................. Transfusion of allogeneic
unspecified bone marrow into
peripheral vein, open approach.
30230X2............................. Transfusion of allogeneic related
cord blood stem cells into
peripheral vein, open approach.
30230X3............................. Transfusion of allogeneic
unrelated cord blood stem cells
into peripheral vein, open
approach.
30230X4............................. Transfusion of allogeneic
unspecified cord blood stem cells
into peripheral vein, open
approach.
30230Y2............................. Transfusion of allogeneic related
hematopoietic stem cells into
peripheral vein, open approach.
30230Y3............................. Transfusion of allogeneic
unrelated hematopoietic stem
cells into peripheral vein, open
approach.
30230Y4............................. Transfusion of allogeneic
unspecified hematopoietic stem
cells into peripheral vein, open
approach.
30233G2............................. Transfusion of allogeneic related
bone marrow into peripheral vein,
percutaneous approach.
30233G3............................. Transfusion of allogeneic
unrelated bone marrow into
peripheral vein, percutaneous
approach.
30233G4............................. Transfusion of allogeneic
unspecified bone marrow into
peripheral vein, percutaneous
approach.
30233X2............................. Transfusion of allogeneic related
cord blood stem cells into
peripheral vein, percutaneous
approach.
30233X3............................. Transfusion of allogeneic
unrelated cord blood stem cells
into peripheral vein,
percutaneous approach.
30233X4............................. Transfusion of allogeneic
unspecified cord blood stem cells
into peripheral vein,
percutaneous approach.
30233Y2............................. Transfusion of allogeneic related
hematopoietic stem cells into
peripheral vein, percutaneous
approach.
30233Y3............................. Transfusion of allogeneic
unrelated hematopoietic stem
cells into peripheral vein,
percutaneous approach.
30233Y4............................. Transfusion of allogeneic
unspecified hematopoietic stem
cells into peripheral vein,
percutaneous approach.
30240G2............................. Transfusion of allogeneic related
bone marrow into central vein,
open approach.
30240G3............................. Transfusion of allogeneic
unrelated bone marrow into
central vein, open approach.
30240G4............................. Transfusion of allogeneic
unspecified bone marrow into
central vein, open approach.
30240X2............................. Transfusion of allogeneic related
cord blood stem cells into
central vein, open approach.
30240X3............................. Transfusion of allogeneic
unrelated cord blood stem cells
into central vein, open approach.
30240X4............................. Transfusion of allogeneic
unspecified cord blood stem cells
into central vein, open approach.
30240Y2............................. Transfusion of allogeneic related
hematopoietic stem cells into
central vein, open approach.
30240Y3............................. Transfusion of allogeneic
unrelated hematopoietic stem
cells into central vein, open
approach.
30240Y4............................. Transfusion of allogeneic
unspecified hematopoietic stem
cells into central vein, open
approach.
30243G2............................. Transfusion of allogeneic related
bone marrow into central vein,
percutaneous approach.
30243G3............................. Transfusion of allogeneic
unrelated bone marrow into
central vein, percutaneous
approach.
30243G4............................. Transfusion of allogeneic
unspecified bone marrow into
central vein, percutaneous
approach.
30243X2............................. Transfusion of allogeneic related
cord blood stem cells into
central vein, percutaneous
approach.
30243X3............................. Transfusion of allogeneic
unrelated cord blood stem cells
into central vein, percutaneous
approach.
30243X4............................. Transfusion of allogeneic
unspecified cord blood stem cells
into central vein, percutaneous
approach.
30243Y2............................. Transfusion of allogeneic related
hematopoietic stem cells into
central vein, percutaneous
approach.
30243Y3............................. Transfusion of allogeneic
unrelated hematopoietic stem
cells into central vein,
percutaneous approach.
30243Y4............................. Transfusion of allogeneic
unspecified hematopoietic stem
cells into central vein,
percutaneous approach.
30250G1............................. Transfusion of nonautologous bone
marrow into peripheral artery,
open approach.
30250X1............................. Transfusion of nonautologous cord
blood stem cells into peripheral
artery, open approach.
30250Y1............................. Transfusion of nonautologous
hematopoietic stem cells into
peripheral artery, open approach.
30253G1............................. Transfusion of nonautologous bone
marrow into peripheral artery,
percutaneous approach.
30253X1............................. Transfusion of nonautologous cord
blood stem cells into peripheral
artery, percutaneous approach.
30253Y1............................. Transfusion of nonautologous
hematopoietic stem cells into
peripheral artery, percutaneous
approach.
30260G1............................. Transfusion of nonautologous bone
marrow into central artery, open
approach.
30260X1............................. Transfusion of nonautologous cord
blood stem cells into central
artery, open approach.
30260Y1............................. Transfusion of nonautologous
hematopoietic stem cells into
central artery, open approach.
30263G1............................. Transfusion of nonautologous bone
marrow into central artery,
percutaneous approach.
30263X1............................. Transfusion of nonautologous cord
blood stem cells into central
artery, percutaneous approach.
30263Y1............................. Transfusion of nonautologous
hematopoietic stem cells into
central artery, percutaneous
approach.
------------------------------------------------------------------------
We examined claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRG 014 and identified the subset of cases
within MS-DRG 014 reporting procedure codes for allogeneic HCT related
donor source, allogeneic HCT unrelated donor source, and allogeneic HCT
unspecified donor source, respectively. Our findings are shown in the
following table.
[[Page 19178]]
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 014--All cases........................................... 854 28.2 $91,446
MS-DRG 014--Cases reporting allogeneic HCT related donor source. 292 29.5 87,444
MS-DRG 014--Cases reporting allogeneic HCT unrelated donor 466 27.9 95,146
source.........................................................
MS-DRG 014--Cases reporting allogeneic HCT unspecified donor 90 26.2 90,945
source.........................................................
----------------------------------------------------------------------------------------------------------------
The total number of cases reported in MS-DRG 014 was 854, with an
average length of stay of 28.2 days and average costs of $91,446. For
the subset of cases reporting procedure codes for allogeneic HCT
related donor source, there were a total of 292 cases with an average
length of stay of 29.5 days and average costs of $87,444. For the
subset of cases reporting procedure codes for allogeneic HCT unrelated
donor source, there was a total of 466 cases with an average length of
stay of 27.9 days and average costs of $95,146. For the subset of cases
reporting procedure codes for allogeneic HCT unspecified donor source,
there was a total of 90 cases with an average length of stay of 26.2
days and average costs of $90,945.
Based on the analysis described above, the current MS-DRG
assignment for the cases in MS-DRG 014 that identify patients who
undergo an allogeneic HCT procedure, regardless of donor source,
appears appropriate. The data analysis reflects that each subset of
cases reporting a procedure code for an allogeneic HCT procedure (that
is, related, unrelated, or unspecified donor source) has an average
length of stay and average costs that are comparable to the average
length of stay and average costs of all cases in MS-DRG 014. We also
take this opportunity to note that, in deciding whether to propose to
make further modifications to the MS-DRGs for particular circumstances
brought to our attention, we do not consider the reported revenue
codes. Rather, as stated previously, we consider whether the resource
consumption and clinical characteristics of the patients with a given
set of conditions are significantly different than the remaining
patients represented in the MS-DRG. We do this by evaluating the ICD-
10-CM diagnosis and/or ICD-10-PCS procedure codes that identify the
patient conditions, procedures, and the relevant MS-DRG(s) that are the
subject of a request. Specifically, for this request, as noted above,
we analyzed the cases reporting the ICD-10-PCS procedure codes that
identify an allogeneic HCT procedure according to the donor source. We
then evaluated patient care costs using average costs and average
lengths of stay (based on the MedPAR data) and rely on the judgment of
our clinical advisors to determine whether the patients are clinically
distinct or similar to other patients represented in the MS-DRG.
Because MS-DRG 014 is defined by patients who undergo an allogeneic HCT
transplant procedure, our clinical advisors state they are all
clinically similar in that regard. We also note that the ICD-10-PCS
procedure codes that describe an allogeneic HCT procedure were revised
effective October 1, 2016 to uniquely identify the donor source in
response to a request and proposal that was discussed at the March 9-
10, 2016 ICD-10 Coordination and Maintenance Committee meeting. We
refer readers to the website at: https://www.cms.gov/Medicare/Coding/ICD9Provider DiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html
for the committee meeting materials and discussion regarding this
proposal.
In response to the requestor's statement that allogeneic related
and allogeneic unrelated HCT cases are clinically different and have
significantly different donor search and cell acquisition charges, our
clinical advisors support maintaining the current structure for MS-DRG
014 because they believe that MS-DRG 014 appropriately classifies all
patients who undergo an allogeneic HCT procedures and, therefore, it is
clinically coherent. While the requestor stated that there are clinical
differences in the related and unrelated HCT cases, they did not
provide any specific examples of these clinical differences. With
regard to the donor search and cell acquisition charges, the requestor
noted that the unrelated donor cases are more expensive than the
related donor cases because of the donor search process, which includes
a registry search to identify the best donor source, extensive donor
screenings, evaluation, and cell acquisition and transportation
services for the patient. The requestor appeared to base that belief
according to the donor source and average charges reported with revenue
code 0815. As noted above, we use MedPAR data and do not consider the
reported revenue codes in deciding whether to propose to make further
modifications to the MS-DRGs. Based on our analysis of claims data for
MS-DRG 014, our clinical advisors stated that the resources are similar
for patients who undergo an allogeneic HCT procedure regardless of the
donor source.
In reviewing this request, we also reviewed the instructions on
billing for stem cell transplantation in Chapter 3 of the Medicare
Claims Processing Manual and found that there appears to be inadvertent
duplication under Section 90.3.1 and Section 90.3.3 of Chapter 3, as
both sections provide instructions on Billing for Stem Cell
Transplantation. Therefore, we are further reviewing the Medicare
Claims Processing Manual to identify potential revisions to address
this duplication. However, we also note that section 90.3.1 and section
90.3.3 provide different instruction regarding which revenue code
should be reported. Section 90.3.1 instructs providers to report
revenue code 0815 and Section 90.3.3 instructs providers to report
revenue code 0819. We note that we issued instructions as a One-Time
Notification, Pub. No. 100-04, Transmittal 3571, Change Request 9674,
effective January 1, 2017, which instructs that the appropriate revenue
code to report on claims for allogeneic stem cell acquisition/donor
services is revenue code 0815. Accordingly, we also are considering
additional revisions as needed to conform the instructions for
reporting these codes in the Medicare Claims Processing Manual.
With regard to the requestor's recommendation that we create a new
code edit through the inpatient MCE similar to the edit in the I/OCE
which requires reporting of revenue code 0815 on the claim, we note
that the MCE is not designed to include revenue codes for claims
editing purposes. Rather, as stated in section II.F.16. of the preamble
of this proposed rule, it is a software program that detects and
reports errors in the coding of Medicare claims data. The coding of
Medicare claims data refers to diagnosis and procedure coding, as well
as demographic information.
For the reasons described above, we are not proposing to change the
current structure of MS-DRG 014. We are not proposing to split MS-DRG
014 into two new MS-DRGs that assign cases according to whether the
allogeneic donor source is related or unrelated, as the requestor
suggested.
In addition, while conducting our analysis of cases reporting ICD-
10-PCS
[[Page 19179]]
procedure codes for allogeneic HCT procedures that are assigned to MS-
DRG 014, we noted that 8 procedure codes for autologous HCT procedures
are currently included in MS-DRG 014, as shown in the following table.
These codes are not properly assigned because MS-DRG 014 is defined by
cases reporting allogenic HCT procedures.
------------------------------------------------------------------------
ICD-10-PCS code Code description
------------------------------------------------------------------------
30230X0............................. Transfusion of autologous cord
blood stem cells into peripheral
vein, open approach.
30233X0............................. Transfusion of autologous cord
blood stem cells into peripheral
vein, percutaneous approach.
30240X0............................. Transfusion of autologous cord
blood stem cells into central
vein, open approach.
30243X0............................. Transfusion of autologous cord
blood stem cells into central
vein, percutaneous approach.
30250X0............................. Transfusion of autologous cord
blood stem cells into peripheral
artery, open approach.
30253X0............................. Transfusion of autologous cord
blood stem cells into peripheral
artery, percutaneous approach.
30260X0............................. Transfusion of autologous cord
blood stem cells into central
artery, open approach.
30263X0............................. Transfusion of autologous cord
blood stem cells into central
artery, percutaneous approach.
------------------------------------------------------------------------
The 8 ICD-10-PCS procedure codes for autologous HCT procedures were
inadvertently included in MS-DRG 014 as a result of efforts to
replicate the ICD-9-CM MS-DRGs. Under the ICD-9-CM MS-DRGs, procedure
code 41.06 (Cord blood stem cell transplant) was used to identify these
procedures and was also assigned to MS-DRG 014. As shown in the ICD-9-
CM code description, the reference to ``autologous'' is not included.
However, because the ICD-10-PCS autologous HCT procedure codes were
considered as plausible translations of the ICD-9-CM procedure code
(41.06), they were inadvertently included in MS-DRG 014. We also note
that, of these 8 procedure codes, there are 4 procedure codes that
describe a transfusion via arterial access. As described in more detail
below, because a transfusion procedure always uses venous access rather
than arterial access, these codes are considered clinically invalid and
were the subject of a proposal discussed at the March 5-6, 2019 ICD-10
Coordination and Maintenance Committee meeting to delete these codes
effective October 1, 2019 (FY 2020).
The majority of ICD-10-PCS procedure codes specifying autologous
HCT procedures are currently assigned to MS-DRGs 016 and 017
(Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy
and Autologous Bone Marrow Transplant without CC/MCC, respectively).
These codes are listed in the following table.
------------------------------------------------------------------------
ICD-10-PCS code Code description
------------------------------------------------------------------------
30230AZ............................. Transfusion of embryonic stem
cells into peripheral vein, open
approach.
30230G0............................. Transfusion of autologous bone
marrow into peripheral vein, open
approach.
30230Y0............................. Transfusion of autologous
hematopoietic stem cells into
peripheral vein, open approach.
30233AZ............................. Transfusion of embryonic stem
cells into peripheral vein,
percutaneous approach.
30233G0............................. Transfusion of autologous bone
marrow into peripheral vein,
percutaneous approach.
30233Y0............................. Transfusion of autologous
hematopoietic stem cells into
peripheral vein, percutaneous
approach.
30240AZ............................. Transfusion of embryonic stem
cells into central vein, open
approach.
30240G0............................. Transfusion of autologous bone
marrow into central vein, open
approach.
30240Y0............................. Transfusion of autologous
hematopoietic stem cells into
central vein, open approach.
30243AZ............................. Transfusion of embryonic stem
cells into central vein,
percutaneous approach.
30243G0............................. Transfusion of autologous bone
marrow into central vein,
percutaneous approach.
30243Y0............................. Transfusion of autologous
hematopoietic stem cells into
central vein, percutaneous
approach.
30250G0............................. Transfusion of autologous bone
marrow into peripheral artery,
open approach.
30250Y0............................. Transfusion of autologous
hematopoietic stem cells into
peripheral artery, open approach.
30253G0............................. Transfusion of autologous bone
marrow into peripheral artery,
percutaneous approach.
30253Y0............................. Transfusion of autologous
hematopoietic stem cells into
peripheral artery, percutaneous
approach.
30260G0............................. Transfusion of autologous bone
marrow into central artery, open
approach.
30260Y0............................. Transfusion of autologous
hematopoietic stem cells into
central artery, open approach.
30263G0............................. Transfusion of autologous bone
marrow into central artery,
percutaneous approach.
30263Y0............................. Transfusion of autologous
hematopoietic stem cells into
central artery, percutaneous
approach.
------------------------------------------------------------------------
While we believe, as indicated, that the cases reporting ICD-10-PCS
procedure codes for autologous HCT procedures may be improperly
assigned to MS-DRG 014, we also examined claims data for this subset of
cases to determine the frequency with which they were reported and the
relative resource use as compared with all cases assigned to MS-DRGs
016 and 017. Our findings are shown in the following table.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 014--Cases reporting autologous cord blood stem cell 6 23.5 $38,319
donor source...................................................
MS-DRG 016--All cases........................................... 2,150 18 47,546
MS-DRG 017--All cases........................................... 104 11 33,540
----------------------------------------------------------------------------------------------------------------
For the subset of cases in MS-DRG 014 reporting ICD-10-PCS codes
for autologous HCT procedures, there was a total of 6 cases with an
average length of stay of 23.5 days and average costs of $38,319. The
total number of cases reported in MS-DRG 016 was 2,150, with an average
length of stay of 18 days and average costs of $47,546. The total
number of cases reported in MS-DRG 017 was 104, with an average length
of
[[Page 19180]]
stay of 11 days and average costs of $33,540.
The results of our analysis indicate that the frequency with which
these autologous HCT procedure codes was reported in MS-DRG 014 is low
and that average costs of cases reporting autologous HCT procedures
assigned to MS-DRG 014 are more aligned with the average costs of cases
assigned to MS-DRGs 016 and 017, with the average costs being lower
than the average costs for all cases assigned to MS-DRG 016 and higher
than the average costs for all cases assigned to MS-DRG 017. Our
clinical advisors also indicated that the procedure codes for
autologous HCT procedures are more clinically aligned with cases that
are assigned to MS-DRGs 016 and 017 that are comprised of autologous
HCT procedures. Therefore, we are proposing to reassign the following 4
procedure codes for HCT procedures specifying autologous cord blood
stem cell as the donor source via venous access to MS-DRGs 016 and 017
for FY 2020.
------------------------------------------------------------------------
ICD-10-PCS code Code description
------------------------------------------------------------------------
30230X0............................. Transfusion of autologous cord
blood stem cells into peripheral
vein, open approach.
30233X0............................. Transfusion of autologous cord
blood stem cells into peripheral
vein, percutaneous approach.
30240X0............................. Transfusion of autologous cord
blood stem cells into central
vein, open approach.
30243X0............................. Transfusion of autologous cord
blood stem cells into central
vein, percutaneous approach.
------------------------------------------------------------------------
As discussed earlier in this section, the 4 procedure codes for HCT
procedures that describe an autologous cord blood stem cell transfusion
via arterial access currently assigned to MS-DRG 014, as listed
previously, are considered clinically invalid. These procedure codes
were discussed at the March 5-6, 2019 ICD-10 Coordination and
Maintenance Committee meeting, along with additional procedure codes
that are also considered clinically invalid, as described in the
section below.
During our analysis of procedure codes that describe a HCT
procedure, we identified 128 clinically invalid codes from the
transfusion table (table 302) in the ICD-10-PCS classification
identifying a transfusion using arterial access, as listed in Table
6P.1a. associated with this proposed rule (which is available via the
internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). As shown in
Table 6P.1a., these 128 procedure codes describe transfusion procedures
with body system/region values ``5'' Peripheral Artery and ``6''
Central Artery. Because a transfusion procedure always uses venous
access rather than arterial access, these codes are considered
clinically invalid and were proposed for deletion at the March 5-6,
2019 ICD-10 Coordination and Maintenance Committee meeting. We refer
the reader to the website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials.html for the Committee meeting
materials regarding this proposal.
We examined claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 014, 016, and 017 to determine if there
were any cases that reported one of the 128 clinically invalid codes
from the transfusion table in the ICD-10-PCS classification identifying
a transfusion using arterial access, and as listed in Table 6P.1a.
associated with this proposed rule. Our clinical advisors agree that
because a transfusion procedure always uses venous access rather than
arterial access, these codes are considered invalid. Because these
procedure codes describe clinically invalid procedures, we would not
expect these codes to be reported in any claims data. Our findings are
shown in the following table.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRGs 014, 016, and 017--All cases............................ 3,108 20.4 $59,140
MS-DRGs 014, 016, and 017--Cases with invalid transfusion codes. 31 19.6 52,912
----------------------------------------------------------------------------------------------------------------
As shown in this table, we found a total of 3,108 cases across MS-
DRGs 014, 016, and 017 with an average length of stay of 20.4 days and
average costs of $59,140. We found a total of 31 cases (0.9 percent)
reporting a procedure code for an invalid transfusion procedure,
identifying the body system/region value ``5'' Peripheral Artery or
``6'' Central Artery, with an average length of stay of 19.6 days and
average costs of $52,912. The results of the data analysis demonstrate
that these invalid transfusion procedures represent approximately 1
percent of all discharges across MS-DRGs 014, 016, and 017. To
summarize, we are proposing to: (1) Reassign the four ICD-10-PCS codes
for HCT procedures specifying autologous cord blood stem cell as the
donor source from MS-DRG 014 to MS-DRGs 016 and 017 (procedure codes
30230X0, 30233X0, 30240X0, 30243X0); and (2) delete the 128 clinically
invalid codes from the transfusion table in the ICD-10-PCS
Classification describing a transfusion using arterial access that were
discussed at the March 5-6, 2019 ICD-10 Coordination and Maintenance
Committee meeting and are listed in Table 6P.1a associated with this
proposed rule. As discussed previously, we are not proposing to split
MS-DRG 014 into the two requested new MS DRGs that would assign cases
according to whether the allogeneic donor source is related or
unrelated.
c. Chimeric Antigen Receptor (CAR) T-Cell Therapies
We received a request to create a new MS-DRG for procedures
involving CAR T-cell therapies. The requestor stated that creation of a
new MS-DRG would improve payment for CAR T-cell therapies in the
inpatient setting. According to the requestor, while cases involving
CAR T-cell therapy may now be eligible for new technology add-on
payments and outlier payments, there continue to be significant
financial losses by providers. The requestor also suggested that CMS
modify its existing payment mechanisms to use a CCR of 1.0 for charges
associated with CAR T-cell therapy.
In addition, the requestor included technical and operational
suggestions related to CAR T-cell therapy, such as
[[Page 19181]]
the development of unique CAR T-cell therapy revenue and cost centers
for billing and cost reporting purposes. We will consider these
technical and operational suggestions in the development of future
billing and cost reporting guidelines and instructions.
Currently, procedures involving CAR T-cell therapies are identified
with ICD-10-PCS procedure codes XW033C3 (Introduction of engineered
autologous chimeric antigen receptor t-cell immunotherapy into
peripheral vein, percutaneous approach, new technology group 3) and
XW043C3 (Introduction of engineered autologous chimeric antigen
receptor t-cell immunotherapy into central vein, percutaneous approach,
new technology group 3), which became effective October 1, 2017. In the
FY 2019 IPPS/LTCH PPS final rule, we finalized our proposal to assign
cases reporting these ICD-10-PCS procedure codes to Pre-MDC MS-DRG 016
for FY 2019 and to revise the title of this MS-DRG to ``Autologous Bone
Marrow Transplant with CC/MCC or T-cell Immunotherapy''. We refer
readers to section II.F.2.d. of the preamble of the FY 2019 IPPS/LTCH
PPS final rule for a complete discussion of these final policies (83 FR
41172 through 41174).
As stated earlier, the current procedure codes for CAR T-cell
therapies both became effective October 1, 2017. In the FY 2019 IPPS/
LTCH PPS final rule (83 FR 41172 through 41174), we indicated we should
collect more comprehensive clinical and cost data before considering
assignment of a new MS-DRG to these therapies. While the September 2018
update of the FY 2018 MedPAR data file does contain some claims that
include those procedure codes that identify CAR T-cell therapies, the
number of cases is limited, and the submitted costs vary widely due to
differences in provider billing and charging practices for this
therapy. Therefore, while these claims could potentially be used to
create relative weights for a new MS-DRG, we do not have the
comprehensive clinical and cost data that we generally believe are
needed to do so. Furthermore, given the relative newness of CAR T-cell
therapy and our proposal to continue new technology add-on payments for
FY 2020 for the two CAR T-cell therapies that currently have FDA
approval (KYMRIAHTM and YESCARTATM), as discussed
in section II.G.4.d. of the preamble of this proposed rule, at this
time we believe it may be premature to consider creation of a new MS-
DRG specifically for cases involving CAR T-cell therapy for FY 2020.
Therefore, we are proposing not to modify the current MS-DRG
assignment for cases reporting CAR T-cell therapies for FY 2020. As
noted earlier, cases reporting ICD-10-PCS codes XW033C3 and XW043C3
would continue to be eligible to receive new technology add-on payments
for discharges occurring in FY 2020 if our proposal to continue such
payments is finalized. Currently, we expect that, in future years, we
would have additional data that exhibit more stability and greater
consistency in charging and billing practices that could be used to
evaluate the potential creation of a new MS-DRG specifically for cases
involving CAR T-cell therapies.
Alternatively, notwithstanding our concerns regarding the claims
data, and the concerns discussed in the FY 2019 IPPS/LTCH PPS final
rule (83 FR 41172 to 41174), we are seeking public comments on payment
alternatives for CAR T-cell therapies, including payment under any
potential new MS-DRG. We also are inviting public comments on how these
payment alternatives would affect access to care, as well as how they
affect incentives to encourage lower drug prices, which is a high
priority for this Administration. As discussed in the FY 2019 IPPS/LTCH
PPS final rule (83 FR 41172 through 41174), we are considering
approaches and authorities to encourage value-based care and lower drug
prices. We are soliciting public comments on how the effective dates of
any potential payment methodology alternatives, if any were to be
adopted, may intersect and affect future participation in any such
alternative approaches.
As part of our solicitation of public comment on the potential
creation of a new MS-DRG for CAR T-cell therapy procedures, we are also
seeking comment on the most appropriate way to develop the relative
weight if we were to finalize the creation of a new MS-DRG. While the
data are limited, it may be operationally possible to create a relative
weight by dividing the average costs of cases that include the CAR T-
cell procedures by the average costs of all cases, consistent with our
current methodology for setting the relative weights for FY 2020 and
using the same applicable data sources used for other MS-DRGs (for FY
2020, the FY 2018 MedPAR data and FY 2016 HCRIS data). We are seeking
public comments on whether this is the most accurate method for
determining the relative weight, given the current variation in the
claims data for these procedures, and also on how to address the
significant number of cases involving clinical trials. While we do not
typically exclude cases in clinical trials when developing the relative
weights, in this case, the absence of the drug costs on claims for
cases involving clinical trial claims could have a significant impact
on the relative weight. It is unclear whether a relative weight
calculated using cases for which hospitals do and do not incur drug
costs would accurately reflect the resource costs of caring for
patients who are not involved in clinical trials. A different approach
might be to develop a relative weight using an appropriate portion of
the average sales price (ASP) for these drugs as an alternative way to
reflect the costs involved in treating patients receiving CAR T-cell
therapies. We are requesting public comments on these approaches or
other approaches for setting the relative weight if we were to finalize
a new MS-DRG. We note that any such new MS-DRG would be established in
a budget neutral manner, consistent with section 1886(d)(4)(C)(iii) of
the Act, which specifies that the annual DRG reclassification and
recalibration of the relative weights must be made in a manner that
ensures that aggregate payments to hospitals are not affected.
Another potential consideration if we were to create a new MS-DRG
is the extent to which it would be appropriate to geographically adjust
the payment under any such new MS-DRG. Under the methodology for
determining the Federal payment rate for operating costs under the
IPPS, the labor-related proportion of the national standardized amounts
is adjusted by the wage index to reflect the relative differences in
labor costs among geographic areas. The IPPS Federal payment rate for
operating costs is calculated as the MS-DRG relative weight x [(labor-
related applicable standardized amount x applicable wage index) +
(nonlabor-related applicable standardized amount x cost-of-living
adjustment)]. Given our understanding that the costs for CAR T-cell
therapy drugs do not vary among geographic areas, and given that costs
for CAR T-cell therapy would likely be an extremely high portion of the
costs for the MS-DRG, we are seeking public comments on whether we
should not geographically adjust the payment for cases assigned to any
potential new MS-DRG for CAR T-cell therapy procedures. We also are
seeking public comments on whether to instead apply the geographic
adjustment to a lower proportion of payments under any potential new
MS-DRG and, if so, how that lower proportion should be determined. We
note that while the prices of other drugs may also not vary
significantly among geographic areas, generally speaking, those other
drugs would not have estimated costs as high
[[Page 19182]]
as those of CAR T-cell therapies, nor would they represent as
significant a percentage of the average costs for the case. We are
seeking public comments on the use of our exceptions and adjustments
authority under section 1886(d)(5)(I) of the Act (or other relevant
authorities) to implement any such potential changes.
Section 1886(d)(5)(B) of the Act provides that prospective payment
hospitals that have residents in an approved graduate medical education
(GME) program receive an additional payment for a Medicare discharge to
reflect the higher patient care costs of teaching hospitals relative to
nonteaching hospitals. The regulations regarding the calculation of
this additional payment, known as the indirect medical education (IME)
adjustment, are located at 42 CFR 412.105. The formula is traditionally
described in terms of a certain percentage increase in payment for
every 10-percent increase in the resident-to-bed ratio. For some
hospitals, this percentage increase can exceed an additional 25 percent
or more of the otherwise applicable payment. Some hospitals, sometimes
the same hospitals, can also receive a large percentage increase in
payments due to the Medicare disproportionate hospital (DSH) adjustment
provision under section 1886(d)(5)(F) of the Act. The regulations
regarding the calculation of the additional DSH payment are located at
42 CFR 412.106.
Given that the payment for cases assigned to a new MS-DRG for CAR
T-cell therapy could significantly exceed the historical payment for
any existing MS-DRG, these percentage add-on payments could arguably
result in unreasonably high additional payments for CAR T-cell therapy
cases unrelated in any significant empirical way to the costs of the
hospital in providing care. For example, consider a teaching hospital
that has an IME adjustment factor of 0.25, and a DSH adjustment factor
of 0.10. If we were to create a new MS-DRG for CAR T-cell therapy
procedures that resulted in an average IPPS Federal payment rate for
operating costs of $400,000, under the current payment mechanism, the
hospital would receive an IME payment of $100,000 ($400,000 x 0.25) and
a DSH payment of $40,000 ($400,000 x 0.10), such that the total IPPS
Federal payment rate for operating costs including IME and DSH payments
would be $540,000 ($400,000 + $100,000 + $40,000). We are seeking
public comments on whether the IME and DSH payments should not be made
for cases assigned to any new MS-DRG for CAR T-cell therapy. We also
are seeking public comments on whether we should instead reduce the
applicable percentages used to determine these add-ons and, if so, how
those lower percentages should be determined. We are seeking public
comments on the use of our exceptions and adjustments authority under
section 1886(d)(5)(I) of the Act (or other relevant authorities) to
implement any potential changes.
As further discussed section II.G.7. of the preamble to this
proposed rule, we are also requesting public comment on other payment
alternatives for these cases, including eliminating the use of the CCR
in calculating the new technology add-on payment for KYMRIAH[supreg]
and YESCARTA[supreg] by making a uniform add-on payment that equals the
proposed maximum add-on payment, that is, 65 percent of the cost of the
technology (in accordance with the proposed increase in the calculation
of the maximum new technology add-on payment amount), which in this
instance would be $242,450; and/or using a higher percentage than the
proposed 65 percent to calculate the maximum new technology add-on
payment amount.
We are also requesting public comments on whether, in light of the
additional experience with billing and payment for cases involving CAR
T-cell therapies to Medicare patients, we should consider utilizing a
specific CCR for ICD-10-PCS procedure codes used to report the
performance of procedures involving the use of CAR T-cell therapies;
for example, a CCR of 1.0, when determining outlier payments, when
determining the new technology add-on payments, and when determining
payments to IPPS-excluded cancer hospitals for CAR T-cell therapies.
We note that we also considered this payment alternative for FY
2019, as discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41172
through 41174). We indicated in that rulemaking that such a payment
alternative might use a CCR of 1.0 for charges associated with ICD-10-
PCS procedure codes XW033C3 and XW043C3, given that many public
inquirers believed that hospitals would be unlikely to set charges
different from the costs for KYMRIAH[supreg] and YESCARTA[supreg] CAR
T-cell therapies. We also indicated such a change would result in a
higher outlier payment, higher new technology add-on payment, or the
determination of higher costs for IPPS-excluded cancer hospital cases.
For example, and as described in the FY 2019 IPPS LTCH PPS final rule
(83 FR 41773), if a hospital charged $400,000 for the procedure
described by ICD-10-PCS procedure code XW033C3, the application of a
hypothetical CCR of 0.25 results in a cost of $100,000 (= $400,000 *
0.25) while the application of a hypothetical CCR of 1.00 results in a
cost of $400,000 (= $400,000 * 1.0).
3. MDC 1 (Diseases and Disorders of the Nervous System): Carotid Artery
Stent Procedures
The logic for case assignment to MS-DRGs 034, 035, and 036 (Carotid
Artery Stent Procedures with MCC, with CC, and without CC/MCC,
respectively) as displayed in the ICD-10 MS-DRG Version 36 Definitions
Manual (which is available via the internet on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html) is
comprised of two lists of logic that include procedure codes for
operating room (O.R.) procedures involving dilation of a carotid artery
(common, internal or external) with intraluminal device(s). The first
list of logic is entitled ``Operating Room Procedures'' and the second
list of logic is entitled ``Operating Room Procedures with Operating
Room Procedures''. We identified 46 ICD-10-PCS procedure codes in the
second logic list that do not describe dilation of a carotid artery
with an intraluminal device. Of these 46 procedure codes, we identified
24 codes describing dilation of a carotid artery without an
intraluminal device; 8 codes describing dilation of the vertebral
artery; and 14 codes describing dilation of a vein (jugular, vertebral
and face), as shown in the following table.
ICD-10 PCS Codes That Involve Dilation of a Neck Artery or Vein With and
Without an Intraluminal Device
------------------------------------------------------------------------
ICD-10-PCS code Code description
------------------------------------------------------------------------
037H3Z6............................. Dilation of right common carotid
artery, bifurcation, percutaneous
approach.
037H3ZZ............................. Dilation of right common carotid
artery, percutaneous approach.
[[Page 19183]]
037H4Z6............................. Dilation of right common carotid
artery, bifurcation, percutaneous
endoscopic approach.
037H4ZZ............................. Dilation of right common carotid
artery, percutaneous endoscopic
approach.
037J3Z6............................. Dilation of left common carotid
artery, bifurcation, percutaneous
approach.
037J3ZZ............................. Dilation of left common carotid
artery, percutaneous approach.
037J4Z6............................. Dilation of left common carotid
artery, bifurcation, percutaneous
endoscopic approach.
037J4ZZ............................. Dilation of left common carotid
artery, percutaneous endoscopic
approach.
037K3Z6............................. Dilation of right internal carotid
artery, bifurcation, percutaneous
approach.
037K3ZZ............................. Dilation of right internal carotid
artery, percutaneous approach.
037K4Z6............................. Dilation of right internal carotid
artery, bifurcation, percutaneous
endoscopic approach.
037K4ZZ............................. Dilation of right internal carotid
artery, percutaneous endoscopic
approach.
037L3Z6............................. Dilation of left internal carotid
artery, bifurcation, percutaneous
approach.
037L3ZZ............................. Dilation of left internal carotid
artery, percutaneous approach.
037L4Z6............................. Dilation of left internal carotid
artery, bifurcation, percutaneous
endoscopic approach.
037L4ZZ............................. Dilation of left internal carotid
artery, percutaneous endoscopic
approach.
037M3Z6............................. Dilation of right external carotid
artery, bifurcation, percutaneous
approach.
037M3ZZ............................. Dilation of right external carotid
artery, percutaneous approach.
037M4Z6............................. Dilation of right external carotid
artery, bifurcation, percutaneous
endoscopic approach.
037M4ZZ............................. Dilation of right external carotid
artery, percutaneous endoscopic
approach.
037N3Z6............................. Dilation of left external carotid
artery, bifurcation, percutaneous
approach.
037N3ZZ............................. Dilation of left external carotid
artery, percutaneous approach.
037N4Z6............................. Dilation of left external carotid
artery, bifurcation, percutaneous
endoscopic approach.
037N4ZZ............................. Dilation of left external carotid
artery, percutaneous endoscopic
approach.
037P3Z6............................. Dilation of right vertebral
artery, bifurcation, percutaneous
approach.
037P3ZZ............................. Dilation of right vertebral
artery, percutaneous approach.
037P4Z6............................. Dilation of right vertebral
artery, bifurcation, percutaneous
endoscopic approach.
037P4ZZ............................. Dilation of right vertebral
artery, percutaneous endoscopic
approach.
037Q3Z6............................. Dilation of left vertebral artery,
bifurcation, percutaneous
approach.
037Q3ZZ............................. Dilation of left vertebral artery,
percutaneous approach.
037Q4Z6............................. Dilation of left vertebral artery,
bifurcation, percutaneous
endoscopic approach.
037Q4ZZ............................. Dilation of left vertebral artery,
percutaneous endoscopic approach.
057M3DZ............................. Dilation of right internal jugular
vein with intraluminal device,
percutaneous approach.
057M4DZ............................. Dilation of right internal jugular
vein with intraluminal device,
percutaneous endoscopic approach.
057N3DZ............................. Dilation of left internal jugular
vein with intraluminal device,
percutaneous approach.
057N4DZ............................. Dilation of left internal jugular
vein with intraluminal device,
percutaneous endoscopic approach.
057P3DZ............................. Dilation of right external jugular
vein with intraluminal device,
percutaneous approach.
057P4DZ............................. Dilation of right external jugular
vein with intraluminal device,
percutaneous endoscopic approach.
057Q3DZ............................. Dilation of left external jugular
vein with intraluminal device,
percutaneous approach.
057Q4DZ............................. Dilation of left external jugular
vein with intraluminal device,
percutaneous endoscopic approach.
057R3DZ............................. Dilation of left vertebral vein
with intraluminal device,
percutaneous approach.
057R4DZ............................. Dilation of right vertebral vein
with intraluminal device,
percutaneous endoscopic approach.
057S3DZ............................. Dilation of left vertebral vein
with intraluminal device,
percutaneous approach.
057S4DZ............................. Dilation of left vertebral vein
with intraluminal device,
percutaneous endoscopic approach.
057T3DZ............................. Dilation of right face vein with
intraluminal device, percutaneous
approach.
057T4DZ............................. Dilation of right face vein with
intraluminal device, percutaneous
endoscopic approach.
------------------------------------------------------------------------
We examined claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 034, 035, and 036 and identified cases
reporting any one of the 46 ICD-10-PCS procedure codes listed in the
tables above. Our findings are shown in the following table.
MS-DRGs for Carotid Artery Stent Procedures
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 034--All cases........................................... 863 6.8 $27,600
MS-DRG 034--Cases with procedure code other than dilation of a 15 8.8 36,596
carotid artery with an intraluminal device.....................
MS-DRG 035--All cases........................................... 2,369 3 16,731
MS-DRG 035--Cases with procedure code other than dilation of a 52 3.5 17,815
carotid artery with an intraluminal device.....................
MS-DRG 036--All cases........................................... 3,481 1.4 12,637
MS-DRG 036--Cases with procedure code other than dilation of a 67 1.4 12,621
carotid artery with an intraluminal device.....................
----------------------------------------------------------------------------------------------------------------
As shown in the table above, we found a total of 863 cases with an
average length of stay of 6.8 days and average costs of $27,600 in MS-
DRG 034. There were 15 cases reporting at least one of the 46 procedure
codes that
[[Page 19184]]
do not describe dilation of the carotid artery with an intraluminal
device in MS-DRG 034 with an average length of stay of 8.8 days and
average costs of $36,596. For MS-DRG 035, we found a total of 2,369
cases with an average length of stay of 3 days and average costs of
$16,731. There were 52 cases reporting at least one of the 46 procedure
codes that do not describe dilation of the carotid artery with an
intraluminal device in MS-DRG 035 with an average length of stay of 3.5
days and average costs of $17,815. For MS-DRG 036, we found a total of
3,481 cases with an average length of stay of 1.4 days and average
costs of $12,637. There were 67 cases reporting at least one of the 46
procedure codes that do not describe dilation of the carotid artery
with an intraluminal device in MS-DRG 036 with an average length of
stay of 1.4 days and average costs of $12,621.
Our clinical advisors stated that MS-DRGs 034, 035, and 036 are
defined to include only those procedure codes that describe procedures
that involve dilation of a carotid artery with an intraluminal device.
Therefore, we are proposing to remove the procedure codes listed in the
table above from MS-DRGs 034, 035, and 036 that describe procedures
which (1) do not include an intraluminal device; (2) describe
procedures performed on arteries other than a carotid; and (3) describe
procedures performed on a vein.
The 46 ICD-10-PCS procedure codes listed in the table above are
also assigned to MS-DRGs 037, 038, and 039 (Extracranial Procedures
with MCC, with CC, and without CC/MCC, respectively). Therefore, we
also examined claims data from the September 2018 update of the FY 2018
MedPAR file for MS-DRGs 037, 038, and 039. Our findings are shown in
the following table.
MS-DRGs for Extracranial Procedures
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 037--All cases........................................... 3,612 7.1 $23,703
MS-DRG 038--All cases........................................... 11,406 3.1 12,480
MS-DRG 039--All cases........................................... 22,938 1.5 8,400
----------------------------------------------------------------------------------------------------------------
We found a total of 3,612 cases in MS-DRG 037 with an average
length of stay of 7.1 days and average costs of $23,703. We found a
total of 11,406 cases in MS-DRG 038 with an average length of stay of
3.1 days and average costs of $12,480. We found a total of 22,938 cases
in MS-DRG 039 with an average length of stay of 1.5 days and average
costs of $8,400.
During our review of claims data for MS-DRGs 037, 038, and 039, we
also discovered 96 ICD-10-PCS procedure codes describing dilation of a
carotid artery with an intraluminal device that were inadvertently
included as a result of efforts to replicate the ICD-9 based MS-DRGs.
These procedure codes are also included in the logic for MS-DRGs 034,
035, and 036. Under ICD-9-CM, procedure codes 00.61 (Percutaneous
angioplasty of extracranial vessel(s)) and 00.63 (Percutaneous
insertion of carotid artery stent(s)) are both required to be reported
on a claim to identify that a carotid artery stent procedure was
performed and for assignment of the case to MS-DRGs 034, 035, and 036.
Procedure code 00.61 is designated as an O.R. procedure, while
procedure code 00.63 is designated as a non-O.R. procedure. Under ICD-
10-PCS, a carotid artery stent procedure is described by one unique
code that includes both clinical concepts of the angioplasty (dilation)
and the insertion of the stent (intraluminal device). This
``combination code'' under ICD-10-PCS is designated as an O.R.
procedure. Under ICD-9-CM, procedure code 00.61 reported in the absence
of procedure code 00.63 results in assignment to MS-DRGs 037, 038, and
039 according to the MS-DRG logic because procedure code 00.61 has an
inclusion term for vertebral vessels, as well as for the carotid
vessels. Therefore, when all of the comparable translations of
procedure code 00.61 as an O.R. procedure were replicated from the ICD-
9 based MS-DRGs to the ICD-10 based MS-DRGs, this replication
inadvertently results in the assignment of ICD-10-PCS procedure codes
that identify and describe a carotid artery stent procedure to MS-DRGs
037, 038, and 039. Therefore, we are proposing to remove the 96 ICD-10-
PCS procedure codes describing dilation of a carotid artery with an
intraluminal device from MS-DRGs 037, 038, and 039.
We also found 6 procedure codes describing dilation of a carotid
artery with an intraluminal device in MS-DRGs 037, 038, and 039 that
are not currently assigned to MS-DRGs 034, 035, and 036. Our clinical
advisors recommended that these 6 procedure codes be reassigned from
MS-DRGs 037, 038, and 039 to MS-DRGs 034, 035, and 036 because the 6
procedure codes are consistent with the other procedures describing
dilation of a carotid artery with an intraluminal device that are
currently assigned to MS-DRGs 034, 035, and 036. We refer readers to
Table 6P.1b. associated with this proposed rule (which is available via
the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) for the
complete list of procedure codes that we are proposing to remove from
MS-DRGs 037, 038, and 039.
We also note that, as discussed in section II.F.14.f. of the
preamble of this proposed rule, we are deleting a number of codes that
include the ICD-10-PCS qualifier term ``bifurcation'' as the result of
the finalized proposal discussed at the September 11-12, 2018 ICD-10
Coordination and Maintenance Committee meeting. We refer readers to the
website at: https://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/ICD-9-CM-C-and-M-Meeting-Materials.html for
the committee meeting materials and discussion regarding this proposal.
We note that, of the 96 procedure codes that we are proposing to remove
from the logic for MS-DRGs 037, 038, and 039, there are 48 procedure
codes that include the qualifier term ``bifurcation''. Therefore, these
48 procedure codes will be deleted effective October 1, 2019. The 48
remaining valid procedure codes that do not include the term
``bifurcation'' that we are proposing to remove from MS-DRGs 037, 038,
and 039 will continue to be assigned to MS-DRGs 034, 035, and 036.
Lastly, if the applicable proposed MS-DRG changes are finalized, we
would make a conforming change to the ICD-10 MS-DRG Version 37
Definitions Manual for FY 2020 by combining all the procedure codes
identifying a carotid artery stent procedure within MS-DRGs 034, 035,
and 036 into one list entitled ``Operating Room Procedures'' to better
reflect the
[[Page 19185]]
definition of these MS-DRGs based on the discussion and proposals
described above.
4. MDC 4 (Diseases and Disorders of the Respiratory System): Pulmonary
Embolism
We received a request to reassign three ICD-10-CM diagnosis codes
for pulmonary embolism with acute cor pulmonale from MS-DRG 176
(Pulmonary Embolism without MCC) to the higher severity level MS-DRG
175 (Pulmonary Embolism with MCC). The three diagnosis codes are
identified in the following table.
------------------------------------------------------------------------
ICD-10-CM code Code description
------------------------------------------------------------------------
I26.01.............................. Septic pulmonary embolism with
acute cor pulmonale.
I26.02.............................. Saddle embolus of pulmonary artery
with acute cor pulmonale.
I26.09.............................. Other pulmonary embolism with
acute cor pulmonale.
------------------------------------------------------------------------
The requestor noted that, in the FY 2019 IPPS/LTCH PPS final rule
(83 FR 41231 through 41234), we finalized the proposal to remove the
special logic in the GROUPER for processing claims containing a code on
the Principal Diagnosis Is Its Own CC or MCC Lists and deleted the
relevant tables from the ICD-10 MS-DRG Definitions Manual Version 36,
effective October 1, 2018. As a result of this change, cases reporting
any one of the three ICD-10-CM diagnosis codes describing a pulmonary
embolism with acute cor pulmonale were reassigned from MS-DRG 175 to
MS-DRG 176, absent a secondary diagnosis code to trigger assignment to
MS-DRG 175. The requestor stated that this change in the MS-DRG
assignment for these cases resulted in a reduction in payment for cases
involving pulmonary embolism with acute cor pulmonale and that the FY
2019 payment rate for MS-DRG 176 does not appropriately account for the
costs and resource utilization associated with these cases because the
subset of patients with pulmonary embolism with acute cor pulmonale
often represents a more severe set of patients with pulmonary embolism.
The logic for case assignment to MS-DRGs 175 and 176 is displayed
in the ICD-10 MS-DRG Version 36 Definitions Manual, which is available
via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html.
We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 175 and 176 to identify cases reporting
diagnosis codes describing pulmonary embolism with acute cor pulmonale
as listed above (ICD-10-CM diagnosis codes I26.01, I26.02 or I26.09) as
the principal diagnosis or as a secondary diagnosis. Our findings are
shown in the following table.
MS-DRGs for Pulmonary Embolism
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 175--All cases........................................... 24,389 5.2 $10,294
MS-DRG 175--Cases with pulmonary embolism with acute cor 2,326 5.7 13,034
pulmonale......................................................
MS-DRG 176--All cases........................................... 30,215 3.3 6,356
MS-DRG 176--Cases with pulmonary embolism with acute cor 1,821 3.9 9,630
pulmonale......................................................
----------------------------------------------------------------------------------------------------------------
As shown in the table, for MS-DRG 175, there was a total of 24,389
cases with an average length of stay of 5.2 days and average costs of
$10,294. Of these 24,389 cases, there were 2,326 cases reporting
pulmonary embolism with acute cor pulmonale, with an average length of
stay 5.7 days and average costs of $13,034. For MS-DRG 176, there was a
total of 30,215 cases with an average length of stay of 3.3 days and
average costs of $6,356. Of these 30,215 cases, there were 1,821 cases
reporting pulmonary embolism with acute cor pulmonale with an average
length of stay of 3.9 days and average costs of $9,630.
As stated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41231
through 41234), available ICD-10 data can now be used to evaluate other
indicators of resource utilization and, as shown by our claims
analysis, the data indicate that the average costs of cases reporting
pulmonary embolism or saddle embolus with acute cor pulmonale ($9,630)
in MS-DRG 176 are closer to the average costs for all pulmonary
embolism cases in MS-DRG 175 ($10,294) as compared to the average costs
for all cases in MS-DRG 176 ($6,356). Our clinical advisors also agree
that this subset of patients with acute cor pulmonale often represents
a more severe set of patients and that these cases are more
appropriately assigned to the higher severity level ``with MCC'' MS-
DRG. Therefore, we are proposing to reassign cases reporting diagnosis
code I26.01, I26.02, or I26.09 to the higher severity level MS-DRG 175
and to revise the title for MS-DRG 175 to ``Pulmonary Embolism with MCC
or Acute Cor Pulmonale'' to more accurately reflect the diagnoses
assigned there.
5. MDC 5 (Diseases and Disorders of the Circulatory System)
a. Transcatheter Mitral Valve Repair With Implant
As we did for the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28008
through 28010) and for the FY 2017 IPPS/LTCH PPS proposed rule (81 FR
24985 through 24989), for FY 2020, we received a request to modify the
MS-DRG assignment for transcatheter mitral valve repair (TMVR) with
implant procedures. ICD-10-PCS procedure code 02UG3JZ (Supplement
mitral valve with synthetic substitute, percutaneous approach)
identifies and describes this procedure. This request also included the
suggestion that CMS give consideration to reclassifying other
endovascular cardiac valve repair procedures. Specifically, the
requestor recommended that cases reporting procedure codes describing
an endovascular cardiac valve repair with implant be reassigned to MS-
DRGs 266 and 267 (Endovascular Cardiac Valve Replacement with and
without MCC, respectively) and that the MS-DRG titles be revised to
Endovascular Cardiac Valve Interventions with Implant with and without
MCC, respectively. We refer readers to detailed discussions of
[[Page 19186]]
the MitraClip[supreg] System (hereafter referred to as
MitraClip[supreg]) for transcatheter mitral valve repair in previous
rulemakings, including the FY 2012 IPPS/LTCH PPS proposed rule (76 FR
25822) and final rule (76 FR 51528 through 51529), the FY 2013 IPPS/
LTCH PPS proposed rule (77 FR 27902 through 27903) and final rule (77
FR 53308 through 53310), the FY 2015 IPPS/LTCH PPS proposed rule (79 FR
28008 through 28010) and final rule (79 FR 49889 through 49892), the FY
2016 IPPS/LTCH PPS proposed rule (80 FR 24356 through 24359) and final
rule (80 FR 49363 through 49367), and the FY 2017 IPPS/LTCH PPS
proposed rule (81 FR 24985 through 24989) and final rule (81 FR 56809
through 56813), in response to requests for MS-DRG reclassification, as
well as the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27547 through
27552), under the new technology add-on payment policy. In the FY 2014
IPPS/LTCH PPS final rule (78 FR 50575), we were unable to consider
further the application for a new technology add-on payment for
MitraClip[supreg] because the technology had not received FDA approval
by the July 1, 2013 deadline.
In the FY 2015 IPPS/LTCH PPS final rule, we finalized our proposal
to not create a new MS-DRG or to reassign cases reporting ICD-9-CM
procedure code 35.97 that described procedures involving the
MitraClip[supreg] to another MS-DRG (79 FR 49889 through 49892). Under
a new application, the request for new technology add-on payments for
the MitraClip[supreg] System was approved for FY 2015 (79 FR 49941
through 49946). The new technology add-on payment for MitraClip[supreg]
was subsequently discontinued effective FY 2017.
In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49371), we finalized
a modification to the MS-DRGs to which procedures involving the
MitraClip[supreg] were assigned. For the ICD-10 based MS-DRGs to fully
replicate the ICD-9-CM based MS-DRGs, ICD-10-PCS code 02UG3JZ
(Supplement mitral valve with synthetic substitute, percutaneous
approach), which identifies the MitraClip[supreg] technology and is the
ICD-10-PCS code translation for ICD-9-CM procedure code 35.97
(Percutaneous mitral valve repair with implant), was assigned to new
MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures with MCC and
without MCC, respectively) and continued to be assigned to MS-DRGs 231
and 232 (Coronary Bypass with PTCA with MCC and without MCC,
respectively).
In the FY 2017 IPPS/LTCH PPS proposed and final rules, we also
discussed our analysis of MS-DRGs 228, 229, and 230 (Other
Cardiothoracic Procedures with MCC, with CC, and without CC/MCC,
respectively) with regard to the possible reassignment of cases
reporting ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve
with synthetic substitute, percutaneous approach). We finalized our
proposal to collapse these MS-DRGs (228, 229, and 230) from three
severity levels to two severity levels by deleting MS-DRG 230 and
revising the structure of MS-DRG 229. We also finalized our proposal to
reassign ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve
with synthetic substitute, percutaneous approach) from MS-DRGs 273 and
274 to MS-DRG 228 and revised MS-DRG 229 (81 FR 56813).
According to the requestor, there are substantial clinical and
resource differences between the transcatheter mitral valve repair
(TMVR) procedure and other procedures currently grouping to MS-DRGs 228
and 229. The requestor noted that, currently, ICD-10-PCS procedure code
02UG3JZ is the only endovascular valve intervention with implant
procedure that maps to MS-DRGs 228 and 229. The requestor also noted
that other ICD-10-PCS procedure codes describing procedures for
endovascular (transcatheter) cardiac valve repair with implant map to
MS-DRGs 273 and 274 or to MS-DRGs 216, 217, 218, 219, 220, and 221
(Cardiac Valve and Other Major Cardiothoracic Procedures with and
without Cardiac Catheterization with MCC, with CC and without CC/MCC,
respectively). The requestor further noted that all ICD-10-PCS
procedure codes for endovascular cardiac valve replacement procedures
map to MS-DRGs 266 (Endovascular Cardiac Valve Replacement with MCC)
and 267 (Endovascular Cardiac Valve Replacement without MCC).
The ICD-10-PCS procedure codes describing a transcatheter cardiac
valve repair procedure with an implant are listed in the following
table.
------------------------------------------------------------------------
ICD-10-PCS code Description
------------------------------------------------------------------------
02UF37J............................. Supplement aortic valve created
from truncal valve with
autologous tissue substitute,
percutaneous approach.
02UF37Z............................. Supplement aortic valve with
autologous tissue substitute,
percutaneous approach.
02UF38J............................. Supplement aortic valve created
from truncal valve with
zooplastic tissue, percutaneous
approach.
02UF38Z............................. Supplement aortic valve with
zooplastic tissue, percutaneous
approach.
02UF3JJ............................. Supplement aortic valve created
from truncal valve with synthetic
substitute, percutaneous
approach.
02UF3JZ............................. Supplement aortic valve with
synthetic substitute,
percutaneous approach.
02UF3KJ............................. Supplement aortic valve created
from truncal valve with
nonautologous tissue substitute,
percutaneous approach.
02UF3KZ............................. Supplement aortic valve with
nonautologous tissue substitute,
percutaneous approach.
02UG37E............................. Supplement mitral valve created
from left atrioventricular valve
with autologous tissue
substitute, percutaneous
approach.
02UG37Z............................. Supplement mitral valve with
autologous tissue substitute,
percutaneous approach.
02UG38E............................. Supplement mitral valve created
from left atrioventricular valve
with zooplastic tissue,
percutaneous approach.
02UG38Z............................. Supplement mitral valve with
zooplastic tissue, percutaneous
approach.
02UG3KE............................. Supplement mitral valve created
from left atrioventricular valve
with nonautologous tissue
substitute, percutaneous
approach.
02UG3KZ............................. Supplement mitral valve with
nonautologous tissue substitute,
percutaneous approach.
02UG3JE............................. Supplement mitral valve created
from left atrioventricular valve
with synthetic substitute,
percutaneous approach.
02UG3JZ............................. Supplement mitral valve with
synthetic substitute,
percutaneous approach.
02UH37Z............................. Supplement pulmonary valve with
autologous tissue substitute,
percutaneous approach.
02UH38Z............................. Supplement pulmonary valve with
zooplastic tissue, percutaneous
approach.
02UH3JZ............................. Supplement pulmonary valve with
synthetic substitute,
percutaneous approach.
02UH3KZ............................. Supplement pulmonary valve with
nonautologous tissue substitute,
percutaneous approach.
02UJ37G............................. Supplement tricuspid valve created
from right atrioventricular valve
with autologous tissue
substitute, percutaneous
approach.
02UJ37Z............................. Supplement tricuspid valve with
autologous tissue substitute,
percutaneous approach.
02UJ38G............................. Supplement tricuspid valve created
from right atrioventricular valve
with zooplastic tissue,
percutaneous approach.
02UJ38Z............................. Supplement tricuspid valve with
zooplastic tissue, percutaneous
approach.
02UJ3JG............................. Supplement tricuspid valve created
from right atrioventricular valve
with synthetic substitute,
percutaneous approach.
02UJ3JZ............................. Supplement tricuspid valve with
synthetic substitute,
percutaneous approach.
[[Page 19187]]
02UJ3KG............................. Supplement tricuspid valve created
from right atrioventricular valve
with nonautologous tissue
substitute, percutaneous
approach.
02UJ3KZ............................. Supplement tricuspid valve with
nonautologous tissue substitute,
percutaneous approach.
------------------------------------------------------------------------
The ICD-10-PCS procedure codes describing a transcatheter cardiac
valve replacement procedure are listed in the following table.
------------------------------------------------------------------------
ICD-10-PCS code Description
------------------------------------------------------------------------
02RF37H............................. Replacement of aortic valve with
autologous tissue substitute,
transapical, percutaneous
approach.
02RF37Z............................. Replacement of aortic valve with
autologous tissue substitute,
percutaneous approach.
02RF38H............................. Replacement of aortic valve with
zooplastic tissue, transapical,
percutaneous approach.
02RF38Z............................. Replacement of aortic valve with
zooplastic tissue, percutaneous
approach.
02RF3JH............................. Replacement of aortic valve with
synthetic substitute,
transapical, percutaneous
approach.
02RF3JZ............................. Replacement of aortic valve with
synthetic substitute,
percutaneous approach.
02RF3KH............................. Replacement of aortic valve with
nonautologous tissue substitute,
transapical, percutaneous
approach.
02RF3KZ............................. Replacement of aortic valve with
nonautologous tissue substitute,
percutaneous approach.
02RG37H............................. Replacement of mitral valve with
autologous tissue substitute,
transapical, percutaneous
approach.
02RG37Z............................. Replacement of mitral valve with
autologous tissue substitute,
percutaneous approach.
02RG38H............................. Replacement of mitral valve with
zooplastic tissue, transapical,
percutaneous approach.
02RG38Z............................. Replacement of mitral valve with
zooplastic tissue, percutaneous
approach.
02RG3JH............................. Replacement of mitral valve with
synthetic substitute,
transapical, percutaneous
approach.
02RG3JZ............................. Replacement of mitral valve with
synthetic substitute,
percutaneous approach.
02RG3KH............................. Replacement of mitral valve with
nonautologous tissue substitute,
transapical, percutaneous
approach.
02RG3KZ............................. Replacement of mitral valve with
nonautologous tissue substitute,
percutaneous approach.
02RH37H............................. Replacement of pulmonary valve
with autologous tissue
substitute, transapical,
percutaneous approach.
02RH37Z............................. Replacement of pulmonary valve
with autologous tissue
substitute, percutaneous
approach.
02RH38H............................. Replacement of pulmonary valve
with zooplastic tissue,
transapical, percutaneous
approach.
02RH38Z............................. Replacement of pulmonary valve
with zooplastic tissue,
percutaneous approach.
02RH3JH............................. Replacement of pulmonary valve
with synthetic substitute,
transapical, percutaneous
approach.
02RH3JZ............................. Replacement of pulmonary valve
with synthetic substitute,
percutaneous approach.
02RH3KH............................. Replacement of pulmonary valve
with nonautologous tissue
substitute, transapical,
percutaneous approach.
02RH3KZ............................. Replacement of pulmonary valve
with nonautologous tissue
substitute, percutaneous
approach.
02RJ37H............................. Replacement of tricuspid valve
with autologous tissue
substitute, transapical,
percutaneous approach.
02RJ37Z............................. Replacement of tricuspid valve
with autologous tissue
substitute, percutaneous
approach.
02RJ38H............................. Replacement of tricuspid valve
with zooplastic tissue,
transapical, percutaneous
approach.
02RJ38Z............................. Replacement of tricuspid valve
with zooplastic tissue,
percutaneous approach.
02RJ3JH............................. Replacement of tricuspid valve
with synthetic substitute,
transapical, percutaneous
approach.
02RJ3JZ............................. Replacement of tricuspid valve
with synthetic substitute,
percutaneous approach.
02RJ3KH............................. Replacement of tricuspid valve
with nonautologous tissue
substitute, transapical,
percutaneous approach.
02RJ3KZ............................. Replacement of tricuspid valve
with nonautologous tissue
substitute, percutaneous
approach.
X2RF332............................. Replacement of aortic valve using
zooplastic tissue, rapid
deployment technique,
percutaneous approach, new
technology group 2.
------------------------------------------------------------------------
The requestor performed its own analyses, first comparing TMVR
procedures (ICD-10-PCS procedure code 02UG3JZ) to other procedures
currently assigned to MS-DRGs 228 and 229, as well as to the
transcatheter cardiac valve replacement procedures in MS-DRGs 266 and
267. We refer the reader to the ICD-10 MS-DRG Version 36 Definitions
Manual for complete documentation of the logic for case assignment to
MS-DRGs 228 and 229 (which is available via the internet on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html).
According to the requestor, its findings indicate that TMVR is more
closely aligned with MS-DRGs 266 and 267 than MS-DRGs 228 and 229 with
regard to average length of stay and average [standardized] costs. The
requestor also examined the impact of removing cases reporting a TMVR
procedure (ICD-10-PCS procedure code 02UG3JZ) from MS-DRGs 228 and 229
and adding those cases to MS-DRGs 266 and 267. The requestor noted this
movement would have minimal impact to MS-DRGs 266 and 267 based on its
analysis. In addition, the requestor stated that its request is in
alignment with CMS' policy goal of creating and maintaining clinically
coherent MS-DRGs.
The requestor acknowledged that CMS has indicated in prior
rulemaking that TMVR procedures are not clinically similar to
endovascular cardiac valve replacement procedures, and the requestor
agreed that they are distinct procedures. However, the requestor also
believed that TMVR is more similar to the replacement procedures in MS-
DRGs 266 and 267 compared to the other procedures currently assigned to
MS-DRGs 228 and 229. The requestor provided the following table of
procedures in volume order (highest to lowest) to illustrate the
clinical differences between TMVR procedures and other procedures
currently assigned to MS-DRGs 228 and 229.
----------------------------------------------------------------------------------------------------------------
ICD-10-PCS root
Procedure Approach Anatomy treated operation Implanted device
----------------------------------------------------------------------------------------------------------------
TMVR............................ Percutaneous...... Valves............ Supplement........ Substitute.
Destruction..................... Open.............. Atria............. Destruction....... None.
[[Page 19188]]
Coronary Atherectomy............ Open.............. Coronary Artery... Extirpation....... None.
Insertion....................... Percutaneous...... Atria or Insertion......... Pacemaker or
Ventricles. Intraluminal
Device.
Destruction..................... Percutaneous...... Atria............. Destructions...... None.
Structural Heart Repair......... Open.............. Septum, Heart, Repair............ None.
Chordae Tendinae,
or Papillary
Muscle.
Structural Heart Excision....... Open.............. Septum, Atria, Excision.......... None.
Ventricles,
Chordae Tendinae,
or Papillary
Muscle.
----------------------------------------------------------------------------------------------------------------
The requestor noted that, among the procedures listed in the table,
TMVR is the only procedure that involves treatment of a cardiac valve
and is the only procedure that involves implanting a synthetic
substitute.
To illustrate the similarities between TMVR procedures and
endovascular cardiac valve replacements in MS-DRGs 266 and 267, the
requestor provided the following table.
----------------------------------------------------------------------------------------------------------------
ICD-10-PCS root
Procedure Approach Anatomy treated operation Implanted device
----------------------------------------------------------------------------------------------------------------
TMVR............................ Percutaneous...... Valves............ Supplement........ Substitute.
Endovascular Cardiac Valve Percutaneous...... Valves............ Replacement....... Substitute.
Replacement.
----------------------------------------------------------------------------------------------------------------
The requestor noted that both TMVR procedures and endovascular
cardiac valve replacements use a percutaneous approach, treat cardiac
valves, and use an implanted device for purposes of improving the
function of the specified valve. The requestor believed that the
analyses support the request to group TMVR procedures with endovascular
cardiac valve replacements from a resource perspective and an
improvement to clinical coherence could be achieved because TMVR
procedures are more similar to the endovascular cardiac valve
replacements compared to the other procedures in MS-DRGs 228 and 229,
where TMVR is currently assigned.
As noted earlier in this section, the request also included the
suggestion that CMS give consideration to reclassifying other
endovascular cardiac valve repair with implant procedures to MS-DRGs
266 and 267; specifically, endovascular cardiac valve repair with
implant procedures involving the aortic, pulmonary, tricuspid and other
non-TMVR mitral valve procedures that currently group to MS-DRGs 273
and 274 or MS-DRGs 216, 217, 218, 219, 220 and 221. The requestor
acknowledged that endovascular cardiac valve repair with implant
procedures involving these other cardiac valves have lower volumes in
comparison to the TMVR procedure (ICD-10-PCS procedure code 02UG3JZ),
which makes analysis of these procedures a little more difficult.
However, the requestor suggested that movement of these procedures to
MS-DRGs 266 and 267 would enable the ability to maintain clinical
coherence for all endovascular cardiac valve interventions. The
requestor also stated that there is an anticipated increase in the
volume of not only the TMVR procedure described by ICD-10-PCS procedure
code 02UG3JZ (which has grown annually since the MitraClip[supreg] was
approved for new technology add-on payment in FY 2015), but also for
the other endovascular cardiac valve repair with implant procedures,
such as those involving the tricuspid valve, which are currently under
study in the United States and Europe. Based on this anticipated
increase in volume for endovascular cardiac valve repair with implant
procedures, the requestor believed that it would be advantageous to
take this opportunity to restructure the MS-DRGs by moving all the
endovascular cardiac valve repair with implant procedures to MS-DRGs
266 and 267 with revised titles as noted previously, to improve
clinical consistency beginning in FY 2020. The requestor further noted
that while the requestor believes its request reflects the best
approach for appropriate MS-DRG assignment for TMVR and other
endovascular cardiac valve repair with implant procedures, the
requestor understands that CMS may consider other alternatives.
We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for cases reporting ICD-10-PCS procedure code 02UG3JZ
in MS-DRGs 228 and 229 as well as cases reporting one of the procedure
codes listed above describing a transcatheter cardiac valve repair with
implant procedure in MS-DRGs 216, 217, 218, 219, 220, 221, 273, and
274. Our findings are shown in the tables below.
MS-DRGs for Transcatheter Cardiac Valve Repair With Implant Procedures
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 216--All cases........................................... 5,909 16 $70,435
MS-DRG 216--Cases with procedure codes for transcatheter cardiac 48 12.6 72,556
valve repair...................................................
MS-DRG 217--All cases........................................... 2,166 9.4 47,299
MS-DRG 217--Cases with procedure codes for transcatheter cardiac 25 3.4 40,707
valve repair...................................................
MS-DRG 218--All cases........................................... 268 6.8 39,501
MS-DRG 218--Cases with procedure codes for transcatheter cardiac 4 1.3 45,903
valve repair...................................................
MS-DRG 219--All cases........................................... 15,105 10.9 55,423
MS-DRG 219--Cases with procedure codes for transcatheter cardiac 55 7.1 65,880
valve repair...................................................
[[Page 19189]]
MS-DRG 220--All cases........................................... 15,889 6.6 38,313
MS-DRG 220--Cases with procedure codes for transcatheter cardiac 40 3 38,906
valve repair...................................................
MS-DRG 221--All cases........................................... 2,652 4.7 33,577
MS-DRG 221--Cases with procedure codes for transcatheter cardiac 13 2.2 29,646
valve repair...................................................
MS-DRG 228--All cases........................................... 5,583 9.2 46,613
MS-DRG 228--Cases with procedure code 02UG3JZ (Supplement mitral 1,688 5.6 49,569
valve with synthetic substitute, percutaneous approach)........
MS-DRG 229--All cases........................................... 6,593 4.3 32,322
MS-DRG 229--Cases with procedure code 02UG3JZ (Supplement mitral 2,018 1.7 38,321
valve with synthetic substitute, percutaneous approach)........
MS-DRG 273--All cases........................................... 7,785 6.9 27,200
MS-DRG 273--Cases with procedure codes for transcatheter cardiac 6 7.5 52,370
valve repair...................................................
MS-DRG 274--All cases........................................... 20,434 2.3 22,771
MS-DRG 274--Cases with procedure codes for transcatheter cardiac 7 1.4 28,152
valve repair...................................................
----------------------------------------------------------------------------------------------------------------
As shown in the table, we found a total of 5,909 cases for MS-DRG
216 with an average length of stay of 16 days and average costs of
$70,435. Of those 5,909 cases, there were 48 cases reporting a
procedure code for a transcatheter cardiac valve repair with an average
length of stay of 12.6 days and average costs of $72,556. We found a
total of 2,166 cases for MS-DRG 217 with an average length of stay of
9.4 days and average costs of $47,299. Of those 2,166 cases, there was
a total of 25 cases reporting a procedure for a transcatheter cardiac
valve repair with an average length of stay of 3.4 days and average
costs of $40,707. We found a total of 268 cases for MS-DRG 218 with an
average length of stay of 6.8 days and average costs of $39,501. Of
those 268 cases, there were 4 cases reporting a procedure code for a
transcatheter cardiac valve repair with an average length of stay of
1.3 days and average costs of $45,903. We found a total of 15,105 cases
for MS-DRG 219 with an average length of stay of 10.9 days and average
costs of $55,423. Of those 15,105 cases, there were 55 cases reporting
a procedure code for a transcatheter cardiac valve repair with an
average length of stay of 7.1 days and average costs of $65,880. We
found a total of 15,889 cases for MS-DRG 220 with an average length of
stay of 6.6 days and average costs of $38,313. Of those 15,889 cases,
there were 40 cases reporting a procedure code for a transcatheter
cardiac valve repair with an average length of stay of 3 days and
average costs of $38,906. We found a total of 2,652 cases for MS-DRG
221 with an average length of stay of 4.7 days and average costs of
$33,577. Of those 2,652 cases, there were 13 cases reporting a
procedure code for a transcatheter cardiac valve repair with an average
length of stay of 2.2 days and average costs of $29,646.
For MS-DRG 228, we found a total of 5,583 cases with an average
length of stay of 9.2 days and average costs of $46,613. Of those 5,583
cases, there were 1,688 cases reporting ICD-10-PCS procedure code
02UG3JZ (Supplement mitral valve with synthetic substitute,
percutaneous approach) with an average length of stay of 5.6 days and
average costs of $49,569. As noted previously, ICD-10-PCS procedure
code 02UG3JZ is the only endovascular cardiac valve repair with implant
procedure assigned to MS-DRGs 228 and 229. We found a total of 6,593
cases for MS-DRG 229 with an average length of stay of 4.3 days and
average costs of $32,322. Of those 6,593 cases, there were 2,018 cases
reporting ICD-10-PCS procedure code 02UG3JZ with an average length of
stay of 1.7 days and average costs of $38,321.
For MS-DRG 273, we found a total of 7,785 cases with an average
length of stay of 6.9 days and average costs of $27,200. Of those 7,785
cases, there were 6 cases reporting a procedure code for a
transcatheter cardiac valve repair with an average length of stay of
7.5 days and average costs of $52,370. We found a total of 20,434 cases
in MS-DRG 274 with an average length of stay of 2.3 days and average
costs of $22,771. Of those 20,434 cases, there were 7 cases reporting a
procedure code for a transcatheter cardiac valve repair with an average
length of stay of 1.4 days and average costs of $28,152.
We also analyzed cases reporting any one of the procedure codes
listed above describing a transcatheter cardiac valve replacement
procedure in MS-DRGs 266 and 267. Our findings are shown in the table
below.
MS-DRGs for Transcatheter Cardiac Valve Replacement Procedures
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 266--All cases........................................... 15,079 5.6 $51,402
MS-DRG 267--All cases........................................... 20,845 2.4 41,891
----------------------------------------------------------------------------------------------------------------
As shown in the table, there was a total of 15,079 cases with an
average length of stay of 5.6 days and average costs of $51,402 in MS-
DRG 266. For MS-DRG 267, there was a total of 20,845 cases with an
average length of stay of 2.4 days and average costs of $41,891.
As stated previously, the requestor noted that ICD-10-PCS procedure
code 02UG3JZ describing a transcatheter mitral valve repair with
implant procedure is the only endovascular cardiac valve intervention
with implant procedure assigned to MS-DRGs 228 and 229. The data
analysis shows that for the cases reporting procedure code 02UG3JZ in
MS-DRGs 228 and 229, the average length of stay and average costs are
aligned with the average length of stay and average costs of cases in
MS-DRGs 266 and 267, respectively.
The data also show that, for MS-DRGs 216, 217, 218, 219, 220, and
221 and for
[[Page 19190]]
MS-DRG 274, the average length of stay for cases reporting a
transcatheter cardiac valve with implant procedure is shorter than the
average length of stay for all the cases in their assigned MS-DRG. For
MS-DRG 273, the average length of stay for cases reporting a
transcatheter cardiac valve with implant procedure is slightly longer
(7.5 days versus 6.9 days). In addition, the average costs for the
cases reporting a transcatheter cardiac valve with implant procedure
are higher when compared to all the cases in their assigned MS-DRG with
the exception of MS-DRG 217 ($40,707 versus $47,299) and MS-DRG 221
($29,646 versus $33,577).
Our clinical advisors continue to believe that transcatheter
cardiac valve repair procedures are not the same as a transcatheter
(endovascular) cardiac valve replacement. However, they agree with the
requestor and, based on our data analysis, that these procedures are
more clinically coherent in that they also describe endovascular
cardiac valve interventions with implants and are similar in terms of
average length of stay and average costs to cases in MS-DRGs 266 and
267 when compared to other procedures in their current MS-DRG
assignment. For these reasons, our clinical advisors agree that we
should propose to reassign the endovascular cardiac valve repair
procedures (supplement procedures) listed previously to the
endovascular cardiac valve replacement MS-DRGs.
We analyzed the impact of grouping the endovascular cardiac valve
repair with implant (supplement) procedures with the endovascular
cardiac valve replacement procedures. The following table reflects our
findings for the proposed revised endovascular cardiac valve
(supplement) procedures with the endovascular cardiac valve replacement
MS-DRGs with a 2-way severity level split.
Proposed Revised MS-DRGs for Endovascular Cardiac Valve Replacement and Supplement Procedures
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 266 (Endovascular Cardiac Valve Replacement and 16,922 5.7 $51,564
Supplement Procedures with MCC)................................
MS-DRG 267 (Endovascular Cardiac Valve Replacement and 22,958 2.4 41,563.
Supplement Procedures without MCC).............................
----------------------------------------------------------------------------------------------------------------
As shown in the table, there was a total of 16,922 cases for the
endovascular cardiac valve replacement and supplement procedures with
MCC group, with an average length of stay of 5.7 days and average costs
of $51,564. There was a total of 22,958 cases for the endovascular
cardiac valve replacement and supplement procedures without MCC group,
with an average length of stay of 2.4 days and average costs of
$41,563. We applied the criteria to create subgroups for the two-way
severity level split for the proposed revised MS-DRGs and found that
all five criteria were met. For the proposed revised MS-DRGs, there is
at least (1) 500 or more cases in the MCC group or in the without MCC
subgroup; (2) 5 percent or more of the cases in the MCC group or in the
without MCC subgroup; (3) a 20 percent difference in average costs
between the MCC group and the without MCC group; (4) a $2,000
difference in average costs between the MCC group and the without MCC
group; and (5) a 3-percent reduction in cost variance, indicating that
the proposed severity level splits increase the explanatory power of
the base MS-DRG in capturing differences in expected cost between the
proposed MS-DRG severity level splits by at least 3 percent and thus
improve the overall accuracy of the IPPS payment system.
During our review of the transcatheter cardiac valve repair
(supplement) procedures in MS-DRGs 216, 217, 218, 219, 220, and 221,
MS-DRGs 228 and 229, and MS-DRGs 273 and 274, our clinical advisors
recommended that we also analyze the claims data to identify other
(non-supplement) transcatheter (endovascular) procedures that involve
the cardiac valves and are assigned to those same MS-DRGs to determine
if additional modifications may be warranted, consistent with our
ongoing efforts to refine the ICD-10 MS-DRGs.
We analyzed the following ICD-10-PCS procedure codes that are
currently assigned to MS-DRGs 216, 217, 218, 219, 220, and 221.
------------------------------------------------------------------------
ICD-10-PCS code Description
------------------------------------------------------------------------
02QF3ZJ............................. Repair aortic valve created from
truncal valve, percutaneous
approach.
02QF3ZZ............................. Repair aortic valve, percutaneous
approach.
02QG3ZE............................. Repair mitral valve created from
left atrioventricular valve,
percutaneous approach.
02QG3ZZ............................. Repair mitral valve, percutaneous
approach.
02QH3ZZ............................. Repair pulmonary valve,
percutaneous approach.
02QJ3ZG............................. Repair tricuspid valve created
from right atrioventricular
valve, percutaneous approach.
02QJ3ZZ............................. Repair tricuspid valve,
percutaneous approach.
02TH3ZZ............................. Resection of pulmonary valve,
percutaneous approach.
02VG3ZZ............................. Restriction of mitral valve,
percutaneous approach.
02WF38Z............................. Revision of zooplastic tissue in
aortic valve, percutaneous
approach.
02WF3JZ............................. Revision of synthetic substitute
in aortic valve, percutaneous
approach.
02WF3KZ............................. Revision of nonautologous tissue
substitute in aortic valve,
percutaneous approach.
02WG37Z............................. Revision of autologous tissue
substitute in mitral valve,
percutaneous approach.
02WG38Z............................. Revision of zooplastic tissue in
mitral valve, percutaneous
approach.
02WG3JZ............................. Revision of synthetic substitute
in mitral valve, percutaneous
approach.
02WG3KZ............................. Revision of nonautologous tissue
substitute in mitral valve,
percutaneous approach.
02WH37Z............................. Revision of autologous tissue
substitute in pulmonary valve,
percutaneous approach.
02WH38Z............................. Revision of zooplastic tissue in
pulmonary valve, percutaneous
approach.
02WH3JZ............................. Revision of synthetic substitute
in pulmonary valve, percutaneous
approach.
02WH3KZ............................. Revision of nonautologous tissue
substitute in pulmonary valve,
percutaneous approach.
02WJ37Z............................. Revision of autologous tissue
substitute in tricuspid valve,
percutaneous approach.
[[Page 19191]]
02WJ38Z............................. Revision of zooplastic tissue in
tricuspid valve, percutaneous
approach.
02WJ3JZ............................. Revision of synthetic substitute
in tricuspid valve, percutaneous
approach.
02WJ3KZ............................. Revision of nonautologous tissue
substitute in tricuspid valve,
percutaneous approach.
------------------------------------------------------------------------
We also analyzed ICD-10-PCS procedure code 02TH3ZZ (Resection of
pulmonary valve, percutaneous approach) that is currently assigned to
MS-DRGs 228 and 229. Lastly, we analyzed the following ICD-10-PCS
procedure codes that are currently assigned to MS-DRGs 273 and 274.
------------------------------------------------------------------------
ICD-10-PCS code Description
------------------------------------------------------------------------
025F3ZZ............................. Destruction of aortic valve,
percutaneous approach.
025G3ZZ............................. Destruction of mitral valve,
percutaneous approach.
025H3ZZ............................. Destruction of pulmonary valve,
percutaneous approach.
025J3ZZ............................. Destruction of tricuspid valve,
percutaneous approach.
027F34Z............................. Dilation of aortic valve with drug-
eluting intraluminal device,
percutaneous approach.
027F3DZ............................. Dilation of aortic valve with
intraluminal device, percutaneous
approach.
027F3ZZ............................. Dilation of aortic valve,
percutaneous approach.
027G34Z............................. Dilation of mitral valve with drug-
eluting intraluminal device,
percutaneous approach.
027G3DZ............................. Dilation of mitral valve with
intraluminal device, percutaneous
approach.
027G3ZZ............................. Dilation of mitral valve,
percutaneous approach.
027H34Z............................. Dilation of pulmonary valve with
drug-eluting intraluminal device,
percutaneous approach.
027H3DZ............................. Dilation of pulmonary valve with
intraluminal device, percutaneous
approach.
027H3ZZ............................. Dilation of pulmonary valve,
percutaneous approach.
027J34Z............................. Dilation of tricuspid valve with
drug-eluting intraluminal device,
percutaneous approach.
027J3DZ............................. Dilation of tricuspid valve with
intraluminal device, percutaneous
approach.
027J3ZZ............................. Dilation of tricuspid valve,
percutaneous approach.
02BF3ZZ............................. Excision of aortic valve,
percutaneous approach.
02BG3ZZ............................. Excision of mitral valve,
percutaneous approach.
02BH3ZZ............................. Excision of pulmonary valve,
percutaneous approach.
02BJ3ZZ............................. Excision of tricuspid valve,
percutaneous approach.
------------------------------------------------------------------------
We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for cases reporting any of the above listed procedure
codes in MS-DRGs 216, 217, 218, 219, 220, and 221, MS-DRGs 228 and 229,
and MS-DRGs 273 and 274. Our findings are shown in the following
tables. We note that there were no cases found in MS-DRGs 228 and 229
reporting ICD-10-PCS procedure code 02TH3ZZ (Resection of pulmonary
valve, percutaneous approach).
Other Cardiac Valve Procedures in MS-DRGs 216 Through 221
----------------------------------------------------------------------------------------------------------------
Number of Average length
ICD-10-PCS code Description times reported of stay Average costs
----------------------------------------------------------------------------------------------------------------
02QF3ZZ........................ Repair aortic valve, 58 9.7 $33,588
percutaneous approach.
02QG3ZE........................ Repair mitral valve created 4 1.3 38,680
from left atrioventricular
valve, percutaneous approach.
02QG3ZZ........................ Repair mitral valve, 40 3.4 30,160
percutaneous approach.
02QH3ZZ........................ Repair pulmonary valve, 1 1 33,014
percutaneous approach.
02QJ3ZG........................ Repair tricuspid valve created 1 9 51,294
from right atrioventricular
valve, percutaneous approach.
02QJ3ZZ........................ Repair tricuspid valve, 15 5 25,208
percutaneous approach.
02VG3ZZ........................ Restriction of mitral valve, 11 8.1 53,798
percutaneous approach.
02WF38Z........................ Revision of zooplastic tissue 26 8.9 61,124
in aortic valve, percutaneous
approach.
02WF3JZ........................ Revision of synthetic 37 7.1 26,605
substitute in aortic valve,
percutaneous approach.
02WF3KZ........................ Revision of nonautologous 2 1 69,030
tissue substitute in aortic
valve, percutaneous approach.
02WG38Z........................ Revision of zooplastic tissue 2 7.5 16,982
in mitral valve, percutaneous
approach.
02WG3JZ........................ Revision of synthetic 31 7.3 28,682
substitute in mitral valve,
percutaneous approach.
02WH3JZ........................ Revision of synthetic 1 6 30,340
substitute in pulmonary valve,
percutaneous approach.
02WJ3JZ........................ Revision of synthetic 1 3 14,145
substitute in tricuspid valve,
percutaneous approach.
-----------------------------------------------
Total...................... ............................... 230 7.1 34,968
----------------------------------------------------------------------------------------------------------------
Other Cardiac Valve Procedures in MS-DRGs 273 and 274
----------------------------------------------------------------------------------------------------------------
Number of Average length
ICD-10-PCS code Description times reported of stay Average costs
----------------------------------------------------------------------------------------------------------------
025F3ZZ........................ Destruction of aortic valve, 6 4.7 $11,130
percutaneous approach.
[[Page 19192]]
025J3ZZ........................ Destruction of tricuspid valve, 21 3.9 18,320
percutaneous approach.
027F34Z........................ Dilation of aortic valve with 1 16 53,786
drug-eluting intraluminal
device, percutaneous approach.
027F3DZ........................ Dilation of aortic valve with 5 8.4 20,951
intraluminal device,
percutaneous approach.
027F3ZZ........................ Dilation of aortic valve, 1,720 8.6 25,265
percutaneous approach.
027G3ZZ........................ Dilation of mitral valve, 86 6.4 19,791
percutaneous approach.
027H3ZZ........................ Dilation of pulmonary valve, 5 3.8 10,506
percutaneous approach.
02BJ3ZZ........................ Excision of tricuspid valve, 1 4 30,843
percutaneous approach.
-----------------------------------------------
Total...................... ............................... 1,845 8.4 24,851
----------------------------------------------------------------------------------------------------------------
We found that the overall frequency with which cases reporting at
least one of the above ICD-10-PCS procedure codes were reflected in the
claims data was 2,075 times with an average length of stay of 8.5 days
and average costs of $27,838. ICD-10-PCS procedure code 027F3ZZ
(Dilation of aortic valve, percutaneous approach) had the highest
frequency of 1,720 times with an average length of stay of 8.6 days and
average costs of $25,265. We also found that cases reporting ICD-10-PCS
procedure code 02WF3KZ (Revision of nonautologous tissue substitute in
aortic valve, percutaneous approach) had the highest average costs of
$69,030 with an average length of stay of 1 day. While not displayed
above, we also note that, of the 7,785 cases found in MS-DRG 273, from
the remaining procedure codes describing procedures other than those
performed on a cardiac valve, there were 4,920 cases reporting ICD-10-
PCS procedure code 02583ZZ (Destruction of conduction mechanism,
percutaneous approach) with an average length of stay of 6.6 days and
average costs of $26,800, representing approximately 63 percent of all
the cases in that MS-DRG. In addition, of the 20,434 cases in MS-DRG
274, from the remaining procedure codes describing procedures other
than those performed on a cardiac valve, there were 9,268 cases
reporting ICD-10-PCS procedure code 02583ZZ (Destruction of conduction
mechanism, percutaneous approach) with an average length of stay of 3.2
days and average costs of $21,689, and 8,775 cases reporting ICD-10-PCS
procedure code 02L73DK (Occlusion of left atrial appendage with
intraluminal device, percutaneous approach) with an average length of
stay of 1.2 days and average costs of $25,476, representing
approximately 88 percent of all the cases in that MS-DRG.
After analyzing the claims data to identify the overall frequency
with which the other (non-supplement) ICD-10-PCS procedure codes
describing a transcatheter (endovascular) cardiac valve procedure were
reported and assigned to MS-DRGs 216, 217, 218, 219, 220, and 221, MS-
DRGs 228 and 229, and MS-DRGs 273 and 274, our clinical advisors
suggested that these other cardiac valve procedures should be grouped
together because the procedure codes are describing procedures
performed on a cardiac valve with a percutaneous (transcatheter/
endovascular) approach, they can be performed in a cardiac
catheterization laboratory, they require that the interventional
cardiologist have special additional training and skills, and often
require additional ancillary procedures and equipment, such as trans-
esophageal echocardiography, be available at the time of the procedure.
Our clinical advisors noted that these procedures are generally
considered more complicated and resource-intensive, and form a
clinically coherent group. They also noted that the majority of
procedures currently being reported in MS-DRGs 273 and 274 are
procedures other than those involving a cardiac valve and, therefore,
believed that reassignment of the other (non-supplement) ICD-10-PCS
procedure codes describing a transcatheter (endovascular) cardiac valve
procedure would have minimal impact to those MS-DRGs.
We then analyzed the impact of grouping the other transcatheter
cardiac valve procedures. The following table reflects our findings for
the suggested other endovascular cardiac valve procedures MS-DRGs with
a 2-way severity level split.
Suggested MS-DRGs for Other Endovascular Cardiac Valve Procedures
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG XXX (Other Endovascular Cardiac Valve Procedures with 1,527 9.7 $27,801
MCC)...........................................................
MS-DRG XXX (Other Endovascular Cardiac Valve Procedures without 560 3.9 17,027
MCC)...........................................................
----------------------------------------------------------------------------------------------------------------
As shown in the table, there were 1,527 cases for the other
endovascular cardiac valve procedures with MCC group, with an average
length of stay of 9.7 days and average costs of $27,801. There was a
total of 560 cases for the other endovascular cardiac valve procedures
without MCC group, with an average length of stay of 3.9 days and
average costs of $17,027. We applied the criteria to create subgroups
for the two-way severity level split for the suggested MS-DRGs and
found that all five criteria were met. For the suggested MS-DRGs, there
is at least (1) 500 or more cases in the MCC group or in the without
MCC subgroup; (2) 5 percent or more of the cases in the MCC group or in
the without MCC subgroup; (3) a 20 percent difference in average costs
between the MCC group and the without MCC group; (4) at least a $2,000
difference in average costs between the MCC group and the without MCC
group; and (5) a 3-percent reduction in cost variance, indicating that
the proposed severity level splits increase the explanatory power of
the base MS-DRG in capturing differences in expected cost between the
proposed MS-DRG severity level splits by at least 3 percent and thus
improve the overall accuracy of the IPPS payment system.
[[Page 19193]]
For FY 2020, we are proposing to modify the structure of MS-DRGs
266 and 267 by reassigning the procedure codes describing a
transcatheter cardiac valve repair (supplement) procedure from the list
above and to revise the title of these MS-DRGs. We are proposing to
revise the title of MS-DRGs 266 from ``Endovascular Cardiac Valve
Replacement with MCC'' to ``Endovascular Cardiac Valve Replacement and
Supplement Procedures with MCC'' and the title of MS-DRG 267 from
``Endovascular Cardiac Valve Replacement without MCC'' to
``Endovascular Cardiac Valve Replacement and Supplement Procedures
without MCC'', to reflect the proposed restructuring. We also are
proposing to create two new MS-DRGs with a two-way severity level split
for the remaining (non-supplement) transcatheter cardiac valve
procedures listed above. These proposed new MS-DRGs are proposed new
MS-DRG 319 (Other Endovascular Cardiac Valve Procedures with MCC) and
proposed new MS-DRG 320 (Other Endovascular Cardiac Valve Procedures
without MCC), which would also conform with the severity level split of
MS-DRGs 266 and 267. We are proposing to reassign the procedure codes
from their current MS-DRGs to the proposed new MS-DRGs.
b. Revision of Pacemaker Lead
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41189 through
41190), we finalized our proposal to maintain the Version 35 ICD-10 MS-
DRG GROUPER logic for the Version 36 ICD-10 MS-DRG GROUPER logic within
MS-DRGs 260, 261, and 262 (Cardiac Pacemaker Revision Except Device
Replacement with MCC, with CC and without CC/MCC, respectively) so that
cases reporting any of the ICD-10-PCS procedure codes describing
procedures involving pacemakers and related procedures and associated
devices would continue to be assigned to those MS-DRGs under MDC 5
because they are reported when a pacemaker device requires revision and
they have a corresponding circulatory system diagnosis. We also
discussed and finalized the addition of ICD-10-PCS procedure codes
02H63MZ (Insertion of cardiac lead into right atrium, percutaneous
approach) and 02H73MZ (Insertion of cardiac lead into left atrium,
percutaneous approach) to the GROUPER logic as non-O.R. procedures that
impact the MS-DRG assignment when reported as stand-alone codes for the
insertion of a pacemaker lead within MS-DRGs 260, 261, and 262 in
response to a commenter's suggestion.
After publication of the FY 2019 IPPS/LTCH PPS final rule, it was
brought to our attention that ICD-10-PCS procedure code 02H60JZ
(Insertion of pacemaker lead into right atrium, open approach) was
inadvertently omitted from the GROUPER logic for MS-DRGs 260, 261, and
262. This procedure code is designated as a non-O.R. procedure.
However, we note that, within MDC 5, in MS-DRGs 242, 243, and 244, this
procedure code is part of a code pair that requires another procedure
code (cluster). We are proposing to add procedure code 02H60JZ to the
list of non-O.R. procedures that would impact MS-DRGs 260, 261, and 262
when reported as a stand-alone procedure code, consistent with ICD-10-
PCS procedure codes 02H63JZ (Insertion of pacemaker lead into right
atrium, percutaneous approach) and 02H64JZ (Insertion of pacemaker lead
into right atrium, percutaneous endoscopic approach), which also
describe the insertion of a pacemaker lead into the right atrium. If
the proposal is finalized, we would make conforming changes to the ICD-
10 MS-DRG Definitions Manual Version 37.
6. MDC 8 (Diseases and Disorders of the Musculoskeletal System and
Connective Tissue)
a. Knee Procedures With Principal Diagnosis of Infection
We received a request to add ICD-10-CM diagnosis codes M00.9
(Pyogenic arthritis, unspecified) and A54.42 (Gonococcal arthritis) to
the list of principal diagnoses for MS-DRGs 485, 486, and 487 (Knee
Procedure with Principal Diagnosis of Infection with MCC, with CC, and
without CC/MCC, respectively) in MDC 8. The requestor believed that
adding diagnosis code M00.9 is necessary to accurately recognize knee
procedures that are performed with a principal diagnosis of infectious
arthritis, including those procedures performed when the specific
infectious agent is unknown. The requestor stated that, currently, only
diagnosis codes describing infections caused by a specific bacterium
are included in MS-DRGs 485, 486, and 487. The requestor stated that
additional diagnosis codes such as M00.9 are indicated for knee
procedures performed as a result of infection because pyogenic
arthritis can reasonably be diagnosed based on the patient's history
and clinical symptoms, even if a bacterial infection is not confirmed
by culture. For example, the requestor noted that a culture may present
negative for infection if a patient has been treated with antibiotics
prior to knee surgery, but other clinical signs may indicate a
principal diagnosis of joint infection. In the absence of a culture
identifying an infection by a specific bacterium, the requestor stated
that ICD-10-CM diagnosis code M00.09 should also be included as a
principal diagnosis in MS-DRGs 485, 486, and 487.
The requestor also asserted that ICD-10-CM diagnosis code A54.42
should be added to the list of principal diagnoses for MS-DRGs 485,
486, and 487 because gonococcal arthritis is also an infectious type of
arthritis that can be an indication for a knee procedure.
Currently, cases reporting ICD-10-CM diagnosis codes M00.9 or
A54.42 as a principal diagnosis group to MS-DRGs 488 and 489 (Knee
Procedures without Principal Diagnosis of Infection with and without
CC/MCC, respectively) when a knee procedure is also reported on the
claim.
We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for ICD-10-CM diagnosis codes M00.9 and A54.42, which
are currently assigned to medical MS-DRGs 548, 549, and 550 (Septic
Arthritis with MCC, with CC, and without CC/MCC, respectively) in the
absence of a surgical procedure. Our findings are shown in the
following table.
MS-DRGs for Septic Arthritis With Pyogenic Arthritis or Gonococcal Arthritis
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 548--All cases........................................... 601 8.1 $13,974
MS-DRG 548--Cases with pyogenic arthritis as principal diagnosis 312 7.6 13,177
MS-DRG 549--All cases........................................... 1,169 5.0 8,547
MS-DRG 549--Cases with pyogenic arthritis as principal diagnosis 686 4.7 7,976
MS-DRG 549--Cases with gonococcal arthritis as principal 2 8.0 7,070
diagnosis......................................................
MS-DRG 550--All cases........................................... 402 3.5 6,317
[[Page 19194]]
MS-DRG 550--Cases with pyogenic arthritis as principal diagnosis 260 3.2 6,209
MS-DRG 550--Cases with gonococcal arthritis as principal 3 2.3 3,929
diagnosis......................................................
----------------------------------------------------------------------------------------------------------------
As shown in the table, we found a total of 2,172 cases in MS-DRGs
548, 549, and 550. A total of 601 cases were reported in MS-DRG 548,
with an average length of stay of 8.1 days and average costs of
$13,974. Cases in MS-DRG 548 with a principal diagnosis of pyogenic
arthritis (ICD-10-CM diagnosis code M00.9) accounted for 312 of these
601 cases, and reported an average length of stay of 7.6 days and
average costs of $13,177. None of the cases in MS-DRG 548 had a
principal diagnosis of gonococcal arthritis (ICD-10-CM diagnosis code
A54.42).
The total number of cases reported in MS-DRG 549 was 1,169, with an
average length of stay of 5 days and average costs of $8,547. Within
this MS-DRG, 686 cases had a principal diagnosis described by ICD-10-CM
diagnosis code M00.9, with an average length of stay of 4.7 days and
average costs of $7,976. Two of the cases reported in MS-DRG 549 had a
principal diagnosis described by ICD-10-CM diagnosis code A54.42. These
2 cases had an average length of stay of 8 days and average costs of
$7,070.
The total number of cases reported in MS-DRG 550 was 402, with an
average length of stay of 3.5 days and average costs of $6,317. Within
this MS-DRG, 260 cases had a principal diagnosis described by ICD-10-CM
diagnosis code M00.9 with an average length of stay of 3.2 days and
average costs of $6,209. Three of the cases reported in MS-DRG 550 had
a principal diagnosis described by ICD-10-CM diagnosis code A54.42.
These 3 cases had an average length of stay of 2.3 days and average
costs of $3,929.
In summary, for MS-DRGs 548, 549, and 550, there were 1,258 cases
that reported ICD-10-CM diagnosis code M00.9 as the principal diagnosis
and 5 cases that reported ICD-10-CM diagnosis code A54.42 as the
principal diagnosis. We note that, overall, our data analysis suggests
that the MS-DRG assignment for cases reporting ICD-10-CM diagnosis
codes M00.9 and A54.42 is appropriate based on the average costs and
average length of stay. However, it is unclear how many of these cases
involved infected knee joints because neither ICD-10-CM diagnosis code
M00.9 nor A54.42 is specific to the knee. We then analyzed claims data
for MS-DRGs 485, 486, and 487 (Knee Procedures with Principal Diagnosis
of Infection with MCC, with CC, and without CC/MCC, respectively) and
for MS-DRGs 488 and 489 (Knee Procedures without Principal Diagnosis of
Infection with and without CC/MCC, respectively). For MS-DRGs 488 and
489, we also analyzed claims data for cases reporting a knee procedure
with ICD-10-CM diagnosis code M00.9 or A54.42 as a principal diagnosis,
as these are the MS-DRGs to which such cases would currently group. Our
findings are shown in the following table.
MS-DRGs for Knee Procedures With and Without Infection
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 485--All cases........................................... 1,021 9.7 $23,980
MS-DRG 486--All cases........................................... 2,260 6 16,060
MS-DRG 487--All cases........................................... 614 4.2 12,396
MS-DRG 488--All cases........................................... 2,857 4.8 14,197
MS-DRG 488--Cases with pyogenic arthritis as principal diagnosis 524 7.1 16,894
MS-DRG 489--All cases........................................... 2,416 2.4 9,217
MS-DRG 489--Cases with pyogenic arthritis as principal diagnosis 195 4.1 9,526
MS-DRG 489--Cases with gonococcal arthritis as principal 1 8 10,810
diagnosis......................................................
----------------------------------------------------------------------------------------------------------------
As shown in the table, we found a total of 1,021 cases reported in
MS-DRG 485, with an average length of stay of 9.7 days and average
costs of $23,980. We found a total of 2,260 cases reported in MS-DRG
486, with an average length of stay of 6.0 days and average costs of
$16,060. The total number of cases reported in MS-DRG 487 was 614, with
an average length of stay of 4.2 days and average costs of $12,396. For
MS-DRG 488, we found a total of 2,857 cases with an average length of
stay of 4.8 days and average costs of $14,197. Of these 2,857 cases, we
found 524 cases that reported a principal diagnosis of pyogenic
arthritis (ICD-10-CM diagnosis code M00.9), with an average length of
stay of 7.1 days and average costs of $16,894. There were no cases
found that reported a principal diagnosis of gonococcal arthritis (ICD-
10-CM diagnosis code A54.42). For MS-DRG 489, we found a total of 2,416
cases with an average length of stay of 2.4 days and average costs of
$9,217. Of these 2,416 cases, we found 195 cases that reported a
principal diagnosis of pyogenic arthritis (ICD-10-CM diagnosis code
M00.9), with an average length of stay of 4.1 days and average costs of
$9,526. We found 1 case that reported a principal diagnosis of
gonococcal arthritis (ICD-10-CM diagnosis code A54.42) in MS-DRG 489,
with an average length of stay of 8 days and average costs of $10,810.
Upon review of the data, we noted that the average costs and
average length of stay for cases reporting a principal diagnosis of
pyogenic arthritis (ICD-10-CM diagnosis code M00.9) in MS-DRG 488 are
higher than the average costs and average length of stay for all cases
in MS-DRG 488. We found similar results for MS-DRG 489 for the cases
reporting diagnosis code M00.9 or A54.42 as the principal diagnosis.
As stated earlier, the requestor recommended that ICD-10-CM
diagnosis codes M00.9 and A54.42 be added to the list of principal
diagnoses in MS-DRGs 485, 486, and 487 to recognize knee procedures
that are performed with a principal diagnosis of an infectious type of
arthritis. Because these diagnosis codes are not specific to the knee
in the code description, we
[[Page 19195]]
examined the ICD-10-CM Alphabetic Index to review the entries that
refer and correspond to these diagnosis codes. Specifically, we
searched the Index for codes M00.9 and A54.42 and found the following
entries.
[GRAPHIC] [TIFF OMITTED] TP03MY19.000
Our clinical advisors agreed that the results of our ICD-10-CM
Alphabetic Index review combined with the data analysis results support
the addition of ICD-10-CM diagnosis code M00.9 to the list of principal
diagnoses of infection for MS-DRGs 485, 486, and 487. The entries for
diagnosis code M00.9 include infection of the knee, and as discussed
above, in our data analysis, we found cases reporting ICD-10-CM
diagnosis code M00.9 as a principal diagnosis in MS-DRGs 488 and 489,
indicating that knee procedures are, in fact, being performed for an
infectious arthritis of the knee. In addition, the average costs for
cases reporting a principal diagnosis code of pyogenic arthritis (ICD-
10-CM diagnosis code M00.9) in MS-DRG 488 are similar to the average
costs of cases in MS-DRG 486 ($16,894 and $16,060, respectively).
Because MS-DRG 488 includes cases with a CC or an MCC, we reviewed how
many of the 524 cases reporting a principal diagnosis code of pyogenic
arthritis (ICD-10-CM diagnosis code M00.9) were reported with a CC or
an MCC. We found that there were 361 cases reporting a CC with an
average length of stay of 6 days and average costs of $14,092 and 163
cases reporting an MCC with an average length of stay of 9.5 days and
average costs of $23,100. Therefore, the cases in MS-DRG 488 reporting
a principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis
code M00.9) with an MCC have average costs that are consistent with the
average costs of cases in MS-DRG 485 ($23,100 and $23,980,
respectively), and the cases with a CC have average costs that are
consistent with the average costs of cases in MS-DRG 486 ($14,092 and
$16,060, respectively), as noted above.
[[Page 19196]]
We also note that the average length of stay for cases reporting a
principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis
code M00.9) with an MCC in MS-DRG 488 is similar to the average length
of stay for cases in MS-DRG 485 (9.5 days and 9.7 days, respectively),
and the cases with a CC have an average length of stay that is
equivalent to the average length of stay for cases in MS-DRG 486 (6
days and 6 days, respectively). We further note that the average length
of stay for cases reporting a principal diagnosis code of pyogenic
arthritis (ICD-10-CM diagnosis code M00.9) in MS-DRG 489 is similar to
the average length of stay for cases in MS DRG 487 (4.1 days and 4.2
days, respectively). Lastly, the average costs for cases reporting a
principal diagnosis code of pyogenic arthritis (ICD-10-CM diagnosis
code M00.9) in MS-DRG 489 are consistent with the average costs for
cases in MS-DRG 487 ($9,526 and $12,396, respectively), with a
difference of $2,870. For these reasons, we are proposing to add ICD-
10-CM diagnosis code M00.9 to the list of principal diagnosis codes for
MS-DRGs 485, 486, and 487.
Our clinical advisors did not support the addition of ICD-10-CM
diagnosis code A54.42 to the list of principal diagnosis codes for MS-
DRGs 485, 486, and 487 because ICD-10-CM diagnosis code A54.42 is not
specifically indexed to include the knee or any infection in the knee.
Therefore, we are not proposing to add ICD-10-CM diagnosis code A54.42
to the list of principal diagnosis codes for these MS-DRGs.
Upon review of the existing list of principal diagnosis codes for
MS-DRGs 485, 486, and 487, our clinical advisors recommended that we
review the following ICD-10-CM diagnosis codes currently included on
the list of principal diagnosis codes because the codes are not
specific to the knee.
------------------------------------------------------------------------
ICD-10-CM code Code description
------------------------------------------------------------------------
M86.9..................... Osteomyelitis, unspecified.
T84.50XA.................. Infection and inflammatory reaction due to
unspecified internal joint prosthesis,
initial encounter.
T84.51XA.................. Infection and inflammatory reaction due to
internal right hip prosthesis, initial
encounter.
T84.52XA.................. Infection and inflammatory reaction due to
internal left hip prosthesis, initial
encounter.
T84.59XA.................. Infection and inflammatory reaction due to
other internal joint prosthesis, initial
encounter.
T84.60XA.................. Infection and inflammatory reaction due to
internal fixation device of unspecified
site, initial encounter.
T84.63XA.................. Infection and inflammatory reaction due to
internal fixation device of spine, initial
encounter.
T84.69XA.................. Infection and inflammatory reaction due to
internal fixation device of other site,
initial encounter.
------------------------------------------------------------------------
These ICD-10-CM diagnosis codes are currently assigned to medical
MS-DRGs 559, 560, and 561 (Aftercare, Musculoskeletal System and
Connective Tissue with MCC, with CC, and without CC/MCC, respectively)
within MDC 8 in the absence of a surgical procedure. Similar to the
process described above, we examined the ICD-10-CM Alphabetic Index to
review the entries that refer and correspond to the diagnosis codes
shown in the table above. We found the following entries.
------------------------------------------------------------------------
-------------------------------------------------------------------------
Index entries referring to M86.9: Osteomyelitis (general) (infective)
(localized) (neonatal) (purulent) (septic) (staphylococcal)
(streptococcal) (suppurative) (with periostitis).
Index entries referring to T84.50XA:Complication(s) (from) (of) > joint
prosthesis, internal > infection or inflammation Infection, infected,
infective (opportunistic) > joint NEC > due to internal joint
prosthesis.
Index entries referring to T84.51XA: Infection, infected, infective
(opportunistic) > hip (joint) NEC > due to internal joint prosthesis >
right.
Index entries referring to T84.52XA: Infection, infected, infective
(opportunistic) > hip (joint) NEC > due to internal joint prosthesis >
left.
Index entries referring to T84.59XA: Complication(s) (from) (of) > joint
prosthesis, internal > infection or inflammation > specified joint NEC
Infection, infected, infective (opportunistic) > shoulder (joint) NEC >
due to internal joint prosthesis.
Index entries referring to T84.60XA: Complication(s) (from) (of) >
fixation device, internal (orthopedic) > infection and inflammation.
Index entries referring to T84.63XA: Complication(s) (from) (of) >
fixation device, internal (orthopedic) > infection and inflammation >
spine.
Index entries referring to T84.69XA: Complication(s) (from) (of) >
fixation device, internal (orthopedic) > infection and inflammation >
specified site NEC.
------------------------------------------------------------------------
The Index entries for the ICD-10-CM diagnosis codes listed above
reflect terms relating to an infection. However, none of the entries is
specific to the knee. In addition, we note that there are other
diagnosis codes in the subcategory T84.5- series (Infection and
inflammatory reaction due to internal joint prosthesis) that are
specific to the knee. For example, ICD-10-CM diagnosis code T84.53X-
(Infection and inflammatory reaction due to internal right knee
prosthesis) or ICD-10-CM diagnosis code T84.54X- (Infection and
inflammatory reaction due to internal left knee prosthesis) with the
appropriate 7th digit character to identify initial encounter,
subsequent encounter or sequela, would be reported to identify a
documented infection of the right or left knee due to an internal
prosthesis. We further note that these ICD-10-CM diagnosis codes
(T84.53X- and T84.54X-) with the 7th character ``A'' for initial
encounter are currently already in the list of principal diagnosis
codes for MS-DRGs 485, 486, and 487.
Our clinical advisors support the removal of the above ICD-10-CM
diagnosis codes from the list of principal diagnosis codes for MS-DRGs
485, 486, and 487 because they are not specifically indexed to include
an infection of the knee and there are other diagnosis codes in the
subcategory T84.5- series that uniquely identify an infection and
inflammatory reaction of the right or left knee due to an internal
prosthesis as noted above.
We also analyzed claims data for MS-DRGs 485, 486 and 487 to
identify cases reporting one of the above listed ICD-10-CM diagnosis
codes not specific to the knee as a principal diagnosis. Our findings
are shown in the following table.
[[Page 19197]]
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 485--Cases reporting principal diagnosis code not 13 11.2 $30,765
specific to the knee...........................................
MS-DRG 486--Cases reporting principal diagnosis code not 43 6.5 15,837
specific to the knee...........................................
MS-DRG 487--Cases reporting principal diagnosis code not 7 2.6 11,362
specific to the knee...........................................
----------------------------------------------------------------------------------------------------------------
For MS-DRG 485, we found 13 cases reporting one of the diagnosis
codes not specific to the knee as a principal diagnosis with an average
length of stay of 11.2 days and average costs of $30,765. For MS-DRG
486, we found 43 cases reporting one of the diagnosis codes not
specific to the knee as a principal diagnosis with an average length of
stay of 6.5 days and average costs of $15,837. For MS-DRG 487, we found
7 cases reporting one of the diagnosis codes not specific to the knee
as a principal diagnosis with an average length of stay of 2.6 days and
average costs of $11,362.
Overall, for MS-DRGs 485, 486, and 487, there were a total of 63
cases reporting one of the ICD-10-CM diagnosis codes not specific to
the knee as a principal diagnosis with an average length of stay of 7
days and average costs of $18,421. Of those 63 cases, there were 32
cases reporting a principal diagnosis code from the ICD-10-CM
subcategory T84.5-series (Infection and inflammatory reaction due to
internal joint prosthesis); 23 cases reporting a principal diagnosis
code from the ICD-10-CM subcategory T84.6-series (Infection and
inflammatory reaction due to internal fixation device), with 22 of the
23 cases reporting ICD-10-CM diagnosis code T84.69XA (Infection and
inflammatory reaction due to internal fixation device of other site,
initial encounter) and 1 case reporting ICD-10-CM diagnosis code
T84.63XA (Infection and inflammatory reaction due to internal fixation
device of spine, initial encounter); and 8 cases reporting ICD-10-CM
diagnosis code M86.9 (Osteomyelitis, unspecified) as a principal
diagnosis.
Our clinical advisors believe that there may have been coding
errors among the 63 cases reporting a principal diagnosis of infection
not specific to the knee. For example, 32 cases reported a principal
diagnosis code from the ICD-10-CM subcategory T84.5-series (Infection
and inflammatory reaction due to internal joint prosthesis) that was
not specific to the knee and, as stated previously, there are other
codes in this subcategory that uniquely identify an infection and
inflammatory reaction of the right or left knee due to an internal
prosthesis.
Based on the results of our claims analysis and input from our
clinical advisors, we are proposing to remove the following ICD-10-CM
diagnosis codes that do not describe an infection of the knee from the
list of principal diagnosis codes for MS-DRGs 485, 486, and 487: M86.9;
T84.50XA; T84.51XA; T84.52XA; T84.59XA; T84.60XA; T84.63XA; and
T84.69XA. We are not proposing to change the current assignment of
these diagnosis codes in MS-DRGs 559, 560, and 561.
In addition, our clinical advisors recommended that we add the
following ICD-10-CM diagnosis codes as principal diagnosis codes for
MS-DRGs 485, 486, and 487 because they are specific to the knee and
describe an infection.
------------------------------------------------------------------------
ICD-10-CM code Code description
------------------------------------------------------------------------
A18.02.................... Tuberculous arthritis of other joints.
M01.X61................... Direct infection of right knee in infectious
and parasitic diseases classified
elsewhere.
M01.X62................... Direct infection of left knee in infectious
and parasitic diseases classified
elsewhere.
M01.X69................... Direct infection of unspecified knee in
infectious and parasitic diseases
classified elsewhere.
M71.061................... Abscess of bursa, right knee.
M71.062................... Abscess of bursa, left knee.
M71.069................... Abscess of bursa, unspecified knee.
M71.161................... Other infective bursitis, right knee.
M71.162................... Other infective bursitis, left knee.
M71.169................... Other infective bursitis, unspecified knee.
------------------------------------------------------------------------
ICD-10-CM diagnosis code A18.02 (Tuberculous arthritis of other
joints) is currently assigned to medical MS-DRGs 548, 549, and 550
(Septic Arthritis with MCC, with CC, and without CC/MCC, respectively)
within MDC 8 and MS-DRGs 974, 975, and 976 (HIV with Major Related
Condition with MCC, with CC, and without CC/MCC, respectively) within
MDC 25 (Human Immunodeficiency Virus Infections) in the absence of a
surgical procedure. ICD-10-CM diagnosis codes M01.X61 (Direct infection
of right knee in infectious and parasitic diseases classified
elsewhere), M01.X62 (Direct infection of left knee in infectious and
parasitic diseases classified elsewhere), and M01.X69 (Direct infection
of unspecified knee in infectious and parasitic diseases classified
elsewhere) are currently assigned to medical MS-DRGs 548, 549, and 550
(Septic Arthritis with MCC, with CC, and without CC/MCC, respectively)
within MDC 8 in the absence of a surgical procedure. ICD-10-CM
diagnosis codes M71.061 (Abscess of bursa, right knee), M71.062
(Abscess of bursa, left knee), M71.069 (Abscess of bursa, unspecified
knee), M71.161 (Other infective bursitis, right knee), M71.162 (Other
infective bursitis, left knee), and M71.169 (Other infective bursitis,
unspecified knee) are currently assigned to medical MS-DRGs 557 and 558
(Tendonitis, Myositis and Bursitis with and without MCC, respectively)
within MDC 8 in the absence of a surgical procedure.
Similar to the process described above, we examined the ICD-10-CM
Alphabetic Index to review the entries that refer and correspond to the
diagnosis codes shown in the table above. We found the following
entries.
BILLING CODE 4120-01-P
[[Page 19198]]
[GRAPHIC] [TIFF OMITTED] TP03MY19.001
[[Page 19199]]
[GRAPHIC] [TIFF OMITTED] TP03MY19.002
[[Page 19200]]
[GRAPHIC] [TIFF OMITTED] TP03MY19.003
BILLING CODE 4120-01-C
We note that there were no Index entries specifically for ICD-10-CM
diagnosis codes M71.061, M71.062, M71.069, M71.161, M71.162, and
M71.169. Rather, there were Index entries at the subcategory levels of
M71.06- and M71.16-. We found the following entries.
[[Page 19201]]
------------------------------------------------------------------------
-------------------------------------------------------------------------
Index entry referring to M71.06-: (connective tissue) (embolic)
(fistulous) (infective) (metastatic) (multiple) (pernicious) (pyogenic)
(septic) > bursa > knee.
Index entry referring to M71.16-: Infective NEC > knee.
------------------------------------------------------------------------
Our clinical advisors agreed that the results of our review of the
ICD-10-CM Alphabetic Index support the addition of these ICD-10-CM
diagnosis codes to MS-DRGs 485, 486, and 487 because the Index entries
and/or the code descriptions clearly describe or include an infection
that is specific to the knee.
Therefore, we are proposing to add the following ICD-10-CM
diagnosis codes to the list of principal diagnosis codes for MS-DRGs
485, 486, and 487: A18.02; M01.X61; M01.X62; M01.X69; M71.061; M71.062;
M71.069; M71.161; M71.162; and M71.169.
b. Neuromuscular Scoliosis
We received a request to add ICD-10-CM diagnosis codes describing
neuromuscular scoliosis to the list of principal diagnosis codes for
MS-DRGs 456, 457, and 458 (Spinal Fusion except Cervical with Spinal
Curvature or Malignancy or Infection or Extensive Fusions with MCC,
with CC, and without CC/MCC, respectively). Excluding the ICD-10-CM
diagnosis codes that address the cervical spine, the following ICD-10-
CM diagnosis codes are used to describe neuromuscular scoliosis.
------------------------------------------------------------------------
ICD-10-CM code Code description
------------------------------------------------------------------------
M41.40.................... Neuromuscular scoliosis, site unspecified.
M41.44.................... Neuromuscular scoliosis, thoracic region.
M41.45.................... Neuromuscular scoliosis, thoracolumbar
region.
M41.46.................... Neuromuscular scoliosis, lumbar region.
M41.47.................... Neuromuscular scoliosis, lumbosacral region.
------------------------------------------------------------------------
The requestor asserted that all levels of neuromuscular scoliosis,
except cervical, should group to the non-cervical spinal fusion MS-DRGs
for spinal curvature (MS-DRGs 456, 457, and 458). The requestor also
noted that the current MS-DRG logic only groups cases reporting
neuromuscular scoliosis to MS-DRGs 456, 457, and 458 when neuromuscular
scoliosis is reported as a secondary diagnosis. The requestor contended
that it would be rare for a diagnosis of neuromuscular scoliosis to be
reported as a secondary diagnosis because there is not a ``code first''
note in the ICD-10-CM Tabular List of Diseases and Injuries indicating
to ``code first'' the underlying cause. According to the requestor,
when a diagnosis of neuromuscular scoliosis is the reason for an
admission for non-cervical spinal fusion, neuromuscular scoliosis must
be sequenced as the principal diagnosis because it is the chief
condition responsible for the admission. However, this sequencing,
which adheres to the ICD-10-CM Official Guidelines for Coding and
Reporting, prevents the admission from grouping to the non-cervical
spinal fusion MS-DRGs for spinal curvature caused by neuromuscular
scoliosis.
We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for cases reporting any of the ICD-10-CM diagnosis
codes describing neuromuscular scoliosis (as listed previously) as a
principal diagnosis with a non-cervical spinal fusion, which are
currently assigned to MS-DRGs 459 and 460 (Spinal Fusion except
Cervical with MCC and without MCC, respectively). Our findings are
shown in the following table.
MS-DRGs for Cases Involving Non-Cervical Spinal Fusion With Principal Diagnosis of Neuromuscular Scoliosis
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 459--All cases........................................... 3,903 8.6 $46,416
MS-DRG 459--Cases with principal diagnosis of neuromuscular 3 15.3 95,745
scoliosis......................................................
MS-DRG 460--All cases........................................... 52,597 3.3 28,754
MS-DRG 460--Cases with principal diagnosis of neuromuscular 8 4.3 71,406
scoliosis......................................................
----------------------------------------------------------------------------------------------------------------
The data reveal that there was a total of 56,500 cases in MS-DRGs
459 and 460. We found 3,903 cases reported in MS-DRG 459, with an
average length of stay of 8.6 days and average costs of $46,416. Of
these 3,903 cases, 3 reported a principal diagnosis code of
neuromuscular scoliosis, with an average length of stay of 15.3 days
and average costs of $95,745. We found a total of 52,597 cases in MS-
DRG 460, with an average length of stay of 3.3 days and average costs
of $28,754. Of these 52,597 cases, 8 cases reported a principal
diagnosis code describing neuromuscular scoliosis, with an average
length of stay of 4.3 days and average costs of $71,406. The data
clearly demonstrate that the average costs and average length of stay
for the small number of cases reporting a principal diagnosis of
neuromuscular scoliosis are higher in comparison to all the cases in
their assigned MS-DRG.
We also analyzed claims data for MS-DRGs 456, 457, and 458 (Spinal
Fusion except Cervical with Spinal Curvature or Malignancy or Infection
or Extensive Fusions with MCC, with CC, and without CC/MCC,
respectively) to identify the spinal fusion cases reporting any of the
ICD-10-CM codes describing neuromuscular scoliosis (as listed
previously) as a secondary diagnosis. Our findings are shown in the
following table.
[[Page 19202]]
MS-DRGs for Cases Involving Non-Cervical Spinal Fusion With Spinal Curvature or Malignancy or Infection or
Extensive Fusions With Secondary Diagnosis of Neuromuscular Scoliosis
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 456--All cases........................................... 1,344 12.0 $66,012
MS-DRG 456--Cases with secondary diagnosis of neuromuscular 6 18.2 79,809
scoliosis......................................................
MS-DRG 457--All cases........................................... 3,654 6.2 47,577
MS-DRG 457--Cases with secondary diagnosis of neuromuscular 12 4.5 31,646
scoliosis......................................................
MS-DRG 458--All cases........................................... 1,245 3.4 34,179
MS-DRG 458--Cases with secondary diagnosis of neuromuscular 6 3.3 31,117
scoliosis......................................................
----------------------------------------------------------------------------------------------------------------
The data indicate that there were 1,344 cases reported in MS-DRG
456, with an average length of stay of 12 days and average costs of
$66,012. Of these 1,344 cases, 6 cases reported a secondary diagnosis
code describing neuromuscular scoliosis, with an average length of stay
of 18.2 days and average costs of $79,809. We found a total of 3,654
cases in MS-DRG 457, with an average length of stay of 6.2 days and
average costs of $47,577. Twelve of these 3,654 cases reported a
secondary diagnosis code describing neuromuscular scoliosis, with an
average length of stay of 4.5 days and average costs of $31,646.
Finally, the 1,245 cases reported in MS-DRG 458 had an average length
of stay of 3.4 days and average costs of $34,179. Of these 1,245 cases,
6 cases reported neuromuscular scoliosis as a secondary diagnosis, with
an average length of stay of 3.3 days and average costs of $31,117.
We reviewed the ICD-10-CM Tabular List of Diseases for subcategory
M41.4 and confirmed there is a ``Code also underlying condition'' note.
We also reviewed the ICD-10-CM Official Guidelines for Coding and
Reporting for the ``code also'' note at Section 1.A.12.b., which
states: ``A `code also' note instructs that two codes may be required
to fully describe a condition, but this note does not provide
sequencing direction.'' Our clinical advisors agree that the sequencing
of the ICD-10-CM diagnosis codes is determined by which condition leads
to the encounter and is responsible for the admission. They also note
that there may be instances in which the underlying cause of the
diagnosis of neuromuscular scoliosis is not treated or responsible for
the admission.
As discussed earlier, our review of the claims data shows that a
small number of cases reported neuromuscular scoliosis either as a
principal diagnosis in MS-DRGs 459 and 460 or as a secondary diagnosis
in MS-DRGs 456, 457, and 458. Our clinical advisors agree that while
the volume of cases is small, the average costs and average length of
stay for the cases reporting neuromuscular scoliosis as a principal
diagnosis with a non-cervical spinal fusion currently grouping to MS-
DRGs 459 and 460 are more aligned with the average costs and average
length of stay for the cases reporting neuromuscular scoliosis as a
secondary diagnosis with a non-cervical spinal fusion currently
grouping to MS-DRGs 456, 457, and 458. Therefore, for the reasons
described above, we are proposing to add the following ICD-10-CM codes
describing neuromuscular scoliosis to the list of principal diagnosis
codes for MS-DRGs 456, 457, and 458: M41.40; M41.44; M41.45; M41.46;
and M41.47.
c. Secondary Scoliosis and Secondary Kyphosis
We received a request to add ICD-10-CM diagnosis codes describing
secondary scoliosis and secondary kyphosis to the list of principal
diagnoses for MS-DRGs 456, 457, and 458 (Spinal Fusion except Cervical
with Spinal Curvature or Malignancy or Infection or Extensive Fusions
with MCC, with CC, and without CC/MCC, respectively). Excluding the
ICD-10-CM diagnosis codes that address the cervical spine, the
following ICD-10-CM diagnosis codes are used to describe secondary
scoliosis.
------------------------------------------------------------------------
ICD-10-CM code Code description
------------------------------------------------------------------------
M41.50.................... Other secondary scoliosis, site unspecified.
M41.54.................... Other secondary scoliosis, thoracic region.
M41.55.................... Other secondary scoliosis, thoracolumbar
region.
M41.56.................... Other secondary scoliosis, lumbar region.
M41.57.................... Other secondary scoliosis, lumbosacral
region.
------------------------------------------------------------------------
Excluding the ICD-10-CM diagnosis codes that address the cervical
spine, the following ICD-10-CM diagnosis codes are used to describe
secondary kyphosis.
------------------------------------------------------------------------
ICD-10-CM code Code description
------------------------------------------------------------------------
M40.10.................... Other secondary kyphosis, site unspecified.
M40.14.................... Other secondary kyphosis, thoracic region.
M40.15.................... Other secondary kyphosis, thoracolumbar
region.
------------------------------------------------------------------------
The requestor stated that generally in cases of diagnoses of
secondary scoliosis or kyphosis, the underlying cause of the condition
is not treated or is not responsible for the admission. If a patient is
admitted for surgery to correct non-cervical spinal curvature, it is
appropriate to sequence the diagnosis of secondary scoliosis or
secondary kyphosis as principal diagnosis. However, reporting a
diagnosis of secondary scoliosis or secondary
[[Page 19203]]
kyphosis as the principal diagnosis with a non-cervical spinal fusion
procedure results in the case grouping to MS-DRG 459 or 460 (Spinal
Fusion except Cervical with MCC and without MCC, respectively), instead
of the spinal fusion with spinal curvature MS-DRGs 456, 457, and 458.
We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 459 and 460 to determine the number of
cases reporting an ICD-10-CM diagnosis code describing secondary
scoliosis or secondary kyphosis as the principal diagnosis. Our
findings are shown in the following table.
MS-DRGs for Cases Involving Non-Cervical Spinal Fusion With a Principal Diagnosis of Secondary Scoliosis or
Secondary Kyphosis
----------------------------------------------------------------------------------------------------------------
Number of Average
MS-DRG cases length of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 459--All cases........................................... 3,903 8.6 $46,416
MS-DRG 459--Cases with a principal diagnosis of secondary 4 7.3 56,024
scoliosis......................................................
MS-DRG 459--Cases with a principal diagnosis of secondary 4 5.8 41,883
kyphosis.......................................................
MS-DRG 460--All cases........................................... 52,597 3.3 28,754
MS-DRG 460--Cases with a principal diagnosis of secondary 34 3.6 34,424
scoliosis......................................................
MS-DRG 460--Cases with a principal diagnosis of secondary 31 4.6 42,315
kyphosis.......................................................
----------------------------------------------------------------------------------------------------------------
As shown in the table, we found a total of 3,903 cases in MS-DRG
459, with an average length of stay of 8.6 days and average costs of
$46,416. Of these 3,903 cases, we found 4 cases that reported a
principal diagnosis of secondary scoliosis, with an average length of
stay of 7.3 days and average costs of $56,024. We also found 4 cases
that reported a principal diagnosis of secondary kyphosis, with an
average length of stay of 5.8 days and average costs of $41,883. For
MS-DRG 460, we found a total of 52,597 cases with an average length of
stay of 3.3 days and average costs of $28,754. Of these 52,597 cases,
we found 34 cases that reported a principal diagnosis of secondary
scoliosis, with an average length of stay of 3.6 days and average costs
of $34,424. We found 31 cases that reported a principal diagnosis of
secondary kyphosis in MS-DRG 460, with an average length of stay of 4.6
days and average costs of $42,315.
We also analyzed claims data for MS-DRGs 456, 457, and 458 to
determine the number of cases reporting an ICD-10-CM diagnosis code
describing secondary scoliosis or secondary kyphosis as a secondary
diagnosis. Our findings are shown in the following table.
MS-DRGs for Cases Involving Non-Cervical Spinal Fusion With Spinal Curvature or Malignancy or Infection or
Extensive Fusions With Secondary Diagnosis of Secondary Scoliosis or Secondary Kyphosis
----------------------------------------------------------------------------------------------------------------
Number of Average
MS-DRG cases length of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 456--All cases........................................... 1,344 12 $66,012
MS-DRG 456--Cases with a secondary diagnosis of secondary 37 7.7 58,009
scoliosis......................................................
MS-DRG 456--Cases with a secondary diagnosis of secondary 52 12 78,865
kyphosis.......................................................
MS-DRG 457--All cases........................................... 3,654 6.2 47,577
MS-DRG 457--Cases with a secondary diagnosis of secondary 187 4.9 37,655
scoliosis......................................................
MS-DRG 457--Cases with a secondary diagnosis of secondary 114 5.2 37,357
kyphosis.......................................................
MS-DRG 458--All cases........................................... 1,245 3.4 34,179
MS-DRG 458--Cases with a secondary diagnosis of secondary 190 3.0 29,052
scoliosis......................................................
MS-DRG 458--Cases with a secondary diagnosis of secondary 39 3.7 31,015
kyphosis.......................................................
----------------------------------------------------------------------------------------------------------------
The data indicate that there were 1,344 cases in MS-DRG 456, with
an average length of stay of 12 days and average costs of $66,012. Of
these 1,344 cases, there were 37 cases that reported a secondary
diagnosis of secondary scoliosis, with an average length of stay of 7.7
days and average costs of $58,009. There were also 52 cases in MS-DRG
456 reporting a secondary diagnosis of secondary kyphosis, with an
average length of stay of 12 days and average costs of $78,865. In MS-
DRG 457, there was a total of 3,654 cases, with an average length of
stay of 6.2 days and average costs of $47,577. Of these 3,654 cases,
there were 187 cases that reported secondary scoliosis as a secondary
diagnosis, with an average length of stay of 4.9 days and average costs
of $37,655. In MS-DRG 457, there were also 114 cases that reported a
secondary diagnosis of secondary kyphosis, with an average length of
stay of 5.2 days and average costs of $37,357. Finally, there was a
total of 1,245 cases in MS-DRG 458, with an average length of stay of
3.4 days and average costs of $34,179. Of these 1,245 cases, there were
190 cases that reported a secondary diagnosis of secondary scoliosis,
with an average length of stay of 3 days and average costs of $29,052.
There were 39 cases in MS-DRG 458 that reported a secondary diagnosis
of secondary kyphosis, with an average length of stay of 3.7 days and
average costs of $31,015.
Our clinical advisors agree that the average length of stay and
average costs for the small number of cases reporting secondary
scoliosis or secondary kyphosis as a principal diagnosis with a non-
cervical spinal fusion currently grouping to MS-DRGs 459 and 460 are
generally more aligned with the average length of stay and average
costs for the cases reporting secondary scoliosis or secondary kyphosis
as a secondary diagnosis with a non-cervical spinal fusion currently
grouping to MS-DRGs 456, 457, and 458. They also note that there may be
instances in which the underlying cause of the diagnosis of secondary
scoliosis or secondary kyphosis is not treated or responsible for the
admission.
Therefore, for the reasons described above, we are proposing to add
the following ICD-10-CM diagnosis codes describing secondary scoliosis
and
[[Page 19204]]
secondary kyphosis to the list of principal diagnosis codes for MS-DRGs
456, 457, and 458: M40.10; M40.14; M40.15; M41.50; M41.54; M41.55;
M41.56; and M41.57. During our review of MS-DRGs 456, 457, and 458, we
found the following diagnosis codes that describe conditions involving
the cervical region.
------------------------------------------------------------------------
ICD-10-CM code Code description
------------------------------------------------------------------------
M40.03.................... Postural kyphosis, cervicothoracic region.
M40.202................... Unspecified kyphosis, cervical region.
M40.203................... Unspecified kyphosis, cervicothoracic
region.
M40.292................... Other kyphosis, cervical region.
M40.293................... Other kyphosis, cervicothoracic region.
M41.02.................... Infantile idiopathic scoliosis, cervical
region.
M41.03.................... Infantile idiopathic scoliosis,
cervicothoracic region.
M41.112................... Juvenile idiopathic scoliosis, cervical
region.
M41.113................... Juvenile idiopathic scoliosis,
cervicothoracic region.
M41.122................... Adolescent idiopathic scoliosis, cervical
region.
M41.123................... Adolescent idiopathic scoliosis,
cervicothoracic region.
M41.22.................... Other idiopathic scoliosis, cervical region.
M41.23.................... Other idiopathic scoliosis, cervicothoracic
region.
M41.82.................... Other forms of scoliosis, cervical region.
M41.83.................... Other forms of scoliosis, cervicothoracic
region.
M42.01.................... Juvenile osteochondrosis of spine, occipito-
atlanto-axial region.
M42.02.................... Juvenile osteochondrosis of spine, cervical
region.
M42.03.................... Juvenile osteochondrosis of spine,
cervicothoracic region.
M43.8X1................... Other specified deforming dorsopathies,
occipito-atlanto-axial region.
M43.8X2................... Other specified deforming dorsopathies,
cervical region.
M43.8X3................... Other specified deforming dorsopathies,
cervicothoracic region.
M46.21.................... Osteomyelitis of vertebra, occipito-atlanto-
axial region.
M46.22.................... Osteomyelitis of vertebra, cervical region.
M46.23.................... Osteomyelitis of vertebra, cervicothoracic
region.
M48.51XA.................. Collapsed vertebra, not elsewhere
classified, occipito-atlanto-axial region,
initial encounter for fracture.
M48.52XA.................. Collapsed vertebra, not elsewhere
classified, cervical region, initial
encounter for fracture.
M48.53XA.................. Collapsed vertebra, not elsewhere
classified, cervicothoracic region, initial
encounter for fracture.
M40.12.................... Other secondary kyphosis, cervical region.
M40.13.................... Other secondary kyphosis, cervicothoracic
region.
M41.41.................... Neuromuscular scoliosis, occipito-atlanto-
axial region.
M4.142.................... Neuromuscular scoliosis, cervical region.
M4143..................... Neuromuscular scoliosis, cervicothoracic
region.
M41.52.................... Other secondary scoliosis, cervical region.
M41.53.................... Other secondary scoliosis, cervicothoracic
region.
------------------------------------------------------------------------
Our clinical advisors noted that because the diagnosis codes shown
in the table above describe conditions involving the cervical region,
they are not clinically appropriate for assignment to MS-DRGs 456, 457,
and 458, which are defined by non-cervical spinal fusion procedures
(with spinal curvature or malignancy or infection or extensive
fusions). Therefore, our clinical advisors recommended that these codes
be removed from the MS-DRG logic for these MS-DRGs. As such, we are
proposing to remove the diagnosis codes that describe conditions
involving the cervical region as shown in the table above from MS-DRGs
456, 457, and 458.
7. MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract):
Extracorporeal Shock Wave Lithotripsy (ESWL)
We received two separate, but related requests to add ICD-10-CM
diagnosis code N13.6 (Pyonephrosis) and ICD-10-CM diagnosis code
T83.192A (Other mechanical complication of indwelling ureteral stent,
initial encounter) to the list of principal diagnosis codes for MS-DRGs
691 and 692 (Urinary Stones with ESW Lithotripsy with CC/MCC and
without CC/MCC, respectively) in MDC 11 so that cases are assigned more
appropriately when an Extracorporeal Shock Wave Lithotripsy (ESWL)
procedure is performed.
ICD-10-CM diagnosis code N13.6 currently groups to MS-DRGs 689 and
690 (Kidney and Urinary Tract Infections with MCC and without MCC,
respectively) and ICD-10-CM diagnosis code T83.192A currently groups to
MS-DRGs 698, 699, and 700 (Other Kidney and Urinary Tract Diagnoses
with MCC, with CC, and without CC/MCC, respectively).
The ICD-10-PCS procedure codes for identifying procedures involving
ESWL are designated as non-O.R. procedures and are shown in the
following table.
------------------------------------------------------------------------
ICD-10-PCS code Code description
------------------------------------------------------------------------
0TF3XZZ................... Fragmentation in right kidney pelvis,
external approach.
0TF4XZZ................... Fragmentation in left kidney pelvis,
external approach.
OTF6XZZ................... Fragmentation in right ureter, external
approach.
OTF7XZZ................... Fragmentation in left ureter, external
approach.
OTFBXZZ................... Fragmentation in bladder, external approach.
OTFCXZZ................... Fragmentation in bladder neck, external
approach.
OTFDXZZ................... Fragmentation in urethra, external approach.
------------------------------------------------------------------------
[[Page 19205]]
Pyonephrosis can be described as an infection of the kidney with
pus in the upper collecting system which can progress to obstruction.
Patients with an obstruction in the upper urinary tract due to urinary
stones (calculi), tumors, fungus balls or ureteropelvic obstruction
(UPJ) may also have a higher risk of developing pyonephrosis. If
pyonephrosis is not recognized and treated promptly, it can result in
serious complications, including fistulas, septic shock, irreversible
damage to the kidneys, and death.
As noted above, the requestor recommended that ICD-10-CM diagnosis
codes N13.6 and T83.192A be added to the list of principal diagnosis
codes for MS-DRGs 691 and 692. There are currently four MS-DRGs that
group cases for diagnoses involving urinary stones, which are
subdivided to identify cases with and without an ESWL procedure: MS-
DRGs 691 and 692 (Urinary Stones with ESW Lithotripsy with and without
CC/MCC, respectively) and MS-DRGs 693 and 694 (Urinary Stones without
ESW Lithotripsy with and without MCC, respectively).
The requestor stated that when patients who have been diagnosed
with hydronephrosis secondary to renal and ureteral calculus
obstruction undergo an ESWL procedure, ICD-10-CM diagnosis code N13.2
(Hydronephrosis with renal and ureteral calculous obstruction) is
reported and groups to MS-DRGs 691 and 692. However, if a patient with
a diagnosis of hydronephrosis has a urinary tract infection (UTI) in
addition to a renal calculus obstruction and undergoes an ESWL
procedure, ICD-10-CM diagnosis code N13.6 must be coded and reported as
the principal diagnosis, which groups to MS-DRGs 689 and 690. The
requestor stated that ICD-10-CM diagnosis code N13.6 should be grouped
to MS-DRGs 691 and 692 when reported as a principal diagnosis because
this grouping will more appropriately reflect resource consumption for
patients who undergo an ESWL procedure for obstructive urinary calculi,
while also receiving treatment for urinary tract infections.
With regard to ICD-10-CM diagnosis code T83.192A, the requestor
believed that when an ESWL procedure is performed for the treatment of
calcifications within and around an indwelling ureteral stent, it is
comparable to an ESWL procedure performed for the treatment of urinary
calculi. Therefore, the requestor recommended adding ICD-10-CM
diagnosis code T83.192A to MS-DRGs 691 and 692 when reported as a
principal diagnosis and an ESWL procedure is also reported on the
claim.
To analyze these separate, but related requests, we first reviewed
the reporting of ICD-10-CM diagnosis code N13.6 within the ICD-10-CM
classification. ICD-10-CM diagnosis code N13.6 is to be assigned for
conditions identified in the code range N13.0-N13.5 with infection.
(Codes in this range describe hydronephrosis with obstruction.)
Infection may be documented by the patient's provider as urinary tract
infection (UTI) or as specific as acute pyelonephritis. We agree with
the requestor that if a patient with a diagnosis of hydronephrosis has
a urinary tract infection (UTI) in addition to a renal calculus
obstruction and undergoes an ESWL procedure, ICD-10-CM diagnosis code
N13.6 must be coded and reported as the principal diagnosis, which
groups to MS-DRGs 689 and 690. In this case scenario, the ESWL
procedure is designated as a non-O.R. procedure and does not impact the
MS-DRG assignment when reported with ICD-10-CM diagnosis code N13.6.
The ICD-10-CM classification instructs that when both a urinary
obstruction and a genitourinary infection co-exist, the correct code
assignment for reporting is ICD-10-CM diagnosis code N13.6, which is
appropriately grouped to MS-DRGs 689 and 690 (Kidney and Urinary Tract
Infections with MCC and without MCC, respectively) because it describes
a type of urinary tract infection. Therefore, in response to the
requestor's suggestion that ICD-10-CM diagnosis code N13.6 be grouped
to MS-DRGs 691 and 692 when reported as a principal diagnosis to more
appropriately reflect resource consumption for patients who undergo an
ESWL procedure for obstructive urinary calculi while also receiving
treatment for urinary tract infections, we note that the ICD-10-CM
classification provides instruction to identify the conditions reported
with ICD-10-CM diagnosis code N13.6 as an infection, and not as urinary
stones. Our clinical advisors agree with this classification and the
corresponding MS-DRG assignment for diagnosis code N13.6. In addition,
our clinical advisors noted that an ESWL procedure is a non-O.R.
procedure and they do not believe that this procedure is a valid
indicator of resource consumption for cases that involve an infection
and obstruction. Our clinical advisors believe that the resources used
for a case that involves an infection and an obstruction are clinically
distinct from the cases that involve an obstruction only in the course
of treatment. Therefore, our clinical advisors do not agree with the
request to add ICD-10-CM diagnosis code N13.6 to the list of principal
diagnoses for MS-DRGs 691 and 692.
We also performed various analyses of claims data to evaluate this
request. We analyzed claims data from the September 2018 update of the
FY 2018 MedPAR file for MS-DRGs 689 and 690 to identify cases reporting
ICD-10-CM diagnosis code N13.6 as the principal diagnosis with and
without an ESWL procedure. Our findings are reflected in the table
below.
Kidney and Urinary Tract Infections With Principal Diagnosis of Pyonephrosis With and Without ESWL
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 689--All cases........................................... 68,020 4.8 $7,873
MS-DRG 689--Cases with principal diagnosis of pyonephrosis...... 1,024 6.1 13,809
MS-DRG 689--Cases with principal diagnosis of pyonephrosis with 6 14.2 45,489
ESWL...........................................................
MS-DRG 690--All cases........................................... 131,999 3.5 5,692
MS-DRG 690--Cases with principal diagnosis of pyonephrosis...... 4,625 3.6 5,483
MS-DRG 690--Cases with principal diagnosis of pyonephrosis with 24 4.8 14,837
ESWL...........................................................
----------------------------------------------------------------------------------------------------------------
For MS-DRG 689, we found a total of 68,020 cases with an average
length of stay of 4.8 days and average costs of $7,873. Of those 68,020
cases, we found 1,024 cases reporting pyonephrosis (ICD-10-CM diagnosis
code N13.6) as a principal diagnosis with an average length of stay of
6.1 days and average costs of $13,809. Of those 1,024 cases reporting
pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis,
there were 6 cases that also reported an ESWL procedure with an average
length of stay of 14.2 days and average costs of $45,489. For MS-DRG
[[Page 19206]]
690, we found a total of 131,999 cases with an average length of stay
of 3.5 days and average costs of $5,692. Of those 131,999 cases, we
found 4,625 cases reporting pyonephrosis (ICD-10-CM diagnosis code
N13.6) as a principal diagnosis with an average length of stay of 3.6
days and average costs of $5,483. Of those 4,625 cases reporting
pyonephrosis (ICD-10-CM diagnosis code N13.6) as a principal diagnosis,
there were 24 cases that also reported an ESWL procedure with an
average length of stay of 4.8 days and average costs of $14,837.
The data indicate that the 1,024 cases reporting pyonephrosis (ICD-
10-CM diagnosis code N13.6) as a principal diagnosis in MS-DRG 689 have
a longer average length of stay (6.1 days versus 4.8 days) and higher
average costs ($13,809 versus $7,873) compared to all the cases in MS-
DRG 689. The data also indicate that the 6 cases reporting pyonephrosis
(ICD-10-CM diagnosis code N13.6) as a principal diagnosis that also
reported an ESWL procedure have a longer average length of stay (14.2
days versus 4.8 days) and higher average costs ($45,489 versus $7,873)
in comparison to all the cases in MS-DRG 689. We found similar results
for cases reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a
principal diagnosis with an ESWL procedure in MS-DRG 690, where the
average length of stay was slightly longer (4.8 days versus 3.5 days)
and the average costs were higher ($14,837 versus $5,692).
We then conducted further analysis for the six cases in MS-DRG 689
that reported a principal diagnosis of pyonephrosis with ESWL to
determine what factors may be contributing to the longer lengths of
stay and higher average costs. Specifically, we analyzed the MCC
conditions that were reported across the six cases. Our findings are
shown in the table below.
Secondary Diagnosis MCC Conditions Reported in MS-DRG 689 With Principal Diagnosis of Pyonephrosis with ESWL
----------------------------------------------------------------------------------------------------------------
Number of Average
ICD-10-CM code Description times reported length of stay Average costs
----------------------------------------------------------------------------------------------------------------
A41.9........................... Sepsis, unspecified organism.. 2 26.5 96,525
G82.50.......................... Quadriplegia, unspecified..... 1 7 13,782
I50.23.......................... Acute on chronic systolic 1 7 13,304
(congestive) heart failure.
J96. 01......................... Acute respiratory failure with 1 7 13,304
hypoxia.
K66.1........................... Hemoperitoneum................ 1 10 26,314
L89.153......................... Pressure ulcer of sacral 1 8 26,487
region, stage 3.
R57.1........................... Hypovolemic shock............. 1 10 26,314
-----------------------------------------------
Total....................... .............................. 8 12.8 39,069
----------------------------------------------------------------------------------------------------------------
We found seven secondary diagnosis MCC conditions reported among
the six cases in MS-DRG 689 that had a principal diagnosis of
pyonephrosis with ESWL. These MCC conditions appear to have contributed
to the longer lengths of stay and higher average costs for those six
cases. As shown in the table above, the overall average length of stay
for the cases reporting these conditions is 12.8 days with average
costs of $39,069, which is consistent with the average length of stay
of 14.2 days and average costs of $45,489 for the cases in MS-DRG 689
that had a principal diagnosis of pyonephrosis with ESWL.
We then analyzed the 24 cases in MS-DRG 690 that reported a
principal diagnosis of pyonephrosis with ESWL to determine what factors
may be contributing to the longer lengths of stay and higher average
costs. Specifically, we analyzed the CC conditions that were reported
across the 24 cases. Our findings are shown in the table below.
Secondary Diagnosis CC Conditions Reported in MS-DRG 690 With Principal Diagnosis of Pyonephrosis With ESWL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of Average
ICD-10-CM code Description times reported length of stay Average costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
B37.0........................................ Candidal stomatitis...................................... 2 9.5 $18,895
B37.49....................................... Other urogenital candidiasis............................. 2 7.5 30,458
C79.89....................................... Secondary malignant neoplasm of other specified sites.... 1 3 5,882
E22.2........................................ Syndrome of inappropriate secretion of antidiuretic 1 2 5,979
hormone.
E44.0........................................ Moderate protein-calorie malnutrition.................... 1 6 9,027
E46.......................................... Unspecified protein-calorie malnutrition................. 2 5.5 8,704
E87.0........................................ Hyperosmolality and hypernatremia........................ 1 6 9,027
E87.1........................................ Hypo-osmolality and hyponatremia......................... 1 5 12,339
F11.20....................................... Opioid dependence, uncomplicated......................... 1 1 8,209
F33.1........................................ Major depressive disorder, recurrent, moderate........... 1 12 55,034
G81.94....................................... Hemiplegia, unspecified affecting left nondominant side.. 3 9.3 25,390
G82.20....................................... Paraplegia, unspecified.................................. 1 10 15,142
G93.40....................................... Encephalopathy, unspecified.............................. 2 7 10,277
I13.0........................................ Hypertensive heart and chronic kidney disease with heart 1 4 12,348
failure and stage 1 through stage 4 chronic kidney
disease, or unspecified chronic kidney dis.
I48.1........................................ Persistent atrial fibrillation........................... 1 12 55,034
I50.22....................................... Chronic systolic (congestive) heart failure.............. 1 12 55,034
I50.32....................................... Chronic diastolic (congestive) heart failure............. 2 3.5 9,115
I69.351...................................... Hemiplegia and hemiparesis following cerebral infarction 1 3 4,845
affecting right dominant side.
[[Page 19207]]
I69.859...................................... Hemiplegia and hemiparesis following other 1 4 18,160
cerebrovascular disease affecting unspecified side.
I97.791...................................... Other intraoperative cardiac functional disturbances 1 8 8,114
during other surgery.
J44.0........................................ Chronic obstructive pulmonary disease with acute lower 1 11 25,641
respiratory infection.
J44.1........................................ Chronic obstructive pulmonary disease with (acute) 2 5 11,283
exacerbation.
J96.10....................................... Chronic respiratory failure, unspecified whether with 1 12 55,034
hypoxia or hypercapnia.
J96.11....................................... Chronic respiratory failure with hypoxia................. 2 7 15,243
K57.92....................................... Diverticulitis of intestine, part unspecified, without 1 8 12,150
perforation or abscess without bleeding.
N12.......................................... Tubulo-interstitial nephritis, not specified as acute or 1 11 25,641
chronic.
N13.8........................................ Other obstructive and reflux uropathy.................... 1 5 32,854
N17.9........................................ Acute kidney failure, unspecified........................ 1 2 21,329
N20.1........................................ Calculus of ureter....................................... 1 10 15,142
N20.2........................................ Calculus of kidney with calculus of ureter............... 1 6 9,027
R44.3........................................ Hallucinations, unspecified.............................. 1 2 21,329
R47.01....................................... Aphasia.................................................. 1 4 10,161
R78.81....................................... Bacteremia............................................... 1 11 4,849
S37.012A..................................... Minor contusion of left kidney, initial encounter........ 1 2 21,329
T83.511A..................................... Infection and inflammatory reaction due to indwelling 1 10 15,142
urethral catheter, initial encounter.
Z68.1........................................ Body mass index (BMI) 19.9 or less, adult................ 2 4.5 10,040
Z68.43....................................... Body mass index (BMI) 50-59.9, adult..................... 1 3 6,145
-----------------------------------------------
Total.................................... ......................................................... 47 6.6 18,173
--------------------------------------------------------------------------------------------------------------------------------------------------------
We found 37 secondary diagnosis CC conditions reported among the 24
cases in MS-DRG 690 that had a principal diagnosis of pyonephrosis with
ESWL. These CC conditions appear to have contributed to the longer
length of stay and higher average costs for those 24 cases. As shown in
the table above, the overall average length of stay for the cases
reporting these conditions is 6.6 days with average costs of $18,173,
which is higher, although comparable, to the average length of stay of
4.8 days and average costs of $14,837 for the cases in MS-DRG 690 that
had a principal diagnosis of pyonephrosis with ESWL. We note that it
appears that 1 of the 24 cases had at least 4 secondary diagnosis CC
conditions (F33.1, I48.1, I50.22, and J96.10) with an average length of
stay of 12 days and average costs of $55,034, which we believe
contributed greatly overall to the longer length of stay and higher
average costs for those secondary diagnosis CC conditions reported
among the 24 cases.
Our clinical advisors agree that the resource consumption for the 6
cases in MS-DRG 689 and the 24 cases in MS-DRG 690 that reported a
principal diagnosis of pyonephrosis with ESWL cannot be directly
attributed to ESWL and believe that it is the secondary diagnosis MCC
and CC conditions that are the major contributing factors to the longer
average length of stay and higher average costs for these cases.
We also analyzed claims data for MS-DRGs 691 and 692 (Urinary
Stones with ESW Lithotripsy with CC/MCC and without CC/MCC,
respectively) and MS-DRGs 693 and 694 (Urinary Stones without ESW
Lithotripsy with MCC and without MCC, respectively) to identify claims
reporting pyonephrosis (ICD-10-CM diagnosis code N13.6) as a secondary
diagnosis. Our findings are shown in the following table.
MS-DRGs for Urinary Stones With Secondary Diagnosis of Pyonephrosis With and Without ESWL
----------------------------------------------------------------------------------------------------------------
Number of Average
MS-DRG times reported length of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 691--All cases........................................... 140 3.9 $11,997
MS-DRG 691--Cases with secondary diagnosis of pyonephrosis and 3 8 24,280
ESWL...........................................................
MS-DRG 692--All cases........................................... 124 2.1 8,326
MS-DRG 693--All cases........................................... 1,315 5.1 9,668
MS-DRG 693--Cases with secondary diagnosis of pyonephrosis...... 16 5.5 9,962
MS-DRG 694--All cases........................................... 7,240 2.7 5,263
MS-DRG 694--Cases with secondary diagnosis of pyonephrosis...... 89 3.5 6,678
----------------------------------------------------------------------------------------------------------------
As shown in the table above, in MS-DRG 691, there was a total of
140 cases with an average length of stay of 3.9 days and average costs
of $11,997. Of those 140 cases, there were 3 cases that reported
pyonephrosis as a secondary diagnosis and an ESWL procedure with an
average length of stay of 8.0 days and average costs of $24,280. There
was a total of 124 cases found in MS-DRG 692 with an average length of
stay of 2.1 days and average costs of $8,326. There were no cases in
MS-DRG 692 that reported pyonephrosis as a secondary diagnosis with an
ESWL procedure. For MS-DRG 693, there was a total of 1,315 cases with
an average length of stay of 5.1 days and average costs of $9,668. Of
[[Page 19208]]
those 1,315 cases, there were 16 cases reporting pyonephrosis as a
secondary diagnosis with an average length of stay of 5.5 days and
average costs of $9,962. For MS-DRG 694, there was a total of 7,240
cases with an average length of stay of 2.7 days and average costs of
$5,263. Of those 7,240 cases, there were 89 cases reporting
pyonephrosis as a secondary diagnosis with an average length of stay of
3.5 days and average costs of $6,678.
Similar to the process described above, we then conducted further
analysis for the three cases in MS-DRG 691 that reported a secondary
diagnosis of pyonephrosis with ESWL to determine what factors may be
contributing to the longer lengths of stay and higher average costs.
Specifically, we analyzed what other MCC and CC conditions were
reported across the three cases. We found no other MCC conditions
reported for those three cases. Our findings for the CC conditions
reported for those three cases are shown in the table below.
Secondary Diagnosis CC Conditions Reported in MS-DRG 691
----------------------------------------------------------------------------------------------------------------
Number of Average length
ICD-10-CM code Description times reported of stay Average costs
----------------------------------------------------------------------------------------------------------------
E44.0........................... Moderate protein-calorie 1 15 $52,384
malnutrition.
J96.10.......................... Chronic respiratory failure, 1 7 15,110
unspecified whether with
hypoxia or hypercapnia.
N13.6........................... Pyonephrosis.................. 2 8.5 28,865
N17.9........................... Acute kidney failure, 1 2 5,346
unspecified.
N39.0........................... Urinary tract infection, site 1 2 5,346
not specified.
Q79.6........................... Ehlers-Danlos syndrome........ 1 2 5,346
-----------------------------------------------
Total....................... .............................. 7 6.4 20,181
----------------------------------------------------------------------------------------------------------------
We found six secondary diagnosis CC conditions reported among the
three cases in MS-DRG 691 that had a secondary diagnosis of
pyonephrosis with ESWL. These CC conditions appear to have contributed
to the longer lengths of stay and higher average costs for those three
cases. As shown in the table above, the overall average length of stay
for the cases reporting these conditions is 6.4 days with average costs
of $20,181, which is more consistent with the average length of stay of
8.0 days and average costs of $24,280 for the cases in MS-DRG 691 that
had a secondary diagnosis of pyonephrosis with ESWL.
Our clinical advisors believe that the resource consumption for
those three cases cannot be directly attributed to ESWL and that it is
the secondary diagnosis CC conditions reported in addition to
pyonephrosis, which is also designated as a CC condition, that are the
major contributing factors for the longer average lengths of stay and
higher average costs for these cases in MS-DRG 691.
We did not conduct further analysis for the 16 cases in MS-DRG 693
or the 89 cases in MS-DRG 694 that reported a secondary diagnosis of
pyonephrosis because MS-DRGs 693 and 694 do not include ESWL procedures
and the average length of stay and average costs for those cases were
consistent with the data findings for all of the cases in their
assigned MS-DRG.
As discussed earlier in this section, the requestor suggested that
ICD-10-CM diagnosis code N13.6 should be grouped to MS-DRGs 691 and 692
when reported as a principal diagnosis because this grouping will more
appropriately reflect resource consumption for patients who undergo an
ESWL procedure for obstructive urinary calculi, while also receiving
treatment for urinary tract infections. However, based on the results
of the data analysis and input from our clinical advisors, we believe
that cases for which ICD-10-CM diagnosis code N13.6 was reported as a
principal diagnosis or as a secondary diagnosis with an ESWL procedure
should not be utilized as an indicator for increased utilization of
resources based on the performance of an ESWL procedure. Rather, we
believe that the resource consumption is more likely the result of
secondary diagnosis CC and/or MCC diagnosis codes.
With respect to the requestor's concern that cases reporting ICD-
10-CM diagnosis code T83.192A (Other mechanical complication of
indwelling ureteral stent, initial encounter) and an ESWL procedure are
not appropriately assigned and should be added to the list of principal
diagnoses for MS-DRGs 691 and 692 (Urinary Stones with ESW Lithotripsy
with CC/MCC and without CC/MCC, respectively), our clinical advisors
note that ICD-10-CM diagnosis code T83.192A is not necessarily
indicative of a patient having urinary stones. As such, they do not
support adding ICD-10-CM diagnosis code T83.192A to the list of
principal diagnosis codes for MS-DRGs 691 and 692.
We analyzed claims data to identify cases reporting ICD-10-CM
diagnosis code T83.192A as a principal diagnosis with ESWL in MS-DRGs
698, 699, and 700 (Other Kidney and Urinary Tract Diagnoses with MCC,
with CC, and without CC/MCC, respectively). Our findings are shown in
the following table.
MS-DRGs for Other Kidney and Urinary Tract Diagnoses With Principal Diagnosis of Other Mechanical Complications
of Indwelling Ureteral Stent With ESWL
----------------------------------------------------------------------------------------------------------------
Number of Average
MS-DRG cases length of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 698--All cases........................................... 56,803 6.1 $11,220
MS-DRG 698--Cases with diagnosis code T83.192A reported as 35 7.1 14,574
principal diagnosis............................................
MS-DRG 699--All cases........................................... 33,693 4.2 7,348
MS-DRG 699--Cases with diagnosis code T83.192A reported as 63 4.1 7,652
principal diagnosis............................................
MS-DRG 699--Cases with diagnosis code T83.192A reported as 1 3 7,986
principal diagnosis with ESWL..................................
[[Page 19209]]
MS-DRG 700--All cases........................................... 3,719 3 5,356
----------------------------------------------------------------------------------------------------------------
For MS-DRG 698, there was a total of 56,803 cases reported, with an
average length of stay of 6.1 days and average costs of $11,220. Of
these 56,803 cases, 35 cases reported ICD-10-CM diagnosis code T83.192A
as the principal diagnosis, with an average length of stay of 7.1 days
and average costs of $14,574. There were no cases that reported an ESWL
procedure with ICD-10-CM diagnosis code T83.192A as the principal
diagnosis in MS-DRG 698. For MS-DRG 699, there was a total of 33,693
cases reported, with an average length of stay of 4.2 days and average
costs of $7,348. Of the 33,693 cases in MS-DRG 699, there were 63 cases
that reported ICD-10-CM diagnosis code T83.192A as the principal
diagnosis, with an average length of stay of 4.1 days and average costs
of $7,652. There was only 1 case in MS-DRG 699 that reported ICD-10-CM
diagnosis code T83.192A as the principal diagnosis with an ESWL
procedure, with an average length of stay of 3 days and average costs
of $7,986. For MS-DRG 700, there was a total of 3,719 cases reported,
with an average length of stay of 3 days and average costs of $5,356.
There were no cases that reported ICD-10-CM diagnosis code T83.192A as
the principal diagnosis in MS-DRG 700. Of the 98 cases in MS-DRGs 698
and 699 that reported a principal diagnosis of other mechanical
complication of indwelling ureteral stent (diagnosis code T83.192A),
only 1 case also reported an ESWL procedure. Based on the results of
our data analysis and input from our clinical advisors, we are not
proposing to add ICD-10-CM diagnosis code T83.192A to the list of
principal diagnosis codes for MS-DRGs 691 and 692.
In connection with these requests, our clinical advisors
recommended that we evaluate the frequency with which ESWL is reported
in the inpatient setting across all the MS-DRGs. Therefore, we also
analyzed claims data from the September 2018 update of the FY 2018
MedPAR file to identify the other MS-DRGs to which claims reporting an
ESWL procedure were reported. Our findings are shown in the following
table.
------------------------------------------------------------------------
MS-DRGs MS-DRG description
------------------------------------------------------------------------
654....................... Major Bladder Procedures with CC.
657....................... Kidney and Ureter Procedures for Neoplasm
with CC.
659, 660, 661............. Kidney and Ureter Procedures for Non-
Neoplasm with MCC, with CC, without CC/MCC,
respectively.
662, 663.................. Minor Bladder Procedures with MCC and with
CC, respectively.
665, 666.................. Prostatectomy with MCC and with CC,
respectively.
668, 669, 670............. Transurethral Procedures with MCC, with CC,
and without CC/MCC, respectively.
671....................... Urethral Procedures with CC/MCC.
682, 683.................. Renal Failure with MCC and with CC,
respectively.
689, 690.................. Kidney and Urinary Tract Infections with MCC
and without MCC, respectively.
691, 692.................. Urinary Stones with ESW Lithotripsy with CC/
MCC and without CC/MCC, respectively.
696....................... Kidney and Urinary Tract Signs and Symptoms
without MCC.
698, 699, 700............. Other Kidney and Urinary Tract Diagnoses
with MCC, with CC, and without CC/MCC,
respectively.
982....................... Extensive O.R. Procedure Unrelated to
Principal Diagnosis with CC.
------------------------------------------------------------------------
Our findings with respect to the cases reporting an ESWL procedure
in each of these MS-DRGs, as compared to all cases in the applicable
MS-DRG, are shown in the table below.
----------------------------------------------------------------------------------------------------------------
Number of Average
MS-DRG times reported length of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 654--All cases........................................... 3,838 6.7 $19,805
MS-DRG 654--Cases reporting ESWL................................ 1 5 9,102
MS-DRG 657--All cases........................................... 7,242 4.1 14,047
MS-DRG 657--Cases reporting ESWL................................ 2 2 19,021
MS-DRG 659--All cases........................................... 7,761 8.1 18,717
MS-DRG 659--Cases reporting ESWL................................ 71 11.1 26,366
MS-DRG 660--All cases........................................... 17,617 4.1 10,292
MS-DRG 660--Cases reporting ESWL................................ 193 4 13,627
MS-DRG 661--All cases........................................... 12,434 2.3 7,997
MS-DRG 661--Cases reporting ESWL................................ 154 2.7 12,639
MS-DRG 662--All cases........................................... 614 10.2 23,110
MS-DRG 662--Cases reporting ESWL................................ 1 22 57,520
MS-DRG 663--All cases........................................... 1,349 5 11,213
MS-DRG 663--Cases reporting ESWL................................ 2 3.5 15,870
MS-DRG 665--All cases........................................... 589 9.4 21,328
MS-DRG 665--Cases reporting ESWL................................ 2 16.5 17,710
MS-DRG 666--All cases........................................... 1,517 5.6 13,060
MS-DRG 666--Cases reporting ESWL................................ 2 9.5 16,521
MS-DRG 668--All cases........................................... 2,065 9 20,229
[[Page 19210]]
MS-DRG 668--Cases reporting ESWL................................ 1 4 19,383
MS-DRG 669--All cases........................................... 5,259 4.9 11,217
MS-DRG 669--Cases reporting ESWL................................ 5 2.4 13,006
MS-DRG 670--All cases........................................... 1,707 2.6 7,177
MS-DRG 670--Cases reporting ESWL................................ 5 3 18,416
MS-DRG 671--All cases........................................... 367 6.4 13,519
MS-DRG 671--Cases reporting ESWL................................ 1 3 29,731
MS-DRG 682--All cases........................................... 97,347 5.7 10,384
MS-DRG 682--Cases reporting ESWL................................ 5 10 26,773
MS-DRG 683--All cases........................................... 132,206 3.9 6,450
MS-DRG 683--Cases reporting ESWL................................ 4 13.3 19,706
MS-DRG 689--All cases........................................... 68,020 4.8 7,873
MS-DRG 689--Cases reporting ESWL................................ 11 13.3 35,510
MS-DRG 690--All cases........................................... 131,999 3.5 5,692
MS-DRG 690--Cases reporting ESWL................................ 39 4.9 13,567
MS-DRG 691--All cases........................................... 140 3.9 11,997
MS-DRG 691--Cases reporting ESWL................................ 140 3.9 11,997
MS-DRG 692--All cases........................................... 124 2.1 8,326
MS-DRG 692--Cases reporting ESWL................................ 124 2.1 8,326
MS-DRG 696--All cases........................................... 5,933 2.9 4,938
MS-DRG 696--Cases reporting ESWL................................ 2 2.5 6,238
MS-DRG 698--All cases........................................... 56,803 6.1 11,220
MS-DRG 698--Cases reporting ESWL................................ 18 9.2 27,818
MS-DRG 699--All cases........................................... 33,693 4.2 7,348
MS-DRG 699--Cases reporting ESWL................................ 9 4.4 10,986
MS-DRG 700--All cases........................................... 3,719 3 5,356
MS-DRG 700--Cases reporting ESWL................................ 1 1 7,580
MS-DRG 982--All cases........................................... 16,834 6.3 16,939
MS-DRG 982--Cases reporting ESWL................................ 2 11 74,751
----------------------------------------------------------------------------------------------------------------
Our data analysis indicates that, generally, the subset of cases
reporting an ESWL procedure appear to have a longer average length of
stay and higher average costs when compared to all the cases in their
assigned MS-DRG. However, we note that this same subset of cases also
reported at least one O.R. procedure and/or diagnosis designated as a
CC or an MCC, which our clinical advisors believe are contributing
factors to the longer average lengths of stay and higher average costs,
with the exception of the case assigned to MS-DRG 700, which is a
medical MS-DRG and has no CC or MCC conditions in the logic. Therefore,
our clinical advisors do not believe that cases reporting an ESWL
procedure should be considered as an indication of increased resource
consumption for inpatient hospitalizations.
Our clinical advisors also suggested that we evaluate the reporting
of ESWL procedures in the inpatient setting over the past few years. We
analyzed claims data for MS-DRGs 691 and 692 from the FY 2012 through
the FY 2016 MedPAR files, which were used in our analysis of claims
data for MS-DRG reclassification requests effective for FY 2014 through
FY 2018. We note that the analysis findings shown in the following
table reflect ICD-9-CM, ICD-10-CM and ICD-10-PCS coded claims data.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2014 (version 31) FY 2015 (version 32) FY 2016 (version 33) FY 2017 (version 34) FY 2018 (version 35)
-----------------------------------------------------------------------------------------------------------------------------------------------------
MS-DRG Average Average Average Average Average
Number length Average Number length Average Number length Average Number length Average Number length Average
of cases of stay costs of cases of stay costs of cases of stay costs of cases of stay costs of cases of stay costs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
MS-DRG 691--Urinary Stones with ESW 898 3.77 $10,274 832 3.81 $11,141 812 3.72 $11,534 750 4.06 $11,907 448 3.4 $11,502
Lithotripsy w CC/MCC.....................
MS-DRG 692--Urinary Stones with ESW 231 2.02 7,292 197 2.14 8,041 133 2.32 9,273 103 2.39 9,398 61 2.3 8,702
Lithotripsy without CC/MCC...............
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The data show a steady decline in the number of cases reporting
urinary stones with an ESWL procedure for the past 5 years. As
previously noted, the total number of cases reporting urinary stones
with an ESWL procedure for MS-DRGs 691 and 692 based on our analysis of
the September 2018 update of the FY 2018 MedPAR file was 264, which
again is a decline from the prior year's figures. As discussed
throughout this section, an ESWL procedure is a non-O.R. procedure
which currently groups to medical MS-DRGs 691 and 692. Therefore,
because an ESWL procedure is a non-O.R. procedure and due to decreased
usage of this procedure in the inpatient setting for the treatment of
urinary stones, our clinical advisors believe that there is no longer a
clinical reason to subdivide the MS-DRGs for urinary stones (MS-DRGs
691, 692, 693, and 694) based on ESWL procedures.
Therefore, we are proposing to delete MS-DRGs 691 and 692 and to
revise the titles for MS-DRGs 693 and 694 from ``Urinary Stones without
ESW Lithotripsy with MCC'' and ``Urinary Stones without ESW Lithotripsy
without MCC'', respectively to ``Urinary Stones with MCC'' and
``Urinary Stones without MCC'', respectively.
8. MDC 12 (Diseases and Disorders of the Male Reproductive System):
Diagnostic Imaging of Male Anatomy
We received a request to review four ICD-10-CM diagnosis codes
describing
[[Page 19211]]
body parts associated with male anatomy that are currently assigned to
MDC 5 (Diseases and Disorders of the Circulatory System) in MS-DRGs 302
and 303 (Atherosclerosis with MCC and Atherosclerosis without MCC,
respectively). The four codes are listed in the following table.
------------------------------------------------------------------------
ICD-10-CM code Code description
------------------------------------------------------------------------
R93.811................... Abnormal radiologic findings on diagnostic
imaging of right testicle.
R93.812................... Abnormal radiologic findings on diagnostic
imaging of left testicle.
R93.813................... Abnormal radiologic findings on diagnostic
imaging of testicles, bilateral.
R93.819................... Abnormal radiologic findings on diagnostic
imaging of unspecified testicle.
------------------------------------------------------------------------
The requestor recommended that the four diagnosis codes shown in
the table above be considered for assignment to MDC 12 (Diseases and
Disorders of the Male Reproductive System), consistent with other
diagnosis codes that include the male anatomy. However, the requestor
did not suggest a specific MS-DRG assignment within MDC 12.
We examined claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 302 and 303 to identify any cases
reporting a diagnosis code for abnormal radiologic findings on
diagnostic imaging of the testicles. We did not find any such cases.
Our clinical advisors reviewed this request and determined that the
assignment of diagnosis codes R93.811, R93.812, R93.813, and R93.819 to
MDC 5 in MS-DRGs 302 and 303 was a result of replication from ICD-9-CM
diagnosis code 793.2 (Nonspecific (abnormal) findings on radiological
and other examination of other intrathoracic organs) which was assigned
to those MS-DRGs. Therefore, our clinical advisors support reassignment
of these codes to MDC 12. Our clinical advisors agree that this
reassignment is clinically appropriate because these diagnosis codes
are specific to the male anatomy, consistent with other diagnosis codes
in MDC 12 that include the male anatomy. Specifically, our clinical
advisors suggest reassignment of the four diagnosis codes to MS-DRGs
729 and 730 (Other Male Reproductive System Diagnoses with CC/MCC and
without CC/MCC, respectively). Therefore, we are proposing to reassign
ICD-10-CM diagnosis codes R93.811, R93.812, R93.813, and R93.819 from
MDC 5 in MS-DRGs 302 and 303 to MDC 12 in MS-DRGs 729 and 730.
9. MDC 14 (Pregnancy, Childbirth and the Puerperium): Proposed
Reassignment of Diagnosis Code O99.89
We received a request to review the MS-DRG assignment for cases
reporting ICD-10-CM diagnosis code O99.89 (Other specified diseases and
conditions complicating pregnancy, childbirth and the puerperium). The
requestor stated that it is experiencing MS-DRG shifts to MS-DRG 769
(Postpartum and Post Abortion Diagnoses with O.R. Procedure) as a
result of the new obstetric MS-DRG logic when ICD-10-CM diagnosis code
O99.89 is reported as a principal diagnosis in the absence of a
delivery code on the claim (to indicate the patient delivered during
that hospitalization), or when there is no other secondary diagnosis
code on the claim indicating that the patient is in the postpartum
period. According to the requestor, claims reporting ICD-10-CM
diagnosis code O99.89 as a principal diagnosis for conditions described
as occurring during the antepartum period that are reported with an
O.R. procedure are grouping to MS-DRG 769. In the example provided by
the requestor, ICD-10-CM diagnosis code O99.89 was reported as the
principal diagnosis, with ICD-10-CM diagnosis codes N13.2
(Hydronephrosis with renal and ureteral calculous obstruction) and
Z3A.25 (25 weeks of gestation of pregnancy) reported as secondary
diagnoses with ICD-10-PCS procedure code 0T68DZ (Dilation of right
ureter with intraluminal device, endoscopic approach), resulting in
assignment to MS-DRG 769. The requestor noted that, in the FY 2019
IPPS/LTCH PPS final rule (83 FR 41212), we stated ``If there was not a
principal diagnosis of abortion reported on the claim, the logic asks
if there was a principal diagnosis of an antepartum condition reported
on the claim. If yes, the logic then asks if there was an O.R.
procedure reported on the claim. If yes, the logic assigns the case to
one of the proposed new MS-DRGs 817, 818, or 819.'' In the requestor's
example, there were not any codes reported to indicate that the patient
was in the postpartum period, nor was there a delivery code reported on
the claim. Therefore, the requestor suggested that a more appropriate
assignment for ICD-10-CM diagnosis code O99.89 may be MS-DRGs 817, 818,
and 819 (Other Antepartum Diagnoses with O.R. Procedure with MCC, with
CC and without CC/MCC, respectively).
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41202 through
41216), we finalized our proposal to restructure the MS-DRGs within MDC
14 (Pregnancy, Childbirth and the Puerperium) which established new
concepts for the GROUPER logic. As a result of the modifications made,
ICD-10-CM diagnosis code O99.89 was classified as a postpartum
condition and is currently assigned to MS-DRG 769 (Postpartum and Post
Abortion Diagnoses with O.R. Procedure) and MS-DRG 776 (Postpartum and
Post Abortion Diagnoses without O.R. Procedure) under the Version 36
ICD-10 MS-DRGs. As also discussed and displayed in Diagram 2 in the FY
2019 IPPS/LTCH PPS final rule (83 FR 41212 through 41213), the logic
asks if there was a principal diagnosis of a postpartum condition
reported on the claim. If yes, the logic then asks if there was an O.R.
procedure reported on the claim. If yes, the logic assigns the case to
MS-DRG 769. If no, the logic assigns the case to MS-DRG 776. Therefore,
the MS-DRG assignment for the example provided by the requestor is
grouping accurately according to the current GROUPER logic.
We analyzed claims data from the September 2018 update of the FY
2018 MedPAR file for cases reporting diagnosis code O99.89 in MS-DRGs
769 and 776 as a principal diagnosis or as a secondary diagnosis. Our
findings are shown in the following table.
[[Page 19212]]
Postpartum MS-DRGs With Principal or Secondary Diagnosis of Other Specified Diseases and Conditions Complicating
Pregnancy, Childbirth and the Puerperium
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 769--All cases........................................... 91 4.3 $11,015
MS-DRG 769--Cases reporting diagnosis code O99.89 as principal 7 5.6 19,059
diagnosis......................................................
MS-DRG 769--Cases reporting diagnosis code O99.89 as secondary 61 12.1 41,717
diagnosis......................................................
MS-DRG 776--All cases........................................... 560 3.1 5,332
MS-DRG 776--Cases reporting diagnosis code O99.89 as principal 57 3.5 6,439
diagnosis......................................................
----------------------------------------------------------------------------------------------------------------
As shown in the table above, we found a total of 91 cases in MS-DRG
769 with an average length of stay of 4.3 days and average costs of
$11,015. Of these 91 cases, 7 cases reported ICD-10-CM diagnosis code
O99.89 as a principal diagnosis with an average length of stay of 5.6
days and average costs of $19,059, and 61 cases reported ICD-10-CM
diagnosis code O99.89 as a secondary diagnosis with an average length
of stay of 12.1 days and average costs of $41,717. For MS-DRG 776, we
found a total of 560 cases with an average length of stay of 3.1 days
and average costs of $5,332. Of these 560 cases, 57 cases reported ICD-
10-CM diagnosis code O99.89 as a principal diagnosis with an average
length of stay of 3.5 days and average costs of $6,439. There were no
cases reporting ICD-10-CM diagnosis code O99.89 as a secondary
diagnosis in MS-DRG 776.
For MS-DRG 769, the data show that the 68 cases reporting ICD-10-CM
diagnosis code O99.89 as a principal or secondary diagnosis have a
longer average length of stay and higher average costs compared to all
the cases in MS-DRG 769. For MS-DRG 776, the data show that the 57
cases reporting a principal diagnosis of ICD-10-CM diagnosis code
O99.89 have a similar average length of stay compared to all the cases
in MS-DRG 776 (3.5 days versus 3.1 days) and average costs that are
consistent with the average costs of all cases in MS-DRG 776 ($6,439
versus $5,332).
We note that the description for ICD-10-CM diagnosis code O99.89
``Other specified diseases and conditions complicating pregnancy,
childbirth and the puerperium'', describes conditions that may occur
during the antepartum period (pregnancy), during childbirth, or during
the postpartum period (puerperium). In addition, in the ICD-10-CM
Tabular List of Diseases, there is an inclusion term at subcategory
O99.8- instructing users that the reporting of any diagnosis codes in
that subcategory is intended for conditions that are reported in
certain ranges of the classification. Specifically, the inclusion term
states ``Conditions in D00-D48, H00-H95, M00-N99, and Q00-Q99.'' There
is also an instructional note to ``Use additional code to identify
condition.'' As a result, ICD-10-CM diagnosis code O99.89 may be
reported to identify conditions that occur during the antepartum period
(pregnancy), during childbirth, or during the postpartum period
(puerperium). However, it is not restricted to the reporting of
obstetric specific conditions only. In the example provided by the
requestor, ICD-10-CM diagnosis code O99.89 was reported as the
principal diagnosis with ICD-10-CM diagnosis code N13.2 (Hydronephrosis
with renal and ureteral calculous obstruction) as a secondary
diagnosis. ICD-10-CM diagnosis code N13.2 is within the code range
referenced earlier in this section (M00-N99) and qualifies as an
appropriate condition for reporting according to the instruction.
As noted earlier, ICD-10-CM diagnosis code O99.89 is intended to
report conditions that occur during the antepartum period (pregnancy),
during childbirth, or during the postpartum period (puerperium) and is
not restricted to the reporting of obstetric specific conditions only.
However, because the diagnosis code description includes three distinct
obstetric related stages, it is not clear what stage the patient is in
by this single code. For example, upon review of subcategory O99.8-, we
recognized that the other ICD-10-CM diagnosis code sub-subcategories
are expanded to include unique codes that identify the condition as
occurring or complicating pregnancy, childbirth or the puerperium.
Specifically, sub-subcategory O99.81- (Abnormal glucose complicating
pregnancy, childbirth, and the puerperium) is expanded to include the
following ICD-10-CM diagnosis codes.
------------------------------------------------------------------------
ICD-10-CM code Code description
------------------------------------------------------------------------
O99.810................... Abnormal glucose complicating pregnancy.
O99.814................... Abnormal glucose complicating childbirth.
O99.815................... Abnormal glucose complicating the
puerperium.
------------------------------------------------------------------------
The codes listed above specifically identify at what stage the
abnormal glucose was a complicating condition. Because each code
uniquely identifies a stage, the code can be easily classified under
MDC 14 as an antepartum condition (ICD-10-CM diagnosis code O99.810),
occurring during a delivery episode (ICD-10-CM diagnosis code O99.814),
or as a postpartum condition (ICD-10-CM diagnosis code O99.815). The
same is not true for ICD-10-CM diagnosis code O99.89 because it
includes all three stages in the single code.
Therefore, we examined the number and type of secondary diagnoses
reported with ICD-10-CM diagnosis code O99.89 as a principal diagnosis
for MS-DRGs 769 and 776 to identify how many secondary diagnoses were
related to other obstetric conditions and how many were related to non-
obstetric conditions.
[[Page 19213]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of
secondary Number of Number of Number of Number of Number of
diagnoses secondary OB secondary OB secondary OB secondary OB secondary non-
MS-DRG reported with related related related related OB related
O99.89 as diagnoses antepartum postpartum delivery diagnoses
principal diagnoses diagnoses diagnoses
--------------------------------------------------------------------------------------------------------------------------------------------------------
MS-DRG 769.............................................. 59 13 11 1 1 46
MS-DRG 776.............................................. 376 113 88 19 6 263
--------------------------------------------------------------------------------------------------------------------------------------------------------
As shown in the table above, there was a total of 59 secondary
diagnoses reported with diagnosis code O99.89 as the principal
diagnosis for MS-DRG 769. Of those 59 secondary diagnoses, 13 were
obstetric (OB) related diagnosis codes (11 antepartum, 1 postpartum and
1 delivery) and 46 were non-obstetric (Non-OB) related diagnosis codes.
For MS-DRG 776, there was a total of 376 secondary diagnoses reported
with diagnosis code O99.89 as the principal diagnosis. Of those 376
secondary diagnoses, 113 were obstetric (OB) related diagnosis codes
(88 antepartum, 19 postpartum and 6 delivery) and 263 were non-
obstetric (Non-OB) related diagnosis codes.
The data reflect that, for MS-DRGs 769 and 776, the number of
secondary diagnoses identified as OB-related antepartum diagnoses is
greater than the number of secondary diagnoses identified as OB-related
postpartum diagnoses (99 antepartum diagnoses versus 20 postpartum
diagnoses). The data also indicate that, of the 435 secondary diagnoses
reported with ICD-10-CM diagnosis code O99.89 as the principal
diagnosis, 309 (71 percent) of those secondary diagnoses were non-OB-
related diagnosis codes. Because there was a greater number of
secondary diagnoses identified as OB-related antepartum diagnoses
compared to the OB-related postpartum diagnoses within the postpartum
MS-DRGs when ICD-10-CM diagnosis code O99.89 was reported as the
principal diagnosis, we performed further analysis of diagnosis code
O99.89 within the antepartum MS-DRGs.
Under the Version 35 ICD-10 MS-DRGs, diagnosis code O99.89 was
classified as an antepartum condition and was assigned to MS-DRG 781
(Other Antepartum Diagnoses with Medical Complications). Therefore, we
also analyzed claims data for MS-DRGs 817, 818 and 819 (Other
Antepartum Diagnoses with O.R. Procedure with MCC, with CC and without
CC/MCC, respectively) and MS-DRGs 831, 832, and 833 (Other Antepartum
Diagnoses without O.R. Procedure with MCC, with CC and without CC/MCC,
respectively) for cases reporting ICD-10-CM diagnosis code O99.89 as a
secondary diagnosis. We note that the analysis for the proposed FY 2020
ICD-10 MS-DRGs is based upon the September 2018 update of the FY 2018
MedPAR claims data that were grouped through the ICD-10 MS-DRG GROUPER
Version 36. Our findings are shown in the table below.
Antepartum MS-DRGs With Secondary Diagnosis of Other Specified Diseases and Conditions Complicating Pregnancy,
Childbirth and the Puerperium
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 817--All cases........................................... 63 5.7 $14,948
MS-DRG 817--Cases reporting diagnosis code O99.89 as secondary 8 10.8 24,359
diagnosis......................................................
MS-DRG 818--All cases........................................... 78 4.1 9,343
MS-DRG 818--Cases reporting diagnosis code O99.89 as secondary 7 3.4 14,182
diagnosis......................................................
MS-DRG 819--All cases........................................... 25 2.2 5,893
MS-DRG 819--Cases reporting diagnosis code O99.89 as secondary 1 1 4,990
diagnosis......................................................
MS-DRG 831--All cases........................................... 747 4.8 7,714
MS-DRG 831--Cases reporting diagnosis code O99.89 as secondary 127 5.4 7,050
diagnosis......................................................
MS-DRG 832--All cases........................................... 1,142 3.6 5,159
MS-DRG 832--Cases reporting diagnosis code O99.89 as secondary 145 4.2 5,656
diagnosis......................................................
MS-DRG 833--All cases........................................... 537 2.6 3,807
MS-DRG 833--Cases reporting diagnosis code O99.89 as secondary 47 2.6 3,307
diagnosis......................................................
----------------------------------------------------------------------------------------------------------------
As shown in the table above, we found a total of 63 cases in MS-DRG
817 with an average length of stay of 5.7 days and average costs of
$14,948. Of these 63 cases, there were 8 cases reporting ICD-10-CM
diagnosis code O99.89 as a secondary diagnosis with an average length
of stay of 10.8 days and average costs of $24,359. For MS-DRG 818, we
found a total of 78 cases with an average length of stay of 4.1 days
and average costs of $9,343. Of these 78 cases, there were 7 cases
reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with
an average length of stay of 3.4 days and average costs of $14,182. For
MS-DRG 819, we found a total of 25 cases with an average length of stay
of 2.2 days and average costs of $5,893. Of these 25 cases, there was 1
case reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis
with an average length of stay of 1 day and average costs of $4,990.
For MS-DRG 831, we found a total of 747 cases with an average
length of stay of 4.8 days and average costs of $7,714. Of these 747
cases, there were 127 cases reporting ICD-10-CM diagnosis code O99.89
as a secondary diagnosis with an average length of stay of 5.4 days and
average costs of $7,050. For MS-DRG 832, we found a total of 1,142
cases with an average length of stay of 3.6 days and average costs of
$5,159. Of these 1,142 cases, there were 145 cases reporting ICD-10-CM
diagnosis code O99.89 as a secondary diagnosis with an average length
of stay of 4.2 days and average costs of $5,656. For MS-DRG 833, we
found a total of 537 cases with an average length of stay of 2.6 days
and average costs of $3,807. Of these 537 cases, there were 47 cases
reporting ICD-10-CM diagnosis code O99.89 as a secondary diagnosis with
an average length of stay of 2.6 days and average costs of $3,307.
[[Page 19214]]
Overall, there was a total of 335 cases reporting ICD-10-CM
diagnosis code O99.89 as a secondary diagnosis within the antepartum
MS-DRGs. Of those 335 cases, 16 cases involved an O.R. procedure and
319 cases did not involve an O.R. procedure. The data indicate that
ICD-10-CM diagnosis code O99.89 is reported more often as a secondary
diagnosis within the antepartum MS-DRGs (335 cases) than it is reported
as a principal or secondary diagnosis within the postpartum MS-DRGs
(125 cases).
Our clinical advisors believe that, because ICD-10-CM diagnosis
code O99.89 can be reported during the antepartum period (pregnancy),
during childbirth, or during the postpartum period (puerperium), there
is not a clear clinical indication as to which set of MS-DRGs
(antepartum, delivery, or postpartum) would be the most appropriate
assignment for this diagnosis code. They recommended that we
collaborate with the National Center for Health Statistics (NCHS) at
the Centers for Disease Control and Prevention (CDC), in consideration
of a proposal to possibly expand ICD-10-CM diagnosis code O99.89 to
become a sub-subcategory that would result in the creation of unique
codes with a sixth digit character to specify which obstetric related
stage the patient is in. For example, under subcategory O99.8-, a
proposed new sub-subcategory for ICD-10-CM diagnosis code O99.89- could
include the following proposed new diagnosis codes:
O99.890 (Other specified diseases and conditions
complicating pregnancy);
O99.894 (Other specified diseases and conditions
complicating childbirth); and
O99.85 (Other specified diseases and conditions
complicating the puerperium).
If such a proposal to create this new sub-subcategory and new
diagnosis codes were approved and finalized, it would enable improved
data collection and more appropriate MS-DRG assignment, consistent with
the current MS-DRG assignments of the existing obstetric related
diagnosis codes. For instance, a new diagnosis code described as
``complicating pregnancy'' would be clinically aligned with the
antepartum MS-DRGs, a new diagnosis code described as ``complicating
childbirth'' would be clinically aligned with the delivery MS-DRGs, and
a new diagnosis code described as ``complicating the puerperium'' would
be clinically aligned with the postpartum MS-DRGs. (We note that all
requests for new diagnosis codes require that a proposal be approved
for discussion at a future ICD-10 Coordination and Maintenance
Committee meeting.)
While our clinical advisors could not provide a strong clinical
justification for classifying ICD-10-CM diagnosis code O99.89 as an
antepartum condition versus as a postpartum condition for the reasons
described above, they did consider the claims data to be informative as
to how the diagnosis code is being reported for obstetric patients. In
analyzing both the postpartum MS-DRGs and the antepartum MS-DRGs
discussed earlier in this section, they agreed that the data clearly
show that ICD-10-CM diagnosis code O99.89 is reported more frequently
as a secondary diagnosis within the antepartum MS-DRGs than it is
reported as a principal or secondary diagnosis within the postpartum
MS-DRGs.
Based on our analysis of claims data and input from our clinical
advisors, we are proposing to reclassify ICD-10-CM diagnosis code
O99.89 from a postpartum condition to an antepartum condition under MDC
14. If finalized, ICD-10-CM diagnosis code O99.89 would follow the
logic as described in the FY 2019 IPPS/LTCH PPS final rule (83 FR
41212) which asks if there was a principal diagnosis of an antepartum
condition reported on the claim. If yes, the logic then asks if there
was an O.R. procedure reported on the claim. If yes, the logic assigns
the case to MS-DRG 817, 818, or 819. If no (there was not an O.R.
procedure reported on the claim), the logic assigns the case to MS-DRG
831, 832, or 833.
10. MDC 22 (Burns): Skin Graft to Perineum for Burn
We received a request to add seven ICD-10-PCS procedure codes that
describe a skin graft to the perineum to MS-DRG 927 (Extensive Burns Or
Full Thickness Burns with MV >96 Hours with Skin Graft) and MS-DRGs 928
and 929 (Full Thickness Burn with Skin Graft Or Inhalation Injury with
CC/MCC and without CC/MCC, respectively) in MDC 22. The seven procedure
codes are listed in the following table.
------------------------------------------------------------------------
ICD-10-PCS code Code description
------------------------------------------------------------------------
0HR9X73................... Replacement of perineum skin with autologous
tissue substitute, full thickness, external
approach.
0HR9X74................... Replacement of perineum skin with autologous
tissue substitute, partial thickness,
external approach.
0HR9XJ3................... Replacement of perineum skin with synthetic
substitute, full thickness, external
approach.
0HR9XJ4................... Replacement of perineum skin with synthetic
substitute, partial thickness, external
approach.
0HR9XJZ................... Replacement of perineum skin with synthetic
substitute, external approach.
0HR9XK3................... Replacement of perineum skin with non-
autologous tissue substitute, full
thickness, external approach.
0HR9XK4................... Replacement of perineum skin with non-
autologous tissue substitute, partial
thickness, external approach.
------------------------------------------------------------------------
These seven procedure codes are currently assigned to MS-DRGs 746
and 747 (Vagina, Cervix and Vulva Procedures with CC/MCC and without
CC/MCC, respectively). In addition, when reported in conjunction with a
principal diagnosis in MDC 21 (Injuries, Poisonings and Toxic Effects
of Drugs), these codes group to MS-DRGs 907, 908, and 909 (Other O.R.
Procedures For Injuries with MCC, with CC and without CC/MCC,
respectively), and when reported in conjunction with a principal
diagnosis in MDC 24 (Multiple Significant Trauma), these codes group to
MS-DRGs 957, 958, and 959 (Other O.R. Procedures For Multiple
Significant Trauma with MCC, with CC and without CC/MCC, respectively).
In addition, these procedures are designated as non-extensive O.R.
procedures and are assigned to MS-DRGs 987, 988 and 989 (Non-Extensive
O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and
without CC/MCC, respectively) when a principal diagnosis that is
unrelated to the procedure is reported on the claim.
The requestor provided an example in which it identified one case
where a patient underwent debridement and split thickness skin graft
(STSG) to the perineum area (only), and expressed concern that the case
did not route to MS-DRGs 928 and 929 to recognize operating room
resources. (We note that the requestor did not specify the diagnosis
associated with this case nor the MS-DRG to which this one case was
grouped.) The requestor stated that providers may document various
terminologies for this anatomic site,
[[Page 19215]]
including perineum, groin, and buttocks crease; therefore, when a
provider deems a burn to affect the perineum as opposed to the groin or
buttock crease, cases should route to MS-DRGs which compensate
hospitals for skin grafting operating room resources. Therefore, the
requestor recommended that the cited seven ICD-10-PCS codes be added to
the list of procedure codes for a skin graft within MS-DRGs 927, 928,
and 929.
We reviewed this request by analyzing claims data from the
September 2018 update of the FY 2018 MedPAR file for cases reporting
any of the above seven procedure codes in MS-DRGs 746, 747, 907, 908,
909, 957, 958, 959, 987, 988, and 989. Our findings are shown in the
following table.
Cases Involving Skin Graft to the Perineum
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 746--All cases........................................... 1,344 5 $11,847
MS-DRG 746--Cases with skin graft to the perineum procedure..... 1 2 10,830
MS-DRG 907--All cases........................................... 7,843 10 28,919
MS-DRG 907--Cases with skin graft to the perineum procedure..... 1 8 21,909
MS-DRG 908--All cases........................................... 9,286 5.3 14,601
MS-DRG 908--Cases with skin graft to the perineum procedure..... 1 6 8,410
MS-DRG 988--All cases........................................... 8,391 5.7 12,294
MS-DRG 988--Cases with skin graft to the perineum procedure..... 2 3 6,906
MS-DRG 989--All cases........................................... 1,551 3.1 8,171
MS-DRG 989--Cases with skin graft to the perineum procedure..... 1 7 14,080
----------------------------------------------------------------------------------------------------------------
As shown in the table above, the overall volume of cases reporting
a skin graft to the perineum procedure is low, with a total of 6 cases
found. In MS-DRG 746, we found a total of 1,344 cases with an average
length of stay of 5 days and average costs of $11,847. The single case
reporting a skin graft to the perineum procedure in MS-DRG 746 had a
length of stay of 2 days and a cost of $10,830. In MS-DRG 907, we found
a total of 7,843 cases with an average length of stay of 10 days and
average costs of $28,919. The single case reporting a skin graft to the
perineum procedure in MS-DRG 907 had a length of stay of 8 days and a
cost of $21,909. In MS-DRG 908, we found a total of 9,286 cases with an
average length of stay of 5.3 days and average costs of $14,601. The
single case reporting a skin graft to the perineum procedure in MS-DRG
908 had a length of stay of 6 days and a cost of $8,410. In MS-DRG 988,
we found a total of 8,391 cases with an average length of stay of 5.7
days and average costs of $12,294. The 2 cases reporting a skin graft
to the perineum procedure in MS-DRG 988 had an average length of stay
of 3 days and average costs of $6,906. In MS-DRG 989, we found a total
of 1,551 cases with an average length of stay of 3.1 days and average
costs of $8,171. The single case reporting a skin graft to the perineum
procedure in MS-DRG 989 had a length of stay of 7 day and a cost of
$14,080. We found no cases reporting a skin graft to the perineum
procedure in MS-DRG 747, 909, 957, 958, 959, or 987. Cases reporting a
skin graft to the perineum procedure generally had shorter length of
stays and lower average costs than those of their assigned MS-DRGs
overall.
We then analyzed claims data for MS-DRGs 927, 928, and 929 (the MS-
DRGs to which the requestor suggested that these cases group) for all
cases reporting a procedure describing a skin graft to the perineum
listed in the table above to consider how the resources involved in the
cases reporting a procedure describing a skin graft to the perineum
compared to those of all cases in MS-DRGs 927, 928, and 929. Our
findings are shown in the following table.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 927--All cases........................................... 146 30.9 $147,903
MS-DRG 928--All cases........................................... 1,149 15.7 45,523
MS-DRG 928--Cases with skin graft to the perineum procedure..... 5 39 64,041
MS-DRG 929--All cases........................................... 296 7.9 21,474
----------------------------------------------------------------------------------------------------------------
As shown in the table above, for MS-DRG 927, we found a total of
146 cases with an average length of stay of 30.9 days and average costs
of $147,903; no cases reporting a skin graft to the perineum procedure
were found. For MS-DRG 928, we found a total of 1,149 cases with an
average length of stay of 15.7 days and average costs of $45,523. We
found 5 cases reporting a skin graft to the perineum procedure with an
average length of stay of 39 days and average costs of $64,041. For MS-
DRG 929, we found a total of 296 cases with an average length of stay
of 7.9 days and average costs of $21,474; and no cases reporting a skin
graft to the perineum procedure were found. We note that none of the 5
cases reporting a skin graft to the perineum in MS-DRGs 927, 928, and
929 reported a skin graft to the perineum procedure as the only
operating room procedure. Therefore, it is not possible to determine
how much of the operating room resources for these 5 cases were
attributable to the skin graft to the perineum procedure.
Our clinical advisors reviewed the claims data described above and
noted that none of the cases reporting the seven identified procedure
codes that grouped to MS-DRGs 746, 907, 908, 988, and 989 (listed in
the table above) had a principal or secondary diagnosis of a burn,
which suggests that these skin grafts were not performed to treat a
burn. Therefore, our clinical advisors believe that it would not be
appropriate for these cases that report a skin graft to the perineum
procedure to group to MS-DRGs 927, 928, and 929, which describe burns.
Our clinical advisors state that the seven ICD-10-PCS procedure codes
that describe a skin graft to the perineum are more clinically aligned
with the other procedures in MS-DRGs 746 and 747, to which they are
currently assigned. Therefore, we are
[[Page 19216]]
not proposing to add the seven identified procedure codes to MS-DRGs
927, 928, and 929.
11. MDC 23 (Factors Influencing Health Status and Other Contacts With
Health Services): Proposed Assignment of Diagnosis Code R93.89
We received a request to consider reassignment of ICD-10-CM
diagnosis code R93.89 (Abnormal finding on diagnostic imaging of other
specified body structures) from MDC 5 (Diseases and Disorders of the
Circulatory System) in MS-DRGs 302 and 303 (Atherosclerosis with and
without MCC and Atherosclerosis without MCC, respectively) to MDC 23
(Factors Influencing Health Status and Other Contact with Health
Services), consistent with other diagnosis codes that include abnormal
findings. However, the requestor did not suggest a specific MS-DRG
assignment within MDC 23.
We examined claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 302 and 303 and identified cases reporting
diagnosis code R93.89. Our findings are shown in the following table.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 302--All cases........................................... 3,750 3.8 $7,956
MS-DRG 302--Cases reporting diagnosis code R93.89............... 3 7.7 10,818
MS-DRG 303--All cases........................................... 12,986 2.3 4,920
MS-DRG 303--Cases reporting diagnosis code R93.89............... 10 2 3,416
----------------------------------------------------------------------------------------------------------------
As shown in the table, for MS-DRG 302, there was a total of 3,750
cases with an average length of stay of 3.8 days and average costs of
$7,956. Of these 3,750 cases, there were 3 cases reporting abnormal
finding on diagnostic imaging of other specified body structures, with
an average length of stay 7.7 days and average costs of $10,818. For
MS-DRG 303, there was a total of 12,986 cases with an average length of
stay of 2.3 days and average costs of $4,920. Of these 12,986 cases,
there were 10 cases reporting abnormal finding on diagnostic imaging of
other specified body structures, with an average length of stay 2 days
and average costs of $3,416.
Our clinical advisors reviewed this request and determined that the
assignment of diagnosis code R93.89 to MDC 5 in MS-DRGs 302 and 303 was
a result of replication from ICD-9-CM diagnosis code 793.2 (Nonspecific
(abnormal) findings on radiological and other examination of other
intrathoracic organs), which was assigned to those MS-DRGs. Therefore,
they support reassignment of diagnosis code R93.89 to MDC 23. Our
clinical advisors agree this reassignment is clinically appropriate as
it is consistent with other diagnosis codes in MDC 23 that include
abnormal findings from other nonspecified sites. Specifically, our
clinical advisors suggest reassignment of diagnosis code R89.93 to MS-
DRGs 947 and 948 (Signs and Symptoms with and without MCC,
respectively). Therefore, we are proposing to reassign ICD-10-CM
diagnosis code R93.89 from MDC 5 in MS-DRGs 302 and 303 to MDC 23 in
MS-DRGs 947 and 948.
12. Review of Procedure Codes in MS-DRGs 981 Through 983 and 987
Through 989
a. Adding Procedure Codes and Diagnosis Codes Currently Grouping to MS-
DRGs 981 Through 983 or MS-DRGs 987 Through 989 into MDCs
We annually conduct a review of procedures producing assignment to
MS-DRGs 981 through 983 (Extensive O.R. Procedure Unrelated to
Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) or MS-DRGs 987 through 989 (Nonextensive O.R. Procedure
Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) on the basis of volume, by procedure, to see if it would
be appropriate to move cases reporting these procedure codes out of
these MS-DRGs into one of the surgical MS-DRGs for the MDC into which
the principal diagnosis falls. The data are arrayed in two ways for
comparison purposes. We look at a frequency count of each major
operative procedure code. We also compare procedures across MDCs by
volume of procedure codes within each MDC. We use this information to
determine which procedure codes and diagnosis codes to examine.
We identify those procedures occurring in conjunction with certain
principal diagnoses with sufficient frequency to justify adding them to
one of the surgical MS-DRGs for the MDC in which the diagnosis falls.
We also consider whether it would be more appropriate to move the
principal diagnosis codes into the MDC to which the procedure is
currently assigned. Based on the results of our review of the claims
data from the September 2018 update of the FY 2018 MedPAR file, we are
proposing to move the cases reporting the procedures and/or principal
diagnosis codes described below from MS-DRGs 981 through 983 or MS-DRGs
987 through 989 into one of the surgical MS-DRGs for the MDC into which
the principal diagnosis or procedure is assigned.
(1) Gastrointestinal Stromal Tumors With Excision of Stomach and Small
Intestine
Gastrointestinal stromal tumors (GIST) are tumors of connective
tissue, and are currently assigned to MDC 8 (Diseases and Disorders of
the Musculoskeletal System and Connective Tissue). The ICD-10-CM
diagnosis codes describing GIST are listed in the table below.
------------------------------------------------------------------------
ICD-10-CM diagnosis code Code description
------------------------------------------------------------------------
C49.A0.................... Gastrointestinal stromal tumor, unspecified
site.
C49.A1.................... Gastrointestinal stromal tumor of esophagus.
C49.A2.................... Gastrointestinal stromal tumor of stomach.
C49.A3.................... Gastrointestinal stromal tumor of small
intestine.
C49.A4.................... Gastrointestinal stromal tumor of large
intestine.
C49.A5.................... Gastrointestinal stromal tumor of rectum.
C49.A9.................... Gastrointestinal stromal tumor of other
sites.
------------------------------------------------------------------------
[[Page 19217]]
During our review of cases that group to MS-DRGs 981 through 983,
we noted that when procedures describing open excision of the stomach
or small intestine (ICD-10-PCS procedure codes 0DB60ZZ (Excision of
stomach, open approach) and 0DB80ZZ (Excision of small intestine, open
approach)) were reported with a principal diagnosis of GIST, the cases
group to MS-DRGs 981 through 983. These two excision codes are assigned
to several MDCs, as listed in the table below. Whenever there is a
surgical procedure reported on the claim, which is unrelated to the MDC
to which the case was assigned based on the principal diagnosis, it
results in an MS-DRG assignment to a surgical class referred to as
``unrelated operating room procedures''.
DRG Assignments for ICD-10-PCS Procedure Codes 0DB60ZZ and 0DB80ZZ
----------------------------------------------------------------------------------------------------------------
MDC DRG DRG Description
----------------------------------------------------------------------------------------------------------------
5............................ 264......................... Other Circulatory O.R. Procedures.
6............................ 326-328..................... Stomach, Esophageal and Duodenal Procedures.
10........................... 619-621..................... Procedures for Obesity.
17........................... 820-822..................... Lymphoma and Leukemia with Major Procedure.
17........................... 826-828..................... Myeloproliferative Disorders or Poorly
Differentiated Neoplasms with Major Procedure.
21........................... 907-909..................... Other O.R. Procedures for Injuries.
24........................... 957-959..................... Other Procedures for Multiple Significant Trauma.
----------------------------------------------------------------------------------------------------------------
We first examined cases that reported a principal diagnosis of GIST
and ICD-10-PCS procedure code 0DB60ZZ or 0DB80ZZ that currently group
to MS-DRGs 981 through 983, as well as all cases in MS-DRGs 981 through
983. Our findings are shown in the table below.
MS-DRGs 981-983: All Cases and Cases With Principal Diagnosis of GIST and Procedure Code 0DB60ZZ or 0DB80ZZ
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--All cases........................................... 29,192 11.3 $29,862
MS-DRG 981--Cases with procedure code 0DB60ZZ................... 46 12.4 35,723
MS-DRG 981--Cases with procedure code 0DB80ZZ................... 12 10.8 28,059
MS-DRG 982--All cases........................................... 16,834 6.3 16,939
MS-DRG 982--Cases with procedure code 0DB60ZZ................... 104 6.8 17,442
MS-DRG 982--Cases with procedure code 0DB80ZZ................... 41 8 18,961
MS-DRG 983--All cases........................................... 3,166 3.3 11,872
MS-DRG 983--Cases with procedure code 0DB60ZZ................... 97 4.5 11,901
MS-DRG 983--Cases with procedure code 0DB80ZZ................... 19 4.5 9,971
----------------------------------------------------------------------------------------------------------------
Of the MDCs to which these gastrointestinal excision procedures are
currently assigned, our clinical advisors indicated that cases with a
principal diagnosis of GIST that also report an open gastrointestinal
excision procedure code would logically be assigned to MDC 6 (Diseases
and Disorders of the Digestive System). Within MDC 6, ICD-10-PCS
procedures codes 0DB60ZZ and 0DB80ZZ are currently assigned to MS-DRGs
326, 327, and 328 (Stomach, Esophageal and Duodenal Procedures with
MCC, CC, and without CC/MCC, respectively). To understand how the
resources associated with the subset of cases reporting a principal
diagnosis of GIST and procedure code 0DB60ZZ or 0DB80ZZ compare to
those of cases in MS-DRGs 326, 327, and 328 as a whole, we examined the
average costs and average length of stay for all cases in MS-DRGs 326,
327, and 328. Our findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 326--All cases........................................... 9,898 13 $36,129
MS-DRG 327--All cases........................................... 9,602 6.6 18,736
MS-DRG 328--All cases........................................... 7,634 2.9 11,555
----------------------------------------------------------------------------------------------------------------
Our clinical advisors reviewed these data and noted that the
average length of stay and average costs of this subset of cases were
similar to those of cases in MS-DRGs 326, 327, and 328 in MDC 6. To
consider whether it was appropriate to move the GIST diagnosis codes
from MDC 8, we examined the other procedure codes reported for cases
that report a principal diagnosis of GIST and noted that almost all of
the O.R. procedures most frequently reported were assigned to MDC 6
rather than MDC 8. Our clinical advisors believe that, given the
similarity in resource use between this subset of cases and cases in
MS-DRGs 326, 327, and 328, and that the GIST diagnosis codes are
gastrointestinal in nature, they would be more appropriately assigned
to MS-DRGs 326, 327, and 328 in MDC 6 than their current assignment in
MDC 8. Therefore, we are proposing to move the GIST diagnosis codes
listed above from MDC 8 to MDC 6 within MS-DRGs 326, 327, and 328.
Under our proposal, cases reporting a principal diagnosis of GIST would
group to MS-DRGs 326, 327, and 328.
(2) Peritoneal Dialysis Catheter Complications
During our review of the cases currently grouping to MS-DRGs 981-
[[Page 19218]]
983, we noted that cases reporting a principal diagnosis of
complications of peritoneal dialysis catheters with procedure codes
describing removal, revision, and/or insertion of new peritoneal
dialysis catheters group to MS-DRGs 981 through 983. The ICD-10-CM
diagnosis codes that describe complications of peritoneal dialysis
catheters, listed in the table below, are assigned to MDC 21 (Injuries,
Poisonings and Toxic Effects of Drugs). These principal diagnoses are
frequently reported with the procedure codes describing removal,
revision, and/or insertion of new peritoneal dialysis catheters.
------------------------------------------------------------------------
ICD-10-CM code Code description
------------------------------------------------------------------------
T85.611A.................. Breakdown (mechanical) of intraperitoneal
dialysis catheter, initial encounter.
T85.621A.................. Displacement of intraperitoneal dialysis
catheter, initial encounter.
T85.631A.................. Leakage of intraperitoneal dialysis
catheter, initial encounter.
T85.691A.................. Other mechanical complication of
intraperitoneal dialysis catheter, initial
encounter.
T85.71XA.................. Infection and inflammatory reaction due to
peritoneal dialysis catheter, initial
encounter.
T85.898A.................. Other specified complication of other
internal prosthetic devices, implants and
graft, initial encounter.
------------------------------------------------------------------------
The procedure codes in the table below describe removal, revision,
and/or insertion of new peritoneal dialysis catheters or revision of
synthetic substitutes and are currently assigned to MDC 6 (Diseases and
Disorders of the Digestive System) in MS-DRGs 356, 357, and 358 (Other
Digestive System O.R. Procedures with MCC, with CC, and without CC/MCC,
respectively).
------------------------------------------------------------------------
ICD-10-PCS procedure code Code description
------------------------------------------------------------------------
0WHG03Z................... Insertion of infusion device into peritoneal
cavity, open approach.
0WHG43Z................... Insertion of infusion device into peritoneal
cavity, percutaneous endoscopic approach.
0WPG03Z................... Removal of infusion device from peritoneal
cavity, open approach.
0WPG43Z................... Removal of infusion device from peritoneal
cavity, percutaneous endoscopic approach.
0WWG03Z................... Revision of infusion device in peritoneal
cavity, open approach.
0WWG0JZ................... Revision of synthetic substitute in
peritoneal cavity, open approach.
0WWG43Z................... Revision of infusion device in peritoneal
cavity, percutaneous endoscopic approach.
0WWG4JZ................... Revision of synthetic substitute in
peritoneal cavity, percutaneous endoscopic
approach.
------------------------------------------------------------------------
We examined the claims data from the September 2018 update of the
FY 2018 MedPAR file for the average costs and length of stay for cases
that report a principal diagnosis of complications of peritoneal
dialysis catheters with a procedure describing removal, revision, and/
or insertion of new peritoneal dialysis catheters or revision of
synthetic substitutes. Our findings are shown in the table below. We
note that we did not find any such cases in MS-DRG 983.
MS-DRG 981 Through 982: Peritoneal Dialysis Catheter Procedures With Principal Diagnosis of Complications of
Peritoneal Dialysis Catheters
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting peritoneal dialysis catheter 1,603 8.5 $20,676
procedures with a principal diagnosis of complications of
peritoneal dialysis catheters..................................
MS-DRG 982--Cases reporting peritoneal dialysis catheter 5 8.6 11,694
procedures with a principal diagnosis of complications of
peritoneal dialysis catheters..................................
----------------------------------------------------------------------------------------------------------------
Our clinical advisors indicated that, within MDC 21, the procedures
describing removal, revision, and/or insertion of new peritoneal
dialysis catheters or revision of synthetic substitutes most suitably
group to MS-DRGs 907, 908, and 909, which contain all procedures for
injuries that are not specific to the hand, skin, and wound
debridement. To determine how the resources for this subset of cases
compared to cases in MS-DRGs 907, 908, and 909 as a whole, we examined
the average costs and length of stay for cases in MS-DRGs 907, 908, and
909. Our findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 907--All cases........................................... 9,482 9.7 $27,492
MS-DRG 908--All cases........................................... 9,305 5.3 14,597
MS-DRG 909--All cases........................................... 3,011 3 9,587
----------------------------------------------------------------------------------------------------------------
Our clinical advisors considered these data and noted that the
average costs and length of stay for this subset of cases, most of
which group to MS-DRG 981, are lower than the average costs and length
of stay for cases of the same
[[Page 19219]]
severity level in MS-DRGs 907. However, our clinical advisors believe
that the procedures describing removal, revision, and/or insertion of
new peritoneal dialysis catheters or revision of synthetic substitutes
are clearly related to the principal diagnosis codes describing
complications of peritoneal dialysis catheters and, therefore, it is
clinically appropriate for the procedures to group to the same MS-DRGs
as the principal diagnoses. Therefore, we are proposing to add the
eight procedure codes listed in the table above that describe removal,
revision, and/or insertion of new peritoneal dialysis catheters or
revision of synthetic substitutes to MDC 21 (Injuries, Poisonings &
Toxic Effects of Drugs) in MS-DRGs 907, 908, and 909. Under this
proposal, cases reporting a principal diagnosis of complications of
peritoneal dialysis catheters with a procedure describing removal,
revision, and/or insertion of new peritoneal dialysis catheters or
revision of synthetic substitutes would group to MS-DRGs 907, 908, and
909.
(3) Bone Excision With Pressure Ulcers
During our review of the cases that group to MS-DRGs 981 through
983, we noted that when procedures describing excision of the sacrum,
pelvic bones, and coccyx (ICD-10-PCS procedure codes 0QB10ZZ (Excision
of sacrum, open approach), 0QB20ZZ (Excision of right pelvic bone, open
approach), 0QB30ZZ (Excision of left pelvic bone, open approach), and
0QBS0ZZ (Excision of coccyx, open approach)) are reported with a
principal diagnosis of pressure ulcers in MDC 9 (Diseases and Disorders
of the Skin, Subcutaneous Tissue and Breast), the cases group to MS-
DRGs 981 through 983. The procedures describing excision of the sacrum,
pelvic bones, and coccyx group to several MDCs, which are listed in the
table below.
MS-DRG Assignments for ICD-10-PCS Codes 0QB10ZZ, 0QB20ZZ, 0QB30ZZ, and 0QBS0ZZ
----------------------------------------------------------------------------------------------------------------
MDC MS-DRG MS-DRG description
----------------------------------------------------------------------------------------------------------------
3............................ 133-134..................... Other Ear, Nose, Mouth and Throat O.R. Procedures
with CC/MCC and without CC/MCC, respectively.
8............................ 515-517..................... Other Musculoskeletal System and Connective Tissue
O.R. Procedures with MCC, with CC, and without CC/
MCC, respectively.
10........................... 628-630..................... Other Endocrine, Nutritional and Metabolic O.R.
Procedures with MCC, with CC, and without CC/MCC,
respectively.
21........................... 907-909..................... Other O.R. Procedures for Injuries.
24........................... 957-959..................... Other Procedures for Multiple Significant Trauma.
----------------------------------------------------------------------------------------------------------------
When cases reporting procedure codes describing excision of the
sacrum, pelvic bones, and coccyx report a principal diagnosis from MDC
9, the ICD-10-CM diagnosis codes that are most frequently reported as
principal diagnoses are listed below.
------------------------------------------------------------------------
ICD-10-CM diagnosis code Code description
------------------------------------------------------------------------
L89.150................... Pressure ulcer of sacral region,
unstageable.
L89.153................... Pressure ulcer of sacral region, stage 3.
L89.154................... Pressure ulcer of sacral region, stage 4.
L89.214................... Pressure ulcer of right hip, stage 4.
L89.224................... Pressure ulcer of left hip, stage 4.
L89.314................... Pressure ulcer of right buttock, stage 4.
L89.324................... Pressure ulcer of left buttock, stage 4.
L89.894................... Pressure ulcer of other site, stage 4.
------------------------------------------------------------------------
We examined the claims data from the September 2018 update of the
FY 2018 MedPAR file for the average costs and length of stay for cases
that report procedures describing excision of the sacrum, pelvic bones,
and coccyx in conjunction with a principal diagnosis of pressure
ulcers.
MS-DRGs 981 Through 983: Cases Reporting Excision of the Sacrum, Pelvic Bones, and Coccyx Reported With a
Principal Diagnosis of Pressure Ulcers
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting excision of the sacrum, pelvic 394 11.9 $24,398
bones, and coccyx and a principal diagnosis of pressure ulcers.
MS-DRG 982--Cases Reporting excision of the sacrum, pelvic 477 9.4 16,464
bones, and coccyx and a principal diagnosis of pressure ulcers.
MS-DRG 983--Cases Reporting excision of the sacrum, pelvic 38 4.8 8,519
bones, and coccyx and a principal diagnosis of pressure ulcers.
----------------------------------------------------------------------------------------------------------------
Our clinical advisors indicated that, given the nature of these
procedures, they could not be appropriately assigned to the specific
surgical MS-DRGs within MDC 9, which are: Skin graft; skin debridement;
mastectomy for malignancy; and breast biopsy, local excision, and other
breast procedures. Therefore, our clinical advisors believe that these
procedures would most suitably group to MS-DRGs 579, 580, and 581
(Other Skin, Subcutaneous Tissue and Breast Procedures with MCC, with
CC, and without CC/MCC, respectively), which contain procedures
[[Page 19220]]
assigned to MDC 9 that do not fit within the specific surgical MS-DRGs
in MDC 9. Therefore, we examined the claims data for the average length
of stay and average costs for MS-DRGs 579, 580, and 581 in MDC 9. Our
findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 579...................................................... 4,091 9.2 $19,873
MS-DRG 580...................................................... 10,048 5.2 11,229
MS-DRG 581...................................................... 4,364 3 8,987
----------------------------------------------------------------------------------------------------------------
Our clinical advisors reviewed these data and noted that, in this
subset of cases, most cases group to MS-DRGs 981 and 982 and have
greater average length of stay and average costs than those cases of
the same severity level in MS-DRGs 579 and 580. The smaller number of
cases that group to MS-DRG 983 have lower average costs than cases in
MS-DRG 581. However, our clinical advisors believe that the procedure
codes describing excision of the sacrum, pelvic bones, and coccyx are
clearly related to the principal diagnosis codes describing pressure
ulcers, as these procedures would be performed to treat pressure ulcers
in the sacrum, hip, and buttocks regions. Therefore, our clinical
advisors believe that it is clinically appropriate for the procedures
to group to the same MS-DRGs as the principal diagnoses. Therefore, we
are proposing to add the ICD-10-PCS procedure codes describing excision
of the sacrum, pelvic bones, and coccyx to MDC 9 in MS-DRGs 579, 580,
and 581. Under this proposal, cases reporting a principal diagnosis in
MDC 9 (such as pressure ulcers) with a procedure describing excision of
the sacrum, pelvic bones, and coccyx would group to MS-DRGs 579, 580,
and 581.
(4) Lower Extremity Muscle and Tendon Excision
During the review of the cases that group to MS-DRGs 981 through
983, we noted that when several ICD-10-PCS procedure codes describing
excision of lower extremity muscles and tendons are reported in
conjunction with ICD-10-CM diagnosis codes in MDC 10 (Endocrine,
Nutritional and Metabolic Diseases and Disorders), the cases group to
MS-DRGs 981 through 983. These ICD-10-PCS procedure codes are listed in
the table below, and are assigned to several MS-DRGs, which are also
listed below.
----------------------------------------------------------------------------------------------------------------
ICD-10-PCS procedure code Code description
-----------------------------------------------------------------------------------
0KBN0ZZ......................... Excision of right hip muscle, open approach.
0KBP0ZZ......................... Excision of left hip muscle, open approach.
0KBS0ZZ......................... Excision of right lower leg muscle, open
approach.
0KBT0ZZ......................... Excision of left lower leg muscle, open approach.
0KBV0ZZ......................... Excision of right foot muscle, open approach.
0KBW0ZZ......................... Excision of left foot muscle, open approach.
0LBV0ZZ......................... Excision of right foot tendon, open approach.
0LBW0ZZ......................... Excision of left foot tendon, open approach.
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
MDC MS-DRG MS-DRG description
----------------------------------------------------------------------------------------------------------------
01........................... 040-042..................... Peripheral, Cranial Nerve and Other Nervous System
Procedures with MCC, with CC or Peripheral
Neurostimulator, and without CC/MCC, respectively.
08........................... 500-502..................... Soft Tissue Procedures with MCC, with CC, and
without CC/MCC, respectively.
09........................... 579-581..................... Other Skin, Subcutaneous Tissue and Breast
Procedures with MCC, with CC, and without CC/MCC,
respectively.
21........................... 907-909..................... Other O.R. Procedures for Injuries.
24........................... 957-959..................... Other Procedures for Multiple Significant Trauma.
----------------------------------------------------------------------------------------------------------------
The ICD-10-CM diagnosis codes in MDC 10 that are most frequently
reported as the principal diagnosis with a procedure describing
excision of lower extremity muscles and tendons are listed in the table
below. The combination indicates debridement procedures for more
complex diabetic ulcers.
------------------------------------------------------------------------
ICD-10-CM procedure code Code description
------------------------------------------------------------------------
E11.621................... Type 2 diabetes mellitus with foot ulcer.
E11.69.................... Type 2 diabetes mellitus with other
specified complication.
E11.628................... Type 2 diabetes mellitus with other skin
complications.
E11.622................... Type 2 diabetes mellitus with other skin
ulcer.
E10.621................... Type 1 diabetes mellitus with foot ulcer.
------------------------------------------------------------------------
To understand the resource use for the subset of cases reporting
procedure codes describing excision of lower extremity muscles and
tendons that are currently grouping to MS-DRGs 981 through 983, we
examined claims data
[[Page 19221]]
for the average length of stay and average costs for these cases. Our
findings are shown in the table below.
MS-DRGs 981-983: Cases Reporting Procedures Describing Excision of Lower Extremity Muscles and Tendons With a
Principal Diagnosis in MDC 10
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting excision of lower extremity muscles 125 9.1 $19,031
and tendons and a principal diagnosis in MDC 10................
MS-DRG 982--Cases reporting excision of lower extremity muscles 561 6.2 12,000
and tendons and a principal diagnosis in MDC 10................
MS-DRG 983--Cases reporting excision of lower extremity muscles 16 4.8 9,003
and tendons and a principal diagnosis in MDC 10................
----------------------------------------------------------------------------------------------------------------
Our clinical advisors examined cases reporting procedures
describing excision of lower extremity muscles and tendons with a
principal diagnosis in the MS-DRGs within MDC 10 and determined that
these cases would most suitably group to MS-DRGs 622, 623, and 624
(Skin Grafts and Wound Debridement for Endocrine, Nutritional and
Metabolic Disorders with MCC, with CC, and without CC/MCC,
respectively). Therefore, we examined the average length of stay and
average costs for cases assigned to MS-DRGs 622, 623, and 624. Our
findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 622...................................................... 1,540 11.7 $25,114
MS-DRG 623...................................................... 4,849 6.6 13,490
MS-DRG 624...................................................... 232 3.7 7,442
----------------------------------------------------------------------------------------------------------------
Our clinical advisors reviewed these data and noted that most of
the cases reporting procedures describing excision of lower extremity
muscles and tendons group to MS-DRGs 981 and 982. For these cases, the
average length of stay and average costs are lower than those of cases
that currently group to MS-DRGs 622 and 623. However, our clinical
advisors believe that these procedures are clearly related to the
principal diagnoses in MDC 10, as they would be performed to treat
skin-related complications of diabetes and, therefore, it is clinically
appropriate for the procedures to group to the same MS-DRGs as the
principal diagnoses. Therefore, we are proposing to add the procedure
codes listed previously describing excision of lower extremity muscles
and tendons to MDC 10. Under our proposal, cases reporting these
procedure codes with a principal diagnosis in MDC 10 would group to MS-
DRGs 622, 623, and 624.
(5) Kidney Transplantation Procedures
During our review of the cases that group to MS-DRGs 981 through
983, we noted that when procedures describing transplantation of
kidneys (ICD-10-PCS procedure codes 0TY00Z0 (Transplantation of right
kidney, allogeneic, open approach) and 0TY10Z0 (Transplantation of left
kidney, allogeneic, open approach)) are reported in conjunction with
ICD-10-CM diagnosis codes in MDC 5 (Diseases and Disorders of the
Circulatory System), the cases group to MS-DRGs 981 through 983. The
ICD-10-CM diagnosis codes in MDC 5 that are reported with the kidney
transplantation codes are I13.0 (Hypertensive heart and chronic kidney
disease with heart failure and with stage 1 through stage 4 chronic
kidney disease) and I13.2 (Hypertensive heart and chronic kidney
disease with heart failure and with stage 5 chronic kidney disease),
which group to MDC 5. Procedure codes describing transplantation of
kidneys are assigned to MS-DRG 652 (Kidney Transplant) in MDC 11. We
examined claims data to identify the average length of stay and average
costs for cases reporting procedure codes describing transplantation of
kidneys with a principal diagnosis in MDC 5, which are currently
grouping to MS-DRGs 981 through 983. Our findings are shown in the
table below. We did not find any such cases in MS-DRG 983.
MS-DRGs 981 Through 983: Cases Reporting Procedures Describing Transplantation of Kidney With a Principal
Diagnosis in MDC 5
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting transplantation of kidney and a 285 6.8 $25,340
principal diagnosis in MDC 5...................................
MS-DRG 982--Cases reporting transplantation of kidney and a 2 3.5 21,678
principal diagnosis in MDC 5...................................
----------------------------------------------------------------------------------------------------------------
Our clinical advisors examined the MS-DRGs within MDC 5 and
indicated that, given the nature of the procedures compared to the
specific surgical procedures contained in the other surgical MS-DRGs in
MDC 5, they could not be appropriately assigned to any of the specific
surgical MS-DRGs. Therefore, they determined that these cases would
most suitably group to MS-DRG 264 (Other Circulatory System O.R.
Procedures), which contains a broader range of procedures related to
MDC 5 diagnoses. We examined claims data to determine the average
length of stay and
[[Page 19222]]
average costs for cases assigned to MS-DRG 264. We found a total of
10,073 cases, with an average length of stay of 9.3 days and average
costs of $22,643.
Our clinical advisors reviewed these data and noted that the
average costs for cases reporting transplantation of kidney with a
diagnosis from MDC 5 are similar to the average costs of cases in MS-
DRG 264 ($22,643 in MS-DRG 264 compared to $25,340 in MS-DRG 981),
while the average length of stay is shorter than that of cases in MS-
DRG 264 (9.3 days in MS-DRG 264 compared to 6.8 days in MS-DRG 981).
Our clinical advisors noted that ICD-10-CM diagnosis codes describing
hypertensive heart and chronic kidney disease without heart failure
(I13.10 (Hypertensive heart and chronic kidney disease without heart
failure, with stage 1 through stage 4 chronic kidney disease, or
unspecified chronic kidney disease) and I13.11 (Hypertensive heart and
chronic kidney disease without heart failure, with stage 5 chronic
kidney disease, or end stage renal disease group) group to MS-DRG 652
(Kidney Transplant) in MDC 11 (Diseases and Disorders of the Kidney and
Urinary Tract). Our clinical advisors also noted that the counterpart
codes describing hypertensive heart and chronic kidney disease with
heart failure are as related to the kidney transplantation codes as the
codes without heart failure, but because the codes with heart failure
group to MDC 5, cases reporting a kidney transplant procedure with a
diagnosis code of hypertensive heart and chronic kidney disease with
heart failure currently group to MS-DRGs 981 through 983. Therefore, we
are proposing to add ICD-10-PCS procedure codes 0TY00Z0 and 0TY10Z0 to
MS-DRG 264 in MDC 5. Under this proposal, cases reporting a principal
diagnosis in MDC 5 with a procedure describing kidney transplantation
would group to MS-DRG 264 in MDC 5. We note that because MDC 5 covers
the circulatory system, and kidney transplants generally group to MDC
11, we are seeking public comments on whether the procedure codes
should instead continue to group to MS-DRGs 981 through 983.
(6) Insertion of Feeding Device
During our review of the cases that group to MS-DRGs 981 through
983, we noted that when ICD-10-PCS procedure code 0DH60UZ (Insertion of
feeding device into stomach, open approach) is reported with ICD-10-CM
diagnosis codes assigned to MDC 1 (Diseases and Disorders of the
Nervous System) or MDC 10 (Endocrine, Nutritional and Metabolic
Diseases and Disorders), the cases group to MS-DRGs 981 through 983.
ICD-10-PCS procedure code 0DH60UZ is currently assigned to MDC 6
(Diseases and Disorders of the Digestive System) in MS-DRGs 326, 327,
and 328 (Stomach, Esophageal and Duodenal Procedures) and MDC 21
(Injuries, Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908,
and 909 (Other O.R. Procedures for Injuries). We also noticed that: (1)
When ICD-10-PCS procedure code 0DH60UZ is reported with a principal
diagnosis in MDC 1, the ICD-10-CM diagnosis codes reported with this
procedure code describe cerebral infarctions of various etiology and
anatomic locations and resulting complications; and (2) when ICD-10-PCS
procedure code 0DH60UZ is reported with a principal diagnosis in MDC
10, the ICD-10-CM diagnosis codes reported with this procedure code
pertain to dehydration, failure to thrive, and various forms of
malnutrition.
We examined claims data to identify the average length of stay and
average costs for cases in MS-DRGs 981 through 983 reporting ICD-10-PCS
procedure code 0DH60UZ in conjunction with a principal diagnosis from
MDC 1 or MDC 10. Our findings are shown in the table below.
MS-DRGs 981 Through 983: Cases Reporting Procedure Code 0DH60UZ With a Principal Diagnosis in MDC 1 or MDC 10
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting procedure code 0DH60UZ and a 115 19.3 $40,598
principal diagnosis in MDC 1...................................
MS-DRG 982--Cases reporting procedure code 0DH60UZ and a 43 13.2 25,042
principal diagnosis in MDC 1...................................
MS-DRG 983--Cases reporting procedure code 0DH60UZ and a 4 14.3 26,954
principal diagnosis in MDC 1...................................
MS-DRG 981--Cases reporting procedure code 0DH60UZ and a 47 13.4 24,690
principal diagnosis in MDC 10..................................
MS-DRG 982--Cases reporting procedure code 0DH60UZ and a 20 7.2 12,792
principal diagnosis in MDC 10..................................
MS-DRG 983--Cases reporting procedure code 0DH60UZ and a 5 5.0 8,608
principal diagnosis in MDC 10..................................
----------------------------------------------------------------------------------------------------------------
Our clinical advisors determined that the feeding tube procedure
was related to specific diagnoses within MDC 1 and MDC 10 and,
therefore, could be assigned to both MDCs. Therefore, they reviewed the
MS-DRGs within MDC 1 and MDC 10. They determined that the most suitable
MS-DRG assignment within MDC 1 would be MS-DRGs 040, 041, and 042
(Peripheral, Cranial Nerve and Other Nervous System Procedures with
MCC, with CC or Peripheral Neurostimulator, and without CC/MCC,
respectively), which contain procedures assigned to MDC 1 that describe
insertion of devices into anatomical areas that are not part of the
nervous system. Our clinical advisors determined that the most suitable
MS-DRG assignment within MDC 10 would be MS-DRGs 628, 629, and 630
(Other Endocrine, Nutritional and Metabolic O.R. Procedures with MCC,
with CC, and without CC/MCC, respectively), which contain the most
clinically similar procedures assigned to MDC 10, such as those
describing insertion of infusion pump into subcutaneous tissue and
fascia. Therefore, we examined claims data to identify the average
length of stay and average costs for cases assigned to MDC 1 in MS-DRGs
040, 041, and 042 and MDC 10 in MS-DRGs 628, 629, and 630. Our findings
are shown in the tables below.
[[Page 19223]]
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRGs in MDC 1 cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 040...................................................... 4,211 10.2 $27,096
MS-DRG 041...................................................... 6,153 5.1 16,917
MS-DRG 042...................................................... 2,249 3.0 13,365
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRGs in MDC 10 cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 628...................................................... 3,004 9.9 $25,472
MS-DRG 629...................................................... 5,435 7.2 16,391
MS-DRG 630...................................................... 237 3.2 10,659
----------------------------------------------------------------------------------------------------------------
Our clinical advisors reviewed these data and noted that the
average length of stay and average costs for the subset of cases
reporting ICD-10-PCS procedure code 0DH60UZ with a principal diagnosis
assigned to MDC 1 are higher than those cases in MS-DRGs 040, 041, and
042. For example, the cases reporting ICD-10-PCS procedure code 0DH60UZ
and a principal diagnosis in MDC 1 that currently group to MS-DRG 981
have an average length of stay of 19.3 days and average costs of
$40,598, while the cases in MS-DRG 040 have an average length of stay
of 10.2 days and average costs of $27,096. Our clinical advisors noted
that the average length of stay and average costs for the subset of
cases reporting ICD-10-PCS procedure code 0DH60UZ with a principal
diagnosis assigned to MDC 10 are more closely aligned with those cases
in MS-DRGs 628, 629, and 630. In both cases, our clinical advisors
believe that the insertion of feeding device is clearly related to the
principal diagnoses in MDC 1 and MDC 10 and, therefore, it is
clinically appropriate for the procedures to group to the same MS-DRGs
as the principal diagnoses. Therefore, we are proposing to add ICD-10-
PCS procedure code 0DH60UZ to MDC 1 and MDC 10. Under this proposal,
cases reporting procedure code 0DH60UZ with a principal diagnosis in
MDC 1 would group to MS-DRGs 040, 041, and 042, while cases reporting
ICD-10-PCS procedure code 0DH60UZ with a principal diagnosis in MDC 10
would group to MS-DRGs 628, 629, and 630.
(7) Basilic Vein Reposition in Chronic Kidney Disease
During our review of the cases that group to MS-DRGs 981 through
983, we noted that when procedures codes describing reposition of
basilic vein (ICD-10-PCS procedure codes 05SB0ZZ (Reposition right
basilic vein, open approach), 05SB3ZZ (Reposition right basilic vein,
percutaneous approach), 05SC0ZZ (Reposition left basilic vein, open
approach), and 05SC3ZZ (Reposition left basilic vein, percutaneous
approach)) are reported with a principal diagnosis in MDC 11 (Diseases
and Disorders of the Kidney and Urinary Tract) (typically describing
chronic kidney disease), the cases group to MS-DRGs 981 through 983.
This code combination suggests a revision of an arterio-venous fistula
in a patient on chronic hemodialysis. We examined claims data to
identify the average length of stay and average costs for cases
reporting procedures describing reposition of basilic vein with a
principal diagnosis in MDC 11, which are currently grouping to MS-DRGs
981 through 983. Our findings are shown in the table below.
MS-DRGs 981-983: Cases Reporting Procedures Describing Reposition of Basilic Vein With Principal Diagnosis in
MDC 11
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting procedures describing reposition of 48 4.6 $12,232
basilic vein and a principal diagnosis in MDC 11...............
MS-DRG 982--Cases reporting procedures describing reposition of 10 6.9 18,481
basilic vein and a principal diagnosis in MDC 11...............
MS-DRG 983--Cases reporting procedures describing reposition of 1 3.0 3,552
basilic vein and a principal diagnosis in MDC 11...............
----------------------------------------------------------------------------------------------------------------
Our clinical advisors examined claims data for cases in the MS-DRGs
within MDC 11 and determined that cases reporting procedures describing
reposition of basilic vein with a principal diagnosis in MDC 11 would
most suitably group to MS-DRGs 673, 674, and 675 (Other Kidney and
Urinary Tract Procedures with MCC, with CC, and without CC/MCC,
respectively), to which MDC 11 procedures describing reposition of
veins (other than renal veins) are assigned. Therefore, we examined
claims data to identify the average length of stay and average costs
for cases assigned to MS-DRGs 673, 674, and 675. Our findings are shown
in the table below.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 673...................................................... 10,542 10.8 $25,842
MS-DRG 674...................................................... 6,167 7.4 17,685
MS-DRG 675...................................................... 437 3.9 11,858
----------------------------------------------------------------------------------------------------------------
[[Page 19224]]
Our clinical advisors reviewed these data and noted that the
average length of stay and average costs for cases reporting procedures
describing reposition of basilic vein with a principal diagnosis in MDC
11 with an MCC are significantly lower than for those cases in MS-DRG
673. The average length of stay and average costs are similar for those
cases with a CC, while the single case without a CC or MCC had
significantly lower costs than the average costs of cases in MS-DRG
675. However, our clinical advisors believe that when the procedures
describing reposition of basilic vein are reported with a principal
diagnosis describing chronic kidney disease, the procedure is likely
related to arteriovenous fistulas for dialysis associated with the
chronic kidney disease. Therefore, our clinical advisors believe that
it is clinically appropriate for the procedures to group to the same
MS-DRGs as the principal diagnoses. Therefore, we are proposing to add
ICD-10-PCS procedures codes 05SB0ZZ, 05SB3ZZ, 05SC0ZZ, and 05SC3ZZ to
MDC 11. Under our proposal, cases reporting procedure codes describing
reposition of basilic vein with a principal diagnosis in MDC 11 would
group to MS-DRGs 673, 674, and 675.
(8) Colon Resection With Fistula
During our review of the cases that group to MS-DRGs 981 through
983, we noted that when ICD-10-PCS procedure code 0DTN0ZZ (Resection of
sigmoid colon, open approach) is reported with a principal diagnosis in
MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract), the
cases group to MS-DRGs 981 through 983. The principal diagnosis most
frequently reported with ICD-10-PCS procedure code 0DTN0ZZ in MDC 11 is
ICD-10-CM code N321 (Vesicointestinal fistula). ICD-10-PCS procedure
code 0DTN0ZZ currently groups to several MDCs, which are listed in the
table below.
MS-DRG Assignments for ICD-10-PCS Procedure Code 0DTN0ZZ
------------------------------------------------------------------------
MDC MS-DRG MS-DRG description
------------------------------------------------------------------------
6..................... 329-331............... Major Small and Large
Bowel Procedures.
17.................... 820-822............... Lymphoma and Leukemia
with Major Procedure.
17.................... 826-828............... Myeloproliferative
Disorders or Poorly
Differentiated
Neoplasms with Major
Procedure.
21.................... 907-909............... Other O.R. Procedures
for Injuries.
24.................... 957-959............... Other Procedures for
Multiple Significant
Trauma.
------------------------------------------------------------------------
We examined claims data to identify the average length of stay and
average costs for cases reporting procedure code 0DTN0ZZ with a
principal diagnosis in MDC 11, which are currently grouping to MS-DRGs
981 through 983. Our findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases reporting procedure code 0DTN0ZZ and a 27 15.81 $44,743
principal diagnosis in MDC 11..................................
MS-DRG 982--Cases reporting procedure code 0DTN0ZZ and a 33 8.48 20,105
principal diagnosis in MDC 11..................................
MS-DRG 983--Cases reporting procedure code 0DTN0ZZ and a 5 3.60 12,351
principal diagnosis in MDC 11..................................
----------------------------------------------------------------------------------------------------------------
Our clinical advisors examined the MS-DRGs within MDC 11 and
determined that the cases reporting procedure code 0DTN0ZZ with a
principal diagnosis in MDC 11 would most suitably group to MS-DRGs 673,
674, and 675, which contain procedures performed on structures other
than kidney and urinary tract anatomy. We note that the claims data
describing the average length of stay and average costs for cases in
these MS-DRGs are included in a table earlier in this section. Because
vesicointestinal fistulas involve both the bladder and the bowel, some
procedures in both MDC 6 (Diseases and Disorders of the Digestive
System) and MDC 11 (Diseases and Disorders of the Kidney and Urinary
Tract) would be expected to be related to a principal diagnosis of
vesicointestinal fistula (ICD-10-CM code N321). Our clinical advisors
observed that procedure code 0DTN0ZZ is the second most common
procedure reported in conjunction with a principal diagnosis of code
N321, after ICD-10-PCS procedure code 0TQB0ZZ (Repair bladder, open
approach), which is assigned to both MDC 6 and MDC 11. Our clinical
advisors reviewed the data and noted that the average length of stay
and average costs for this subset of cases are generally higher for
this subset of cases than for cases in MS-DRGs 673, 674, and 675.
However, our clinical advisors believe that when ICD-10-PCS procedure
code 0DTN0ZZ is reported with a principal diagnosis in MDC 11
(typically vesicointestinal fistula), the procedure is related to the
principal diagnosis. Therefore, we are proposing to add ICD-10-PCS
procedure code 0DTN0ZZ to MDC 11. Under our proposal, cases reporting
procedure code 0DTN0ZZ with a principal diagnosis of vesicointestinal
fistula (diagnosis code N321) in MDC 11 would group to MS-DRGs 673,
674, and 675.
b. Reassignment of Procedures Among MS-DRGs 981 Through 983 and 987
Through 989
We also review the list of ICD-10-PCS procedures that, when in
combination with their principal diagnosis code, result in assignment
to MS-DRGs 981 through 983, or 987 through 989, to ascertain whether
any of those procedures should be reassigned from one of those two
groups of MS-DRGs to the other group of MS-DRGs based on average costs
and the length of stay. We look at the data for trends such as shifts
in treatment practice or reporting practice that would make the
resulting MS-DRG assignment illogical. If we find these shifts, we
would propose to move cases to keep the MS-DRGs clinically similar or
to provide payment for the cases in a similar manner. Generally, we
move only those procedures for which we have an adequate number of
discharges to analyze the data.
[[Page 19225]]
Based on the results of our review of claims data in the September
2018 update of the FY 2018 MedPAR file, we are not proposing to change
the current structure of MS-DRGs 981 through 983 and MS-DRGs 987
through 989.
c. Proposed Additions for Diagnosis and Procedure Codes to MDCs
Below we summarize the requests we received to examine cases found
to group to MS-DRGs 981 through 983 or MS-DRGs 987 through 989 to
determine if it would be appropriate to add procedure codes to one of
the surgical MS DRGs for the MDC into which the principal diagnosis
falls or to move the principal diagnosis to the surgical MS-DRGs to
which the procedure codes are assigned.
(1) Stage 3 Pressure Ulcers of the Hip
We received a request to reassign cases for a stage 3 pressure
ulcer of the left hip when reported with procedures involving excision
of pelvic bone or transfer of hip muscle from MS-DRGs 981, 982, and 983
(Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC,
with CC, and without CC/MCC, respectively) to MS-DRG 579 (Other Skin,
Subcutaneous Tissue and Breast Procedures with MCC) in MDC 9. ICD-10-CM
diagnosis code L89.223 (Pressure ulcer left hip, stage 3) is used to
report this condition and is currently assigned to MDC 9 (Diseases and
Disorders of the Skin, Subcutaneous Tissue and Breast). We refer
readers to section II.12.a. of the preamble of this proposed rule,
where we address ICD-10-PCS procedure code 0QB30ZZ (Excision of left
pelvic bone, open approach), which was reviewed as part of our ongoing
analysis of the unrelated MS-DRGs and which we are proposing to add to
MS-DRGs 579, 580, and 581 in MDC 5. (While the requestor only referred
to base MS-DRG 579, we believe it is appropriate to assign the cases to
MS-DRGs 579, 580, and 581 by severity level.) ICD-10-PCS procedure
codes 0KXP0ZZ (Transfer left hip muscle, open approach) and 0KXN0ZZ
(Transfer right hip muscle, open approach) may be reported to describe
transfer of hip muscle procedures and are currently assigned to MDC 1
(Diseases and Disorders of the Nervous System) and MDC 8 (Diseases and
Disorders of the Musculoskeletal System and Connective Tissue). We
included ICD-10-PCS procedure code 0KXN0ZZ in our analysis because it
describes the identical procedure on the right side.
Our analysis of this grouping issue confirmed that, when a stage 3
pressure ulcer of the left hip (ICD-10-CM diagnosis code L89.223) is
reported as a principal diagnosis with ICD-10-PCS procedure code
0KXP0ZZ or 0KXN0ZZ, these cases group to MS-DRGs 981, 982, and 983. The
reason for this grouping is because whenever there is a surgical
procedure reported on a claim that is unrelated to the MDC to which the
case was assigned based on the principal diagnosis, it results in an
MS-DRG assignment to a surgical class referred to as ``unrelated
operating room procedures.'' In the example provided, because ICD-10-CM
diagnosis code L89.223 describing a stage 3 pressure ulcer of left hip
is classified to MDC 9 and because ICD-10-PCS procedure codes 0KXP0ZZ
and 0KXN0ZZ are classified to MDC 1 (Diseases and Disorders of the
Nervous System) in MS-DRGs 040, 041, and 042 (Peripheral, Cranial Nerve
and Other Nervous System Procedures with MCC, with CC or Peripheral
Neurostimulator, and without CC/MCC, respectively) and MDC 8 (Diseases
and Disorders of the Musculoskeletal System and Connective Tissue) in
MS-DRGs 500, 501, and 502 (Soft Tissue Procedures with MCC, with CC,
and without CC/MCC, respectively), the GROUPER logic assigns this case
to the ``unrelated operating room procedures'' set of MS-DRGs.
For our review of this grouping issue and the request to have
procedure code 0KXP0ZZ added to MDC 9, we examined claims data for
cases reporting procedure code 0KXP0ZZ or 0KXN0ZZ in conjunction with a
diagnosis code that typically groups to MDC 9. Our findings are shown
in the table below.
MS-DRGs 981 Through 983: Cases With Hip Muscle Transfer and Principal Diagnosis in MDC 9
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases with procedure code 0KXP0ZZ or 0KXN0ZZ and 72 12.6 $25,023
principal diagnosis in MDC 9...................................
MS-DRG 982--Cases with procedure code 0KXP0ZZ or 0KXN0ZZ and 130 10.5 17,955
principal diagnosis in MDC 9...................................
MS-DRG 983--Cases with procedure code 0KXP0ZZ or 0KXN0ZZ and 16 6.5 13,196
principal diagnosis in MDC 9...................................
----------------------------------------------------------------------------------------------------------------
As indicated earlier, the requestor suggested that we move ICD-10-
PCS procedure code 0KXP0ZZ to MS-DRG 579. However, our clinical
advisors believe that, within MDC 9, these procedure codes are more
clinically aligned with the procedure codes assigned to MS-DRGs 573,
574, and 575 (Skin Graft for Skin Ulcer or Cellulitis with MCC, with CC
and without CC/MCC, respectively), which are more specific to the care
of stage 3, 4 and unstageable pressure ulcers than MS-DRGs 579, 580,
and 581. Therefore, we examined claims data to identify the average
length of stay and average costs for cases assigned to MS-DRGs 573,
574, and 575. Our findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 573...................................................... 548 15.4 $34,549
MS-DRG 574...................................................... 1,254 9.8 21,251
MS-DRG 575...................................................... 238 5.4 12,006
----------------------------------------------------------------------------------------------------------------
We note that the average costs for cases in MS-DRGs 573 and 574 are
higher than the average costs of the subset of cases with the same
severity reporting a hip muscle transfer and a principal diagnosis in
MDC 9, while the average costs of those cases in MS-DRG 575 are similar
to the average costs of those cases that are currently grouping
[[Page 19226]]
to MS-DRG 983. However, our clinical advisors believe that the cases of
hip muscle transfer represent a distinct, recognizable clinical group
similar to those cases in MS-DRGs 573, 574, and 575, and that the
procedures are clearly related to the principal diagnosis codes.
Therefore, they believe that it is clinically appropriate for the
procedures to group to the same MS-DRGs as the principal diagnoses.
Therefore, we are proposing to add ICD-10-PCS procedure codes 0KXP0ZZ
and 0KXN0ZZ to MDC 9. Under our proposal, cases reporting ICD-10-PCS
procedure code 0KXP0ZZ or 0KXN0ZZ with a principal diagnosis in MDC 9
would group to MS-DRGs 573, 574, and 575.
(2) Gastrointestinal Stromal Tumor
We received a request to reassign cases for gastrointestinal
stromal tumor of the stomach when reported with a procedure describing
laparoscopic bypass of the stomach to jejunum from MS-DRGs 981, 982,
and 983 to MS-DRGs 326, 327, and 328 (Stomach, Esophageal and Duodenal
Procedures with MCC, with CC, and without CC/MCC, respectively) by
adding ICD-10-PCS procedure code 0D164ZA (Bypass stomach to jejunum,
percutaneous endoscopic approach) to MDC 6. ICD-10-CM diagnosis code
C49.A2 (Gastrointestinal stromal tumor of stomach) is used to report
this condition and is currently assigned to MDC 8. ICD-10-PCS procedure
code 0D164ZA is used to report the stomach bypass procedure and is
currently assigned to MDC 5 (Diseases and Disorders of the Circulatory
System), MDC 6 (Diseases and Disorders of the Digestive System), MDC 7
(Diseases and Disorders of the Hepatobiliary System and Pancreas), MDC
10 (Endocrine, Nutritional and Metabolic Diseases and Disorders), and
MDC 17 (Myeloproliferative Diseases and Disorders, Poorly
Differentiated Neoplasms). We refer readers to section II.12.a. of the
preamble of this proposed rule where we discuss our proposal to move
the listed diagnosis codes describing gastrointestinal stromal tumors,
including ICD-10-CM diagnosis code C49.A2, into MDC 6. Therefore, this
proposal, if finalized, would address the cases grouping to MS-DRGs 981
through 983 by instead moving the diagnosis codes to MDC 6, which would
result in the diagnosis code and the procedure code referenced by the
requestor grouping to the same MDC.
(3) Finger Cellulitis
We received a request to reassign cases for cellulitis of the right
finger when reported with a procedure describing open excision of the
right finger phalanx from MS-DRGs 981, 982, and 983 to MS-DRGs 579,
580, and 581 (Other Skin, Subcutaneous Tissue and Breast Procedures
with MCC, with CC, and without CC/MCC, respectively). Currently, ICD-
10-CM diagnosis code L03.011 (Cellulitis of right finger) is used to
report this condition and is currently assigned to MDC 09 in MS-DRGs
573, 574, and 575 (Skin Graft for Skin Ulcer or Cellulitis with MCC,
CC, and without CC/MCC, respectively), 576, 577, and 578 (Skin Graft
except for Skin Ulcer or Cellulitis with MCC, CC, and without CC/MCC,
respectively), and 602 and 603 (Cellulitis with MCC and without MCC,
respectively). ICD-10-PCS procedure code 0PBT0ZZ (Excision of right
finger phalanx, open approach) is used to identify the excision
procedure, and is currently assigned to MDC 03 (Diseases and Disorders
of the Ear, Nose, Mouth and Throat) in MS-DRGs 133 and 134 (Other Ear,
Nose, Mouth and Throat O.R. Procedures with CC/MCC, and without CC/MCC,
respectively); MDC 08 (Diseases and Disorders of the Musculoskeletal
System and Connective Tissue) in MS-DRGs 515, 516, and 517 (Other
Musculoskeletal System and Connective Tissue O.R. Procedures with MCC,
with CC, and without CC/MCC, respectively); MDC 10 (Endocrine,
Nutritional and Metabolic Diseases and Disorders) in MS-DRGs 628, 629,
and 630 (Other Endocrine, Nutritional and Metabolic O.R. Procedures
with MCC, with CC, and without CC/MCC, respectively); MDC 21 (Injuries,
Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908, and 909
(Other O.R. Procedures for Injuries with MCC, with CC, and without CC/
MCC, respectively); and MDC 24 (Multiple Significant Trauma) in MS-DRGs
957, 958, and 959 (Other O.R. Procedures for Multiple Significant
Trauma with MCC, with CC, and without CC/MCC, respectively).
Our analysis of this grouping issue confirmed that when a procedure
such as open excision of right finger phalanx (ICD-10-PCS procedure
code 0PBT0ZZ) is reported with a principal diagnosis from MDC 9, such
as cellulitis of the right finger (ICD-10-CM diagnosis code L03.011),
these cases group to MS-DRGs 981, 982, and 983. During our review of
this issue, we also examined claims data for similar procedures
describing excision of phalanges (which are listed in the table below)
and noted the same pattern. We further noted that the ICD-10-PCS
procedure codes describing excision of phalanx procedures with the
diagnostic qualifier ``X'', which are used to report these procedures
when performed for diagnostic purposes, are already assigned to MS-DRGs
579, 580, and 581 (to which the requestor suggested these cases group).
Our clinical advisors also believe that procedures describing resection
of phalanges should be assigned to the same MS-DRG as the excisions,
because the resection procedures would also group to MS-DRGs 981, 982,
and 983 when reported with a principal diagnosis from MDC 9.
------------------------------------------------------------------------
ICD-10-PCS procedure code Code description
------------------------------------------------------------------------
0PBR0ZZ...................... Excision of right thumb phalanx, open
approach.
0PBR3ZZ...................... Excision of right thumb phalanx,
percutaneous approach.
0PBR4ZZ...................... Excision of right thumb phalanx,
percutaneous endoscopic approach.
0PBS0ZZ...................... Excision of left thumb phalanx, open
approach.
0PBS3ZZ...................... Excision of left thumb phalanx,
percutaneous approach.
0PBS4ZZ...................... Excision of left thumb phalanx,
percutaneous endoscopic approach.
0PBT0ZZ...................... Excision of right finger phalanx, open
approach.
0PBT3ZZ...................... Excision of right finger phalanx,
percutaneous approach.
0PBT4ZZ...................... Excision of right finger phalanx,
percutaneous endoscopic approach.
0PBV0ZZ...................... Excision of left finger phalanx, open
approach.
0PBV3ZZ...................... Excision of left finger phalanx,
percutaneous approach.
0PBV4ZZ...................... Excision of left finger phalanx,
percutaneous endoscopic approach.
0PTR0ZZ...................... Resection of right thumb phalanx, open
approach.
0PTS0ZZ...................... Resection of left thumb phalanx, open
approach.
0PTT0ZZ...................... Resection of right finger phalanx, open
approach.
0PTV0ZZ...................... Resection of left finger phalanx, open
approach.
0RTW0ZZ...................... Resection of right finger phalangeal
joint, open approach.
[[Page 19227]]
0RTX0ZZ...................... Resection of left finger phalangeal
joint, open approach.
------------------------------------------------------------------------
As noted in the previous discussion, whenever there is a surgical
procedure reported on the claim that is unrelated to the MDC to which
the case was assigned based on the principal diagnosis, it results in
an MS-DRG assignment to a surgical class referred to as ``unrelated
operating room procedures''.
We examined the claims data for the three codes describing
cellulitis of the finger (ICD-10-CM diagnosis codes L03.011 (Cellulitis
of the right finger), L03.012 (Cellulitis of left finger), and L03.019
(Cellulitis of unspecified finger)) to identify the average length of
stay and average costs for cases reporting a principal diagnosis of
cellulitis of the finger in conjunction with the excision of phalanx
procedures listed in the table above. We note that there were no cases
reporting a principal diagnosis of cellulitis of the finger in
conjunction with the resection of phalanx procedures listed in the
table above.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 981--Cases with principal diagnosis of cellulitis of the 2 3.5 $7,934
finger and excision of phalanx procedure.......................
MS-DRG 982--Cases with principal diagnosis of cellulitis of the 11 4.2 7,244
finger and excision of phalanx procedure.......................
MS-DRG 983--Cases with principal diagnosis of cellulitis of the 4 4.8 8,058
finger and excision of phalanx procedure.......................
----------------------------------------------------------------------------------------------------------------
We also examined the claims data to identify the average length of
stay and average costs for all cases in MS-DRGs 579, 580, and 581. Our
findings are shown in the table in section II.12.A.3.of the preamble of
this proposed rule.
While our clinical advisors noted that the average length of stay
and average costs for cases in MS-DRGs 579, 580, and 581 are generally
higher than the average length of stay and average costs for the subset
of cases reporting a principal diagnosis of cellulitis of the finger
and a procedure describing excision of phalanx, they believe that the
procedures are clearly related to the principal diagnosis codes and,
therefore, it is clinically appropriate for the procedures to group to
the same MS-DRGs as the principal diagnoses, particularly given that
procedures describing excision of phalanx with the diagnostic qualifier
``X'' are already assigned to these MS-DRGs. In addition, our clinical
advisors believe it is clinically appropriate for the procedures
describing resection of phalanx to be assigned to MS-DRGs 579, 580, and
581 as well. Therefore, we are proposing to add the procedure codes
describing excision and resection of phalanx listed above to MS-DRGs
579, 580, and 581. Under this proposal, cases reporting one of the
excision or resection procedures listed in the table above in
conjunction with a principal diagnosis from MDC 9 would group to MS-
DRGs 579, 580, and 581.
(4) Multiple Trauma With Internal Fixation of Joints
We received a request to reassign cases involving multiple
significant trauma with internal fixation of joints from MS-DRGs 981,
982, and 983 to MS-DRGs 957, 958, and 959 (Other O.R. Procedures for
Multiple Significant Trauma with MCC, with CC, and without CC/MCC,
respectively). The requestor provided an example of several ICD-10-CM
diagnosis codes that together described multiple significant trauma in
conjunction with ICD-10-PCS procedure codes beginning with the prefix
``0SH'' and ``0RH'' that describe internal fixation of joints. The
requestor provided several suggestions to address this assignment,
including: Adding all ICD-10-PCS procedure codes in MDC 8 (Diseases and
Disorders of the Musculoskeletal System and Connective Tissue) with the
exception of codes that group to MS-DRG 956 (Limb Reattachment, Hip and
Femur Procedures for Multiple Significant Trauma) to MS-DRGs 957, 958,
and 959; adding codes within the ``0SH'' and ``0RH'' code ranges to MDC
24; and adding ICD-10-PCS procedure codes from all MDCs except those
that currently group to MS-DRG 955 (Craniotomy for Multiple Significant
Trauma) or MS-DRG 956 (Limb Reattachment, Hip and Femur Procedures for
Multiple Significant Trauma) to MS-DRGs 957, 958, and 959.
While we understand the requestor's concern about these multiple
significant trauma cases, we believe any potential reassignment of
these cases requires significant analysis. Similar to our analysis of
MDC 14 (initially discussed at 81 FR 56854), there are multiple logic
lists in MDC 24 that would need to be reviewed. For example, to satisfy
the logic for multiple significant trauma, the logic requires a
diagnosis code from the significant trauma principal diagnosis list and
two or more significant trauma diagnoses from different body sites. The
significant trauma logic lists for the other body sites (which include
head, chest, abdominal, kidney, urinary system, pelvis or spine, upper
limb, and lower limb) allow the extensive list of diagnosis codes
included in the logic to be reported as a principal or secondary
diagnosis. The analysis of the reporting of all the codes as a
principal and/or secondary diagnosis within MDC 24, combined with the
analysis of all of the ICD-10-PCS procedure codes within MDC 8, is
anticipated to be a multi-year effort. Therefore, we plan to consider
this issue for future rulemaking as part of our ongoing analysis of the
unrelated procedure MS-DRGs.
(5) Totally Implantable Vascular Access Devices
We received a request to reassign cases for insertion of totally
implantable vascular access devices (TIVADs) listed in the table below
when reported with principal diagnoses in MDCs other than MDC 9
(Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast)
and MDC 11 (Diseases and Disorders of the Kidney and Urinary Tract)
from MS-DRGs 981 through 983 to a surgical MS-DRG within the
appropriate MDC based on the principal diagnosis. The requestor noted
that the insertion of
[[Page 19228]]
TIVAD procedures are newly designated as O.R. procedures, effective
October 1, 2018, and are assigned to MDCs 9 and 11. The requestor
stated that TIVADs can be placed for a variety of purposes and are used
to treat a wide range of malignancies at various sites and, therefore,
would likely have a relationship to the principal diagnosis within any
MDC. The requestor suggested that procedures describing the insertion
of TIVADs group to surgical MS-DRGs within every MDC (other than MDCs
2, 20, and 22, which do not contain surgical MS-DRGs). The requestor
further stated that the surgical hierarchy should assign more
significant O.R. procedures within each MDC to a higher position than
procedures describing the insertion of TIVADs because these procedures
consume less O.R. resources than more invasive procedures.
------------------------------------------------------------------------
ICD-PCS code Code description
------------------------------------------------------------------------
0JH60WZ................... Insertion of totally implantable vascular
access device into chest subcutaneous
tissue and fascia, open approach.
0JH80WZ................... Insertion of totally implantable vascular
access device into abdomen subcutaneous
tissue and fascia, open approach.
0JHD0WZ................... Insertion of totally implantable vascular
access device into right upper arm
subcutaneous tissue and fascia, open
approach.
0JHF0WZ................... Insertion of totally implantable vascular
access device into left upper arm
subcutaneous tissue and fascia, open
approach.
0JHG0WZ................... Insertion of totally implantable vascular
access device into right lower arm
subcutaneous tissue and fascia, open
approach.
0JHH0WZ................... Insertion of totally implantable vascular
access device into left lower arm
subcutaneous tissue and fascia, open
approach.
0JHL0WZ................... Insertion of totally implantable vascular
access device into right upper leg
subcutaneous tissue and fascia, open
approach.
0JHM0WZ................... Insertion of totally implantable vascular
access device into left upper leg
subcutaneous tissue and fascia, open
approach.
0JHN0WZ................... Insertion of totally implantable vascular
access device into right lower leg
subcutaneous tissue and fascia, open
approach.
0JHP0WZ................... Insertion of totally implantable vascular
access device into left lower leg
subcutaneous tissue and fascia, open
approach.
------------------------------------------------------------------------
While we agree that TIVAD procedures may be performed in connection
with a variety of principal diagnoses, we note that because these
procedures are newly designated as O.R. procedures effective October 1,
2018, we do not yet have sufficient data to analyze this request. We
plan to consider this issue in future rulemaking as part of our ongoing
analysis of the unrelated procedure MS-DRGs.
(6) Gastric Band Procedure Complications or Infections
We received a request to reassign cases for infection or
complications due to gastric band procedures when reported with a
procedure describing revision of or removal of extraluminal device in/
from the stomach from MS-DRGs 987, 988, and 989 (Non-Extensive O.R.
Procedure Unrelated to Principal Diagnosis with MCC, with CC and
without MCC/CC, respectively) to MS-DRGs 326, 327, and 328 (Stomach,
Esophageal, and Duodenal Procedures with MCC, with CC, and without CC/
MCC, respectively). ICD-10-CM diagnosis codes K95.01 (Infection due to
gastric band procedure) and K95.09 (Other complications of gastric band
procedure) are used to report these conditions and are currently
assigned to MDC 6 (Diseases and Disorders of the Digestive System).
ICD-10-PCS procedure codes 0DW64CZ (Revision of extraluminal device in
stomach, percutaneous endoscopic approach) and 0DP64CZ (Removal of
extraluminal device from stomach, percutaneous endoscopic approach) are
used to report the revision of, or removal of, an extraluminal device
in/from the stomach and are currently assigned to MDC 10 (Endocrine,
Nutritional and Metabolic Diseases and Disorders) in MS-DRGs 619, 620,
and 621 (O.R. Procedures for Obesity with MCC with CC, and without CC/
MCC, respectively).
Our analysis of this grouping issue confirmed that when procedures
describing the revision of or removal of an extraluminal device in/from
the stomach are reported with principal diagnoses in MDC 6 (such as
ICD-10-CM diagnosis codes K95.01 and K95.09), in the absence of a
procedure assigned to MDC 6, these cases group to MS-DRGs 987, 988, and
989. As noted in the previous discussion, whenever there is a surgical
procedure reported on the claim that is unrelated to the MDC to which
the case was assigned based on the principal diagnosis, it results in
an MS-DRG assignment to a surgical class referred to as ``unrelated
operating room procedures''.
We examined the claims data to identify cases involving ICD-10-PCS
procedure codes 0DW64CZ and 0DP64CZ reported with a principal diagnosis
of K95.01 or K95.09 that are currently grouping to MS-DRGs 987, 988,
and 989. Our findings are shown in the table below.
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 987--All cases........................................... 8,674 11 $23,885
MS-DRG 987--Cases reporting procedure code 0DW64CZ or 0DP64CZ 20 6.6 17,873
and principal diagnosis code K95.01 or K95.09..................
MS-DRG 988--All cases........................................... 8,391 5.7 12,294
MS-DRG 988--Cases reporting procedure code 0DW64CZ or 0DP64CZ 105 2.2 7,253
and principal diagnosis code K95.01 or K95.09..................
MS-DRG 989--All cases........................................... 1,551 3.1 8,171
MS-DRG 989--Cases reporting procedure code 0DW64CZ or 0DP64CZ 120 1.6 6,010
and principal diagnosis code K95.01 or K95.09..................
----------------------------------------------------------------------------------------------------------------
We also examined the data for cases in MS-DRGs 326, 327, and 328,
and our findings are provided in a table presented in section II.12.a.
of the preamble of this proposed rule. While our clinical advisors
noted that the average length of stay and average costs of cases in MS-
DRGs 326, 327, and 328 are significantly higher than the average length
of stay and average costs for the subset of cases reporting procedure
code 0DW64CZ or 0DP64CZ and a principal diagnosis code of K95.01 or
K95.09, they believe that the procedures are clearly related to the
principal diagnosis and, therefore, it is clinically appropriate for
the procedures to group to the same MS-DRGs as the principal
[[Page 19229]]
diagnoses. In addition, our clinical advisors believe that because
these procedures are intended to treat a complication of a procedure
related to obesity, rather than the obesity itself, they are more
appropriately assigned to stomach, esophageal, and duodenal procedures
(MS-DRGs 326, 327, and 328) in MDC 6 than to procedures for obesity
(MS-DRGs 619, 620, and 621) in MDC 10.
Therefore, we are proposing to add ICD-10-PCS procedure codes
0DW64CZ and 0DP64CZ to MDC 6 in MS-DRGs 326, 327, and 328. Under this
proposal, cases reporting procedure code 0DW64CZ or 0DP64CZ in
conjunction with a principal diagnosis code of K95.01 or K95.09 would
group to MS-DRGs 326, 327, and 328.
(7) Peritoneal Dialysis Catheters
We received a request to reassign cases for complications of
peritoneal dialysis catheters when reported with procedure codes
describing removal, revision, and/or insertion of new peritoneal
dialysis catheters from MS-DRGs 981 through 983 to MS-DRGs 356, 357,
and 358 (Other Digestive System O.R. Procedures with MCC, with CC, and
without CC/MCC, respectively) in MDC 6 by adding the diagnosis codes
describing complications of peritoneal dialysis catheters to MDC 6. We
refer readers to section II.12.a. of the preamble of this proposed rule
in which we describe our analysis of this issue as part of our broader
review of the unrelated MS-DRGs. Our clinical advisors believe it is
more appropriate to add the procedure codes describing removal,
revision, and/or insertion of new peritoneal dialysis catheters to MS-
DRGs 907, 908, and 909 than to move the diagnosis codes describing
complications of peritoneal dialysis catheters to MDC 6 because the
diagnosis codes describe complications, rather than initial placement,
of peritoneal dialysis catheters, and therefore, are most clinically
aligned with the diagnosis codes assigned to MDC 21 (where they are
currently assigned). In section II.12.a. of the preamble of this
proposed rule, we are proposing to add procedures describing removal,
revision, and/or insertion of peritoneal dialysis catheters to MS-DRGs
907, 908, and 909 in MDC 21.
(8) Occlusion of Left Renal Vein
We received a request to reassign cases for varicose veins in the
pelvic region when reported with an embolization procedure from MS-DRGs
981, 982 and 983 (Non-Extensive O.R. Procedure Unrelated to Principal
Diagnosis with MCC, with CC, and without CC/MCC, respectively) to MS-
DRGs 715 and 716 (Other Male Reproductive System O.R. Procedures for
Malignancy with CC/MCC and without CC/MCC, respectively) and MS-DRGs
717 and 718 (Other Male Reproductive System O.R. Procedures Except
Malignancy with CC/MCC and without CC/MCC, respectively) in MDC 12
(Diseases and Disorders of the Male Reproductive System) and to MS-DRGs
749 and 750 (Other Female Reproductive System O.R. Procedures with CC/
MCC and without CC/MCC, respectively) in MDC 13 (Diseases and Disorders
of the Female Reproductive System). ICD-10-CM diagnosis code I86.2
(Pelvic varices) is reported to identify the condition of varicose
veins in the pelvic region and is currently assigned to MDC 12 and to
MDC 13. ICD-10-PCS procedure code 06LB3DZ (Occlusion of left renal vein
with intraluminal device, percutaneous approach) may be reported to
describe an embolization procedure performed for the treatment of
pelvic varices and is currently assigned to MDC 5 (Diseases and
Disorders of the Circulatory System) in MS-DRGs 270, 271, and 272
(Other Major Cardiovascular Procedures with MCC, with CC, and without
CC/MCC, respectively), MDC 6 (Diseases and Disorders of the Digestive
System) in MS-DRGs 356, 357, and 358 (Other Digestive System O.R.
Procedures with MCC, with CC, and without CC/MCC, respectively), MDC 21
(Injuries, Poisonings and Toxic Effects of Drugs) in MS-DRGs 907, 908,
and 909 (Other O.R. Procedures for Injuries with MCC, CC, without CC/
MCC, respectively), and MDC 24 (Multiple Significant Trauma) in MS-DRGs
957, 958, 959 (Other O.R. Procedures for Multiple Significant Trauma
with MCC, with CC, and without CC/MCC, respectively). The requestor
also noted that when this procedure is performed on the right renal
vein (which is reported with ICD-10-PCS code 06L03DZ (Occlusion of
inferior vena cava with intraluminal device, percutaneous approach) for
varicose veins in the pelvic region, the case groups to MS-DRGs 715 and
716 and MS-DRGs 717 and 718 in MDC 12 (for male patients) or MS-DRGs
749 and 750 in MDC 13 (for female patients).
Our analysis of this grouping issue confirmed that when ICD-10-CM
diagnosis code I86.2 (Pelvic varices) is reported with ICD-10-PCS
procedure code 06LB3DZ, the case groups to MS-DRGs 981, 982, and 983.
As noted above in previous discussions, whenever there is a surgical
procedure reported on the claim that is unrelated to the MDC to which
the case was assigned based on the principal diagnosis, it results in
an MS-DRG assignment to a surgical class referred to as ``unrelated
operating room procedures.''
We examined the claims data to identify cases involving procedure
code 06LB3DZ in MS-DRGs 981, 982, and 983 reported with a principal
diagnosis code of I86.2. We found no cases in the claims data.
In the absence of data to examine, our clinical advisors reviewed
this request and agree with the requestor that when the embolization
procedure is performed on the left renal vein (reported with ICD-10-PCS
procedure code 06LB3DZ), it should group to the same MS-DRGs as when it
is performed on the right renal vein. Therefore, we are proposing to
add ICD-10-PCS procedure code 06LB3DZ to MDC 12 in MS-DRGs 715, 716,
717, and 718 and to MDC 13 in MS-DRGs 749 and 750. Under this proposal,
cases reporting ICD-10-CM diagnosis code I86.2 with ICD-10-PCS
procedure code 06LB3DZ would group to MDC 12 (for male patients) or MDC
13 (for female patients).
13. Operating Room (O.R.) and Non-O.R. Issues
a. Background
Under the IPPS MS-DRGs (and former CMS MS-DRGs), we have a list of
procedure codes that are considered operating room (O.R.) procedures.
Historically, we developed this list using physician panels that
classified each procedure code based on the procedure and its effect on
consumption of hospital resources. For example, generally the presence
of a surgical procedure which required the use of the operating room
would be expected to have a significant effect on the type of hospital
resources (for example, operating room, recovery room, and anesthesia)
used by a patient, and therefore, these patients were considered
surgical. Because the claims data generally available do not precisely
indicate whether a patient was taken to the operating room, surgical
patients were identified based on the procedures that were performed.
Generally, if the procedure was not expected to require the use of the
operating room, the patient would be considered medical (non-O.R.).
Currently, each ICD-10-PCS procedure code has designations that
determine whether and in what way the presence of that procedure on a
claim impacts the MS-DRG assignment. First, each ICD-10-PCS procedure
code is either designated as an O.R. procedure for purposes of MS-DRG
assignment
[[Page 19230]]
(``O.R. procedures'') or is not designated as an O.R. procedure for
purposes of MS-DRG assignment (``non-O.R. procedures''). Second, for
each procedure that is designated as an O.R. procedure, that O.R.
procedure is further classified as either extensive or non-extensive.
Third, for each procedure that is designated as a non-O.R. procedure,
that non-O.R. procedure is further classified as either affecting the
MS-DRG assignment or not affecting the MS-DRG assignment. We refer to
these designations that do affect MS-DRG assignment as ``non-O.R.
affecting the MS-DRG.'' For new procedure codes that have been
finalized through the ICD-10 Coordination and Maintenance Committee
meeting process and are proposed to be classified as O.R. procedures or
non-O.R. procedures affecting the MS-DRG, our clinical advisors
recommend the MS-DRG assignment which is then made available in
association with the proposed rule (Table 6B.--New Procedure Codes) and
subject to public comment. These proposed assignments are generally
based on the assignment of predecessor codes or the assignment of
similar codes. For example, we generally examine the MS-DRG assignment
for similar procedures, such as the other approaches for that
procedure, to determine the most appropriate MS-DRG assignment for
procedures proposed to be newly designated as O.R. procedures. As
discussed in section II.F.15. of the preamble of this proposed rule, we
are making Table 6B.--New Procedure Codes--FY 2020 available on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. We also refer readers to the ICD-
10 MS-DRG Version 36 Definitions Manual at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html for detailed information regarding
the designation of procedures as O.R. or non-O.R. (affecting the MS-
DRG) in Appendix E--Operating Room Procedures and Procedure Code/MS-DRG
Index.
Given the long period of time that has elapsed since the original
O.R. (extensive and non-extensive) and non-O.R. designations were
established, the incremental changes that have occurred to these O.R.
and non-O.R. procedure code lists, and changes in the way inpatient
care is delivered, we plan to conduct a comprehensive, systematic
review of the ICD-10-PCS procedure codes. This will be a multi-year
project during which we will also review the process for determining
when a procedure is considered an operating room procedure. For
example, we may restructure the current O.R. and non-O.R. designations
for procedures by leveraging the detail that is now available in the
ICD-10 claims data. We refer readers to the discussion regarding the
designation of procedure codes in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38066) where we stated that the determination of when a
procedure code should be designated as an O.R. procedure has become a
much more complex task. This is, in part, due to the number of various
approaches available in the ICD-10-PCS classification, as well as
changes in medical practice. While we have typically evaluated
procedures on the basis of whether or not they would be performed in an
operating room, we believe that there may be other factors to consider
with regard to resource utilization, particularly with the
implementation of ICD-10. Therefore, we are again soliciting public
comments on what factors or criteria to consider in determining whether
a procedure is designated as an O.R. procedure in the ICD-10-PCS
classification system for future consideration. Commenters should
submit their recommendations to the following email address:
[email protected] by November 1, 2019.
As a result of this planned review and potential restructuring,
procedures that are currently designated as O.R. procedures may no
longer warrant that designation, and conversely, procedures that are
currently designated as non-O.R. procedures may warrant an O.R. type of
designation. We intend to consider the resources used and how a
procedure should affect the MS-DRG assignment. We may also consider the
effect of specific surgical approaches to evaluate whether to subdivide
specific MS-DRGs based on a specific surgical approach. We plan to
utilize our available MedPAR claims data as a basis for this review and
the input of our clinical advisors. As part of this comprehensive
review of the procedure codes, we also intend to evaluate the MS-DRG
assignment of the procedures and the current surgical hierarchy because
both of these factor into the process of refining the ICD-10 MS-DRGs to
better recognize complexity of service and resource utilization.
We will provide more detail on this analysis and the methodology
for conducting this review in future rulemaking. As we continue to
develop our process and methodology, as noted above, we are soliciting
public comments on other factors to consider in our refinement efforts
to recognize and differentiate consumption of resources for the ICD-10
MS-DRGs.
In this proposed rule, we are addressing requests that we received
regarding changing the designation of specific ICD-10-PCS procedure
codes from non-O.R. to O.R. procedures, or changing the designation
from O.R. procedure to non-O.R. procedure. Below we discuss the process
that was utilized for evaluating the requests that were received for FY
2020 consideration. For each procedure, our clinical advisors
considered:
Whether the procedure would typically require the
resources of an operating room;
Whether it is an extensive or a nonextensive procedure;
and
To which MS-DRGs the procedure should be assigned.
We note that many MS-DRGs require the presence of any O.R.
procedure. As a result, cases with a principal diagnosis associated
with a particular MS-DRG would, by default, be grouped to that MS-DRG.
Therefore, we do not list these MS-DRGs in our discussion below.
Instead, we only discuss MS-DRGs that require explicitly adding the
relevant procedures codes to the GROUPER logic in order for those
procedure codes to affect the MS-DRG assignment as intended. In cases
where we are proposing to change the designation of procedure codes
from non-O.R. procedures to O.R. procedures, we also are proposing one
or more MS-DRGs with which these procedures are clinically aligned and
to which the procedure code would be assigned.
In addition, cases that contain O.R. procedures will map to MS-DRG
981, 982, or 983 (Extensive O.R. Procedure Unrelated to Principal
Diagnosis with MCC, with CC, and without CC/MCC, respectively) or MS-
DRG 987, 988, or 989 (Non-Extensive O.R. Procedure Unrelated to
Principal Diagnosis with MCC, with CC, and without CC/MCC,
respectively) when they do not contain a principal diagnosis that
corresponds to one of the MDCs to which that procedure is assigned.
These procedures need not be assigned to MS-DRGs 981 through 989 in
order for this to occur. Therefore, if requestors included some or all
of MS-DRGs 981 through 989 in their request or included MS-DRGs that
require the presence of any O.R. procedure, we did not specifically
address that aspect in summarizing their request or our response to the
request in the section below.
For procedures that would not typically require the resources of an
operating room, our clinical advisors
[[Page 19231]]
determined if the procedure should affect the MS-DRG assignment.
We received several requests to change the designation of specific
ICD-10-PCS procedure codes from non-O.R. procedures to O.R. procedures,
or to change the designation from O.R. procedures to non-O.R.
procedures. Below we detail and respond to some of those requests. With
regard to the remaining requests, our clinical advisors believe it is
appropriate to consider these requests as part of our comprehensive
review of the procedure codes discussed above.
b. O.R. Procedures to Non-O.R. Procedures
(1) Bronchoalveolar Lavage
Bronchoalveolar lavage (BAL) is a diagnostic procedure in which a
bronchoscope is passed through the patient's mouth or nose into the
lungs. A small amount of fluid is squirted into an area of the lung and
then collected for examination. Two requestors identified 13 ICD-10-PCS
procedure codes describing BAL procedures that generally can be
performed at bedside and would not require the resources of an
operating room. In the ICD-10 MS-DRG Version 36 Definitions Manual,
these 13 ICD-10-PCS procedure codes are currently recognized as O.R.
procedures for purposes of MS-DRG assignment.
We agree with the requestors that these procedures do not typically
require the resources of an operating room. Therefore, we are proposing
to remove the following 13 procedure codes from the FY 2020 ICD-10 MS-
DRGs Version 37 Definitions Manual in Appendix E--Operating Room
Procedures and Procedure Code/MS-DRG Index as O.R. procedures. Under
this proposal, these procedures would no longer impact MS-DRG
assignment.
------------------------------------------------------------------------
ICD-10-PCS code Code description
------------------------------------------------------------------------
0B9H8ZX................... Drainage of lung lingula, via natural or
artificial opening endoscopic, diagnostic.
0B9K8ZX................... Drainage of right lung, via natural or
artificial opening endoscopic, diagnostic.
0B9L8ZX................... Drainage of left lung, via natural or
artificial opening endoscopic, diagnostic.
0B9M8ZX................... Drainage of bilateral lungs, via natural or
artificial opening endoscopic, diagnostic.
0B9C8ZZ................... Drainage of right upper lung lobe, via
natural or artificial opening endoscopic.
0B9D8ZZ................... Drainage of right middle lung lobe, via
natural or artificial opening endoscopic.
0B9F8ZZ................... Drainage of right lower lung lobe, via
natural or artificial opening endoscopic.
0B9G8ZZ................... Drainage of left upper lung lobe, via
natural or artificial opening endoscopic.
0B9H8ZZ................... Drainage of Lung Lingula, via natural or
artificial opening endoscopic.
0B9J8ZZ................... Drainage of left lower lung lobe, via
natural or artificial opening endoscopic.
0B9K8ZZ................... Drainage of right lung, via natural or
artificial opening endoscopic.
0B9L8ZZ................... Drainage of left lung, via natural or
artificial opening endoscopic.
0B9M8ZZ................... Drainage of bilateral lungs, via natural or
artificial opening endoscopic.
------------------------------------------------------------------------
(2) Percutaneous Drainage of Pelvic Cavity
One requestor identified two ICD-10-PCS procedure codes that
describe procedures involving percutaneous drainage of the pelvic
cavity. The two ICD-10-PCS procedure codes are: 0W9J3ZX (Drainage of
pelvic cavity, percutaneous approach, diagnostic) and 0W9J3ZZ (Drainage
of pelvic cavity, percutaneous approach).
ICD-10-PCS procedure code 0W9J3ZX is currently recognized as an
O.R. procedure for purposes of MS-DRG assignment, while the
nondiagnostic ICD-10-PCS procedure code 0W9J3ZZ is not recognized as an
O.R. procedure for purposes of MS-DRG assignment. The requestor stated
that percutaneous drainage procedures of the pelvic cavity for both
diagnostic and nondiagnostic purposes are not complex procedures and
both types of procedures are usually performed in a radiology suite.
The requestor stated that both procedures should be classified as non-
O.R. procedures.
We agree with the requestor that these procedures do not typically
require the resources of an operating room. Therefore, we are proposing
to remove procedure code 0W9J3ZX from the FY 2020 ICD-10 MS-DRG Version
37 Definitions Manual in Appendix E--Operating Room Procedures and
Procedure Code/MS-DRG Index as an O.R. procedure. Under this proposal,
this procedure would no longer impact MS-DRG assignment.
(3) Percutaneous Removal of Drainage Device
One requestor identified two ICD-10-PCS procedure codes that
describe procedures involving the percutaneous placement and removal of
drainage devices from the pancreas. These two ICD-10-PCS procedure
codes are: 0FPG30Z (Removal of drainage device from pancreas,
percutaneous approach) and 0F9G30Z (Drainage of pancreas with drainage
device, percutaneous approach). ICD-10-PCS procedure code 0FPG30Z is
currently recognized as an O.R. procedure for purposes of MS-DRG
assignment, while ICD-10-PCS procedure code 0F9G30Z is not recognized
as an O.R. procedure for purposes of MS-DRG assignment. The requestor
stated that percutaneous placement of drains is typically performed in
a radiology suite under image guidance and removal of a drain would not
be more resource intensive than its placement.
We agree with the requestor that these procedures do not typically
require the resources of an operating room. Therefore, we are proposing
to remove ICD-10-PCS procedure code 0FPG30Z from the FY 2020 ICD-10 MS-
DRG Version 37 Definitions Manual in Appendix E--Operating Room
Procedures and Procedure Code/MS-DRG Index as an O.R. procedure. Under
this proposal, this procedure would no longer impact MS-DRG assignment.
c. Non-O.R. Procedures to O.R. Procedures
(1) Percutaneous Occlusion of Gastric Artery
One requestor identified two ICD-10-PCS procedure codes that
describe percutaneous occlusion and restriction of the gastric artery
with intraluminal device, ICD-10-PCS procedure codes 04L23DZ (Occlusion
of gastric artery with intraluminal device, percutaneous approach) and
04V23DZ (Restriction of gastric artery with intraluminal device,
percutaneous approach), that the requestor stated are currently not
recognized as O.R. procedures for purposes of MS-DRG assignment. The
requestor noted that transcatheter endovascular embolization of the
gastric artery with intraluminal devices uses comparable resources to
transcatheter endovascular embolization of the gastroduodenal artery.
The requestor stated that ICD-10-PCS procedure codes 04L33DZ (Occlusion
of hepatic
[[Page 19232]]
artery with intraluminal device, percutaneous approach) and 04V33DZ
(Restriction of hepatic artery with intraluminal device, percutaneous
approach) are recognized as O.R. procedures for purposes of MS-DRG
assignment, and ICD-10-PCS procedure codes 04L23DZ and 04V23DZ should
therefore also be recognized as O.R. procedures for purposes of MS-DRG
assignment. We note that, contrary to the requestor's statement, ICD-
10-PCS procedure code 04V23DZ is already recognized as an O.R.
procedure for purposes of MS-DRG assignment.
We agree with the requestor that ICD-10-PCS procedure code 04L23DZ
typically requires the resources of an operating room. Therefore, we
are proposing to add this code to the FY 2020 ICD-10 MS-DRG Version 37
Definitions Manual in Appendix E--Operating Room Procedures and
Procedure Code/MS-DRG Index as an O.R. procedure assigned to MS-DRGs
270, 271, and 272 (Other Major Cardiovascular Procedures with MCC, CC,
without CC/MCC, respectively) in MDC 05 (Diseases and Disorders of the
Circulatory System); MS-DRGs 356, 357, and 358 (Other Digestive System
O.R. Procedures, with MCC, CC, without CC/MCC, respectively) in MDC 06
(Diseases and Disorders of the Digestive System); MS-DRGs 907, 908, and
909 (Other O.R. Procedures for Injuries with MCC, CC, without CC/MCC,
respectively) in MDC 21 (Injuries, Poisonings and Toxic Effects of
Drugs); and MS-DRGs 957, 958, and 959 (Other O.R. Procedures for
Multiple Significant Trauma with MCC, CC, without CC/MCC, respectively)
in MDC 24 (Multiple Significant Trauma).
(2) Endoscopic Insertion of Endobronchial Valves
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41257), we discussed
a comment we received in response to the FY 2019 IPPS/LTCH PPS proposed
rule regarding eight ICD-10-PCS procedure codes that describe
endobronchial valve procedures that the commenter believed should be
designated as O.R. procedures. The codes are identified in the
following table.
------------------------------------------------------------------------
ICD-10-PCS code Code description
------------------------------------------------------------------------
0BH38GZ................... Insertion of endobronchial valve into right
main bronchus, via natural or artificial
opening endoscopic.
0BH48GZ................... Insertion of endobronchial valve into right
upper lobe bronchus, via natural or
artificial opening endoscopic.
0BH58GZ................... Insertion of endobronchial valve into right
middle lobe bronchus, via natural or
artificial opening endoscopic.
0BH68GZ................... Insertion of endobronchial valve into right
lower lobe bronchus, via natural or
artificial opening endoscopic.
0BH78GZ................... Insertion of endobronchial valve into left
main bronchus, via natural or artificial
opening endoscopic.
0BH88GZ................... Insertion of endobronchial valve into left
upper lobe bronchus, via natural or
artificial opening endoscopic.
0BH98GZ................... Insertion of endobronchial valve into
lingula bronchus, via natural or artificial
opening endoscopic.
0BHB8GZ................... Insertion of endobronchial valve into left
lower lobe bronchus, via natural or
artificial opening endoscopic.
------------------------------------------------------------------------
The commenter stated that these procedures are most commonly
performed in the O.R., given the need for better monitoring and support
through the process of identifying and occluding a prolonged air leak
using endobronchial valve technology. The commenter also noted that
other endobronchial valve procedures have an O.R. designation. We noted
that, in the ICD-10 MS-DRGs Version 35, these eight ICD-10-PCS
procedure codes are not recognized as O.R. procedures for purposes of
MS-DRG assignment. The commenter requested that these eight procedure
codes be assigned to MS-DRG 163 (Major Chest Procedures with MCC) due
to similar cost and resource use. As discussed in the FY 2019 IPPS/LTCH
PPS final rule, our clinical advisors disagreed with the commenter that
the eight identified procedures typically require the use of an
operating room, and believed that these procedures would typically be
performed in an endoscopy suite. Therefore, we did not finalize a
change to the eight procedure codes describing endoscopic insertion of
an endobronchial valve listed in the table above for FY 2019 under the
ICD-10 MS-DRGs Version 36.
After publication of the FY 2019 IPPS/LTCH PPS final rule, we
received feedback from several stakeholders expressing continued
concern with the designation of the eight ICD-10-PCS procedure codes
describing the endoscopic insertion of an endobronchial valve listed in
the table above, including requests to reconsider the designation of
these codes for FY 2020. Some requestors stated that while they
appreciated CMS' attention to the issue, they believed that important
clinical and financial factors had been overlooked. The requestors
noted that while the site of care is an important consideration for MS-
DRG assignment, there are other clinical factors such as case
complexity, patient health risk and the need for anesthesia that also
affect hospital resource consumption and should influence MS-DRG
assignment. With regard to complexity, the requestors stated that many
of these patients are high-risk, often recovering from major lung
surgery and have significantly compromised respiratory function.
According to one requestor, these patients may have major
comorbidities, such as cancer or emphysema contributing to longer
lengths of stay in the hospital. This requestor acknowledged that
procedures performed for the endoscopic insertion of an endobronchial
valve are often, but not always, performed in the O.R., however, the
requestor also noted this should not preclude the designation of these
procedures as O.R. procedures since there have been other examples of
reclassification requests where the combination of factors, such as
treatment difficulty, resource utilization, patient health status, and
anesthesia administration were considered in the decision to change the
designation for a procedure from non-O.R. to O.R. Another requestor
stated that CMS' current designation of a procedure involving the
endoscopic insertion of an endobronchial valve as a non-O.R. procedure
is not reflective of actual practice and this designation has payment
consequences that may affect access to the treatment for a vulnerable
patient population, with limited treatment options. The requestor
recommended that procedures involving the endoscopic insertion of an
endobronchial valve should be designated as O.R. procedures and
assigned to MS-DRGs 163, 164, and 165 (Major Chest Procedures with MCC,
with CC and without CC/MCC, respectively). In addition, a few of the
requestors also conducted their own analyses and indicated that if
procedures involving the endoscopic insertion of an endobronchial valve
were to be assigned to MS-DRGs 163, 164, and 165, the average costs of
the cases reporting a procedure code describing the endoscopic
insertion of an endobronchial valve would still be higher compared to
all the cases in the assigned MS-DRG.
We examined claims data from the September 2018 update of the FY
2018 MedPAR file for MS-DRGs 163, 164 and
[[Page 19233]]
165 to identify cases reporting any one of the eight procedure codes
listed in the above table describing the endoscopic insertion of an
endobronchial valve. Cases reporting one of these procedure codes would
be assigned to MS-DRG 163, 164, or 165 if at least one other procedure
that is designated as an O.R. procedure and assigned to these MS-DRGs
was also reported on the claim. In addition, cases reporting a
procedure code describing the endoscopic insertion of an endobronchial
valve with a different surgical approach are assigned to MS-DRGs 163,
164, and 165. Our findings are shown in the following table.
MS-DRGs for Major Chest Procedures With Endoscopic Insertion of Endobronchial Valve Procedures
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 163--All cases........................................... 10,812 11.6 $33,433
MS-DRG 163--Cases reporting a procedure for the endoscopic 49 21.1 53,641
insertion of an endobronchial valve............................
MS-DRG 164--All cases........................................... 14,800 5.6 18,202
MS-DRG 164--Cases reporting a procedure for the endoscopic 23 14 37,287
insertion of an endobronchial valve............................
MS-DRG 165--All cases........................................... 7,907 3.3 13,408
MS-DRG 165--Cases reporting a procedure for the endoscopic 3 18.3 39,249
insertion of an endobronchial valve............................
----------------------------------------------------------------------------------------------------------------
We found a total of 10,812 cases in MS-DRG 163 with an average
length of stay of 11.6 days and average costs of $33,433. Of those
10,812 cases, we found 49 cases reporting a procedure for the
endoscopic insertion of an endobronchial valve with an average length
of stay of 21.1 days and average costs of $53,641. For MS-DRG 164, we
found a total of 14,800 cases with an average length of stay of 5.6
days and average costs of $18,202. Of those 14,800 cases, we found 23
cases reporting a procedure for the endoscopic insertion of an
endobronchial valve with an average length of stay of 14 days and
average costs of $37,287. For MS-DRG 165, we found a total of 7,907
cases with an average length of stay of 3.3 days and average costs of
$13,408. Of those 7,907 cases, we found 3 cases reporting a procedure
for the endoscopic insertion of an endobronchial valve with an average
length of stay of 18.3 days and average costs of $39,249.
We also examined claims data to identify any cases reporting any
one of the eight procedure codes listed in the table above describing
the endoscopic insertion of an endobronchial valve within MS-DRGs 166,
167, and 168 (Other Respiratory System O.R. Procedures with MCC, with
CC, and without CC/MCC, respectively). Cases reporting one of these
procedure codes would be assigned to MS-DRG 166, 167, or 168 if at
least one other procedure that is designated as an O.R. procedure and
assigned to these MS-DRGs was also reported on the claim. In addition,
MS-DRGs 166, 167, and 168 are the other surgical MS-DRGs where cases
reporting a respiratory diagnosis within MDC 4 would be assigned. Our
findings are shown in the following table.
MS-DRGs for Other Respiratory System O.R. Procedures With Endoscopic Insertion of Endobronchial Valve
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 166--All cases........................................... 16,050 10.6 $26,645
MS-DRG 166--Cases reporting a procedure for the endoscopic 11 25.7 71,700
insertion of an endobronchial valve............................
MS-DRG 167--All cases........................................... 8,165 5.3 13,687
MS-DRG 167--Cases reporting a procedure for the endoscopic 4 10 28,847
insertion of an endobronchial valve............................
MS-DRG 168--All cases........................................... 2,430 2.8 9,645
----------------------------------------------------------------------------------------------------------------
We found a total of 16,050 cases in MS-DRG 166 with an average
length of stay of 10.6 days and average costs of $26,645. Of those
16,050 cases, we found 11 cases reporting a procedure for the
endoscopic insertion of an endobronchial valve with an average length
of stay of 25.7 days and average costs of $71,700. For MS-DRG 167, we
found a total of 8,165 cases with an average length of stay of 5.3 days
and average costs of $13,687. Of those 8,165 cases, we found 4 cases
reporting a procedure for the endoscopic insertion of an endobronchial
valve with an average length of stay of 10 days and average costs of
$28,847. For MS-DRG 168, we found a total of 2,430 cases with an
average length of stay of 2.8 days and average costs of $9,645. Of
those 2,430 cases, we did not find any cases reporting a procedure for
the endoscopic insertion of an endobronchial valve.
The results of our data analysis indicate that cases reporting a
procedure for the endoscopic insertion of an endobronchial valve in MS-
DRGs 163, 164, 165, 166, and 167 have a longer length of stay and
higher average costs when compared to all the cases in their assigned
MS-DRG. Because the data are based on surgical MS-DRGs 163, 164, 165,
166 and 167, and the procedure codes for endoscopic insertion of an
endobronchial valve are currently designated as non-O.R. procedures,
there was at least one other O.R. procedure reported on the claim
resulting in case assignment to one of those MS-DRGs. Our clinical
advisors indicated that because there was another O.R. procedure
reported, the insertion of the endobronchial valve procedure may or may
not have been
[[Page 19234]]
the main determinant of resource use for those cases. Therefore, we
conducted further analysis to evaluate cases for which no other O.R.
procedure was performed with the endoscopic insertion of an
endobronchial valve and case assignment resulted in a medical MS-DRG.
Our findings are shown in the following table.
Medical MS-DRGs With Insertion of Endobronchial Valve Procedures
----------------------------------------------------------------------------------------------------------------
Number of Average length
MS-DRG cases of stay Average costs
----------------------------------------------------------------------------------------------------------------
MS-DRG 069 (Transient Ischemia without Thrombolytic)............ 1 9 $26,002
MS-DRG 177 (Respiratory Infections and Inflammations with MCC).. 11 19.5 33,877
MS-DRG 178 (Respiratory Infections and Inflammations with CC)... 4 10.8 20,109
MS-DRG 180 (Respiratory Neoplasms with MCC)..................... 2 11.5 19,273
MS-DRG 181 (Respiratory Neoplasms with MCC)..................... 1 3 12,641
MS-DRG 186 (Pleural Effusion with MCC).......................... 1 8 23,609
MS-DRG 187 (Pleural Effusion with CC)........................... 1 18 49,214
MS-DRG 189 (Pulmonary Edema and Respiratory Failure)............ 2 13.5 65,431
MS-DRG 190 (Chronic Obstructive Pulmonary Disease with MCC)..... 2 9 39,925
MS-DRG 191 (Chronic Obstructive Pulmonary Disease with CC)...... 1 15 55,958
MS-DRG 192 (Chronic Obstructive Pulmonary Disease without CC/ 1 5 10,394
MCC)...........................................................
MS-DRG 193 (Simple Pneumonia and Pleurisy with MCC)............. 1 18 27,182
MS-DRG 197 (Interstitial Lung Disease with CC).................. 1 12 11,458
MS-DRG 199 (Pneumothorax with MCC).............................. 28 16.4 38,384
MS-DRG 200 (Pneumothorax with CC)............................... 11 8.3 20,764
MS-DRG 201 (Pneumothorax without CC/MCC)........................ 2 10 20,243
MS-DRG 205 (Other Respiratory System Diagnoses with MCC)........ 2 4.5 10,851
MS-DRG 207 (Respiratory System Diagnosis with Ventilation 4 20 67,299
Support >96 Hours or Peripheral Extracorporeal Membrane
Oxygenation (ECMO))............................................
MS-DRG 208 (Respiratory System Diagnosis with Ventilation 8 13.6 32,533
Support [lE]96 Hours or Peripheral Extracorporeal Membrane
Oxygenation (ECMO))............................................
MS-DRG 815 (Reticuloendothelial and Immunity Disorders with CC). 1 5 17,379
MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical 3 15 39,706
Ventilation >96 Hours with MCC)................................
MS-DRG 919 (Complications of Treatment with MCC)................ 2 5 36,143
MS-DRG 920 (Complications of Treatment with CC)................. 1 5 14,923
-----------------------------------------------
Total....................................................... 91 13.7 33,377
----------------------------------------------------------------------------------------------------------------
The data indicate that there is a wide variation in the average
length of stay and average costs for cases reporting a procedure for
the endoscopic insertion of an endobronchial valve, with volume
generally low across MS-DRGs. As shown in the table, for several of the
medical MS-DRGs, there was only one case reporting a procedure for the
endoscopic insertion of an endobronchial valve. The highest volume of
cases reporting a procedure for the endoscopic insertion of an
endobronchial valve was found in MS-DRG 199 (Pneumothorax with MCC)
with a total of 28 cases with an average length of stay of 16.4 days
and average costs of $38,384. The highest average costs and longest
average length of stay for cases reporting a procedure for the
endoscopic insertion of an endobronchial valve was $67,299 in MS-DRG
207 (Respiratory System Diagnosis with Ventilator Support >96 Hours or
Peripheral Extracorporeal Membrane Oxygenation (ECMO)) where 4 cases
were found with an average length of stay of 20 days. Overall, there
was a total of 91 cases reporting the insertion of an endobronchial
valve procedure with an average length of stay of 13.7 days and average
costs of $33,377 across the medical MS-DRGs.
Our clinical advisors agree that the subset of patients who undergo
endoscopic insertion of an endobronchial procedure are complex and may
have multiple comorbidities such as severe underlying lung disease that
impact the hospital length of stay. They also believe that, as we begin
the process of refining how procedure codes may be classified under
ICD-10-PCS, including designation of a procedure as O.R. or non-O.R.,
we should take into consideration whether the procedure is driving
resource use for the admission. (We refer the reader to section
II.F.13.a. of the preamble of this proposed rule for the discussion of
our plans to conduct a comprehensive review of the ICD-10-PCS procedure
codes). Based on the claims data analysis, which show a wide variation
in average costs for cases reporting endoscopic insertion of an
endobronchial valve without an O.R. procedure, our clinical advisors
are not convinced that endoscopic insertion of an endobronchial valve
is a key contributing factor to the consumption of resources as
reflected in the data. They also believe, in review of the procedures
that are currently assigned to MS-DRGs 163, 164, 165, 166, 167, and
168, that further refinement of these MS-DRGs may be warranted. For
these reasons, at this time, our clinical advisors do not support
designating endoscopic insertion of an endobronchial valve as an O.R.
procedure, nor do they support assignment of these procedures to MS-
DRGs 163, 164, and 165 until additional analyses can be performed for
this subset of patients as part of the comprehensive procedure code
review.
For the reasons described above, we are not proposing to change the
current non-O.R. designation of the eight ICD-10-PCS procedure codes
that describe endoscopic insertion of an endobronchial valve. However,
because we agree that endoscopic insertion of an endobronchial valve
procedures are performed on clinically complex patients, we believe it
may be appropriate to consider designating these procedures as non-O.R.
affecting specific MS-DRGs for FY 2020. Therefore, we are requesting
public comment on designating these procedure codes as non-O.R.
procedures affecting the MS-DRG assignment, including the specific MS-
DRGs that cases reporting the endoscopic insertion
[[Page 19235]]
of an endobronchial valve should affect for FY 2020. As noted, it is
not clear based on the claims data to what degree the endoscopic
insertion of an endobronchial valve is a contributing factor for the
consumption of resources for these clinically complex patients and
given the potential refinement that may be needed for MS-DRGs 163, 164,
165, 166, 167, and 168, we are soliciting comment on whether cases
reporting the endoscopic insertion of an endobronchial valve should
affect any of these MS-DRGs or other MS-DRGs.
14. Proposed Changes to the MS-DRG Diagnosis Codes for FY 2020
a. Background of the CC List and the CC Exclusions List
Under the IPPS MS-DRG classification system, we have developed a
standard list of diagnoses that are considered CCs. Historically, we
developed this list using physician panels that classified each
diagnosis code based on whether the diagnosis, when present as a
secondary condition, would be considered a substantial complication or
comorbidity. A substantial complication or comorbidity was defined as a
condition that, because of its presence with a specific principal
diagnosis, would cause an increase in the length-of-stay by at least 1
day in at least 75 percent of the patients. However, depending on the
principal diagnosis of the patient, some diagnoses on the basic list of
complications and comorbidities may be excluded if they are closely
related to the principal diagnosis. In FY 2008, we evaluated each
diagnosis code to determine its impact on resource use and to determine
the most appropriate CC subclassification (non-CC, CC, or MCC)
assignment. We refer readers to sections II.D.2. and 3. of the preamble
of the FY 2008 IPPS final rule with comment period for a discussion of
the refinement of CCs in relation to the MS-DRGs we adopted for FY 2008
(72 FR 47152 through 47171).
b. Overview of Comprehensive CC/MCC Analysis
In the FY 2008 IPPS/LTCH PPS final rule (72 FR 47159), we described
our process for establishing three different levels of CC severity into
which we would subdivide the diagnosis codes. The categorization of
diagnoses as an MCC, a CC, or a non-CC was accomplished using an
iterative approach in which each diagnosis was evaluated to determine
the extent to which its presence as a secondary diagnosis resulted in
increased hospital resource use. We refer readers to the FY 2008 IPPS/
LTCH PPS final rule (72 FR 47159) for a complete discussion of our
approach. Since this comprehensive analysis was completed for FY 2008,
we have evaluated diagnosis codes individually when receiving requests
to change the severity level of specific diagnosis codes. However,
given the transition to ICD-10-CM and the significant changes that have
occurred to diagnosis codes since this review, we believe it is
necessary to conduct a comprehensive analysis once again. We have
completed this analysis and we are discussing our findings in this
proposed rule. We used the same methodology utilized in FY 2008 to
conduct this analysis, as described below.
For each secondary diagnosis, we measured the impact in resource
use for the following three subsets of patients:
(1) Patients with no other secondary diagnosis or with all other
secondary diagnoses that are non-CCs.
(2) Patients with at least one other secondary diagnosis that is a
CC but none that is an MCC.
(3) Patients with at least one other secondary diagnosis that is an
MCC.
Numerical resource impact values were assigned for each diagnosis
as follows:
------------------------------------------------------------------------
Value Meaning
------------------------------------------------------------------------
0................................ Significantly below expected value
for the non-CC subgroup.
1................................ Approximately equal to expected value
for the non-CC subgroup.
2................................ Approximately equal to expected value
for the CC subgroup.
3................................ Approximately equal to expected value
for the MCC subgroup.
4................................ Significantly above the expected
value for the MCC subgroup.
------------------------------------------------------------------------
Each diagnosis for which Medicare data were available was evaluated
to determine its impact on resource use and to determine the most
appropriate CC subclass (non-CC, CC, or MCC) assignment. In order to
make this determination, the average cost for each subset of cases was
compared to the expected cost for cases in that subset. The following
format was used to evaluate each diagnosis:
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Code Diagnosis Cnt1 C1 Cnt2 C2 Cnt3 C3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Count (Cnt) is the number of patients in each subset and C1, C2,
and C3 are a measure of the impact on resource use of patients in each
of the subsets. The C1, C2, and C3 values are a measure of the ratio of
average costs for patients with these conditions to the expected
average cost across all cases. The C1 value reflects a patient with no
other secondary diagnosis or with all other secondary diagnoses that
are non-CCs. The C2 value reflects a patient with at least one other
secondary diagnosis that is a CC but none that is a major CC. The C3
value reflects a patient with at least one other secondary diagnosis
that is a major CC. A value close to 1.0 in the C1 field would suggest
that the code produces the same expected value as a non-CC diagnosis.
That is, average costs for the case are similar to the expected average
costs for that subset and the diagnosis is not expected to increase
resource usage. A higher value in the C1 (or C2 and C3) field suggests
more resource usage is associated with the diagnosis and an increased
likelihood that it is more like a CC or major CC than a non-CC. Thus, a
value close to 2.0 suggests the condition is more like a CC than a non-
CC but not as significant in resource usage as an MCC. A value close to
3.0 suggests the condition is expected to consume resources more
similar to an MCC than a CC or non-CC. For example, a C1 value of 1.8
for a secondary diagnosis means that for the subset of patients who
have the secondary diagnosis and have either no other secondary
diagnosis present, or all the other secondary diagnoses present are
non-CCs, the impact on resource use of the secondary diagnoses is
greater than the expected value for a non-CC by an amount equal to 80
percent of the difference between the expected value of a CC and a non-
CC (that is, the impact on resource use of the secondary diagnosis is
closer to a CC than a non-CC).
These mathematical constructs are used as guides in conjunction
with the judgment of our clinical advisors to classify each secondary
diagnosis reviewed as an MCC, a CC, or a non-CC. Our clinical advisors
reviewed the resource use impact reports and suggested modifications to
the initial CC subclass assignments when clinically appropriate.
c. Proposed Changes to Severity Levels
(1) Summary of Proposed Changes
The diagnosis codes for which we are proposing a change in severity
level designation as a result of the analysis
[[Page 19236]]
described in this proposed rule are shown in Table 6P.1c. (which is
available via the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). Using the method described above to
perform our comprehensive CC/MCC analysis, our clinical advisors
recommended a change in the severity level designation for 1,492 ICD-
10-CM diagnosis codes. As shown in Table 6P.1c. associated with this
proposed rule, the proposed changes to severity level resulting from
our comprehensive analysis would move some diagnosis codes to a higher
severity level designation and other diagnosis codes to a lower
severity level designation, as indicated in the two columns which
display CMS' FY 2019 classification in column C and the proposed
changes for FY 2020 in column D.
The table below shows the Version 36 ICD-10 MS-DRG categorization
of diagnosis codes by severity level.
Current Categorization of CC Codes
[Version 36]
------------------------------------------------------------------------
Number of
codes
------------------------------------------------------------------------
MCC..................................................... 3,244
CC...................................................... 14,528
Non-CC.................................................. 54,160
---------------
Total............................................... 71,932
------------------------------------------------------------------------
The following table compares the Version 36 ICD-10 MS-DRG CC list
and the proposed Version 37 ICD-10 MS-DRG CC list. There are 17,772
diagnosis codes on the Version 36 MCC/CC lists. The proposed MCC/CC
severity level changes would reduce the number of diagnosis codes on
the MCC/CC lists to 16,790 (3,099 + 13,691). Based on the Version 36
MCC/CC lists, 81.5 percent of cases have at least one MCC/CC present,
using claims data from the September 2018 update of the FY 2018 MedPAR
file. Based on the proposed Version 37 MCC/CC lists, the percent of
cases having at least one MCC/CC present would be reduced to 76.6
percent.
Comparison of Current CC List and Proposed CC List
------------------------------------------------------------------------
Current CC Proposed CC
List List
------------------------------------------------------------------------
Codes designated as an MCC.............. 3,244 3,099
Percent of cases with one or more MCCs.. 41.0% 36.3%
Average charge of cases with one or more $16,439 $16,490
MCCs...................................
Codes designated as a CC................ 14,528 13,691
Percent of cases with one or more CCs... 40.5% 40.3%
Average charge of cases with one or more $10,332 $10,518
CCs....................................
Codes designated as non-CC.............. 54,160 55,142
Percent of cases with no CC............. 18.5% 23.4%
Average charge of cases with no CCs..... $9,885 $10,166
------------------------------------------------------------------------
Using the method described above to perform our comprehensive
analysis, we are proposing to modify the Version 36 CC subclass
assignments for 2.1 percent of the ICD-10-CM diagnosis codes, as
summarized in the table below.
Proposed MCC/CC Subclass Modifications
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed Proposed
Version 36 Proposed version 37 version 37 Version 37
severity level version 37 change to MCC change to CC change to non-
Severity level--CC subclass number of severity level Percent change subclass, subclass, CC subclass,
codes number of number of number of number of
codes codes codes codes
--------------------------------------------------------------------------------------------------------------------------------------------------------
MCC..................................................... 3,244 3,099 -4.5 N/A 136 17
CC...................................................... 14,528 13,691 -5.8 8 N/A 1,148
Non-CC.................................................. 54,160 55,142 1.8 0 183 N/A
-----------------------------------------------------------------------------------------------
Total............................................... 71,932 71,932 N/A 8 319 1,166
--------------------------------------------------------------------------------------------------------------------------------------------------------
As a result of these proposed changes, of the 71,932 diagnosis
codes included in the analysis, the net result would be a decrease of
145 (3,244-3,099) codes designated as an MCC, a decrease of 837
(14,528-13,691) codes designated as a CC, and an increase of 982
(55,142-54,160) codes designated as a non-CC.
(2) Illustrations of Proposed Severity Level Changes
As noted above, based on our comprehensive CC/MCC analysis as
described previously in this section, we are proposing changes in the
severity level designations for 1,492 ICD-10-CM diagnosis codes, and
the specific proposed changes to severity level designations for those
diagnosis codes are shown in Table 6P.1.c. associated with this
proposed rule (which is available via the internet on the CMS website
at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). Below we provide illustrative examples
of certain categories of codes for which we are proposing changes to
the severity level designations as a result of our comprehensive
analysis. As described above, these proposals are based on review of
the data as well as consideration of the clinical nature of each of the
secondary diagnoses and the severity level of clinically similar
diagnoses. The first set of codes, from the Neoplasms chapter,
encompasses more than half of all proposed severity level changes. The
additional examples are from a variety of body systems and conditions,
and they are illustrative of both proposed increases and proposed
decreases in severity level designation. We note that we are making
available a
[[Page 19237]]
supplementary file containing the data describing the impact on
resource use when reported as a secondary diagnosis for all 1,492 ICD-
10-CM diagnosis codes for which we are proposing a change in
designation via the internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
(a) Neoplasms Chapter Codes
Of the total number of ICD-10-CM diagnosis codes for which we are
proposing a change of severity level designation, 767 are from the
Neoplasms chapter of the ICD-10-CM classification (C00-D49) and are
currently designated as a CC. We note that the Neoplasms chapter
contains a total of 1,661 ICD-10-CM diagnosis codes. In Version 36 of
the MS-DRGs, none of the 1,661 neoplasm codes are designated as an MCC,
767 are designated as a CC, and 894 are designated as a non-CC. For all
767 codes currently designated as a CC, our clinical advisors
recommended changing the severity level designation from CC to non-CC.
The following table presents examples of some of the neoplasm codes for
which we are proposing a severity level change to non-CC, and their
impact on resource use when reported as a secondary diagnosis. As noted
previously, the data analysis for the remainder of these neoplasm codes
is included in the supplementary file that we are making available on
the CMS website.
Proposed Severity Level Changes for Neoplasm Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC subclass Proposed CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
C20 (Malignant neoplasm of rectum) 2,960 1.0485 7,561 2.2169 6,492 3.0790 CC...................... Non-CC.
C22.0 (Liver cell carcinoma)...... 1,672 1.2289 9,444 2.0638 12,503 3.0914 CC...................... Non-CC.
C25.0 (Malignant neoplasm of head 1,205 1.1357 3,834 2.1788 6,191 3.0229 CC...................... Non-CC.
of pancreas).
C64.1 (Malignant neoplasm of right 1,512 1.2276 4,463 2.1600 4,593 3.1158 CC...................... Non-CC.
kidney, except renal pelvis).
C64.2 (Malignant neoplasm of left 1,368 1.3407 4,517 2.1947 4,593 3.0947 CC...................... Non-CC.
kidney, except renal pelvis).
C78.01 (Secondary malignant 4,149 1.0417 14,946 2.0888 20,324 3.0043 CC...................... Non-CC.
neoplasm of right lung).
C78.02 (Secondary malignant 3,599 1.0078 13,456 2.0853 18,384 3.0024 CC...................... Non-CC.
neoplasm of left lung).
C79.31 (Secondary malignant 7,164 1.1895 22,989 2.1330 41,387 2.9116 CC...................... Non-CC.
neoplasm of brain).
C79.51 (Secondary malignant 26,095 1.3048 88,022 2.2020 99,670 3.0449 CC...................... Non-CC.
neoplasm of bone).
C90.00 (Multiple myeloma not 9,947 1.1588 34,155 2.2144 33,830 3.1281 CC...................... Non-CC.
having achieved remission).
--------------------------------------------------------------------------------------------------------------------------------------------------------
As described in section II.F.15.b. of the preamble of this proposed
rule, we examined the impact in resource use for three subsets of
patients in order to evaluate the severity level designations for each
secondary diagnosis. In the table above, the C1 values are generally
close to 1, C2 values are generally close to 2, and C3 values are
generally close to 3. As explained in section II.F.15.b. of the
preamble of this proposed rule, these values suggest that when a
neoplasm is reported as a secondary diagnosis, the resources involved
in caring for a patient with this condition are more aligned with a
non-CC severity level than a CC severity level. Our clinical advisors
reviewed these data and believe the resources involved in caring for a
patient with this condition are more aligned with a non-CC severity
level. Our clinical advisors noted that when a neoplasm is reported as
a secondary diagnosis, because it is not the condition that occasioned
the patient's admission to the hospital, it does not significantly
impact resource use. Our clinical advisors noted that if these patients
are admitted for treatment of the neoplasm, the neoplasm is the
principal diagnosis, and other complicating or comorbid conditions
reported as secondary diagnoses would determine the appropriate
severity level designation for each particular case. For example, if a
patient is admitted for resection of malignant neoplasm of the right
kidney, ICD-10-CM diagnosis code C64.1 (Malignant neoplasm of right
kidney, except renal pelvis) is reported as the principal diagnosis,
and any complicating conditions reported as secondary diagnoses during
the hospital stay would determine the appropriate severity level
designation for the case.
(b) Diseases of the Circulatory System Chapter Codes
In the Diseases of the Circulatory System chapter of the ICD-10-CM
diagnosis classification (I00-I99), based on the results of our
comprehensive review, we are proposing to change the severity level
designation for 13 ICD-10-CM diagnosis codes from categories I21 (Acute
myocardial infarction) and I22 (Subsequent ST elevation (STEMI) and
non-ST elevation (NSTEMI) myocardial infarction) from an MCC to a CC.
The following table contains the ICD-10-CM diagnosis codes for
which we are proposing a severity level change, and their impact on
resource use when reported as a secondary diagnosis.
[[Page 19238]]
Proposed Severity Level Changes for Myocardial Infarction Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC subclass Proposed CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
I21.01 (ST elevation (STEMI) 2 1.2010 17 2.9902 38 3.0195 MCC..................... CC.
myocardial infarction involving
left main coronary artery).
I21.02 (ST elevation (STEMI) 149 0.9326 322 1.6565 754 3.3157 MCC..................... CC.
myocardial infarction involving
left anterior descending coronary
artery).
I21.09 (ST elevation (STEMI) 583 1.2201 1,288 2.2225 3,744 3.1094 MCC..................... CC.
myocardial infarction involving
other coronary artery of anterior
wall).
I21.11 (ST elevation (STEMI) 175 1.8486 326 2.0867 581 3.1141 MCC..................... CC.
myocardial infarction involving
right coronary artery).
I21.19 (ST elevation (STEMI) 913 1.5054 1,940 2.2641 4,081 3.1996 MCC..................... CC.
myocardial infarction involving
other coronary artery of inferior
wall).
I21.21 (ST elevation (STEMI) 30 0.9445 56 2.4160 117 2.9965 MCC..................... CC.
myocardial infarction involving
left circumflex coronary artery).
I21.29 (ST elevation (STEMI) 162 1.0143 417 2.2401 1,048 3.3341 MCC..................... CC.
myocardial infarction involving
other sites).
I21.3 (ST elevation (STEMI) 1,271 1.6587 3,876 2.2420 10,168 3.2432 MCC..................... CC.
myocardial infarction of
unspecified site).
I22.0 (Subsequent ST elevation 10 0.9199 74 1.2558 165 2.6794 MCC..................... CC.
(STEMI) myocardial infarction of
anterior wall).
I22.1 (Subsequent ST elevation 4 0.0000 81 1.6022 143 3.3056 MCC..................... CC.
(STEMI) myocardial infarction of
inferior wall).
I22.2 (Subsequent non-ST elevation 94 2.1034 352 2.1291 1,916 3.0157 MCC..................... CC.
(NSTEMI) myocardial infarction).
I22.8 (Subsequent ST elevation 5 2.2963 18 2.0589 53 3.1306 MCC..................... CC.
(STEMI) myocardial infarction of
other sites).
I22.9 (Subsequent ST elevation 27 1.7140 87 1.8737 293 2.9627 MCC..................... CC.
(STEMI) myocardial infarction of
unspecified site).
--------------------------------------------------------------------------------------------------------------------------------------------------------
As shown in the table above, all of these myocardial infarction
codes are currently assigned as MCCs. As explained earlier, values
close to 2.0 in column C1 suggest that the condition is more like a CC
than a non-CC but not as significant in resource usage as an MCC. The
C1 values for the secondary diagnoses with the largest number of cases
in this subset in the table above, ICD-10-CM codes I21.3 and I21.19,
are closer to 2.0 than to 1.0, indicating that these secondary
diagnoses are more aligned with a CC than either a non-CC or an MCC.
Therefore, the data suggest that for patients for whom any of the
myocardial infarction codes listed in the table above is reported as a
secondary diagnosis, the resources involved in their care are not
aligned with those of an MCC. Our clinical advisors reviewed these data
and believe that the resources involved in caring for a patient with
this condition are aligned with a CC. Patients with a secondary
diagnosis of myocardial infarction may require additional diagnostic
imaging, monitoring, medications, and additional interventions, thereby
consuming resources that are consistent with CC status. Our clinical
advisors noted that while, for certain codes, the number of cases shown
in the data may not be sufficient to reliably indicate impact on
resource use as a secondary diagnosis, these codes are clinically
similar to other codes for which the data are sufficient to indicate
impact on resource use. Because our clinical advisors believe that it
is appropriate to ensure consistency across codes describing similar
diagnoses, we are proposing to reassign the severity level for all of
the codes in the table above from an MCC to a CC.
(c) Diseases of the Skin and Subcutaneous Tissue Chapter Codes
In the Diseases of the Skin and Subcutaneous Tissue chapter of the
ICD-10-CM diagnosis classification (L00-L99), based on the results of
our comprehensive review, we are proposing a change to the severity
level for 150 ICD-10-CM diagnosis codes describing pressure ulcers.
Pressure ulcers, which are also known as pressure injuries, involve
damage to the skin and soft tissue. They may result from prolonged
pressure over a bony prominence or result from a medical device. The
ICD-10-CM classification includes 150 diagnosis codes that describe
pressure ulcers across various anatomical regions and across the
various possible stages (stages 1 through 4, unspecified stage, and
unstageable). These codes are listed in Table 6P.1.d. associated with
this proposed rule (which is available via the internet on the CMS
website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). In the course of our
comprehensive review of the CC/MCC lists, our clinical advisors
reviewed the current categorization of pressure ulcers, which designate
all stage 3 and 4 pressure ulcers as MCCs, while stage 1, stage 2,
unspecified stage,
[[Page 19239]]
and unstageable pressure ulcers are currently designated as non-CCs.
Our clinical advisors reviewed data on the relative contribution to
the overall cost of hospital care for all stages of pressure ulcers
coded as secondary diagnoses, and found (1) that there was little
difference in the cost contribution regardless of stage, and (2) the
cost contributions (cost weights) of all stages supported a designation
of CC rather than MCC (for stage 3 and 4 ulcers), and CC rather than
non-CC (for stages 1, 2, unspecified, and unstageable). Our clinical
advisors noted that the apparent similar contribution of all pressure
ulcer stages can be explained by the fact that pressure ulcers occur in
patients with serious underlying illness, such as stroke, cancer,
dementia, and end-stage cardiac or pulmonary disease that can result in
multiple factors (frailty, immobility, paralysis, malnutrition, and
general debility) that predispose them to pressure ulcers. It is the
serious underlying illness and debilitated state that causes the
pressure ulcer that is the primary driver of resource use. Although a
pressure ulcer at any stage requires care and preventive measures that
make additional contributions to the overall cost of care, our clinical
advisors believe that the fact that the ulcer developed in the first
place is more important than the stage of the ulcer itself in
determining the impact on the costs of hospitalization. The presence of
a pressure ulcer may indicate an increase in resource use, but that
increase is similar regardless of the stage of the ulcer.
The following table contains illustrations of pressure ulcer codes
and their impact on resource use when reported as a secondary
diagnosis. We selected secondary diagnosis codes describing pressure
ulcer of the sacrum as examples because they account for almost half of
all instances of pressure ulcers reported as secondary diagnoses, but
note that the data for the codes describing pressure ulcer of other
body parts generally show a similar pattern. As noted previously, the
data analysis for the remainder of the pressure ulcer codes for which
we are proposing a change in severity level designation is included in
the supplementary file that we are making available on the CMS website.
Proposed Severity Level Changes for Pressure Ulcer Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC subclass Proposed CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
L89.150 (Pressure ulcer of sacral 605 2.003 6,247 2.560 24,047 3.254 Non-CC.................. CC.
region, unstageable).
L89.151 (Pressure ulcer of sacral 2,374 1.691 16,688 2.404 36,428 3.182 Non-CC.................. CC.
region, stage 1).
L89.152 (Pressure ulcer of sacral 4,238 1.737 35,608 2.497 95,832 3.274 Non-CC.................. CC.
region, stage 2).
L89.153 (Pressure ulcer of sacral 1,722 1.832 15,266 2.522 48,414 3.289 MCC..................... CC.
region, stage 3).
L89.154 (Pressure ulcer of sacral 1,237 1.755 14,306 2.438 56,619 3.196 MCC..................... CC.
region, stage 4).
L89.159 (Pressure ulcer of sacral 1,453 1.387 12,466 2.311 35,020 3.176 Non-CC.................. CC.
region, unspecified stage).
--------------------------------------------------------------------------------------------------------------------------------------------------------
As explained previously, a value in column C1 that is close to 2.0
suggests the condition is more like a CC than a non-CC but not as
significant in resource usage as an MCC. Given that the values in
column C1 in the table above are closer to 2.0 than to 1.0, the data
suggest that when pressure ulcers of the sacral region are reported as
a secondary diagnosis, the resources involved in caring for these
patients are more consistent with a CC than either a non-CC or an MCC.
Our clinical advisors reviewed these data and believe that it is
appropriate to ensure consistency across codes involving similar
diagnoses. Therefore, we are proposing to designate as CCs both the 50
ICD-10-CM diagnosis codes that are currently designated as MCCs and the
100 ICD-10-CM diagnosis codes currently designated as non-CCs.
We note that, under the Hospital-Acquired Condition (HAC) payment
provision established by section 5001(c) of the Deficit Reduction Act
(DRA) of 2005, hospitals no longer receive additional payment for cases
in which one of the selected conditions occurred but was not present on
admission (POA). That is, the case is paid as though the condition were
not present. The HAC-POA payment provision is applicable for secondary
diagnosis code reporting only, as the selected conditions are
designated as a CC or an MCC when reported as a secondary diagnosis.
For the DRA HAC-POA payment provision, a payment adjustment is only
applicable if there are no other CC/MCC conditions reported on the
claim. Currently, there are 14 HAC categories subject to the HAC-POA
payment provision, one of which is pressure ulcers. The pressure ulcer
HAC category (HAC 04) specifically includes diagnosis codes describing
a stage 3 or stage 4 pressure ulcer because they are designated as an
MCC, as noted earlier in this section. If the proposed severity level
designations for the pressure ulcer diagnosis codes are finalized, the
100 ICD-10-CM diagnosis codes describing pressure ulcers currently
designated as non-CCs would be subject to the HAC-POA payment provision
as CCs when reported as a secondary diagnosis and not POA, effective
beginning in FY 2020. The diagnosis codes describing a stage 3 or stage
4 pressure ulcer would continue to be subject to the HAC-POA payment
provision as CCs.
In addition, consistent with the proposed changes to the severity
level designation of the pressure ulcer codes, we are proposing to
revise the title of the HAC 04 category from ``Pressure Ulcer--Stages
III & IV'' to ``Pressure Ulcers''. We refer readers to the website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalAcqCond/index.html for additional information regarding the
HAC-POA payment provision under the DRA.
(d) Diseases of the Genitourinary System Chapter Codes
In the Diseases of the Genitourinary System chapter of the ICD-10-
CM diagnosis classification (N00-N99), based on the results of our
comprehensive analysis, we are proposing to change the severity level
designation for eight ICD-10-CM diagnosis codes. For these eight
[[Page 19240]]
diagnosis codes, based on their clinical judgment and for the reasons
described below, our clinical advisors recommended that we increase the
severity level designation from a CC to an MCC for one code, and from a
non-CC to a CC for seven codes. The following table contains the
Diseases of the Genitourinary System chapter codes that describe
conditions for which we are proposing a severity level designation
change, and their impact on resource use when reported as a secondary
diagnosis.
Proposed Severity Level Changes for Genitourinary Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC subclass Proposed CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
N10 (Acute pyelonephritis)........ 5,385 0.9639 20,476 1.9444 26,929 3.0413 Non-CC.................. CC.
N18.4 (Chronic kidney disease, 36,940 1.0919 219,482 2.0679 319,849 3.0840 Non-CC.................. CC.
stage 4 (severe)).
N18.5 (Chronic kidney disease, 1,158 1.0303 30,851 2.0841 34,733 3.1508 Non-CC.................. CC.
stage 5).
N18.6 (End stage renal disease)... 26,276 1.5755 578,587 2.3010 492,710 3.2761 CC...................... MCC.
N30.00 (Acute cystitis without 18,597 1.0576 53,820 1.9409 73,996 2.8976 Non-CC.................. CC.
hematuria).
N30.01 (Acute cystitis with 4,872 0.9503 16,949 1.8514 24,422 2.8070 Non-CC.................. CC.
hematuria).
N41.0 (Acute prostatitis)......... 845 0.9519 3,031 1.8163 2,135 3.0450 Non-CC.................. CC.
N76.4 (Abscess of vulva).......... 368 0.8284 1,276 2.0906 1,049 3.1341 Non-CC.................. CC.
--------------------------------------------------------------------------------------------------------------------------------------------------------
The C1, C2, and C3 values in the table above are generally close to
1.0, 2.0, and 3.0, respectively, which would indicate that these
conditions are more aligned with a non-CC than with either a CC or an
MCC. However, our clinical advisors believe that patients with a
secondary diagnosis of one of the genitourinary conditions in the table
above may consume additional resources, including but not limited to
monitoring for hypertension, diagnostic tests, and balancing
electrolytes. Patients with end-stage renal disease (ICD-10-CM code
N18.6) would typically require dialysis in addition to these resources,
which our clinical advisors believe is more aligned with an MCC.
Therefore, we are proposing to change the severity level designations
for the eight codes as shown in the table above.
e. Injury, Poisoning and Certain Other Consequences of External Causes
Chapter Codes
In subcategory S32.5 (Fracture of pubis) of the ICD-10-CM diagnosis
classification, based on our comprehensive analysis, we are proposing
to change the severity level designation from CC to non-CC for 19 ICD-
10-CM diagnosis codes that specify fractures of the pubic bone. The
following table contains the diagnosis codes for which we are proposing
a severity level designation change, and their impact on resource use
when reported as a secondary diagnosis.
Proposed Severity Level Changes, Pubis Fracture Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC subclass Proposed CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
S32.501A (Unspecified fracture of 393 1.0234 1,171 2.1215 847 3.0423 CC...................... Non-CC.
right pubis, initial encounter
for closed fracture).
S32.501K (Unspecified fracture of 1 1.5125 12 2.1144 2 1.8454 CC...................... Non-CC.
right pubis, subsequent encounter
for fracture with nonunion).
S32.502A (Unspecified fracture of 398 1.3072 1,152 2.0593 914 3.0028 CC...................... Non-CC.
left pubis, initial encounter for
closed fracture).
S32.502K (Unspecified fracture of 3 0.0000 7 2.8723 1 0.7401 CC...................... Non-CC.
left pubis, subsequent encounter
for fracture with nonunion).
S32.509A (Unspecified fracture of 49 1.1075 156 2.1066 154 3.1704 CC...................... Non-CC.
unspecified pubis, initial
encounter for closed fracture).
S32.509K (Unspecified fracture of 0 0.0000 1 3.4022 1 2.1306 CC...................... Non-CC.
unspecified pubis, subsequent
encounter for fracture with
nonunion).
S32.511A (Fracture of superior rim 743 1.1812 2,132 2.1519 1,504 2.8763 CC...................... Non-CC.
of right pubis, initial encounter
for closed fracture).
S32.511K (Fracture of superior rim 2 2.0354 5 0.0000 4 2.3425 CC...................... Non-CC.
of right pubis, subsequent
encounter for fracture with
nonunion).
[[Page 19241]]
S32.512A (Fracture of superior rim 760 1.5738 2,098 2.0828 1,590 2.9020 CC...................... Non-CC.
of left pubis, initial encounter
for closed fracture).
S32.512K (Fracture of superior rim 3 2.1915 3 2.4812 8 4.0000 CC...................... Non-CC.
of left pubis, subsequent
encounter for fracture with
nonunion).
S32.519A (Fracture of superior rim 15 2.6829 53 1.5795 35 2.9052 CC...................... Non-CC.
of unspecified pubis, initial
encounter for closed fracture).
S32.519K (Fracture of superior rim 0 0.000 0 0.000 0 0.000 CC...................... Non-CC.
of unspecified pubis, subsequent
encounter for fracture with
nonunion).
S32.591A (Other specified fracture 2,427 1.2524 6,513 2.0970 4,397 2.9930 CC...................... Non-CC.
of right pubis, initial encounter
for closed fracture).
S32.591K (Other specified fracture 7 2.7706 15 1.9772 5 0.8969 CC...................... Non-CC.
of right pubis, subsequent
encounter for fracture with
nonunion).
S32.592A (Other specified fracture 2,424 1.3691 6,604 2.0921 4,922 2.9428 CC...................... Non-CC.
of left pubis, initial encounter
for closed fracture).
S32.592K (Other specified fracture 4 0.6970 24 2.5574 10 3.0015 CC...................... Non-CC.
of left pubis, subsequent
encounter for fracture with
nonunion).
S32.599A (Other specified fracture 151 1.6748 457 2.0518 394 3.1844 CC...................... Non-CC.
of unspecified pubis, initial
encounter for closed fracture).
S32.599K (Other specified fracture 1 0.0000 0 0.0000 3 1.4709 CC...................... Non-CC.
of unspecified pubis, subsequent
encounter for fracture with
nonunion).
--------------------------------------------------------------------------------------------------------------------------------------------------------
The C1, C2, and C3 values in the table above are generally close to
1.0, 2.0, and 3.0, respectively, particularly for those codes for which
the highest number of cases were reported. This indicates that these
conditions are more aligned with a non-CC than with either a CC or an
MCC. Our clinical advisors reviewed these data, particularly with
respect to ICD-10-CM diagnosis codes S32.591A and S32.592A which
account for the majority of cases in this group, and believe the
resources involved in caring for a patient with these conditions are
more aligned with a non-CC. Our clinical advisors noted that, similar
to the proposed severity level designation changes in the Neoplasms
chapter of the ICD-10-CM diagnosis classification discussed above, if
patients are admitted for treatment of an acute or nonunion fracture of
the pubic bone, the fracture is the principal diagnosis, and other
complicating or comorbid conditions reported as secondary diagnoses
would determine the appropriate severity level for each particular
case. For example, if a patient is admitted for surgical treatment of
the nonunion of a right pubic fracture at the superior rim, ICD-10-CM
diagnosis code S32.511K (Fracture of superior rim of right pubis,
subsequent encounter for fracture with nonunion) is reported as the
principal diagnosis. Because our clinical advisors believe that it is
appropriate to ensure consistency across codes involving similar
diagnoses, we are proposing to reassign the severity level for all of
the codes in the table above from a CC to a non-CC.
In category S72 (Fracture of femur) of the ICD-10-CM
classification, based on our comprehensive analysis, we are proposing
to change the severity level designation from MCC to CC for 35 ICD-10-
CM diagnosis codes specifying fractures of the hip. The following table
contains the Injury, Poisoning and Certain Other Consequences of
External Causes chapter codes for which we are proposing a severity
level change, and their impact on resource use when reported as a
secondary diagnosis.
Proposed Severity Level Changes, Hip Fracture Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC subclass Proposed CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
S72.011A (Unspecified 145 2.1400 464 2.3419 700 2.9623 MCC..................... CC.
intracapsular fracture of right
femur, initial encounter for
closed fracture).
S72.012A (Unspecified 155 2.0099 455 2.2738 754 3.0423 MCC..................... CC.
intracapsular fracture of left
femur, initial encounter for
closed fracture).
[[Page 19242]]
S72.019A (Unspecified 1 0.9364 4 1.0008 10 2.7267 MCC..................... CC.
intracapsular fracture of
unspecified femur, initial
encounter for closed fracture).
S72.111A (Displaced fracture of 266 1.5110 605 2.2983 442 3.1874 MCC..................... CC.
greater trochanter of right
femur, initial encounter for
closed fracture).
S72.112A (Displaced fracture of 249 1.7779 573 2.4626 418 3.0108 MCC..................... CC.
greater trochanter of left femur,
initial encounter for closed
fracture).
S72.113A (Displaced fracture of 11 1.7739 21 2.9650 23 3.5762 MCC..................... CC.
greater trochanter of unspecified
femur, initial encounter for
closed fracture).
S72.114A (Nondisplaced fracture of 112 0.8826 339 2.1640 178 3.1028 MCC..................... CC.
greater trochanter of right
femur, initial encounter for
closed fracture).
S72.115A (Nondisplaced fracture of 118 1.3960 288 2.0607 202 2.8640 MCC..................... CC.
greater trochanter of left femur,
initial encounter for closed
fracture).
S72.116A (Nondisplaced fracture of 3 0.9472 8 1.3030 3 3.4270 MCC..................... CC.
greater trochanter of unspecified
femur, initial encounter for
closed fracture).
S72.121A (Displaced fracture of 22 2.0288 74 3.1110 49 3.1174 MCC..................... CC.
lesser trochanter of right femur,
initial encounter for closed
fracture).
S72.122A (Displaced fracture of 23 1.1648 75 2.9379 40 2.4430 MCC..................... CC.
lesser trochanter of left femur,
initial encounter for closed
fracture).
S72.123A (Displaced fracture of 0 0.0000 2 0.0000 6 2.2881 MCC..................... CC.
lesser trochanter of unspecified
femur, initial encounter for
closed fracture).
S72.124A (Nondisplaced fracture of 4 0.9792 19 2.4244 8 2.7792 MCC..................... CC.
lesser trochanter of right femur,
initial encounter for closed
fracture).
S72.125A (Nondisplaced fracture of 5 0.6759 13 1.2700 7 3.1292 MCC..................... CC.
lesser trochanter of left femur,
initial encounter for closed
fracture).
S72.126A (Nondisplaced fracture of 0 0.0000 0 0.0000 1 1.1159 MCC..................... CC.
lesser trochanter of unspecified
femur, initial encounter for
closed fracture).
S72.131A (Displaced apophyseal 1 3.4327 0 0.0000 2 4.0000 MCC..................... CC.
fracture of right femur, initial
encounter for closed fracture).
S72.132A (Displaced apophyseal 0 0.0000 1 2.6423 0 0.0000 MCC..................... CC.
fracture of left femur, initial
encounter for closed fracture).
S72.134A (Nondisplaced apophyseal 0 0.000 1 3.501 0 0.000 MCC..................... CC.
fracture of right femur, initial
encounter for closed fracture).
S72.135A (Nondisplaced apophyseal 0 0.000 0 0.000 0 0.000 MCC..................... CC.
fracture of left femur, initial
encounter for closed fracture).
S72.136A (Nondisplaced apophyseal 0 0.000 0 0.000 0 0.000 MCC..................... CC.
fracture of unspecified femur,
initial encounter for closed
fracture).
[[Page 19243]]
S72.141A (Displaced 289 2.2607 894 2.6329 1,293 3.1692 MCC..................... CC.
intertrochanteric fracture of
right femur, initial encounter
for closed fracture).
S72.142A (Displaced 347 2.2587 972 2.5641 1,405 3.1003 MCC..................... CC.
intertrochanteric fracture of
left femur, initial encounter for
closed fracture).
S72.143A (Displaced 10 2.3446 21 1.0169 35 3.3080 MCC..................... CC.
intertrochanteric fracture of
unspecified femur, initial
encounter for closed fracture).
S72.144A (Nondisplaced 44 1.7331 149 2.4637 168 3.1302 MCC..................... CC.
intertrochanteric fracture of
right femur, initial encounter
for closed fracture).
S72.145A (Nondisplaced 39 1.9170 112 2.8435 170 3.2612 MCC..................... CC.
intertrochanteric fracture of
left femur, initial encounter for
closed fracture).
S72.146A (Nondisplaced 0 0.0000 9 1.2250 2 0.0000 MCC..................... CC.
intertrochanteric fracture of
unspecified femur, initial
encounter for closed fracture).
S72.21XA (Displaced 57 1.7697 159 2.2460 205 3.1614 MCC..................... CC.
subtrochanteric fracture of right
femur, initial encounter for
closed fracture).
S72.22XA (Displaced 70 2.3685 160 2.6079 184 3.2178 MCC..................... CC.
subtrochanteric fracture of left
femur, initial encounter for
closed fracture).
S72.23XA (Displaced 0 0.0000 9 3.4708 6 3.3401 MCC..................... CC.
subtrochanteric fracture of
unspecified femur, initial
encounter for closed fracture).
S72.24XA (Nondisplaced 12 0.5442 22 2.7275 11 3.6028 MCC..................... CC.
subtrochanteric fracture of right
femur, initial encounter for
closed fracture).
S72.25XA (Nondisplaced 13 1.7115 25 2.1005 17 3.1686 MCC..................... CC.
subtrochanteric fracture of left
femur, initial encounter for
closed fracture).
S72.26XA (Nondisplaced 0 0.0000 1 2.0474 0 0.0000 MCC..................... CC.
subtrochanteric fracture of
unspecified femur, initial
encounter for closed fracture).
S72.301A (Unspecified fracture of 61 2.3462 156 3.0491 159 3.5567 MCC..................... CC.
shaft of right femur, initial
encounter for closed fracture).
S72.302A (Unspecified fracture of 71 2.6314 186 2.4838 157 3.4436 MCC..................... CC.
shaft of left femur, initial
encounter for closed fracture).
--------------------------------------------------------------------------------------------------------------------------------------------------------
As shown in the table above, all of these secondary diagnoses are
currently designated as MCCs. The C2 values of the codes most
frequently reported, ICD-10-CM codes S72.142A and S72.141A, are closer
to 3.0 than 2.0, which indicates that they are more clinically aligned
with a CC than an MCC. Therefore, the data suggest that when fracture
of the hip codes are reported as a secondary diagnosis, the resources
involved in caring for patients with these conditions are more aligned
with a CC than an MCC. Our clinical advisors reviewed these data and
believe the resources involved in caring for patients with these
conditions are more aligned with a CC. While we note that there is
little to no data for some of these ICD-10-CM codes as secondary
diagnoses, there is sufficient data for clinically similar secondary
diagnoses. Therefore, because our clinical advisors believe that it is
appropriate to ensure consistency across codes involving similar
diagnoses, we are proposing to reassign the severity level for all of
the codes in the table above from an MCC to a CC.
(f) Factors Influencing Health Status and Contact With Health Services
The last chapter of the ICD-10-CM classification specifies other
factors that influence a patient's health status or necessitate contact
with health care
[[Page 19244]]
providers (Z00-Z99). Of these ICD-10-CM codes, based on our
comprehensive review, we are proposing to change the severity level
designation from non-CC to CC for four codes specifying anti-microbial
drug resistance and one code specifying homelessness. Based on this
same review, we also are proposing to change the severity level
designation from CC to non-CC for 3 ICD-10-CM codes specifying adult
body mass index (BMI) ranges and 13 ICD-10-CM codes indicating that the
patient has previously undergone an organ transplant or cardiac device
implantation with no current complications (the code indicates status
only).
The following table contains the five codes for which we are
proposing a severity level change from non-CC to CC and their impact on
resource use when reported as a secondary diagnosis.
Proposed Severity Level Changes for Z Chapter Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC subclass Proposed CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
Z16.12 (Extended spectrum beta 3,082 2.1134 19,692 2.5995 25,544 3.1752 Non-CC.................. CC.
lactamase (ESBL) resistance).
Z16.21 (Resistance to vancomycin). 692 2.1507 6,733 2.8659 11,672 3.3365 Non-CC.................. CC.
Z16.24 (Resistance to multiple 2,970 1.5821 16,097 2.4086 20,738 3.1174 Non-CC.................. CC.
antibiotics).
Z16.39 (Resistance to other 448 1.2003 2,326 2.2555 2,494 3.1127 Non-CC.................. CC.
specified antimicrobial drug).
Z59.0 (Homelessness).............. 14,927 1.5964 41,328 2.3012 22,101 3.1256 Non-CC.................. CC.
--------------------------------------------------------------------------------------------------------------------------------------------------------
As indicated above, a value close to 2.0 in column C1 suggests that
the secondary diagnosis is more aligned with a CC than a non-CC.
Because the C1 values in the table above are generally close to 2, the
data suggest that when these five Z chapter diagnosis codes are
reported as a secondary diagnosis, the resources involved in caring for
a patient with other factors such as homelessness support increasing
the severity level from a non-CC to a CC. Our clinical advisors
reviewed these data and believe the resources involved in caring for
patients with these other reported factors are more aligned with a CC.
While we note that ICD-10-CM diagnosis code Z16.39 does not follow
this pattern, our clinical advisors believe that this code is
clinically similar to the other diagnoses in the table above describing
anti-microbial drug resistance. Therefore, because our clinical
advisors believe that it is appropriate to ensure consistency across
codes involving similar diagnoses, we are proposing to reassign the
severity level for all four of the codes specifying anti-microbial drug
resistance in the table above from a non-CC to a CC.
The following table contains the 14 BMI and transplant/cardiac
device status codes for which we are proposing a severity level
designation change from CC to non-CC, and their impact on resource use
when reported as a secondary diagnosis.
Proposed Severity Level Changes for Z Chapter BMI and Transplant/Cardiac Device Status Codes as Secondary Diagnosis
--------------------------------------------------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC subclass Proposed CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
Z68.1 (Body mass index (BMI) 19.9 18,983 1.1170 244,156 2.2082 350,731 3.0733 CC...................... Non-CC.
or less, adult).
Z68.41 (Body mass index (BMI) 40.0- 139,420 1.1139 209,300 2.0752 213,929 3.0814 CC...................... Non-CC.
44.9, adult).
Z68.42 (Body mass index (BMI) 45.0- 60,408 1.1643 102,897 2.0783 109,928 3.0867 CC...................... Non-CC.
49.9, adult).
Z94.0 (Kidney transplant status).. 18,649 1.0277 70,484 2.0573 45,382 3.1032 CC...................... Non-CC.
Z94.1 (Heart transplant status)... 2,311 1.0649 8,138 2.2471 5,037 3.2653 CC...................... Non-CC.
Z94.2 (Lung transplant status).... 1,461 1.0886 5,032 2.1898 3,466 3.1285 CC...................... Non-CC.
Z94.3 (Heart and lungs transplant 20 0.8287 88 3.0647 59 3.1675 CC...................... Non-CC.
status).
Z94.4 (Liver transplant status)... 6,050 0.9811 17,556 2.0323 12,970 3.1688 CC...................... Non-CC.
Z94.81 (Bone marrow transplant 1,655 0.9778 5,447 2.0919 5,150 3.1918 CC...................... Non-CC.
status).
Z94.82 (Intestine transplant 119 1.5661 351 2.1844 230 3.2081 CC...................... Non-CC.
status).
Z94.83 (Pancreas transplant 1,789 1.2032 7,788 2.0739 4,536 3.1381 CC...................... Non-CC.
status).
Z94.84 (Stem cells transplant 3,083 1.1451 10,412 2.3041 8,835 3.2932 CC...................... Non-CC.
status).
Z95.811 (Presence of heart assist 1,053 1.6453 7,373 2.3089 5,974 3.1198 CC...................... Non-CC.
device).
Z95.812 (Presence of fully 45 2.0467 132 2.5603 142 2.4139 CC...................... Non-CC.
implantable artificial heart).
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 19245]]
The C1, C2, and C3 values in the table above are generally close to
1.0, 2.0, and 3.0, respectively. This indicates that these conditions
are more aligned with a non-CC than with either a CC or an MCC.
Therefore, the data suggest that when these BMI and transplant/cardiac
device status codes are reported as a secondary diagnosis, the
resources involved in caring for patients with these conditions
indicating health status are not aligned with those of a CC. Our
clinical advisors reviewed these data and believe the resources
involved in caring for patients with these conditions indicating health
status are more aligned with a non-CC. Our clinical advisors noted
that, in the absence of a diagnosis that represents a complication of
the patient's current status, the presence of a BMI within a stated
range or the fact that a patient has previously undergone a transplant
or cardiac device implant is not by itself a clinical indication of
increased severity of illness. Therefore, we are proposing to reassign
the severity level for all of the codes in the table above from a CC to
a non-CC.
(3) Results of Impact Analysis
Using claims data from the September 2018 update of the FY 2018
MedPAR file, we employed the following method to determine the impact
of changing severity level designation for the 1,492 ICD-10-CM
diagnosis codes. Edits and cost estimations used for relative weight
calculations were applied, resulting in 8,908,404 IPPS claims analyzed
for this impact evaluation of our proposed changes to severity levels.
We refer readers to section II.G. of the preamble of this proposed rule
for further information regarding the methodology for calculation of
the proposed relative weights.
First, we analyzed the 8,908,404 IPPS claims using the Version 36
ICD-10 MS-DRG GROUPER to determine the current distribution of severity
level designation. We identified 3,648,331 cases (41.0 percent)
reporting one or more secondary diagnosis codes assigned to the MCC
severity level, 3,612,600 cases (40.5 percent) reporting one or more
secondary diagnosis codes assigned to the CC severity level, and
1,647,473 cases (18.5 percent) not reporting a secondary diagnosis code
assigned to the MCC or CC severity level.
Next, we reprocessed the 8,908,404 claims using the proposed change
in severity level designation for the 1,492 ICD-10-CM diagnosis codes
to determine the impact on the distribution of severity level
designation. We identified 3,236,493 cases (36.3 percent) reporting one
or more secondary diagnosis codes that would be assigned to the MCC
severity level, 3,589,677 cases (40.3 percent) reporting one or more
secondary diagnosis codes that would be assigned to the CC severity
level, and 2,082,234 cases (23.4 percent) not reporting a secondary
diagnosis code that would be assigned to the MCC or CC severity level.
Below we provide a summary of the steps followed for the analysis
performed.
Step 1.--Analyzed 8,908,404 claims to determine the current
distribution of severity level designation.
Severity Level Distribution Before Proposed Changes--8,908,404 Claims
Analyzed
------------------------------------------------------------------------
------------------------------------------------------------------------
Number of cases reporting one or more 3,648,331 (41.0%)
secondary diagnosis codes assigned to the
MCC severity level.......................
Number of cases reporting one or more 3,612,600 (40.5%)
secondary diagnosis codes assigned to the
CC severity level........................
Number of cases reporting no secondary 1,647,473 (18.5%)
diagnosis codes assigned to the MCC or CC
severity level...........................
------------------------------------------------------------------------
Step 2.--Made proposed severity level changes to 1,492 ICD-10-CM
codes.
Step 2--Made proposed severity level changes to 1,492 ICD-10-CM codes.
------------------------------------------------------------------------
Proposed version 37 Number of
Current version 36 severity level severity level codes
------------------------------------------------------------------------
Non-CC............................ CC.................. 183
CC................................ Non-CC.............. 1,148
CC................................ MCC................. 8
MCC............................... Non-CC.............. 17
MCC............................... CC.................. 136
---------------
Total......................... .................... 1,492
------------------------------------------------------------------------
Step 3.--Reprocessed 8,908,404 claims to determine severity level
distribution after changes.
Severity Level Distribution after Proposed Changes--8,908,404 Claims
Analyzed
------------------------------------------------------------------------
------------------------------------------------------------------------
Number of cases reporting one or more 3,236,493 (36.3%)
secondary diagnosis codes assigned to the
MCC severity level.......................
Number of cases reporting one or more 3,589,677 (40.3%)
secondary diagnosis codes assigned to the
CC severity level........................
Number of cases reporting no secondary 2,082,234 (23.4%)
diagnosis codes assigned to the MCC or CC
severity level...........................
------------------------------------------------------------------------
The overall statistics by CC subgroup for the proposed Version 37
MS-DRGs are contained in the table below. Cases in the MCC subgroup
have average costs that are 62 percent higher than the average costs
for cases in the CC subgroup. The CC subgroup with the largest number
of cases is the CC subgroup with 40.3 percent of the cases.
[[Page 19246]]
Overall Statistics for Proposed MS-DRGs
----------------------------------------------------------------------------------------------------------------
Number of
CC subgroup cases Percent Average costs
----------------------------------------------------------------------------------------------------------------
Major........................................................... 3,236,493 36.3 $16,890
CC.............................................................. 3,589,677 40.3 10,518
Non-CC.......................................................... 2,082,234 23.4 10,166
----------------------------------------------------------------------------------------------------------------
The distribution of cases across the different types of CC
subgroups in the proposed Version 37 MS-DRGs is contained in the table
below. The table shows that 91 percent of the cases would be assigned
to base MS-DRGs with three CC subgroups, and only 9 percent of the
cases would be assigned to base MS-DRGs with no CC subgroups.
Distribution of Patient by Type of CC Subgroup in Proposed Version 37 MS-
DRGs
------------------------------------------------------------------------
CC subgroup Number Percent
------------------------------------------------------------------------
None.................................... 68 9
(MCC and CC), Non-CC.................... 84 11
MCC, (CC and Non-CC).................... 132 17
MCC, CC, and Non-CC..................... 477 63
-------------------------------
Total............................... 761 ..............
------------------------------------------------------------------------
We performed regression analysis to compare the variance in the MS-
DRGs with and without the proposed severity level designation changes
and thereby the impact of payment to cost ratios. The results of the
regression analysis showed a slight decrease in variance with the
proposed severity level designation changes, showing an R-squared of
35.9 percent after making the severity level changes, compared with an
R-squared of 35.6 percent in the current Version 36 ICD-10 MS-DRG
GROUPER. This indicates that the proposed severity level changes
increase the explanatory power of the GROUPER in capturing differences
in expected cost between the MS-DRGs and thus would improve the overall
accuracy of the IPPS payment system.
After considering the results of our data analysis, the clinical
judgment of our clinical advisors, and the overall aggregate impact of
these changes, we are proposing a change to the severity level
designations for 1,492 ICD-10-CM diagnosis codes as shown in Table
6P.1c. associated with this proposed rule (which is available via the
internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.)
d. Requested Changes to Severity Levels
(1) Acute Right Heart Failure
We received a request to change the severity level for ICD-10-CM
diagnosis codes I50.811 (Acute right heart failure) and I50.813 (Acute
on chronic right heart failure) from a non-CC to an MCC. The requestor
stated that similar diagnosis codes in the classification are
designated as an MCC. We used the approach outlined earlier in this
section to evaluate this request. The following table shows the claims
data that were used to evaluate this request:
--------------------------------------------------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC subclass Requested CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
I50.811 Acute right heart failure. 92 1.3290 470 2.5375 1,632 3.1907 non-CC.................. MCC.
I50.813 Acute on chronic right 183 1.4412 1,189 2.6036 3,099 3.2870 non-CC.................. MCC.
heart failure.
--------------------------------------------------------------------------------------------------------------------------------------------------------
For ICD-10-CM diagnosis code I50.811, the data suggest that the
resources involved in caring for a patient with this condition are 33
percent greater than expected when the patient has either no other
secondary diagnosis present, or all the other secondary diagnoses
present are non-CCs. The resources are 54 percent greater than expected
when reported in conjunction with another secondary diagnosis that is a
CC, and 19 percent greater than expected when reported in conjunction
with another secondary diagnosis code that is an MCC. Our clinical
advisors reviewed this request and agree that the resources involved in
caring for a patient with this condition are not aligned with those of
an MCC.
For ICD-10-CM diagnosis code I50.813, the data suggest that the
resources involved in caring for a patient with this condition are 44
percent greater than expected when the patient has either no other
secondary diagnosis present or all the other secondary diagnoses
present are non-CCs. The resources are 60 percent greater than expected
when reported in conjunction with another secondary diagnosis that is a
CC, and 28 percent greater than expected when reported in conjunction
with another secondary diagnosis code that is an MCC. Our clinical
advisors reviewed this request and agree that the resources involved in
caring for a patient with this condition are not aligned with those of
an MCC.
However, we note that although the data suggest that the resources
involved in caring for a patient with this condition are not aligned
with those of an MCC, the data suggest and our clinical advisors
believe that the resources appear to be aligned with
[[Page 19247]]
those of a CC. Therefore, we are soliciting public comment on whether a
CC severity level designation for ICD-10-CM diagnosis codes I50.811 and
I50.813 for FY 2020 is appropriate.
(2) Chronic Right Heart Failure
We received a request to change the severity level for ICD-10-CM
diagnosis code I50.812 (Chronic right heart failure) from a non-CC to a
CC. The requestor stated that this code warrants CC classification
because it indicates the presence and treatment of chronic heart
failure. We used the approach outlined earlier to evaluate this
request. The following table contains the data that we used to evaluate
this request:
--------------------------------------------------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC subclass Requested CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
I50.812 Chronic right heart 179 1.5114 1,533 2.1146 1,758 3.0549 non-CC.................. CC.
failure.
--------------------------------------------------------------------------------------------------------------------------------------------------------
For ICD-10-CM diagnosis code I50.812, the data suggest that the
resources involved in caring for a patient with this condition are 51
percent greater than expected when the patient has either no other
secondary diagnosis present or all the other secondary diagnoses
present are non-CCs. The resources are 11 percent greater than expected
when reported in conjunction with another secondary diagnosis that is a
CC, and 5 percent greater than expected when reported in conjunction
with another secondary diagnosis code that is an MCC. Our clinical
advisors reviewed this request and agree that the resources involved in
caring for a patient with this condition are not aligned with those of
a CC. Therefore, we are not proposing a change to the severity level
for ICD-10-CM diagnosis code I50.812.
(3) Ascites in Alcoholic Liver Disease and Toxic Liver Disease
We received a request to change the severity level for ICD-10-CM
diagnosis codes K70.11 (Alcoholic hepatitis with ascites), K70.31
(Alcoholic cirrhosis with ascites), and K71.51 (Toxic liver disease
with chronic active hepatitis with ascites) from a non-CC to a CC. The
requestor stated that these codes warrant CC classification because
providers are not currently compensated for the ascites treatment. We
used the approach outlined earlier to evaluate this request. The
following table contains the data that we used to evaluate this
request.
--------------------------------------------------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC subclass Requested CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
K70.11 Alcoholic hepatitis with 134 1.2952 1,940 2.3444 3,331 3.3635 non-CC.................. CC.
ascites.
K70.31 Alcoholic cirrhosis with 1,634 1.1129 18,675 2.2301 26,822 3.2479 non-CC.................. CC.
ascites.
K71.51 Toxic liver disease with 16 0.8913 218 2.1743 274 3.1418 non-CC.................. CC.
chronic active hepatitis with
ascites.
--------------------------------------------------------------------------------------------------------------------------------------------------------
For ICD-10-CM diagnosis code K70.11, the data suggest that the
resources involved in caring for a patient with this condition are 29
percent greater than expected when the patient has either no other
secondary diagnosis present or all the other secondary diagnoses
present are non-CCs. The resources are 34 percent greater than expected
when reported in conjunction with another secondary diagnosis that is a
CC, and 36 percent greater than expected when reported in conjunction
with another secondary diagnosis code that is an MCC. Our clinical
advisors reviewed this request and agree that the resources involved in
caring for a patient with this condition are not aligned with those of
a CC. Therefore, we are not proposing a change to the severity level
for ICD-10-CM diagnosis code K70.11.
For ICD-10-CM diagnosis code K70.31, the data suggest that the
resources involved in caring for a patient with this condition are 11
percent greater than expected when the patient has either no other
secondary diagnosis present or all the other secondary diagnoses
present are non-CCs. The resources are 23 percent greater than expected
when reported in conjunction with another secondary diagnosis that is a
CC, and 25 percent greater than expected when reported in conjunction
with another secondary diagnosis code that is an MCC. Our clinical
advisors reviewed this request and agree that the resources involved in
caring for a patient with this condition are not aligned with those of
a CC. Therefore, we are not proposing a change to the severity level
for ICD-10-CM diagnosis code K70.31.
For ICD-10-CM diagnosis code K71.51, the data suggest that the
resources involved in caring for a patient with this condition are 11
percent lower than expected when the patient has either no other
secondary diagnosis present, or all the other secondary diagnoses
present are non-CCs. The resources are 17 percent greater than expected
when reported in conjunction with another secondary diagnosis that is a
CC, and 14 percent greater than expected when reported in conjunction
with another secondary diagnosis code that is an MCC. Our clinical
advisors reviewed this request and agree that the resources involved in
caring for a patient with this condition are not aligned with those of
a CC. Therefore, we are not proposing a change to the severity level
for ICD-10-CM diagnosis code K71.51.
(4) Factitious Disorder Imposed on Self
We received a request to change the severity level for ICD-10-CM
diagnosis codes F68.11 (Factitious disorder imposed on self, with
predominantly psychological signs and symptoms) and F68.13 (Factitious
disorder imposed on self, with combined psychological and physical
signs and symptoms) from a
[[Page 19248]]
non-CC to a CC. The requestor stated that similar codes in the
classification are designated as a CC. We used the approach outlined
earlier to evaluate this request. The following table contains the data
that we used to evaluate this request.
--------------------------------------------------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3 Current CC subclass Requested CC subclass
--------------------------------------------------------------------------------------------------------------------------------------------------------
F68.11 Factitious disorder imposed 16 1.2040 59 0.9979 15 3.2395 non-CC.................. CC.
on self, with predominantly
psychological signs and symptoms.
F68.13 Factitious disorder imposed 4 1.6226 32 1.9840 11 4.0000 non-CC.................. CC.
on self, with combined
psychological and physical signs
and symptoms.
--------------------------------------------------------------------------------------------------------------------------------------------------------
For ICD-10-CM diagnosis code F68.11, the number of patients found
in the September 2018 update of the FY 2018 MedPAR data in each of the
subsets is 16, 59, and 15, and for ICD-10-CM diagnosis code F68.13, the
number of patients in each of the subsets is 4, 32, and 11. Our
clinical advisors reviewed this request and believe that due to the
small number of cases in the data, it is not possible to use
statistical methods to evaluate the impact on resource use of patients.
Our clinical advisors also do not believe there is a clinical basis to
change the severity level in the absence of data. Our clinical advisors
noted that if a patient was diagnosed with either one of these ICD-10-
CM diagnoses (ICM-10-CM diagnosis code F68.11 or F68.13), there would
more than likely be another diagnosis code reported that identifies the
psychological and/or physical symptoms the patient is experiencing that
may be a better indicator of resources utilized because these patients
often fabricate their illness and inflict injuries on themselves to
receive attention. For example, a patient may cut his or her finger,
resulting in a wound which requires repair. It is the cut and need for
repair that contribute to the resources consumed in caring for a
patient with this diagnosis. Therefore, we are not proposing a change
to the severity level for ICD-10-CM diagnosis codes F68.11 and F68.13
at this time.
(5) Nonunion and Malunion of Physeal Metatarsal Fractures
We received a request to change the severity level designations for
the following six ICD-10-CM diagnosis codes from a non-CC to a CC:
S99.101B (Unspecified physeal fracture of right metatarsal, initial
encounter for open fracture); S99.101K (Unspecified physeal fracture of
right metatarsal, subsequent encounter for fracture); S99.101P
(Unspecified physeal fracture of right metatarsal, subsequent encounter
for fracture with malunion); S99.132B (Salter-Harris Type III physeal
fracture of left metatarsal, initial encounter for open fracture),
S99.132K (Salter-Harris Type III physeal fracture of left metatarsal,
subsequent encounter for fracture with nonunion); and S99.132P (Salter-
Harris Type III physeal fracture of left metatarsal, subsequent
encounter for fracture with malunion with nonunion). The requestor
stated that similar codes for open fractures, nonunions, and malunions
of other sites currently are designated as CCs. However the requestor
did not provide the specific ICD-10-CM diagnosis codes that are
currently designated as CCs that the requestor believes are an
appropriate comparator. There are a considerable number of fractures,
nonunions, and malunions of other sites, some of which are designated
as CCs and others that are not. In particular, in evaluating this
request, we would want to review the appropriateness of designating
unspecified codes (that is, ICD-10-CM diagnosis codes S99.101B,
S99.101K, and S99.101P) as a CC, to avoid potentially discouraging more
detailed coding. In addition, none of the other ICD-10-CM diagnosis
codes describing Salter-Harris fractures (for example, ICD-10-CM
diagnosis codes in sub-subcategory S99.11- (Salter-Harris Type I
physeal fracture of metatarsal), S99.12- (Salter-Harris Type II physeal
fracture of metatarsal), S99.13- (Salter-Harris Type III physeal
fracture of metatarsal), and S99.14- (Salter-Harris Type IV physeal
fracture of metatarsal)) currently have a CC designation.
Given the lack of supporting information for this request and
because we believe this request may require further research and
analysis to evaluate the relevant category of fracture codes and fully
assess the claims data, we are unable to fully evaluate this request
for FY 2020. Therefore, at this time, we are not proposing changes to
the severity level designations for ICD-10-CM diagnosis codes S99.101B,
S99.101K, S99.101P, S99.132B, S99.132K, and S99.132P as the requestor
recommended.
(6) Other Encephalopathy
In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20241), we
discussed a request that we had received to change the severity level
designation for ICD-10-CM diagnosis code G93.40 (Encephalopathy,
unspecified) from an MCC to a non-CC. We did not propose a change based
on the review of the claims data and input from our clinical advisors.
However, after a review of public comments in response to that
proposal, we finalized a change in the severity level designation for
ICD-10-CM diagnosis code G93.40 from an MCC to a CC (83 FR 41239).
We received a request to reconsider the change in the severity
level designation for ICD-10-CM diagnosis code G93.49 (Other
encephalopathy) from an MCC to a CC, as reflected in Table 6I.2--
Deletions to the MCC List and Table 6J.--Complete CC List that were
associated with the FY 2019 IPPS/LTCH PPS final rule, because the
requestor noted this diagnosis code was not discussed in the FY 2019
IPPS/LTCH PPS proposed or final rules along with the discussion of
related ICD-10-CM diagnosis code G93.40. The requestor stated that
diagnosis code G93.49 warrants an MCC classification to accurately
reflect severity of illness and resources contributing to an extended
length of stay for patients who have this condition.
Our clinical advisors reviewed the data for ICD-10-CM diagnosis
code G93.49 (Other encephalopathy) as set forth in the table below, and
noted that the C1 value is close to 2.0, which indicates that the
resource use is aligned with that of a CC, while the C2 value is about
halfway between 2.0 and 3.0, which is also consistent with the resource
use of a CC. They also compared the C1, C2, and C3 values of diagnosis
code G93.49 to those of diagnosis code G93.40, as also set forth in the
table below, and noted that the values were similar for both codes. Our
clinical advisors noted that similar to diagnosis code G93.40,
diagnosis code
[[Page 19249]]
G93.49 (Other encephalopathy) is poorly defined, not all
encephalopathies are MCCs, and the MCC status may create an incentive
for coding personnel to not pursue specificity of encephalopathy.
Therefore, they believe that these conditions are clinically similar
and should be assigned the same CC severity level status. Therefore, we
are not proposing any change to the severity level for ICD 10 CM
diagnosis code G93.49 (Other encephalopathy) for FY 2020.
----------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Cnt1 C1 Cnt2 C2 Cnt3 C3
----------------------------------------------------------------------------------------------------------------
G93.40 (Encephalopathy, unspecified).......... 32,023 1.812 161,991 2.494 294,088 3.289
G93.49 (Other encephalopathy)................. 4,258 1.758 23,203 2.536 40,836 3.349
----------------------------------------------------------------------------------------------------------------
(7) Obstetrics Chapter Codes
We received a request to change the severity level for 94 ICD-10-CM
diagnosis codes in the Obstetrics chapter of the ICD-10-CM diagnosis
classification that describe a variety of complications of pregnancy,
childbirth and the puerperium. The requestor stated that the
reclassification of the 94 obstetric diagnosis codes would more
appropriately reflect severity of illness and accurate MS-DRG grouping
after CMS' FY 2019 creation of new obstetric MS-DRGs subdivided by
severity level (with MCC, with CC, and without CC/MCC).
The 94 obstetrics codes associated with this request and their
current and requested severity level designation are shown in Table
6P.1e. associated with this proposed rule (which is available via the
internet on the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html). We are
proposing to move some of these diagnosis codes to a higher severity
level and some diagnosis codes to a lower severity level. Our proposals
are shown in the table below.
Our clinical advisors indicated that the approach outlined
elsewhere in this section to evaluate requested changes to severity
levels, in which each diagnosis is evaluated using Medicare cost data
to determine the extent to which its presence as a secondary diagnosis
resulted in increased hospital resource use, could not be used to
evaluate this request because the number of obstetric patients in the
Medicare data was insufficient to perform evaluation using statistical
methods. Instead, our clinical advisors used their clinical judgment to
evaluate the requested changes to the severity levels for the 94
obstetrics diagnosis codes. Our clinical advisors concur with the
requestor that changes to the severity level for some of the obstetrics
diagnosis codes would more appropriately reflect severity of illness
and accurate MS-DRG grouping. Specifically, our clinical advisors
agreed with the requested change to severity from a non-CC to a CC for
10 of the diagnosis codes identified by the requestor because they
believe these conditions clinically warrant a CC designation. They
noted that 6 of the 10 diagnosis codes describe gestational diabetes
mellitus in pregnancy, gestational diabetes mellitus in childbirth, or
gestational diabetes mellitus in the puerperium requiring control,
either by insulin or oral hypoglycemic drugs and the condition would
require additional monitoring and resources in the inpatient setting.
They also noted that 2 of the 10 diagnosis codes describe maternal care
for other isoimmunization in the first trimester for single or multiple
gestations where the fetus is unspecified or fetus number 1 is
specified. They indicated that although there are additional diagnosis
codes describing maternal care for other isoimmunization in the first
trimester that uniquely identify fetus number 2 through fetus number 5,
as well as an ``other'' fetus beyond number 5, they do not believe
these other diagnosis codes have any additional impact on resource use
because treatment would be directed at the entire uterine cavity. They
further noted that 1 of the 10 diagnosis codes describes a conjoined
twin pregnancy in the third trimester and, while conjoined twins occur
rarely and carry a high risk of complications and mortality, they
believe the complexities are greatest in the third trimester. Lastly, 1
of the 10 diagnosis codes describes unspecified diabetes mellitus in
childbirth, and because the diagnosis codes describing unspecified
diabetes mellitus in pregnancy and unspecified diabetes mellitus in the
puerperium are designated as a CC, our clinical advisors agreed that
clinically, the condition occurring in childbirth warrants a CC
designation as well. Our clinical advisors also agreed with the
requested change to severity level from an MCC to a CC for 4 other
diagnosis codes identified by the requestor because, clinically, the CC
designation is consistent with the other diagnosis codes within those
diagnosis code families. For example, the diagnosis codes describing
preexisting type 1 diabetes mellitus in pregnancy, preexisting type 2
diabetes mellitus in pregnancy and unspecified preexisting diabetes
mellitus in pregnancy, regardless of trimester (first, second, third,
and unspecified) are all designated as CCs. Our clinical advisors
agreed that the diagnosis codes describing these same conditions ``in
childbirth'' also warrant a CC designation because the conditions do
not require additional resources or reflect a greater severity of
illness compared to the conditions when they occur ``in pregnancy''.
Therefore, we are proposing a change to the severity level for 14 ICD-
10-CM diagnosis codes as shown in the following table.
----------------------------------------------------------------------------------------------------------------
ICD-10-CM diagnosis code Current CC subclass Proposed CC subclass
----------------------------------------------------------------------------------------------------------------
O24.02 (Pre-existing type 1 diabetes mellitus, in MCC.......................... CC.
childbirth).
O24.12 (Pre-existing type 2 diabetes mellitus, in MCC.......................... CC.
childbirth).
O24.32 (Unspecified pre-existing diabetes mellitus MCC.......................... CC.
in childbirth).
O24.414 (Gestational diabetes mellitus in Non-CC....................... CC.
pregnancy, insulin controlled).
O24.415 (Gestational diabetes mellitus in Non-CC....................... CC.
pregnancy, controlled by oral hypoglycemic drugs).
O24.424 (Gestational diabetes mellitus in Non-CC....................... CC.
childbirth, insulin controlled).
O24.425 (Gestational diabetes mellitus in Non-CC....................... CC.
childbirth, controlled by oral hypoglycemic drugs).
O24.434 (Gestational diabetes mellitus in the Non-CC....................... CC.
puerperium, insulin controlled).
O24.435 (Gestational diabetes mellitus in Non-CC....................... CC.
puerperium, controlled by oral hypoglycemic drugs).
O24.82 (Other pre-existing diabetes mellitus in MCC.......................... CC.
childbirth).
O24.92 (Unspecified diabetes mellitus in Non-CC....................... CC.
childbirth).
[[Page 19250]]
O30.023 (Conjoined twin pregnancy, third trimester) Non-CC....................... CC.
O36.1910 (Maternal care for other isoimmunization, Non-CC....................... CC.
first trimester, not applicable or unspecified).
O36.1911 (Maternal care for other isoimmunization, Non-CC....................... CC.
first trimester, fetus 1).
----------------------------------------------------------------------------------------------------------------
Given the limited number of cases reporting ICD-10-CM obstetrical
codes in the Medicare claims data, we note that use of datasets other
than MedPAR cost data for future evaluation of severity level
designation for the ICD-10-CM diagnosis codes from the Obstetrics
chapter of the ICD-10-CM classification is under consideration.
e. Proposed Additions and Deletions to the Diagnosis Code Severity
Levels for FY 2020
The following tables identify the proposed additions and deletions
to the diagnosis code MCC severity levels list and the proposed
additions and deletions to the diagnosis code CC severity levels list
for FY 2020 and are available via the internet on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
Table 6I.1--Proposed Additions to the MCC List--FY 2020;
Table 6I.2--Proposed Deletions to the MCC List--FY 2020;
Table 6J.1--Proposed Additions to the CC List--FY 2020; and
Table 6J.2--Proposed Deletions to the CC List--FY 2020.
f. Proposed CC Exclusions List for FY 2020
In the September 1, 1987 final notice (52 FR 33143) concerning
changes to the DRG classification system, we modified the GROUPER logic
so that certain diagnoses included on the standard list of CCs would
not be considered valid CCs in combination with a particular principal
diagnosis. We created the CC Exclusions List for the following reasons:
(1) To preclude coding of CCs for closely related conditions; (2) to
preclude duplicative or inconsistent coding from being treated as CCs;
and (3) to ensure that cases are appropriately classified between the
complicated and uncomplicated DRGs in a pair.
In the May 19, 1987 proposed notice (52 FR 18877) and the September
1, 1987 final notice (52 FR 33154), we explained that the excluded
secondary diagnoses were established using the following five
principles:
Chronic and acute manifestations of the same condition
should not be considered CCs for one another;
Specific and nonspecific (that is, not otherwise specified
(NOS)) diagnosis codes for the same condition should not be considered
CCs for one another;
Codes for the same condition that cannot coexist, such as
partial/total, unilateral/bilateral, obstructed/unobstructed, and
benign/malignant, should not be considered CCs for one another;
Codes for the same condition in anatomically proximal
sites should not be considered CCs for one another; and
Closely related conditions should not be considered CCs
for one another.
The creation of the CC Exclusions List was a major project
involving hundreds of codes. We have continued to review the remaining
CCs to identify additional exclusions and to remove diagnoses from the
master list that have been shown not to meet the definition of a CC. We
refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50541
through 50544) for detailed information regarding revisions that were
made to the CC and CC Exclusion Lists under the ICD-9-CM MS-DRGs.
In this FY 2020 IPPS/LTCH PPS proposed rule, for FY 2020, we are
proposing changes to the ICD-10 MS-DRGs Version 37 CC Exclusion List.
Therefore, we have developed Table 6G.1.--Proposed Secondary Diagnosis
Order Additions to the CC Exclusions List--FY 2020; Table 6G.2.--
Proposed Principal Diagnosis Order Additions to the CC Exclusions
List--FY 2020; Table 6H.1.--Proposed Secondary Diagnosis Order
Deletions to the CC Exclusions List--FY 2020; and Table 6H.2.--Proposed
Principal Diagnosis Order Deletions to the CC Exclusions List--FY 2020.
For Table 6G.1, each secondary diagnosis code proposed for addition to
the CC Exclusion List is shown with an asterisk and the principal
diagnoses proposed to exclude the secondary diagnosis code are provided
in the indented column immediately following it. For Table 6G.2, each
of the principal diagnosis codes for which there is a CC exclusion is
shown with an asterisk and the conditions proposed for addition to the
CC Exclusion List that will not count as a CC are provided in an
indented column immediately following the affected principal diagnosis.
For Table 6H.1, each secondary diagnosis code proposed for deletion
from the CC Exclusion List is shown with an asterisk followed by the
principal diagnosis codes that currently exclude it. For Table 6H.2,
each of the principal diagnosis codes is shown with an asterisk and the
proposed deletions to the CC Exclusions List are provided in an
indented column immediately following the affected principal diagnosis.
Tables 6G.1., 6G.2., 6H.1., and 6H.2. associated with this proposed
rule are available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
15. Proposed Changes to the ICD-10-CM and ICD-10-PCS Coding Systems
To identify new, revised and deleted diagnosis and procedure codes,
for FY 2020, we have developed Table 6A.--New Diagnosis Codes, Table
6B.--New Procedure Codes, Table 6C.--Invalid Diagnosis Codes, Table
6D.--Invalid Procedure Codes, Table 6E.--Revised Diagnosis Code Titles,
and Table 6F.--Revised Procedure Code Titles for this proposed rule.
These tables are not published in the Addendum to this proposed
rule but are available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html as described in section VI. of the
Addendum to this proposed rule. As discussed in section II.F.18. of the
preamble of this proposed rule, the code titles are adopted as part of
the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee
process. Therefore, although we publish the code titles in the IPPS
proposed and final rules, they are not subject to comment in the
proposed or final rules.
We are proposing the MDC and MS-DRG assignments for the new
diagnosis and procedure codes as set forth in Table 6A.--New Diagnosis
Codes and Table 6B.--New Procedure Codes. In addition, the proposed
severity level designations for the new diagnosis codes are set forth
in Table 6A. and the proposed O.R. status for the new procedure codes
are set forth in Table 6B.
We are making available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html
[[Page 19251]]
the following tables associated with this proposed rule:
Table 6A.--New Diagnosis Codes--FY 2020;
Table 6B.--New Procedure Codes--FY 2020;
Table 6C.--Invalid Diagnosis Codes--FY 2020;
Table 6D.--Invalid Procedure Codes--FY 2020;
Table 6E.--Revised Diagnosis Code Titles--FY 2020;
Table 6F.--Revised Procedure Code Titles--FY 2020;
Table 6G.1.--Proposed Secondary Diagnosis Order Additions
to the CC Exclusions List--FY 2020;
Table 6G.2.--Proposed Principal Diagnosis Order Additions
to the CC Exclusions List--FY 2020;
Table 6H.1.--Proposed Secondary Diagnosis Order Deletions
to the CC Exclusions List--FY 2020;
Table 6H.2.--Proposed Principal Diagnosis Order Deletions
to the CC Exclusions List--FY 2020;
Table 6I.1.--Proposed Additions to the MCC List--FY 2020;
Table 6I.2.-Proposed Deletions to the MCC List--FY 2020;
Table 6J.1.--Proposed Additions to the CC List--FY 2020;
and
Table 6J.2.--Proposed Deletions to the CC List--FY 2020.
16. Proposed Changes to the Medicare Code Editor (MCE)
The Medicare Code Editor (MCE) is a software program that detects
and reports errors in the coding of Medicare claims data. Patient
diagnoses, procedure(s), and demographic information are entered into
the Medicare claims processing systems and are subjected to a series of
automated screens. The MCE screens are designed to identify cases that
require further review before classification into an MS-DRG.
As discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41220),
we made available the FY 2019 ICD-10 MCE Version 36 manual file. The
link to this MCE manual file, along with the link to the mainframe and
computer software for the MCE Version 36 (and ICD-10 MS-DRGs) are
posted on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/MS-DRG-Classifications-and-Software.html.
For this FY 2020 IPPS/LTCH PPS proposed rule, below we address the
MCE requests we received by the November 1, 2018 deadline. We also
discuss the proposals we are making based on our internal review and
analysis.
a. Age Conflict Edit: Maternity Diagnoses
In the MCE, the Age conflict edit exists to detect inconsistencies
between a patient's age and any diagnosis on the patient's record; for
example, a 5-year-old patient with benign prostatic hypertrophy or a
78-year-old patient coded with a delivery. In these cases, the
diagnosis is clinically and virtually impossible for a patient of the
stated age. Therefore, either the diagnosis or the age is presumed to
be incorrect. Currently, in the MCE, the following four age diagnosis
categories appear under the Age conflict edit and are listed in the
manual and written in the software program:
Perinatal/Newborn--Age of 0 years only; a subset of
diagnoses which will only occur during the perinatal or newborn period
of age 0 (for example, tetanus neonatorum, health examination for
newborn under 8 days old).
Pediatric--Age is 0-17 years inclusive (for example,
Reye's syndrome, routine child health exam).
Maternity--Age range is 12-55 years inclusive (for
example, diabetes in pregnancy, antepartum pulmonary complication).
Adult--Age range is 15-124 years inclusive (for example,
senile delirium, mature cataract).
Under the ICD-10 MCE, the maternity diagnoses category for the Age
conflict edit considers the age range of 12 to 55 years inclusive. For
that reason, the diagnosis codes on this Age conflict edit list would
be expected to apply to conditions or disorders specific to that age
group only.
We received a request to reconsider the age range associated with
the maternity diagnoses category for the Age conflict edit. According
to the requestor, pregnancies can and do occur prior to age 12 and
after age 55. The requestor suggested that a more appropriate age range
would be from age 9 to age 64 for the maternity diagnoses category.
We agree with the requestor that pregnancies can and do occur prior
to the age of 12 and after the age of 55. We also agree that the
suggested range, age 9 to age 64, is an appropriate age range.
Therefore, we are proposing to revise the maternity diagnoses category
for the Age conflict edit to consider the new age range of 9 to 64
years inclusive.
b. Sex Conflict Edit: Diagnoses for Females Only Edit
In the MCE, the Sex conflict edit detects inconsistencies between a
patient's sex and any diagnosis or procedure on the patient's record;
for example, a male patient with cervical cancer (diagnosis) or a
female patient with a prostatectomy (procedure). In both instances, the
indicated diagnosis or the procedure conflicts with the stated sex of
the patient. Therefore, the patient's diagnosis, procedure, or sex is
presumed to be incorrect.
As discussed in section II.F.15. of the preamble of this proposed
rule, Table 6A.--New Diagnosis Codes which is associated with this
proposed rule (and is available via the internet on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the new diagnosis codes that have
been approved to date which will be effective with discharges on and
after October 1, 2019. ICD-10-CM diagnosis code N99.85 (Post
endometrial ablation syndrome) is a new code that describes a condition
consistent with the female sex. We are proposing to add this diagnosis
code to the Diagnoses for Females Only edit code list under the Sex
conflict edit.
c. Unacceptable Principal Diagnosis Edit
In the MCE, there are select codes that describe a circumstance
that influences an individual's health status but does not actually
describe a current illness or injury. There also are codes that are not
specific manifestations but may be due to an underlying cause. These
codes are considered unacceptable as a principal diagnosis. In limited
situations, there are a few codes on the MCE Unacceptable Principal
Diagnosis edit code list that are considered ``acceptable'' when a
specified secondary diagnosis is also coded and reported on the claim.
ICD-10-CM diagnosis codes I46.2 (Cardiac arrest due to underlying
cardiac condition) and I46.8 (Cardiac arrest due to other underlying
condition) are codes that clearly specify cardiac arrest as being due
to an underlying condition. Also, in the ICD-10-CM Tabular List, there
are instructional notes to ``Code first underlying cardiac condition''
at ICD-10-CM diagnosis code I46.2 and to ``Code first underlying
condition'' at ICD-10-CM diagnosis code I46.8. Therefore, we are
proposing to add ICD-10-CM diagnosis codes I46.2 and I46.8 to the
Unacceptable Principal Diagnosis Category edit code list.
As discussed in section II.F.15. of the preamble of this proposed
rule, Table 6A.--New Diagnosis Codes associated with this proposed rule
(which is available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html) lists the new diagnosis
[[Page 19252]]
codes that have been approved to date that will be effective with
discharges occurring on and after October 1, 2019.
We are proposing to add the new ICD-10-CM diagnosis codes listed in
the following table to the Unacceptable Principal Diagnosis Category
edit code list, as these codes are consistent with other ICD-10-CM
diagnosis codes currently included on the Unacceptable Principal
Diagnosis Category edit code list.
------------------------------------------------------------------------
ICD-10-CM code Code description
------------------------------------------------------------------------
T50.915A.................. Adverse effect of multiple unspecified
drugs, medicaments and biological
substances, initial encounter.
T50.915D.................. Adverse effect of multiple unspecified
drugs, medicaments and biological
substances, subsequent encounter.
T50.915S.................. Adverse effect of multiple unspecified
drugs, medicaments and biological
substances, sequela.
T50.916A.................. Underdosing of multiple unspecified drugs,
medicaments and biological substances,
initial encounter.
T50.916D.................. Underdosing of multiple unspecified drugs,
medicaments and biological substances,
subsequent encounter.
T50.916S.................. Underdosing of multiple unspecified drugs,
medicaments and biological substances,
sequela.
Z11.7..................... Encounter for testing for latent
tuberculosis infection.
Z22.7..................... Latent tuberculosis.
Z71.84.................... Encounter for health counseling related to
travel.
Z86.002................... Personal history of in-situ neoplasm of
other and unspecified genital organs.
Z86.003................... Personal history of in-situ neoplasm of oral
cavity, esophagus and stomach.
Z86.004................... Personal history of in-situ neoplasm of
other and unspecified digestive organs.
Z86.005................... Personal history of in-situ neoplasm of
middle ear and respiratory system.
Z86.006................... Personal history of melanoma in-situ.
------------------------------------------------------------------------
d. Non-Covered Procedure Edit
In the MCE, the Non-Covered Procedure edit identifies procedures
for which Medicare does not provide payment. Payment is not provided
due to specific criteria that are established in the National Coverage
Determination (NCD) process. We refer readers to the website at:
https://www.cms.gov/Medicare/Coverage/Determination Process/
howtorequestanNCD.html for additional information on this process. In
addition, there are procedures that would normally not be paid by
Medicare but, due to the presence of certain diagnoses, are paid.
As discussed in section II.F.15. of the preamble of this proposed
rule, Table 6D.--Invalid Procedure Codes associated with this proposed
rule (which is available via the internet on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatient PPS/index.html) lists the procedure codes that are no
longer effective as of October 1, 2019. Included in this table are the
following ICD-10-PCS procedure codes listed on the Non-Covered
Procedure edit code list.
------------------------------------------------------------------------
ICD-10-PCS code Code description
------------------------------------------------------------------------
037G3Z6................... Dilation of intracranial artery,
bifurcation, percutaneous approach.
037G4Z6................... Dilation of intracranial artery,
bifurcation, percutaneous endoscopic
approach.
------------------------------------------------------------------------
We are proposing to remove these codes from the Non-Covered
Procedure edit code list. In addition, as discussed in section
II.F.2.b. of the preamble of this proposed rule, a number of ICD-10-PCS
procedure codes describing bone marrow transplant procedures were the
subject of a proposal discussed at the March 5-6, 2019 ICD-10
Coordination and Maintenance Committee meeting, to be deleted effective
October 1, 2019. We are proposing that if the applicable proposal is
finalized, we would delete the subset of those ICD-10-PCS procedure
codes that are currently listed on the Non-Covered Procedure edit code
list as shown in the following table.
------------------------------------------------------------------------
ICD-10-PCS code Code description
------------------------------------------------------------------------
30250G0................... Transfusion of autologous bone marrow into
peripheral artery, open approach.
30250Y0................... Transfusion of autologous hematopoietic stem
cells into peripheral artery, open
approach.
30253G0................... Transfusion of autologous bone marrow into
peripheral artery, percutaneous approach.
30253Y0................... Transfusion of autologous hematopoietic stem
cells into peripheral artery, percutaneous
approach.
30260G0................... Transfusion of autologous bone marrow into
central artery, open approach.
30260Y0................... Transfusion of autologous hematopoietic stem
cells into central artery, open approach.
30263G0................... Transfusion of autologous bone marrow into
central artery, percutaneous approach.
30263Y0................... Transfusion of autologous hematopoietic stem
cells into central artery, percutaneous
approach.
------------------------------------------------------------------------
e. Future Enhancement
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38053 through
38054), we noted the importance of ensuring accuracy of the coded data
from the reporting, collection, processing, coverage, payment, and
analysis aspects. We have engaged a contractor to assist in the review
of the limited coverage and noncovered procedure edits in the MCE that
may also be present in other claims processing systems that are
utilized by our MACs. The MACs must adhere to criteria specified within
the National Coverage Determinations (NCDs) and may implement their own
edits in addition to what are already incorporated into the MCE,
resulting in duplicate edits. The objective of this review is to
identify where duplicate edits may exist and to determine what the
impact might be if these edits were to be removed from the MCE.
We have noted that the purpose of the MCE is to ensure that errors
and inconsistencies in the coded data are recognized during Medicare
claims processing. As we indicated in the FY 2019 IPPS/LTCH PPS final
rule (83 FR
[[Page 19253]]
41228), we are considering whether the inclusion of coverage edits in
the MCE necessarily aligns with that specific goal because the focus of
coverage edits is on whether or not a particular service is covered for
payment purposes and not whether it was coded correctly.
As we continue to evaluate the purpose and function of the MCE with
respect to ICD-10, we encourage public input for future discussion. As
we have discussed in prior rulemaking, we recognize a need to further
examine the current list of edits and the definitions of those edits.
We continue to encourage public comments on whether there are
additional concerns with the current edits, including specific edits or
language that should be removed or revised, edits that should be
combined, or new edits that should be added to assist in detecting
errors or inaccuracies in the coded data. Comments should be directed
to the MS-DRG Classification Change Mailbox located at:
[email protected] by November 1, 2019 for the FY
2021 rulemaking.
17. Proposed Changes to Surgical Hierarchies
Some inpatient stays entail multiple surgical procedures, each one
of which, occurring by itself, could result in assignment of the case
to a different MS-DRG within the MDC to which the principal diagnosis
is assigned. Therefore, it is necessary to have a decision rule within
the GROUPER by which these cases are assigned to a single MS-DRG. The
surgical hierarchy, an ordering of surgical classes from most resource-
intensive to least resource-intensive, performs that function.
Application of this hierarchy ensures that cases involving multiple
surgical procedures are assigned to the MS-DRG associated with the most
resource-intensive surgical class.
A surgical class can be composed of one or more MS-DRGs. For
example, in MDC 11, the surgical class ``kidney transplant'' consists
of a single MS-DRG (MS-DRG 652) and the class ``major bladder
procedures'' consists of three MS-DRGs (MS-DRGs 653, 654, and 655).
Consequently, in many cases, the surgical hierarchy has an impact on
more than one MS-DRG. The methodology for determining the most
resource-intensive surgical class involves weighting the average
resources for each MS-DRG by frequency to determine the weighted
average resources for each surgical class. For example, assume surgical
class A includes MS-DRGs 001 and 002 and surgical class B includes MS-
DRGs 003, 004, and 005. Assume also that the average costs of MS-DRG
001 are higher than that of MS-DRG 003, but the average costs of MS-
DRGs 004 and 005 are higher than the average costs of MS-DRG 002. To
determine whether surgical class A should be higher or lower than
surgical class B in the surgical hierarchy, we would weigh the average
costs of each MS-DRG in the class by frequency (that is, by the number
of cases in the MS-DRG) to determine average resource consumption for
the surgical class. The surgical classes would then be ordered from the
class with the highest average resource utilization to that with the
lowest, with the exception of ``other O.R. procedures'' as discussed in
this proposed rule.
This methodology may occasionally result in assignment of a case
involving multiple procedures to the lower-weighted MS-DRG (in the
highest, most resource-intensive surgical class) of the available
alternatives. However, given that the logic underlying the surgical
hierarchy provides that the GROUPER search for the procedure in the
most resource-intensive surgical class, in cases involving multiple
procedures, this result is sometimes unavoidable.
We note that, notwithstanding the foregoing discussion, there are a
few instances when a surgical class with a lower average cost is
ordered above a surgical class with a higher average cost. For example,
the ``other O.R. procedures'' surgical class is uniformly ordered last
in the surgical hierarchy of each MDC in which it occurs, regardless of
the fact that the average costs for the MS-DRG or MS-DRGs in that
surgical class may be higher than those for other surgical classes in
the MDC. The ``other O.R. procedures'' class is a group of procedures
that are only infrequently related to the diagnoses in the MDC, but are
still occasionally performed on patients with cases assigned to the MDC
with these diagnoses. Therefore, assignment to these surgical classes
should only occur if no other surgical class more closely related to
the diagnoses in the MDC is appropriate.
A second example occurs when the difference between the average
costs for two surgical classes is very small. We have found that small
differences generally do not warrant reordering of the hierarchy
because, as a result of reassigning cases on the basis of the hierarchy
change, the average costs are likely to shift such that the higher-
ordered surgical class has lower average costs than the class ordered
below it.
Based on the changes that we are proposing to make in this FY 2020
IPPS/LTCH PPS proposed rule, as discussed in section II.F.5. of this
preamble of this proposed rule, we are proposing to revise the surgical
hierarchy for MDC 5 (Diseases and Disorders of the Circulatory System)
as follows: In MDC 5, we are proposing to sequence proposed new MS-DRGs
319 and 320 (Other Endovascular Cardiac Valve Procedures with and
without MCC, respectively) above MS-DRGs 222, 223, 224, 225, 226, and
227 (Cardiac Defibrillator Implant with and without Cardiac
Catheterization with and without AMI/HF/Shock with and without MCC,
respectively) and below MS-DRGs 266 and 267 (Endovascular Cardiac Valve
Replacement with and without MCC, respectively). We also note that, as
discussed in section II.F.5.a. of this preamble of this proposed rule,
we are proposing to revise the titles for MS-DRGs 266 and 267 to
``Endovascular Cardiac Valve Replacement and Supplement Procedures with
MCC'' and ``Endovascular Cardiac Valve Replacement and Supplement
Procedures without MCC'', respectively.
Our proposal for Appendix D--MS-DRG Surgical Hierarchy by MDC and
MS-DRG of the ICD-10 MS-DRG Definitions Manual Version 37 is
illustrated in the following table.
Proposed Surgical Hierarchy: MDC 5
------------------------------------------------------------------------
------------------------------------------------------------------------
MS-DRG 215............................. Other Heart Assist System
Implant.
MS-DRGs 216-221........................ Cardiac Valve and Other Major
Cardiothoracic Procedures.
MS-DRGs 266 and 267.................... Endovascular Cardiac Valve
Procedures.
Proposed New MS-DRGs 319 and 320....... Other Endovascular Cardiac
Valve Procedures.
MS-DRGs 222-227........................ Cardiac Defibrillator Implant.
------------------------------------------------------------------------
[[Page 19254]]
As with other MS-DRG related issues, we encourage commenters to
submit requests to examine ICD-10 claims pertaining to the surgical
hierarchy via the CMS MS-DRG Classification Change Request Mailbox
located at: [email protected] by November 1, 2019
for consideration for FY 2021.
18. Maintenance of the ICD-10-CM and ICD-10-PCS Coding Systems
In September 1985, the ICD-9-CM Coordination and Maintenance
Committee was formed. This is a Federal interdepartmental committee,
co-chaired by the National Center for Health Statistics (NCHS), the
Centers for Disease Control and Prevention (CDC), and CMS, charged with
maintaining and updating the ICD-9-CM system. The final update to ICD-
9-CM codes was made on October 1, 2013. Thereafter, the name of the
Committee was changed to the ICD-10 Coordination and Maintenance
Committee, effective with the March 19-20, 2014 meeting. The ICD-10
Coordination and Maintenance Committee addresses updates to the ICD-10-
CM and ICD-10-PCS coding systems. The Committee is jointly responsible
for approving coding changes, and developing errata, addenda, and other
modifications to the coding systems to reflect newly developed
procedures and technologies and newly identified diseases. The
Committee is also responsible for promoting the use of Federal and non-
Federal educational programs and other communication techniques with a
view toward standardizing coding applications and upgrading the quality
of the classification system.
The official list of ICD-9-CM diagnosis and procedure codes by
fiscal year can be found on the CMS website at: http://cms.hhs.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/codes.html. The official
list of ICD-10-CM and ICD-10-PCS codes can be found on the CMS website
at: http://www.cms.gov/Medicare/Coding/ICD10/index.html.
The NCHS has lead responsibility for the ICD-10-CM and ICD-9-CM
diagnosis codes included in the Tabular List and Alphabetic Index for
Diseases, while CMS has lead responsibility for the ICD-10-PCS and ICD-
9-CM procedure codes included in the Tabular List and Alphabetic Index
for Procedures.
The Committee encourages participation in the previously mentioned
process by health-related organizations. In this regard, the Committee
holds public meetings for discussion of educational issues and proposed
coding changes. These meetings provide an opportunity for
representatives of recognized organizations in the coding field, such
as the American Health Information Management Association (AHIMA), the
American Hospital Association (AHA), and various physician specialty
groups, as well as individual physicians, health information management
professionals, and other members of the public, to contribute ideas on
coding matters. After considering the opinions expressed at the public
meetings and in writing, the Committee formulates recommendations,
which then must be approved by the agencies.
The Committee presented proposals for coding changes for
implementation in FY 2020 at a public meeting held on September 11-12,
2018, and finalized the coding changes after consideration of comments
received at the meetings and in writing by November 13, 2018.
The Committee held its 2019 meeting on March 5-6, 2019. The
deadline for submitting comments on these code proposals is scheduled
for April 5, 2019. It was announced at this meeting that any new
diagnosis and procedure codes for which there was consensus of public
support and for which complete tabular and indexing changes would be
made by May 2019 would be included in the October 1, 2019 update to the
ICD-10-CM diagnosis and ICD-10-PCS procedure code sets. As discussed in
earlier sections of the preamble of this proposed rule, there are new,
revised, and deleted ICD-10-CM diagnosis codes and ICD-10-PCS procedure
codes that are captured in Table 6A.--New Diagnosis Codes, Table 6B.--
New Procedure Codes, Table 6C.--Invalid Diagnosis Codes, Table 6D.--
Invalid Procedure Codes, Table 6E.--Revised Diagnosis Code Titles, and
Table 6F.--Revised Procedure Code Titles for this proposed rule, which
are available via the internet on the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. The code titles are adopted as part of
the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee
process. Therefore, although we make the code titles available for the
IPPS proposed rule, they are not subject to comment in the proposed
rule. Because of the length of these tables, they are not published in
the Addendum to the proposed rule. Rather, they are available via the
internet as discussed in section VI. of the Addendum to this proposed
rule.
Live Webcast recordings of the discussions of the diagnosis and
procedure codes at the Committee's September 11-12, 2018 meeting can be
obtained from the CMS website at: http://cms.hhs.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/icd9ProviderDiagnosticCodes/03_meetings.asp. The live webcast
recordings of the discussions of the diagnosis and procedure codes at
the Committee's March 5-6, 2019 meeting can be obtained from the CMS
website at: https://www.cms.gov/Medicare/Coding/ICD10/C-and-M-Meeting-Materials.html.
The materials for the discussions relating to diagnosis codes at
the September 11-12 2018 meeting and March 5-6, 2019 meeting can be
found at: http://www.cdc.gov/nchs/icd/icd10cm_maintenance.html. These
websites also provide detailed information about the Committee,
including information on requesting a new code, attending a Committee
meeting, and timeline requirements and meeting dates.
We encourage commenters to address suggestions on coding issues
involving diagnosis codes to: Donna Pickett, Co-Chairperson, ICD-10
Coordination and Maintenance Committee, NCHS, Room 2402, 3311 Toledo
Road, Hyattsville, MD 20782. Comments may be sent by Email to:
[email protected].
Questions and comments concerning the procedure codes should be
submitted via Email to: ICDProcedure [email protected].
In the September 7, 2001 final rule implementing the IPPS new
technology add-on payments (66 FR 46906), we indicated we would attempt
to include proposals for procedure codes that would describe new
technology discussed and approved at the Spring meeting as part of the
code revisions effective the following October.
Section 503(a) of Public Law 108-173 included a requirement for
updating diagnosis and procedure codes twice a year instead of a single
update on October 1 of each year. This requirement was included as part
of the amendments to the Act relating to recognition of new technology
under the IPPS. Section 503(a) amended section 1886(d)(5)(K) of the Act
by adding a clause (vii) which states that the Secretary shall provide
for the addition of new diagnosis and procedure codes on April 1 of
each year, but the addition of such codes shall not require the
Secretary to adjust the payment (or diagnosis-related group
classification) until the fiscal year that begins after such date. This
requirement improves the recognition of new technologies under the IPPS
by providing information on these new technologies
[[Page 19255]]
at an earlier date. Data will be available 6 months earlier than would
be possible with updates occurring only once a year on October 1.
While section 1886(d)(5)(K)(vii) of the Act states that the
addition of new diagnosis and procedure codes on April 1 of each year
shall not require the Secretary to adjust the payment, or DRG
classification, under section 1886(d) of the Act until the fiscal year
that begins after such date, we have to update the DRG software and
other systems in order to recognize and accept the new codes. We also
publicize the code changes and the need for a mid-year systems update
by providers to identify the new codes. Hospitals also have to obtain
the new code books and encoder updates, and make other system changes
in order to identify and report the new codes.
The ICD-10 (previously the ICD-9-CM) Coordination and Maintenance
Committee holds its meetings in the spring and fall in order to update
the codes and the applicable payment and reporting systems by October 1
of each year. Items are placed on the agenda for the Committee meeting
if the request is received at least 3 months prior to the meeting. This
requirement allows time for staff to review and research the coding
issues and prepare material for discussion at the meeting. It also
allows time for the topic to be publicized in meeting announcements in
the Federal Register as well as on the CMS website. A complete addendum
describing details of all diagnosis and procedure coding changes, both
tabular and index, is published on the CMS and NCHS websites in June of
each year. Publishers of coding books and software use this information
to modify their products that are used by health care providers. This
5-month time period has proved to be necessary for hospitals and other
providers to update their systems.
A discussion of this timeline and the need for changes are included
in the December 4-5, 2005 ICD-9-CM Coordination and Maintenance
Committee Meeting minutes. The public agreed that there was a need to
hold the fall meetings earlier, in September or October, in order to
meet the new implementation dates. The public provided comment that
additional time would be needed to update hospital systems and obtain
new code books and coding software. There was considerable concern
expressed about the impact this April update would have on providers.
In the FY 2005 IPPS final rule, we implemented section
1886(d)(5)(K)(vii) of the Act, as added by section 503(a) of Public Law
108-173, by developing a mechanism for approving, in time for the April
update, diagnosis and procedure code revisions needed to describe new
technologies and medical services for purposes of the new technology
add-on payment process. We also established the following process for
making these determinations. Topics considered during the Fall ICD-10
(previously ICD-9-CM) Coordination and Maintenance Committee meeting
are considered for an April 1 update if a strong and convincing case is
made by the requestor at the Committee's public meeting. The request
must identify the reason why a new code is needed in April for purposes
of the new technology process. The participants at the meeting and
those reviewing the Committee meeting materials and live webcast are
provided the opportunity to comment on this expedited request. All
other topics are considered for the October 1 update. Participants at
the Committee meeting are encouraged to comment on all such requests.
There were not any requests approved for an expedited April l, 2019
implementation of a code at the September 11-12, 2018 Committee
meeting. Therefore, there were not any new codes for implementation on
April 1, 2019.
ICD-9-CM addendum and code title information is published on the
CMS website at: http://www.cms.hhs.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/index.html?redirect=/icd9ProviderDiagnosticCodes/01overview.asp#TopofPage. ICD-10-CM and
ICD-10-PCS addendum and code title information is published on the CMS
website at: http://www.cms.gov/Medicare/Coding/ICD10/index.html. CMS
also sends copies of all ICD-10-CM and ICD-10-PCS coding changes to its
Medicare contractors for use in updating their systems and providing
education to providers.
Information on ICD-10-CM diagnosis codes, along with the Official
ICD-10-CM Coding Guidelines, can also be found on the CDC website at:
http://www.cdc.gov/nchs/icd/icd10.htm. Additionally, information on
new, revised, and deleted ICD-10-CM diagnosis and ICD-10-PCS procedure
codes is provided to the AHA for publication in the Coding Clinic for
ICD-10. AHA also distributes coding update information to publishers
and software vendors.
The following chart shows the number of ICD-10-CM and ICD-10-PCS
codes and code changes since FY 2016 when ICD-10 was implemented.
Total Number of Codes and Changes in Total Number of Codes per Fiscal
Year ICD-10-CM and ICD-10-PCS Codes
------------------------------------------------------------------------
Fiscal year Number Change
------------------------------------------------------------------------
FY 2016:
ICD-10-CM......................................... 69,823 ........
ICD-10-PCS........................................ 71,974 ........
FY 2017:
ICD-10-CM......................................... 71,486 +1,663
ICD-10-PCS........................................ 75,789 +3,815
FY 2018:
ICD-10-CM......................................... 71,704 +218
ICD-10-PCS........................................ 78,705 +2,916
FY 2019:
ICD-10-CM......................................... 71,932 +228
ICD-10-PCS........................................ 78,881 +176
FY 2020 (Proposed):
ICD-10-CM......................................... 72,184 +252
ICD-10-PCS........................................ 77,221 -1,660
------------------------------------------------------------------------
As mentioned previously, the public is provided the opportunity to
comment on any requests for new diagnosis or procedure codes discussed
at the ICD-10 Coordination and Maintenance Committee meeting.
19. Replaced Devices Offered Without Cost or With a Credit
a. Background
In the FY 2008 IPPS final rule with comment period (72 FR 47246
through 47251), we discussed the topic of Medicare payment for devices
that are replaced without cost or where credit for a replaced device is
furnished to the hospital. We implemented a policy to reduce a
hospital's IPPS payment for certain MS-DRGs where the implantation of a
device that subsequently failed or was recalled determined the base MS-
DRG assignment. At that time, we specified that we will reduce a
hospital's IPPS payment for those MS-DRGs where the hospital received a
credit for a replaced device equal to 50 percent or more of the cost of
the device.
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51556 through
51557), we clarified this policy to state that the policy applies if
the hospital received a credit equal to 50 percent or more of the cost
of the replacement device and issued instructions to hospitals
accordingly.
b. Proposed Changes for FY 2020
As discussed in section II.F.5.a. of the preamble of this proposed
rule, for FY 2020, we are proposing to create new MS-DRGs 319 and 320
(Other Endovascular Cardiac Valve Procedures with and without MCC,
respectively) and to revise the title for MS-DRG 266 from
``Endovascular Cardiac Valve Replacement with MCC'' to
[[Page 19256]]
``Endovascular Cardiac Valve Replacement and Supplement Procedures with
MCC'' and the title for MS-DRG 267 from ``Endovascular Cardiac Valve
Replacement without MCC'' to ``Endovascular Cardiac Valve Replacement
and Supplement Procedures without MCC''.
As stated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24409),
we generally map new MS-DRGs onto the list when they are formed from
procedures previously assigned to MS-DRGs that are already on the list.
Currently, MS-DRGs 216 through 221 are on the list of MS-DRGs subject
to the policy for payment under the IPPS for replaced devices offered
without cost or with a credit as shown in the table below. A subset of
the procedures currently assigned to MS-DRGs 216 through 221 is being
proposed for assignment to proposed new MS-DRGs 319 and 320. Therefore,
we are proposing that if the applicable proposed MS-DRG changes are
finalized, we also would add proposed new MS-DRGs 319 and 320 to the
list of MS-DRGs subject to the policy for payment under the IPPS for
replaced devices offered without cost or with a credit and make
conforming changes to the titles of MS-DRGs 266 and 267 as reflected in
the table below. We also are proposing to continue to include the
existing MS-DRGs currently subject to the policy as also displayed in
the table below.
------------------------------------------------------------------------
MDC MS-DRG MS-DRG title
------------------------------------------------------------------------
Pre-MDC................... 001 Heart Transplant or Implant
of Heart Assist System with
MCC.
Pre-MDC................... 002 Heart Transplant or Implant
of Heart Assist System
without MCC.
1......................... 023 Craniotomy with Major Device
Implant or Acute Complex
CNS Principal Diagnosis
with MCC or Chemotherapy
Implant or Epilepsy with
Neurostimulator.
1......................... 024 Craniotomy with Major Device
Implant or Acute Complex
CNS Principal Diagnosis
without MCC.
1......................... 025 Craniotomy & Endovascular
Intracranial Procedures
with MCC.
1......................... 026 Craniotomy & Endovascular
Intracranial Procedures
with CC.
1......................... 027 Craniotomy & Endovascular
Intracranial Procedures
without CC/MCC.
1......................... 040 Peripheral, Cranial Nerve &
Other Nervous System
Procedures with MCC.
1......................... 041 Peripheral, Cranial Nerve &
Other Nervous System
Procedures with CC or
Peripheral Neurostimulator.
1......................... 042 Peripheral, Cranial Nerve &
Other Nervous System
Procedures without CC/MCC.
3......................... 129 Major Head & Neck Procedures
with CC/MCC or Major
Device.
3......................... 130 Major Head & Neck Procedures
without CC/MCC.
5......................... 215 Other Heart Assist System
Implant.
5......................... 216 Cardiac Valve & Other Major
Cardiothoracic Procedure
with Cardiac
Catheterization with MCC.
5......................... 217 Cardiac Valve & Other Major
Cardiothoracic Procedure
with Cardiac
Catheterization with CC.
5......................... 218 Cardiac Valve & Other Major
Cardiothoracic Procedure
with Cardiac
Catheterization without CC/
MCC.
5......................... 219 Cardiac Valve & Other Major
Cardiothoracic Procedure
without Cardiac
Catheterization with MCC.
5......................... 220 Cardiac Valve & Other Major
Cardiothoracic Procedure
without Cardiac
Catheterization with CC.
5......................... 221 Cardiac Valve & Other Major
Cardiothoracic Procedure
without Cardiac
Catheterization without CC/
MCC.
5......................... 222 Cardiac Defibrillator
Implant with Cardiac
Catheterization with AMI/
Heart Failure/Shock with
MCC.
5......................... 223 Cardiac Defibrillator
Implant with Cardiac
Catheterization with AMI/
Heart Failure/Shock without
MCC.
5......................... 224 Cardiac Defibrillator
Implant with Cardiac
Catheterization without AMI/
Heart Failure/Shock with
MCC.
5......................... 225 Cardiac Defibrillator
Implant with Cardiac
Catheterization without AMI/
Heart Failure/Shock without
MCC.
5......................... 226 Cardiac Defibrillator
Implant without Cardiac
Catheterization with MCC.
5......................... 227 Cardiac Defibrillator
Implant without Cardiac
Catheterization without
MCC.
5......................... 242 Permanent Cardiac Pacemaker
Implant with MCC.
5......................... 243 Permanent Cardiac Pacemaker
Implant with CC.
5......................... 244 Permanent Cardiac Pacemaker
Implant without CC/MCC.
5......................... 245 AICD Generator Procedures.
5......................... 258 Cardiac Pacemaker Device
Replacement with MCC.
5......................... 259 Cardiac Pacemaker Device
Replacement without MCC.
5......................... 260 Cardiac Pacemaker Revision
Except Device Replacement
with MCC.
5......................... 261 Cardiac Pacemaker Revision
Except Device Replacement
with CC.
5......................... 262 Cardiac Pacemaker Revision
Except Device Replacement
without CC/MCC.
5......................... 265 AICD Lead Procedures.
5......................... 266 Endovascular Cardiac Valve
Replacement and Supplement
Procedures with MCC.
5......................... 267 Endovascular Cardiac Valve
Replacement and Supplement
Procedures without MCC.
5......................... 268 Aortic and Heart Assist
Procedures Except Pulsation
Balloon with MCC.
5......................... 269 Aortic and Heart Assist
Procedures Except Pulsation
Balloon without MCC.
5......................... 270 Other Major Cardiovascular
Procedures with MCC.
5......................... 271 Other Major Cardiovascular
Procedures with CC.
5......................... 272 Other Major Cardiovascular
Procedures without CC/MCC.
5......................... 319 Other Endovascular Cardiac
Valve Procedures with MCC.
5......................... 320 Other Endovascular Cardiac
Valve Procedures without
MCC.
8......................... 461 Bilateral or Multiple Major
Joint Procedures of Lower
Extremity with MCC.
8......................... 462 Bilateral or Multiple Major
Joint Procedures of Lower
Extremity without MCC.
8......................... 466 Revision of Hip or Knee
Replacement with MCC.
8......................... 467 Revision of Hip or Knee
Replacement with CC.
8......................... 468 Revision of Hip or Knee
Replacement without CC/MCC.
8......................... 469 Major Hip and Knee Joint
Replacement or Reattachment
of Lower Extremity with MCC
or Total Ankle Replacement.
8......................... 470 Major Hip and Knee Joint
Replacement or Reattachment
of Lower Extremity without
MCC.
------------------------------------------------------------------------
The final list of MS-DRGs subject to the IPPS policy for replaced
devices offered without cost or with a credit will be included in the
FY 2020 IPPS/LTCH PPS final rule and also will be issued to
[[Page 19257]]
providers in the form of a Change Request (CR).
G. Recalibration of the Proposed FY 2020 MS-DRG Relative Weights
1. Data Sources for Developing the Proposed Relative Weights
In developing the proposed FY 2020 system of weights, we are
proposing to use two data sources: Claims data and cost report data. As
in previous years, the claims data source is the MedPAR file. This file
is based on fully coded diagnostic and procedure data for all Medicare
inpatient hospital bills. The FY 2018 MedPAR data used in this proposed
rule include discharges occurring on October 1, 2017, through September
30, 2018, based on bills received by CMS through December 31, 2018,
from all hospitals subject to the IPPS and short-term, acute care
hospitals in Maryland (which at that time were under a waiver from the
IPPS). The FY 2018 MedPAR file used in calculating the proposed
relative weights includes data for approximately 9,480,820 Medicare
discharges from IPPS providers. Discharges for Medicare beneficiaries
enrolled in a Medicare Advantage managed care plan are excluded from
this analysis. These discharges are excluded when the MedPAR ``GHO
Paid'' indicator field on the claim record is equal to ``1'' or when
the MedPAR DRG payment field, which represents the total payment for
the claim, is equal to the MedPAR ``Indirect Medical Education (IME)''
payment field, indicating that the claim was an ``IME only'' claim
submitted by a teaching hospital on behalf of a beneficiary enrolled in
a Medicare Advantage managed care plan. In addition, the December 31,
2018 update of the FY 2018 MedPAR file complies with version 5010 of
the X12 HIPAA Transaction and Code Set Standards, and includes a
variable called ``claim type.'' Claim type ``60'' indicates that the
claim was an inpatient claim paid as fee-for-service. Claim types
``61,'' ``62,'' ``63,'' and ``64'' relate to encounter claims, Medicare
Advantage IME claims, and HMO no-pay claims. Therefore, the calculation
of the proposed relative weights for FY 2020 also excludes claims with
claim type values not equal to ``60.'' The data exclude CAHs, including
hospitals that subsequently became CAHs after the period from which the
data were taken. We note that the proposed FY 2020 relative weights are
based on the ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes
from the FY 2018 MedPAR claims data, grouped through the ICD-10 version
of the proposed FY 2020 GROUPER (Version 37).
The second data source used in the cost-based relative weighting
methodology is the Medicare cost report data files from the HCRIS.
Normally, we use the HCRIS dataset that is 3 years prior to the IPPS
fiscal year. Specifically, we used cost report data from the December
31, 2018 update of the FY 2017 HCRIS for calculating the proposed FY
2020 cost-based relative weights.
2. Methodology for Calculation of the Proposed Relative Weights
As we explain in section II.E.2. of the preamble of this proposed
rule, we calculated the proposed FY 2020 relative weights based on 19
CCRs, as we did for FY 2019. The methodology we are proposing to use to
calculate the FY 2020 MS-DRG cost-based relative weights based on
claims data in the FY 2018 MedPAR file and data from the FY 2017
Medicare cost reports is as follows:
To the extent possible, all the claims were regrouped
using the proposed FY 2020 MS-DRG classifications discussed in sections
II.B. and II.F. of the preamble of this proposed rule.
The transplant cases that were used to establish the
proposed relative weights for heart and heart-lung, liver and/or
intestinal, and lung transplants (MS-DRGs 001, 002, 005, 006, and 007,
respectively) were limited to those Medicare-approved transplant
centers that have cases in the FY 2018 MedPAR file. (Medicare coverage
for heart, heart-lung, liver and/or intestinal, and lung transplants is
limited to those facilities that have received approval from CMS as
transplant centers.)
Organ acquisition costs for kidney, heart, heart-lung,
liver, lung, pancreas, and intestinal (or multivisceral organs)
transplants continue to be paid on a reasonable cost basis. Because
these acquisition costs are paid separately from the prospective
payment rate, it is necessary to subtract the acquisition charges from
the total charges on each transplant bill that showed acquisition
charges before computing the average cost for each MS-DRG and before
eliminating statistical outliers.
Claims with total charges or total lengths of stay less
than or equal to zero were deleted. Claims that had an amount in the
total charge field that differed by more than $30.00 from the sum of
the routine day charges, intensive care charges, pharmacy charges,
implantable devices charges, supplies and equipment charges, therapy
services charges, operating room charges, cardiology charges,
laboratory charges, radiology charges, other service charges, labor and
delivery charges, inhalation therapy charges, emergency room charges,
blood and blood products charges, anesthesia charges, cardiac
catheterization charges, CT scan charges, and MRI charges were also
deleted.
At least 92.3 percent of the providers in the MedPAR file
had charges for 14 of the 19 cost centers. All claims of providers that
did not have charges greater than zero for at least 14 of the 19 cost
centers were deleted. In other words, a provider must have no more than
five blank cost centers. If a provider did not have charges greater
than zero in more than five cost centers, the claims for the provider
were deleted.
Statistical outliers were eliminated by removing all cases
that were beyond 3.0 standard deviations from the geometric mean of the
log distribution of both the total charges per case and the total
charges per day for each MS-DRG.
Effective October 1, 2008, because hospital inpatient
claims include a POA indicator field for each diagnosis present on the
claim, only for purposes of relative weight-setting, the POA indicator
field was reset to ``Y'' for ``Yes'' for all claims that otherwise have
an ``N'' (No) or a ``U'' (documentation insufficient to determine if
the condition was present at the time of inpatient admission) in the
POA field.
Under current payment policy, the presence of specific HAC codes,
as indicated by the POA field values, can generate a lower payment for
the claim. Specifically, if the particular condition is present on
admission (that is, a ``Y'' indicator is associated with the diagnosis
on the claim), it is not a HAC, and the hospital is paid for the higher
severity (and, therefore, the higher weighted MS-DRG). If the
particular condition is not present on admission (that is, an ``N''
indicator is associated with the diagnosis on the claim) and there are
no other complicating conditions, the DRG GROUPER assigns the claim to
a lower severity (and, therefore, the lower weighted MS-DRG) as a
penalty for allowing a Medicare inpatient to contract a HAC. While the
POA reporting meets policy goals of encouraging quality care and
generates program savings, it presents an issue for the relative
weight-setting process. Because cases identified as HACs are likely to
be more complex than similar cases that are not identified as HACs, the
charges associated with HAC cases are likely to be higher as well.
Therefore, if the higher charges of these HAC claims are grouped into
lower severity MS-DRGs prior to the relative
[[Page 19258]]
weight-setting process, the relative weights of these particular MS-
DRGs would become artificially inflated, potentially skewing the
relative weights. In addition, we want to protect the integrity of the
budget neutrality process by ensuring that, in estimating payments, no
increase to the standardized amount occurs as a result of lower overall
payments in a previous year that stem from using weights and case-mix
that are based on lower severity MS-DRG assignments. If this would
occur, the anticipated cost savings from the HAC policy would be lost.
To avoid these problems, we reset the POA indicator field to ``Y''
only for relative weight-setting purposes for all claims that otherwise
have an ``N'' or a ``U'' in the POA field. This resetting ``forced''
the more costly HAC claims into the higher severity MS-DRGs as
appropriate, and the relative weights calculated for each MS-DRG more
closely reflect the true costs of those cases.
In addition, in the FY 2013 IPPS/LTCH PPS final rule, for FY 2013
and subsequent fiscal years, we finalized a policy to treat hospitals
that participate in the Bundled Payments for Care Improvement (BPCI)
initiative the same as prior fiscal years for the IPPS payment modeling
and ratesetting process without regard to hospitals' participation
within these bundled payment models (77 FR 53341 through 53343).
Specifically, because acute care hospitals participating in the BPCI
Initiative still receive IPPS payments under section 1886(d) of the
Act, we include all applicable data from these subsection (d) hospitals
in our IPPS payment modeling and ratesetting calculations as if the
hospitals were not participating in those models under the BPCI
initiative. We refer readers to the FY 2013 IPPS/LTCH PPS final rule
for a complete discussion on our final policy for the treatment of
hospitals participating in the BPCI initiative in our ratesetting
process. For additional information on the BPCI initiative, we refer
readers to the CMS' Center for Medicare and Medicaid Innovation's
website at: http://innovation.cms.gov/initiatives/Bundled-Payments/index.html and to section IV.H.4. of the preamble of the FY 2013 IPPS/
LTCH PPS final rule (77 FR 53341 through 53343).
The participation of hospitals in the BPCI initiative concluded on
September 30, 2018. The participation of hospitals in the Bundled
Payments for Care Improvement (BPCI) Advanced model started on October
1, 2018. The BPCI Advanced model, tested under the authority of section
3021 of the Affordable Care Act (codified at section 1115A of the Act),
is comprised of a single payment and risk track, which bundles payments
for multiple services beneficiaries receive during a Clinical Episode.
Acute care hospitals may participate in BPCI Advanced in one of two
capacities: As a model Participant or as a downstream Episode
Initiator. Regardless of the capacity in which they participate in the
BPCI Advanced model, participating acute care hospitals will continue
to receive IPPS payments under section 1886(d) of the Act. Acute care
hospitals that are Participants also assume financial and quality
performance accountability for Clinical Episodes in the form of a
reconciliation payment. For additional information on the BPCI Advanced
model, we refer readers to the BPCI Advanced web page on the CMS Center
for Medicare and Medicaid Innovation's website at: https://innovation.cms.gov/initiatives/bpci-advanced/. Consistent with our
policy for FY 2019, and consistent with how we have treated hospitals
that participated in the BPCI Initiative, for FY 2020, we continue to
believe it is appropriate to include all applicable data from the
subsection (d) hospitals participating in the BPCI Advanced model in
our IPPS payment modeling and ratesetting calculations because, as
noted above, these hospitals are still receiving IPPS payments under
section 1886(d) of the Act.
The charges for each of the proposed 19 cost groups for each claim
were standardized to remove the effects of differences in proposed area
wage levels, IME and DSH payments, and for hospitals located in Alaska
and Hawaii, the applicable proposed cost-of-living adjustment. Because
hospital charges include charges for both operating and capital costs,
we standardized total charges to remove the effects of differences in
proposed geographic adjustment factors, cost-of-living adjustments, and
DSH payments under the capital IPPS as well. Charges were then summed
by MS-DRG for each of the proposed 19 cost groups so that each MS-DRG
had 19 standardized charge totals. Statistical outliers were then
removed. These charges were then adjusted to cost by applying the
proposed national average CCRs developed from the FY 2017 cost report
data.
The proposed 19 cost centers that we used in the proposed relative
weight calculation are shown in the following table. The table shows
the lines on the cost report and the corresponding revenue codes that
we used to create the proposed 19 national cost center CCRs. If
stakeholders have comments about the groupings in this table, we may
consider those comments as we finalize our policy.
We are inviting public comments on our proposals related to
recalibration of the proposed FY 2020 relative weights and the changes
in relative weights from FY 2019.
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3. Development of Proposed National Average CCRs
We developed the proposed national average CCRs as follows:
Using the FY 2017 cost report data, we removed CAHs, Indian Health
Service hospitals, all-inclusive rate hospitals, and cost reports that
represented time periods of less than 1 year (365 days). We included
hospitals located in Maryland because we include their charges in our
claims database. We then created CCRs for each provider for each cost
center (see prior table for line items used in the calculations) and
removed any CCRs that were greater
[[Page 19272]]
than 10 or less than 0.01. We normalized the departmental CCRs by
dividing the CCR for each department by the total CCR for the hospital
for the purpose of trimming the data. We then took the logs of the
normalized cost center CCRs and removed any cost center CCRs where the
log of the cost center CCR was greater or less than the mean log plus/
minus 3 times the standard deviation for the log of that cost center
CCR. Once the cost report data were trimmed, we calculated a Medicare-
specific CCR. The Medicare-specific CCR was determined by taking the
Medicare charges for each line item from Worksheet D-3 and deriving the
Medicare-specific costs by applying the hospital-specific departmental
CCRs to the Medicare-specific charges for each line item from Worksheet
D-3. Once each hospital's Medicare-specific costs were established, we
summed the total Medicare-specific costs and divided by the sum of the
total Medicare-specific charges to produce national average, charge-
weighted CCRs.
After we multiplied the total charges for each MS-DRG in each of
the proposed 19 cost centers by the corresponding national average CCR,
we summed the 19 ``costs'' across each proposed MS-DRG to produce a
total standardized cost for the proposed MS-DRG. The average
standardized cost for each proposed MS-DRG was then computed as the
total standardized cost for the proposed MS-DRG divided by the
transfer-adjusted case count for the proposed MS-DRG. The average cost
for each proposed MS-DRG was then divided by the national average
standardized cost per case to determine the proposed relative weight.
The proposed FY 2020 cost-based relative weights were then
normalized by a proposed adjustment factor of 1.788337 so that the
average case weight after recalibration was equal to the average case
weight before recalibration. The proposed normalization adjustment is
intended to ensure that recalibration by itself neither increases nor
decreases total payments under the IPPS, as required by section
1886(d)(4)(C)(iii) of the Act.
The proposed 19 national average CCRs for FY 2020 are as follows:
------------------------------------------------------------------------
Group CCR
------------------------------------------------------------------------
Routine Days............................................ 0.433
Intensive Days.......................................... 0.362
Drugs................................................... 0.191
Supplies & Equipment.................................... 0.301
Implantable Devices..................................... 0.308
Therapy Services........................................ 0.297
Laboratory.............................................. 0.109
Operating Room.......................................... 0.175
Cardiology.............................................. 0.099
Cardiac Catheterization................................. 0.106
Radiology............................................... 0.140
MRIs.................................................... 0.073
CT Scans................................................ 0.035
Emergency Room.......................................... 0.154
Blood and Blood Products................................ 0.282
Other Services.......................................... 0.344
Labor & Delivery........................................ 0.369
Inhalation Therapy...................................... 0.151
Anesthesia.............................................. 0.077
------------------------------------------------------------------------
Since FY 2009, the relative weights have been based on 100 percent
cost weights based on our MS-DRG grouping system.
When we recalibrated the DRG weights for previous years, we set a
threshold of 10 cases as the minimum number of cases required to
compute a reasonable weight. We are proposing to use that same case
threshold in recalibrating the proposed MS-DRG relative weights for FY
2020. Using data from the FY 2018 MedPAR file, there were 8 MS-DRGs
that contain fewer than 10 cases. For FY 2020, because we do not have
sufficient MedPAR data to set accurate and stable cost relative weights
for these low-volume MS-DRGs, we are proposing to compute relative
weights for the proposed low-volume MS-DRGs by adjusting their final FY
2019 relative weights by the percentage change in the average weight of
the cases in other MS-DRGs from FY 2019 to FY 2020. The crosswalk table
is shown below.
------------------------------------------------------------------------
Low-volume MS-DRG MS-DRG title Crosswalk to MS-DRG
------------------------------------------------------------------------
338...................... Appendectomy with Final FY 2019 relative
Complicated weight (adjusted by
Principal percent change in
Diagnosis with MCC. average weight of the
cases in other MS-
DRGs).
789...................... Neonates, Died or Final FY 2019 relative
Transferred to weight (adjusted by
Another Acute Care percent change in
Facility. average weight of the
cases in other MS-
DRGs).
790...................... Extreme Immaturity Final FY 2019 relative
or Respiratory weight (adjusted by
Distress Syndrome, percent change in
Neonate. average weight of the
cases in other MS-
DRGs).
791...................... Prematurity with Final FY 2019 relative
Major Problems. weight (adjusted by
percent change in
average weight of the
cases in other MS-
DRGs).
792...................... Prematurity without Final FY 2019 relative
Major Problems. weight (adjusted by
percent change in
average weight of the
cases in other MS-
DRGs).
793...................... Full-Term Neonate Final FY 2019 relative
with Major weight (adjusted by
Problems. percent change in
average weight of the
cases in other MS-
DRGs).
794...................... Neonate with Other Final FY 2019 relative
Significant weight (adjusted by
Problems. percent change in
average weight of the
cases in other MS-
DRGs).
795...................... Normal Newborn..... Final FY 2019 relative
weight (adjusted by
percent change in
average weight of the
cases in other MS-
DRGs).
------------------------------------------------------------------------
H. Proposed Add-On Payments for New Services and Technologies for FY
2020
1. Background
Sections 1886(d)(5)(K) and (L) of the Act establish a process of
identifying and ensuring adequate payment for new medical services and
technologies (sometimes collectively referred to in this section as
``new technologies'') under the IPPS. Section 1886(d)(5)(K)(vi) of the
Act specifies that a medical service or technology will be considered
new if it meets criteria established by the Secretary after notice and
opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act
specifies that a new medical service or technology may be considered
for new technology add-on payment if, based on the estimated costs
incurred with respect to discharges involving such service or
technology, the DRG prospective payment rate otherwise applicable to
such discharges under this subsection is inadequate. We note that,
beginning with discharges occurring in FY 2008, CMS transitioned from
CMS-DRGs to MS-DRGs. The regulations at 42 CFR 412.87 implement these
provisions and specify three criteria for a new medical service or
technology to receive the additional payment: (1) The medical service
or technology must be new; (2) the medical service or technology must
be costly such that the
[[Page 19273]]
DRG rate otherwise applicable to discharges involving the medical
service or technology is determined to be inadequate; and (3) the
service or technology must demonstrate a substantial clinical
improvement over existing services or technologies. Below we highlight
some of the major statutory and regulatory provisions relevant to the
new technology add-on payment criteria, as well as other information.
For a complete discussion on the new technology add-on payment
criteria, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76
FR 51572 through 51574).
Under the first criterion, as reflected in Sec. 412.87(b)(2), a
specific medical service or technology will be considered ``new'' for
purposes of new medical service or technology add-on payments until
such time as Medicare data are available to fully reflect the cost of
the technology in the MS-DRG weights through recalibration. We note
that we do not consider a service or technology to be new if it is
substantially similar to one or more existing technologies. That is,
even if a medical product receives a new FDA approval or clearance, it
may not necessarily be considered ``new'' for purposes of new
technology add-on payments if it is ``substantially similar'' to
another medical product that was approved or cleared by FDA and has
been on the market for more than 2 to 3 years. In the FY 2010 IPPS/RY
2010 LTCH PPS final rule (74 FR 43813 through 43814), we established
criteria for evaluating whether a new technology is substantially
similar to an existing technology, specifically: (1) Whether a product
uses the same or a similar mechanism of action to achieve a therapeutic
outcome; (2) whether a product is assigned to the same or a different
MS-DRG; and (3) whether the new use of the technology involves the
treatment of the same or similar type of disease and the same or
similar patient population. If a technology meets all three of these
criteria, it would be considered substantially similar to an existing
technology and would not be considered ``new'' for purposes of new
technology add-on payments. For a detailed discussion of the criteria
for substantial similarity, we refer readers to the FY 2006 IPPS final
rule (70 FR 47351 through 47352), and the FY 2010 IPPS/LTCH PPS final
rule (74 FR 43813 through 43814).
Under the second criterion, Sec. 412.87(b)(3) further provides
that, to be eligible for the add-on payment for new medical services or
technologies, the MS-DRG prospective payment rate otherwise applicable
to discharges involving the new medical service or technology must be
assessed for adequacy. Under the cost criterion, consistent with the
formula specified in section 1886(d)(5)(K)(ii)(I) of the Act, to assess
the adequacy of payment for a new technology paid under the applicable
MS-DRG prospective payment rate, we evaluate whether the charges for
cases involving the new technology exceed certain threshold amounts.
The MS-DRG threshold amounts used in evaluating new technology add-on
payment applications for FY 2020 are presented in a data file that is
available, along with the other data files associated with the FY 2019
IPPS/LTCH PPS final rule and correction notice, on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2019-IPPS-Final-Rule-Home-Page-Items/FY2019-IPPS-Final-Rule-Data-Files.html?DLPage=1&DLEntries=10&DLSort=0&DLSortDir=ascending. As
finalized in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41275),
beginning with FY 2020, we include the thresholds applicable to the
next fiscal year (previously included in Table 10 of the annual IPPS/
LTCH PPS proposed and final rules) in the data files associated with
the prior fiscal year. Accordingly, the proposed thresholds for
applications for new technology add-on payments for FY 2021 are
presented in a data file that is available on the CMS website, along
with the other data files associated with this FY 2020 proposed rule,
by clicking on the FY 2020 IPPS Proposed Rule Home Page at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html.
In the September 7, 2001 final rule that established the new
technology add-on payment regulations (66 FR 46917), we discussed the
issue of whether the Health Insurance Portability and Accountability
Act (HIPAA) Privacy Rule at 45 CFR parts 160 and 164 applies to claims
information that providers submit with applications for new medical
service or technology add-on payments. We refer readers to the FY 2012
IPPS/LTCH PPS final rule (76 FR 51573) for complete information on this
issue.
Under the third criterion, Sec. 412.87(b)(1) of our existing
regulations provides that a new technology is an appropriate candidate
for an additional payment when it represents an advance that
substantially improves, relative to technologies previously available,
the diagnosis or treatment of Medicare beneficiaries. For example, a
new technology represents a substantial clinical improvement when it
reduces mortality, decreases the number of hospitalizations or
physician visits, or reduces recovery time compared to the technologies
previously available. (We refer readers to the September 7, 2001 final
rule for a more detailed discussion of this criterion (66 FR 46902). We
also refer readers to section II.H.8. of the preamble of this proposed
rule for a discussion of our proposed alternative inpatient new
technology add-on payment pathway for transformative new devices.)
The new medical service or technology add-on payment policy under
the IPPS provides additional payments for cases with relatively high
costs involving eligible new medical services or technologies, while
preserving some of the incentives inherent under an average-based
prospective payment system. The payment mechanism is based on the cost
to hospitals for the new medical service or technology. Under Sec.
412.88, if the costs of the discharge (determined by applying cost-to-
charge ratios (CCRs) as described in Sec. 412.84(h)) exceed the full
DRG payment (including payments for IME and DSH, but excluding outlier
payments), Medicare will make an add-on payment equal to the lesser of:
(1) 50 percent of the estimated costs of the new technology or medical
service (if the estimated costs for the case including the new
technology or medical service exceed Medicare's payment); or (2) 50
percent of the difference between the full DRG payment and the
hospital's estimated cost for the case. Unless the discharge qualifies
for an outlier payment, the additional Medicare payment is limited to
the full MS-DRG payment plus 50 percent of the estimated costs of the
new technology or medical service. We refer readers to section II.H.9.
of the preamble of this proposed rule for a discussion of our proposed
change to the calculation of the new technology add-on payment
beginning in FY 2020, including our proposed amendments to Sec. 412.88
of the regulations.
Section 503(d)(2) of Public Law 108-173 provides that there shall
be no reduction or adjustment in aggregate payments under the IPPS due
to add-on payments for new medical services and technologies.
Therefore, in accordance with section 503(d)(2) of Public Law 108-173,
add-on payments for new medical services or technologies for FY 2005
and later years have not been subjected to budget neutrality.
In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we
modified our regulations at Sec. 412.87 to codify our longstanding
practice of how CMS evaluates the eligibility criteria for new
[[Page 19274]]
medical service or technology add-on payment applications. That is, we
first determine whether a medical service or technology meets the
newness criterion, and only if so, do we then make a determination as
to whether the technology meets the cost threshold and represents a
substantial clinical improvement over existing medical services or
technologies. We amended Sec. 412.87(c) to specify that all applicants
for new technology add-on payments must have FDA approval or clearance
by July 1 of the year prior to the beginning of the fiscal year for
which the application is being considered.
The Council on Technology and Innovation (CTI) at CMS oversees the
agency's cross-cutting priority on coordinating coverage, coding and
payment processes for Medicare with respect to new technologies and
procedures, including new drug therapies, as well as promoting the
exchange of information on new technologies and medical services
between CMS and other entities. The CTI, composed of senior CMS staff
and clinicians, was established under section 942(a) of Public Law 108-
173. The Council is co-chaired by the Director of the Center for
Clinical Standards and Quality (CCSQ) and the Director of the Center
for Medicare (CM), who is also designated as the CTI's Executive
Coordinator.
The specific processes for coverage, coding, and payment are
implemented by CM, CCSQ, and the local Medicare Administrative
Contractors (MACs) (in the case of local coverage and payment
decisions). The CTI supplements, rather than replaces, these processes
by working to assure that all of these activities reflect the agency-
wide priority to promote high-quality, innovative care. At the same
time, the CTI also works to streamline, accelerate, and improve
coordination of these processes to ensure that they remain up to date
as new issues arise. To achieve its goals, the CTI works to streamline
and create a more transparent coding and payment process, improve the
quality of medical decisions, and speed patient access to effective new
treatments. It is also dedicated to supporting better decisions by
patients and doctors in using Medicare-covered services through the
promotion of better evidence development, which is critical for
improving the quality of care for Medicare beneficiaries.
To improve the understanding of CMS' processes for coverage,
coding, and payment and how to access them, the CTI has developed an
``Innovator's Guide'' to these processes. The intent is to consolidate
this information, much of which is already available in a variety of
CMS documents and in various places on the CMS website, in a user
friendly format. This guide was published in 2010 and is available on
the CMS website at: https://www.cms.gov/Medicare/Coverage/CouncilonTechInnov/Downloads/Innovators-Guide-Master-7-23-15.pdf.
As we indicated in the FY 2009 IPPS final rule (73 FR 48554), we
invite any product developers or manufacturers of new medical services
or technologies to contact the agency early in the process of product
development if they have questions or concerns about the evidence that
would be needed later in the development process for the agency's
coverage decisions for Medicare.
The CTI aims to provide useful information on its activities and
initiatives to stakeholders, including Medicare beneficiaries,
advocates, medical product manufacturers, providers, and health policy
experts. Stakeholders with further questions about Medicare's coverage,
coding, and payment processes, or who want further guidance about how
they can navigate these processes, can contact the CTI at
[email protected].
We note that applicants for add-on payments for new medical
services or technologies for FY 2021 must submit a formal request,
including a full description of the clinical applications of the
medical service or technology and the results of any clinical
evaluations demonstrating that the new medical service or technology
represents a substantial clinical improvement, along with a significant
sample of data to demonstrate that the medical service or technology
meets the high-cost threshold. Complete application information, along
with final deadlines for submitting a full application, will be posted
as it becomes available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech.html. To allow interested parties to identify the new medical
services or technologies under review before the publication of the
proposed rule for FY 2021, the CMS website also will post the tracking
forms completed by each applicant. We note that the burden associated
with this information collection requirement is the time and effort
required to collect and submit the data in the formal request for add-
on payments for new medical services and technologies to CMS. The
aforementioned burden is subject to the PRA; it is currently approved
under OMB control number 0938-1347, which expires on December 31, 2020.
2. Public Input Before Publication of a Notice of Proposed Rulemaking
on Add-On Payments
Section 1886(d)(5)(K)(viii) of the Act, as amended by section
503(b)(2) of Public Law 108-173, provides for a mechanism for public
input before publication of a notice of proposed rulemaking regarding
whether a medical service or technology represents a substantial
clinical improvement or advancement. The process for evaluating new
medical service and technology applications requires the Secretary to--
Provide, before publication of a proposed rule, for public
input regarding whether a new service or technology represents an
advance in medical technology that substantially improves the diagnosis
or treatment of Medicare beneficiaries;
Make public and periodically update a list of the services
and technologies for which applications for add-on payments are
pending;
Accept comments, recommendations, and data from the public
regarding whether a service or technology represents a substantial
clinical improvement; and
Provide, before publication of a proposed rule, for a
meeting at which organizations representing hospitals, physicians,
manufacturers, and any other interested party may present comments,
recommendations, and data regarding whether a new medical service or
technology represents a substantial clinical improvement to the
clinical staff of CMS.
In order to provide an opportunity for public input regarding add-
on payments for new medical services and technologies for FY 2020 prior
to publication of this FY 2020 IPPS/LTCH PPS proposed rule, we
published a notice in the Federal Register on October 5, 2018 (83 FR
50379), and held a town hall meeting at the CMS Headquarters Office in
Baltimore, MD, on December 4, 2018. In the announcement notice for the
meeting, we stated that the opinions and presentations provided during
the meeting would assist us in our evaluations of applications by
allowing public discussion of the substantial clinical improvement
criterion for each of the FY 2020 new medical service and technology
add-on payment applications before the publication of the FY 2020 IPPS/
LTCH PPS proposed rule.
Approximately 100 individuals registered to attend the town hall
meeting in person, while additional individuals listened over an open
[[Page 19275]]
telephone line. We also live-streamed the town hall meeting and posted
the morning and afternoon sessions of the town hall on the CMS YouTube
web page at: https://www.youtube.com/watch?v=4z1AhEuGHqQ and https://www.youtube.com/watch?v=m26Xj1EzbIY, respectively. We considered each
applicant's presentation made at the town hall meeting, as well as
written comments submitted on the applications that were received by
the due date of December 14, 2018, in our evaluation of the new
technology add-on payment applications for FY 2020 in this FY 2020
IPPS/LTCH PPS proposed rule.
In response to the published notice and the December 4, 2018 New
Technology Town Hall meeting, we received written comments regarding
the applications for FY 2020 new technology add-on payments. We note
that we do not summarize comments that are unrelated to the
``substantial clinical improvement'' criterion. As explained earlier
and in the Federal Register notice announcing the New Technology Town
Hall meeting (83 FR 50379 through 50381), the purpose of the meeting
was specifically to discuss the substantial clinical improvement
criterion in regard to pending new technology add-on payment
applications for FY 2020. Therefore, we are not summarizing those
written comments in this proposed rule that are unrelated to the
substantial clinical improvement criterion. In section II.H.5. of the
preamble of this FY 2020 IPPS/LTCH PPS proposed rule, we are
summarizing comments regarding individual applications, or, if
applicable, indicating that there were no comments received in response
to the New Technology Town Hall meeting notice, at the end of each
discussion of the individual applications.
Comment: One commenter expressed appreciation for CMS' statements
in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20278 through 20279)
relating to the similarity between data that satisfy the FDA's
designations and data that satisfy the substantial clinical improvement
criterion under the new technology add-on payment policy. The commenter
stated that clarity was provided that will help future applicants
understand which types of data can serve as the foundation for
satisfying the substantial clinical improvement criterion. The
commenter also expressed its appreciation that CMS further clarified
that it accepts a wide range of data that would support the conclusion
that the technology represents a substantial clinical improvement. The
commenter explained that it interpreted CMS' statements to mean that
CMS appreciates and considers the patient's experience and point-of-
view in its determination of a technology's substantial clinical
improvement with respect to existing technologies, and stated that it
hopes the agency will confirm this rationale in upcoming rulemaking.
Response: We appreciate the commenter's support of our clarifying
statements in the FY 2019 IPPS/LTCH PPS proposed rule. Additionally, we
refer the commenter to the September 7, 2001 final rule for a more
detailed discussion of the substantial clinical improvement criterion
(66 FR 46902). We also refer readers to section II.H.8. of the preamble
of this proposed rule for a discussion of our proposed alternative
inpatient new technology add-on payment pathway for transformative new
devices, and sections II.H.6. and II.H.7. of the preamble of this
proposed rule for a discussion of and request for comment on potential
revisions to the new technology add-on payment substantial clinical
improvement criterion.
Comment: Another commenter stated that the criteria for priority
FDA review are very similar to the criteria to substantiate a
technology's substantial clinical improvement under the new technology
add-on payment policy and, therefore, devices used in the inpatient
setting that are determined to be eligible for expedited review and
approved by the FDA should automatically be considered as representing
a substantial clinical improvement with respect to existing
technologies, without further consideration by CMS.
Response: We refer readers to our response to this and similar
comments in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20278
through 20279).
Comment: One commenter stated that an entity submitting an
application for new technology add-on payments should be entitled to
administrative review of an adverse determination by an official of the
Department of Health and Human Services other than an official of the
CMS. The commenter believed that this will provide a safeguard both for
the manufacturer submitting an application, as well as for
beneficiaries who would benefit from access to the innovative
technology that is the subject of the new technology add-on payment
application. The commenter further recommended that administrative
review of an adverse determination should not preclude resubmission of
a modified application at a later point in the future.
Response: As discussed previously, the public has an opportunity at
the New Technology Town Hall meeting to provide input regarding the
substantial clinical improvement criterion for each new technology add-
on payment application under review for the upcoming fiscal year. We
summarize each application in the IPPS/LTCH PPS proposed rule, and
consider the public comments received in response to the proposed rule
in determining whether to approve an application for new technology
add-on payments. Furthermore, we also accept additional supplemental
information on all new technology add-on payment applications
summarized in the proposed rule through the end of the comment period
for the annual IPPS/LTCH PPS proposed rule. We conduct a thorough
review of all applications and, as described above, allow a wide range
of data that would support the conclusion of a representation of
substantial clinical improvement. We also note that an applicant may
always resubmit an application for new technology add-on payments for a
subsequent year following a denial of an application submitted for a
prior fiscal year.
3. ICD-10-PCS Section ``X'' Codes for Certain New Medical Services and
Technologies
As discussed in the FY 2016 IPPS/LTCH PPS final rule (80 FR 49434),
the ICD-10-PCS includes a new section containing the new Section ``X''
codes, which began being used with discharges occurring on or after
October 1, 2015. Decisions regarding changes to ICD-10-PCS Section
``X'' codes will be handled in the same manner as the decisions for all
of the other ICD-10-PCS code changes. That is, proposals to create,
delete, or revise Section ``X'' codes under the ICD-10-PCS structure
will be referred to the ICD-10 Coordination and Maintenance Committee.
In addition, several of the new medical services and technologies that
have been, or may be, approved for new technology add-on payments may
now, and in the future, be assigned a Section ``X'' code within the
structure of the ICD-10-PCS. We posted ICD-10-PCS Guidelines on the CMS
website at: http://www.cms.gov/Medicare/Coding/ICD10/2016-ICD-10-PCS-and-GEMs.html, including guidelines for ICD-10-PCS Section ``X'' codes.
We encourage providers to view the material provided on ICD-10-PCS
Section ``X'' codes.
[[Page 19276]]
4. Proposed FY 2020 Status of Technologies Approved for FY 2019 New
Technology Add-On Payments
a. Defitelio[supreg] (Defibrotide)
Jazz Pharmaceuticals submitted an application for new technology
add-on payments for FY 2017 for defibrotide (Defitelio[supreg]), a
treatment for patients who have been diagnosed with hepatic veno-
occlusive disease (VOD) with evidence of multi-organ dysfunction. VOD,
also known as sinusoidal obstruction syndrome (SOS), is a potentially
life-threatening complication of hematopoietic stem cell
transplantation (HSCT), with an incidence rate of 8 percent to 15
percent. Diagnoses of VOD range in severity from what has been
classically defined as a disease limited to the liver (mild) and
reversible, to a severe syndrome associated with multi-organ
dysfunction or failure and death. Patients who have received treatment
involving HSCT who develop VOD with multi-organ failure face an
immediate risk of death, with a mortality rate of more than 80 percent
when only supportive care is used. The applicant asserted that
Defitelio[supreg] improves the survival rate of patients who have been
diagnosed with VOD with multi-organ failure by 23 percent.
Defitelio[supreg] received Orphan Drug Designation for the
treatment of VOD in 2003 and for the prevention of VOD in 2007. It has
been available to patients as an investigational drug through an
Expanded Access Program since 2006. The applicant's New Drug
Application (NDA) for Defitelio[supreg] received FDA approval on March
30, 2016. The applicant confirmed that Defitelio[supreg] was not
available on the U.S. market as of the FDA NDA approval date of March
30, 2016. According to the applicant, commercial packaging could not be
completed until the label for Defitelio[supreg] was finalized with FDA
approval, and that commercial shipments of Defitelio[supreg] to
hospitals and treatment centers began on April 4, 2016. Therefore, we
agreed that, based on this information, the newness period for
Defitelio[supreg] begins on April 4, 2016, the date of its first
commercial availability.
The applicant received approval to use unique ICD-10-PCS procedure
codes to describe the use of Defitelio[supreg], with an effective date
of October 1, 2016. The approved ICD-10-PCS procedure codes are:
XW03392 (Introduction of defibrotide sodium anticoagulant into
peripheral vein, percutaneous approach); and XW04392 (Introduction of
defibrotide sodium anticoagulant into central vein, percutaneous
approach). After evaluation of the newness, costs, and substantial
clinical improvement criteria for new technology add-on payments for
Defitelio[supreg] and consideration of the public comments we received
in response to the FY 2017 IPPS/LTCH PPS proposed rule, we approved
Defitelio[supreg] for new technology add-on payments for FY 2017 (81 FR
56906). With the new technology add-on payment application, the
applicant estimated that the average Medicare beneficiary would require
a dosage of 25 mg/kg/day for a minimum of 21 days of treatment. The
recommended dose is 6.25 mg/kg given as a 2-hour intravenous infusion
every 6 hours. Dosing should be based on a patient's baseline body
weight, which is assumed to be 70 kg for an average adult patient. All
vials contain 200 mg at a cost of $825 per vial. Therefore, we
determined that cases involving the use of the Defitelio[supreg]
technology would incur an average cost per case of $151,800 (70 kg
adult x 25 mg/kg/day x 21 days = 36,750 mg per patient/200 mg vial =
184 vials per patient x $825 per vial = $151,800). Under existing Sec.
412.88(a)(2), we limit new technology add-on payments to the lesser of
50 percent of the average cost of the technology or 50 percent of the
costs in excess of the MS-DRG payment for the case. As a result, the
maximum new technology add-on payment amount for a case involving the
use of Defitelio[supreg] is $75,900 for FY 2019.
Our policy is that a medical service or technology may continue to
be considered ``new'' for purposes of new technology add-on payments
within 2 or 3 years after the point at which data begin to become
available reflecting the inpatient hospital code assigned to the new
service or technology. Our practice has been to begin and end new
technology add-on payments on the basis of a fiscal year, and we have
generally followed a guideline that uses a 6-month window before and
after the start of the fiscal year to determine whether to extend the
new technology add-on payment for an additional fiscal year. In
general, we extend new technology add-on payments for an additional
year only if the 3-year anniversary date of the product's entry onto
the U.S. market occurs in the latter half of the fiscal year (70 FR
47362).
With regard to the newness criterion for Defitelio[supreg], we
considered the beginning of the newness period to commence on the first
day Defitelio[supreg] was commercially available (April 4, 2016).
Because the 3-year anniversary date of the entry of the
Defitelio[supreg] onto the U.S. market (April 4, 2019) will occur
during FY 2019, we are proposing to discontinue new technology add-on
payments for this technology for FY 2020. We are inviting public
comments on our proposal to discontinue new technology add-on payments
for Defitelio[supreg] for FY 2020.
b. Ustekinumab (Stelara[supreg])
Janssen Biotech submitted an application for new technology add-on
payments for the Stelara[supreg] induction therapy for FY 2018.
Stelara[supreg] received FDA approval on September 23, 2016 as an
intravenous (IV) infusion treatment for adult patients who have been
diagnosed with moderately to severely active Crohn's disease (CD) who
have failed or were intolerant to treatment using immunomodulators or
corticosteroids, but never failed a tumor necrosis factor (TNF)
blocker, or failed or were intolerant to treatment using one or more
TNF blockers. Stelara[supreg] IV is intended for induction--
subcutaneous prefilled syringes are intended for maintenance dosing.
Stelara[supreg] must be administered intravenously by a health care
professional in either an inpatient hospital setting or an outpatient
hospital setting.
Stelara[supreg] for IV infusion is packaged in single 130 mg vials.
Induction therapy consists of a single IV infusion dose using the
following weight-based dosing regimen: Patients weighing 55 kg or less
than (<) 55 kg are administered 260 mg of Stelara[supreg] (2 vials);
patients weighing more than (>) 55 kg, but 85 kg or less than (<) 85 kg
are administered 390 mg of Stelara[supreg] (3 vials); and patients
weighing more than (>) 85 kg are administered 520 mg of Stelara[supreg]
(4 vials). An average dose of Stelara[supreg] administered through IV
infusion is 390 mg (3 vials). Maintenance doses of Stelara[supreg] are
administered at 90 mg, subcutaneously, at 8-week intervals and may
occur in the outpatient hospital setting.
CD is an inflammatory bowel disease of unknown etiology,
characterized by transmural inflammation of the gastrointestinal (GI)
tract. Symptoms of CD may include fatigue, prolonged diarrhea with or
without bleeding, abdominal pain, weight loss and fever. CD can affect
any part of the GI tract including the mouth, esophagus, stomach, small
intestine, and large intestine. Most commonly used pharmacologic
treatments for CD include antibiotics, mesalamines, corticosteroids,
immunomodulators, tumor necrosis alpha (TNF[alpha]) inhibitors, and
anti-integrin agents. Surgery may be necessary for some patients who
have been diagnosed with CD in which conventional therapies have
failed. After evaluation of the newness, costs,
[[Page 19277]]
and substantial clinical improvement criteria for new technology add-on
payments for Stelara[supreg] and consideration of the public comments
we received in response to the FY 2018 IPPS/LTCH PPS proposed rule, we
approved Stelara[supreg] for new technology add-on payments for FY 2018
(82 FR 38129). Cases involving Stelara[supreg] that are eligible for
new technology add-on payments are identified by ICD-10-PCS procedure
code XW033F3 (Introduction of other New Technology therapeutic
substance into peripheral vein, percutaneous approach, new technology
group 3). With the new technology add-on payment application, the
applicant estimated that the average Medicare beneficiary would require
a dosage of 390 mg (3 vials) at a hospital acquisition cost of $1,600
per vial (for a total of $4,800). Under existing Sec. 412.88(a)(2), we
limit new technology add-on payments to the lesser of 50 percent of the
average cost of the technology or 50 percent of the costs in excess of
the MS-DRG payment for the case. As a result, the maximum new
technology add-on payment amount for a case involving the use of
Stelara[supreg] is $2,400 for FY 2019.
With regard to the newness criterion for Stelara[supreg], we
considered the beginning of the newness period to commence when
Stelara[supreg] received FDA approval as an IV infusion treatment for
Crohn's disease (CD) on September 23, 2016. Because the 3-year
anniversary date of the entry of Stelara[supreg] onto the U.S. market
(September 23, 2019) will occur during FY 2019, we are proposing to
discontinue new technology add-on payments for this technology for FY
2020. We are inviting public comments on our proposal to discontinue
new technology add-on payments for Stelara[supreg] for FY 2020.
c. Bezlotoxumab (ZINPLAVATM)
Merck & Co., Inc. submitted an application for new technology add-
on payments for ZINPLAVATM for FY 2018.
ZINPLAVATM is indicated as a treatment to reduce recurrence
of Clostridium difficile infection (CDI) in adult patients who are
receiving antibacterial drug treatment for a diagnosis of CDI and who
are at high risk for CDI recurrence. ZINPLAVATM is not
indicated for the treatment of the presenting episode of CDI and is not
an antibacterial drug. ZINPLAVATM should only be used in
conjunction with an antibacterial drug treatment for CDI.
Clostridium difficile (C-diff) is a disease-causing anaerobic,
spore forming bacterium that affects the gastrointestinal (GI) tract.
Some people carry the C-diff bacterium in their intestines, but never
develop symptoms of an infection. The difference between asymptomatic
colonization and disease is caused primarily by the production of an
enterotoxin (Toxin A) and/or a cytotoxin (Toxin B). The presence of
either or both toxins can lead to symptomatic CDI, which is defined as
the acute onset of diarrhea with a documented infection with toxigenic
C-diff. The GI tract contains millions of bacteria, commonly referred
to as ``normal flora'' or ``good bacteria,'' which play a role in
protecting the body from infection. Antibiotics can kill these good
bacteria and allow C-diff to multiply and release toxins that damage
the cells lining the intestinal wall, resulting in a CDI. CDI is a
leading cause of hospital-associated gastrointestinal illnesses.
Persons at increased risk for CDI include people who are currently on
or who have recently been treated with antibiotics, people who have
encountered current or recent hospitalization, people who are older
than 65 years, immunocompromised patients, and people who have recently
had a diagnosis of CDI. CDI symptoms include, but are not limited to,
diarrhea, abdominal pain, and fever. CDI symptoms range in severity
from mild (abdominal discomfort, loose stools) to severe (profuse,
watery diarrhea, severe abdominal pain, and high fevers). Severe CDI
can be life-threatening and, in rare cases, can cause bowel rupture,
sepsis and organ failure. CDI is responsible for 14,000 deaths per year
in the United States.
C-diff produces two virulent, pro-inflammatory toxins, Toxin A and
Toxin B, which target host colonic endothelial cells by binding to
endothelial cell surface receptors via combined repetitive oligopeptide
(CROP) domains. These toxins cause the release of inflammatory
cytokines leading to intestinal fluid secretion and intestinal
inflammation. The applicant asserted that ZINPLAVATM targets
Toxin B sites within the CROP domain rather than the C-diff organism
itself. According to the applicant, by targeting C-diff Toxin B,
ZINPLAVATM neutralizes Toxin B, prevents large intestine
endothelial cell inflammation, symptoms associated with CDI, and
reduces the recurrence of CDI. ZINPLAVATM received FDA
approval on October 21, 2016, as a treatment to reduce the recurrence
of CDI in adult patients receiving antibacterial drug treatment for CDI
and who are at high risk of CDI recurrence. As previously stated,
ZINPLAVATM is not indicated for the treatment of CDI.
ZINPLAVATM is not an antibacterial drug, and should only be
used in conjunction with an antibacterial drug treatment for CDI.
ZINPLAVATM became commercially available on February 10,
2017. Therefore, the newness period for ZINPLAVATM began on
February 10, 2017. The applicant submitted a request for a unique ICD-
10-PCS procedure code and was granted approval for the following
procedure codes: XW033A3 (Introduction of bezlotoxumab monoclonal
antibody, into peripheral vein, percutaneous approach, new technology
group 3) and XW043A3 (Introduction of bezlotoxumab monoclonal antibody,
into central vein, percutaneous approach, new technology group 3).
After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for
ZINPLAVATM and consideration of the public comments we
received in response to the FY 2018 IPPS/LTCH PPS proposed rule, we
approved ZINPLAVATM for new technology add-on payments for
FY 2018 (82 FR 38119). With the new technology add-on payment
application, the applicant estimated that the average Medicare
beneficiary would require a dosage of 10 mg/kg of ZINPLAVATM
administered as an IV infusion over 60 minutes as a single dose.
According to the applicant, the WAC for one dose is $3,800. Under
existing Sec. 412.88(a)(2), we limit new technology add-on payments to
the lesser of 50 percent of the average cost of the technology or 50
percent of the costs in excess of the MS-DRG payment for the case. As a
result, the maximum new technology add-on payment amount for a case
involving the use of ZINPLAVATM is $1,900 for FY 2019.
With regard to the newness criterion for ZINPLAVATM, we
considered the beginning of the newness period to commence on February
10, 2017. As discussed previously in this section, in general, we
extend new technology add-on payments for an additional year only if
the 3-year anniversary date of the product's entry onto the U.S. market
occurs in the latter half of the upcoming fiscal year. Because the 3-
year anniversary date of the entry of ZINPLAVATM onto the
U.S. market (February 10, 2020) will occur in the first half of FY
2020, we are proposing to discontinue new technology add-on payments
for this technology for FY 2020. We are inviting public comments on our
proposal to discontinue new technology add-on payments for
ZINPLAVATM for FY 2020.
[[Page 19278]]
d. KYMRIAH[supreg] (Tisagenlecleucel) and YESCARTA[supreg]
(Axicabtagene Ciloleucel)
Two manufacturers, Novartis Pharmaceuticals Corporation and Kite
Pharma, Inc., submitted separate applications for new technology add-on
payments for FY 2019 for KYMRIAH[supreg] (tisagenlecleucel) and
YESCARTA[supreg] (axicabtagene ciloleucel), respectively. Both of these
technologies are CD-19-directed T-cell immunotherapies used for the
purposes of treating patients with aggressive variants of non-Hodgkin
lymphoma (NHL).
On May 1, 2018, Novartis Pharmaceuticals Corporation received FDA
approval for KYMRIAH[supreg]'s second indication, the treatment of
adult patients with relapsed or refractory (r/r) large B-cell lymphoma
after two or more lines of systemic therapy including diffuse large B-
cell lymphoma (DLBCL) not otherwise specified, high grade B-cell
lymphoma and DLBCL arising from follicular lymphoma. On October 18,
2017, Kite Pharma, Inc. received FDA approval for the use of
YESCARTA[supreg] indicated for the treatment of adult patients with r/r
large B-cell lymphoma after two or more lines of systemic therapy,
including DLBCL not otherwise specified, primary mediastinal large B-
cell lymphoma, high grade B-cell lymphoma, and DLBCL arising from
follicular lymphoma.
Procedures involving the KYMRIAH[supreg] and YESCARTA[supreg]
therapies are both reported using the following ICD-10-PCS procedure
codes: XW033C3 (Introduction of engineered autologous chimeric antigen
receptor t-cell immunotherapy into peripheral vein, percutaneous
approach, new technology group 3); and XW043C3 (Introduction of
engineered autologous chimeric antigen receptor t-cell immunotherapy
into central vein, percutaneous approach, new technology group 3). In
the FY 2019 IPPS/LTCH PPS final rule, we finalized our proposal to
assign cases reporting these ICD-10-PCS procedure codes to Pre-MDC MS-
DRG 016 for FY 2019 and to revise the title of this MS-DRG to
Autologous Bone Marrow Transplant with CC/MCC or T-cell Immunotherapy.
We refer readers to section II.F.2.d. of the preamble of the FY 2019
IPPS/LTCH PPS final rule for a complete discussion of these final
policies (83 FR 41172 through 41174).
With respect to the newness criterion, according to both
applicants, KYMRIAH[supreg] and YESCARTA[supreg] are the first CAR T-
cell immunotherapies of their kind. As discussed in the FY 2019 IPPS/
LTCH PPS proposed and final rules, because potential cases representing
patients who may be eligible for treatment using KYMRIAH[supreg] and
YESCARTA[supreg] would group to the same MS-DRGs (because the same ICD-
10-CM diagnosis codes and ICD-10-PCS procedures codes are used to
report treatment using either KYMRIAH[supreg] or YESCARTA[supreg]), and
we believed that these technologies are intended to treat the same or
similar disease in the same or similar patient population, and are
purposed to achieve the same therapeutic outcome using the same or
similar mechanism of action, we believed these two technologies are
substantially similar to each other and that it was appropriate to
evaluate both technologies as one application for new technology add-on
payments under the IPPS. For these reasons, we stated that we intended
to make one determination regarding approval for new technology add-on
payments that would apply to both applications, and in accordance with
our policy, would use the earliest market availability date submitted
as the beginning of the newness period for both KYMRIAH[supreg] and
YESCARTA[supreg].
As summarized in the FY 2019 IPPS/LTCH PPS final rule, we received
comments from the applicants for KYMRIAH[supreg] and YESCARTA[supreg]
regarding whether KYMRIAH[supreg] and YESCARTA[supreg] were
substantially similar to each other. The applicant for YESCARTA[supreg]
stated that it believed each technology consists of notable differences
in the construction, as well as manufacturing processes and successes
that may lead to differences in activity. The applicant encouraged CMS
to evaluate YESCARTA[supreg] as a separate new technology add-on
payment application and approve separate new technology add-on payments
for YESCARTA[supreg], effective October 1, 2018, and to not move
forward with a single new technology add-on payment evaluation
determination that covers both CAR T-cell therapies, YESCARTA[supreg]
and KYMRIAH[supreg]. The applicant for KYMRIAH[supreg] indicated that,
based on FDA's approval, it agreed with CMS that KYMRIAH[supreg] is
substantially similar to YESCARTA[supreg], as defined by the new
technology add-on payment application evaluation criteria. We refer
readers to the FY 2019 IPPS/LTCH PPS final rule for a more detailed
summary of these and other public comments we received regarding
substantial similarity for KYMRIAH[supreg] and YESCARTA[supreg].
After consideration of the public comments we received and for the
reasons discussed in the FY 2019 IPPS/LTCH PPS final rule, we stated
that we believed that KYMRIAH[supreg] and YESCARTA[supreg] are
substantially similar to one another. We also noted that for FY 2019,
there was no payment impact regarding this determination of substantial
similarity because the cost of the technologies is the same. However,
we stated that we welcomed additional comments in future rulemaking
regarding whether KYMRIAH[supreg] and YESCARTA[supreg] are
substantially similar and intended to revisit this issue in the FY 2020
IPPS/LTCH PPS proposed rule. For the reasons discussed in the FY 2019
IPPS/LTCH PPS final rule, we continue to believe that KYMRIAH[supreg]
and YESCARTA[supreg] are substantially similar to each other. We note
that for FY 2020, the pricing for KYMRIAH[supreg] and YESCARTA[supreg]
remains the same and, therefore, for FY 2020, there would continue to
be no payment impact regarding the determination that the two
technologies are substantially similar to each other. Similar to last
year, we welcome public comments regarding whether KYMRIAH[supreg] and
YESCARTA[supreg] are substantially similar to each other. We refer
readers to the FY 2019 IPPS/LTCH PPS final rule for a complete
discussion on newness and substantial similarity regarding
KYMRIAH[supreg] and YESCARTA[supreg].
After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for
KYMRIAH[supreg] and YESCARTA[supreg] and consideration of the public
comments we received in response to the FY 2019 IPPS/LTCH PPS proposed
rule, we approved new technology add-on payments for KYMRIAH[supreg]
and YESCARTA[supreg] for FY 2019 (83 FR 41299). Cases involving
KYMRIAH[supreg] or YESCARTA[supreg] that are eligible for new
technology add-on payments are identified by ICD-10-PCS procedure codes
XW033C3 or XW043C3. The applicants for both KYMRIAH[supreg] and
YESCARTA[supreg] estimated that the average cost for an administered
dose of KYMRIAH[supreg] or YESCARTA[supreg] is $373,000. Under existing
Sec. 412.88(a)(2), we limit new technology add-on payments to the
lesser of 50 percent of the average cost of the technology or 50
percent of the costs in excess of the MS-DRG payment for the case. As a
result, for FY 2019, the maximum new technology add-on payment for a
case involving the use of KYMRIAH[supreg] or YESCARTA[supreg] is
$186,500.
As stated above, our policy is that a medical service or technology
may continue to be considered ``new'' for purposes of new technology
add-on payments within 2 or 3 years after the point at which data begin
to become available reflecting the inpatient hospital code assigned to
the new service or technology. With regard to the newness criterion for
KYMRIAH[supreg] and YESCARTA[supreg], as discussed in the FY
[[Page 19279]]
2019 IPPS/LTCH PPS final rule, according to the applicant for
YESCARTA[supreg], the first commercial shipment of YESCARTA[supreg] was
received by a certified treatment center on November 22, 2017. As
stated above, we use the earliest market availability date submitted as
the beginning of the newness period for both KYMRIAH[supreg] and
YESCARTA[supreg]. Therefore, we consider the beginning of the newness
period for both KYMRIAH[supreg] and YESCARTA[supreg] to commence
November 22, 2017. Because the 3-year anniversary date of the entry of
the technology onto the U.S. market (November 22, 2020) will occur
after FY 2020, we are proposing to continue new technology add-on
payments for KYMRIAH[supreg] and YESCARTA[supreg] for FY 2020. Under
the proposed change to the calculation of the new technology add-on
payment amount discussed in section II.H.9. of the preamble of this
proposed rule, we are proposing that the maximum new technology add-on
payment amount for a case involving the use of KYMRIAH[supreg] and
YESCARTA[supreg] would be increased to $242,450 for FY 2020; that is,
65 percent of the average cost of the technology. However, if we do not
finalize the proposed change to the calculation of the new technology
add-on payment amount, we are proposing that the maximum new technology
add-on payment for a case involving KYMRIAH[supreg] or YESCARTA[supreg]
would remain at $186,500 for FY 2020. We are inviting public comments
on our proposals to continue new technology add-on payments for
KYMRIAH[supreg] and YESCARTA[supreg] for FY 2020.
For the reasons discussed in section II.F.2.c. of this proposed
rule, we are proposing not to modify the current MS-DRG assignment for
cases reporting CAR T-cell therapies for FY 2020. Alternatively, we are
seeking public comments on payment alternatives for CAR T-cell
therapies. We also are inviting public comments on how these payment
alternatives would affect access to care, as well as how they affect
incentives to encourage lower drug prices, which is a high priority for
this Administration. As discussed in the FY 2019 IPPS/LTCH PPS final
rule (83 FR 41172 through 41174), we are considering approaches and
authorities to encourage value-based care and lower drug prices. We are
soliciting public comments on how the effective dates of any potential
payment methodology alternatives, if any were to be adopted, may
intersect and affect future participation in any such alternative
approaches. Such payment alternatives could include adjusting the CCRs
used to calculate new technology add-on payments for cases involving
the use of KYMRIAH[supreg] and YESCARTA[supreg]. We note that we also
considered this payment alternative for FY 2019, as discussed in the FY
2019 IPPS/LTCH PPS final rule (83 FR 41172 through 41174), and are
revisiting this approach given the additional experience with CAR T-
cell therapy being provided in hospitals paid under the IPPS and in
IPPS-excluded cancer hospitals. We also are requesting public comments
on other payment alternatives for these cases, including eliminating
the use of CCRs in calculating the new technology add-on payments for
cases involving the use of KYMRIAH[supreg] and YESCARTA[supreg] by
making a uniform add-on payment that equals the proposed maximum add-on
payment, that is, 65 percent of the cost of the technology (in
accordance with the proposed increase in the calculation of the maximum
new technology add-on payment amount), which in this instance would be
$242,450; and/or using a higher percentage than the proposed 65 percent
to calculate the maximum new technology add-on payment amount. If we
were to finalize any such changes to the new technology add-on payment
for cases involving the use of KYMRIAH[supreg] and YESCARTA[supreg], we
would also revise our proposed amendments to Sec. 412.88 accordingly.
e. VYXEOSTM (Cytarabine and Daunorubicin Liposome for
Injection)
Jazz Pharmaceuticals, Inc. submitted an application for new
technology add-on payments for the VYXEOSTM technology for
FY 2019. VYXEOSTM was approved by FDA on August 3, 2017, for
the treatment of adults with newly diagnosed therapy-related acute
myeloid leukemia (t-AML) or AML with myelodysplasia-related changes
(AML-MRC).
Treatment of AML diagnoses usually consists of two phases;
remission induction and post-remission therapy. Phase one, remission
induction, is aimed at eliminating as many myeloblasts as possible. The
most common used remission induction regimens for AML diagnoses are the
``7+3'' regimens using an antineoplastic and an anthracycline.
Cytarabine and daunorubicin are two commonly used drugs for ``7+3''
remission induction therapy. Cytarabine is continuously administered
intravenously over the course of 7 days, while daunorubicin is
intermittently administered intravenously for the first 3 days. The
``7+3'' regimen typically achieves a 70 to 80 percent complete
remission (CR) rate in most patients under 60 years of age.
VYXEOSTM is a nano-scale liposomal formulation
containing a fixed combination of cytarabine and daunorubicin in a 5:1
molar ratio. This formulation was developed by the applicant using a
proprietary system known as CombiPlex. According to the applicant,
CombiPlex addresses several fundamental shortcomings of conventional
combination regimens, specifically the conventional ``7+3'' free drug
dosing, as well as the challenges inherent in combination drug
development, by identifying the most effective synergistic molar ratio
of the drugs being combined in vitro, and fixing this ratio in a nano-
scale drug delivery complex to maintain the optimized combination after
administration and ensuring exposure of this ratio to the tumor.
After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for
VYXEOSTM and consideration of the public comments we
received in response to the FY 2019 IPPS/LTCH PPS proposed rule, we
approved VYXEOSTM for new technology add-on payments for FY
2019 (83 FR 41304). Cases involving VYXEOSTM that are
eligible for new technology add-on payments are identified by ICD-10-
PCS procedure codes XW033B3 (Introduction of cytarabine and
caunorubicin liposome antineoplastic into peripheral vein, percutaneous
approach, new technology group 3) or XW043B3 (Introduction of
cytarabine and daunorubicin liposome antineoplastic into central vein,
percutaneous approach, new technology group 3). In its application, the
applicant estimated that the average cost of a single vial for
VYXEOSTM is $7,750 (daunorubicin 44 mg/m\2\ and cytarabine
100 mg/m\2\). As discussed in the FY 2019 IPPS/LTCH PPS final rule (83
FR 41305), we computed a maximum average of 9.4 vials used in the
inpatient hospital setting with the maximum average cost for
VYXEOSTM used in the inpatient hospital setting equaling
$72,850 ($7,750 cost per vial * 9.4 vials). Under existing Sec.
412.88(a)(2), we limit new technology add-on payments to the lesser of
50 percent of the average cost of the technology or 50 percent of the
costs in excess of the MS-DRG payment for the case. As a result, the
maximum new technology add-on payment for a case involving the use of
VYXEOSTM is $36,425 for FY 2019.
With regard to the newness criterion for VYXEOSTM, we
consider the beginning of the newness period to commence when
VYXEOSTM was approved by the FDA (August 3, 2017). As
discussed previously in this section,
[[Page 19280]]
in general, we extend new technology add-on payments for an additional
year only if the 3-year anniversary date of the product's entry onto
the U.S. market occurs in the latter half of the upcoming fiscal year.
Because the 3-year anniversary date of the entry of the
VYXEOSTM onto the U.S. market (August 3, 2020) will occur in
the second half of FY 2020, we are proposing to continue new technology
add-on payments for this technology for FY 2020. Under the proposed
change to the calculation of the new technology add-on payment amount
discussed in section II.H.9. of the preamble of this proposed rule, we
are proposing that the maximum new technology add-on payment amount for
a case involving the use of VYXEOSTM would be $47,353.50 for
FY 2020; that is, 65 percent of the average cost of the technology.
However, if we do not finalize the proposed change to the calculation
of the new technology add-on payment amount, we are proposing that the
maximum new technology add-on payment for a case involving
VYXEOSTM would remain at $36,425 for FY 2020. We are
inviting public comments on our proposals to continue new technology
add-on payments for VYXEOSTM for FY 2020.
f. VABOMERETM (Meropenem-Vaborbactam)
Melinta Therapeutics, Inc., submitted an application for new
technology add-on payments for VABOMERETM for FY 2019.
VABOMERETM is indicated for use in the treatment of adult
patients who have been diagnosed with complicated urinary tract
infections (cUTIs), including pyelonephritis, caused by designated
susceptible bacteria. VABOMERETM received FDA approval on
August 29, 2017.
After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for
VABOMERETM and consideration of the public comments we
received in response to the FY 2019 IPPS/LTCH PPS proposed rule, we
approved VABOMERETM for new technology add-on payments for
FY 2019 (83 FR 41311). We noted in the FY 2019 IPPS/LTCH PPS final rule
(83 FR 41311) that the applicant did not request approval for the use
of a unique ICD-10-PCS procedure code for VABOMERETM for FY
2019 and that as a result, hospitals would be unable to uniquely
identify the use of VABOMERETM on an inpatient claim using
the typical coding of an ICD-10-PCS procedure code. We noted that in
the FY 2013 IPPS/LTCH PPS final rule (77 FR 53352), with regard to the
oral drug DIFICIDTM, we revised our policy to allow for the
use of an alternative code set to identify oral medications where no
inpatient procedure is associated for the purposes of new technology
add-on payments. We established the use of a NDC as the alternative
code set for this purpose and described our rationale for this
particular code set. This change was effective for payments for
discharges occurring on or after October 1, 2012. In the FY 2019 IPPS/
LTCH PPS final rule, we acknowledged that VABOMERETM is not
an oral drug and is administered by IV infusion, but it was the first
approved new technology aside from an oral drug with no uniquely
assigned inpatient procedure code. Therefore, we believed that the
circumstances with respect to the identification of eligible cases
using VABOMERETM are similar to those addressed in the FY
2013 IPPS/LTCH PPS final rule with regard to DIFICIDTM
because we did not have current ICD-10-PCS code(s) to uniquely identify
the use of VABOMERETM to make the new technology add-on
payment. We stated that because we have determined that
VABOMERETM has met all of the new technology add-on payment
criteria and cases involving the use of VABOMERETM would be
eligible for such payments for FY 2019, we needed to use an alternative
coding method to identify these cases and make the new technology add-
on payment for use of VABOMERETM in FY 2019. Therefore, for
the reasons discussed in the FY 2019 IPPS/LTCH PPS final rule and
similar to the policy in the FY 2013 IPPS/LTCH PPS final rule, cases
involving VABOMERETM that are eligible for new technology
add-on payments for FY 2019 are identified by National Drug Codes (NDC)
65293-0009-01 or 70842-0120-01 (VABOMERETM Meropenem-
Vaborbactam Vial).
According to the applicant, the cost of VABOMERETM is
$165 per vial. A patient receives two vials per dose and three doses
per day. Therefore, the per-day cost of VABOMERETM is $990
per patient. The duration of therapy, consistent with the Prescribing
Information, is up to 14 days. Therefore, the estimated cost of
VABOMERETM to the hospital, per patient, is $13,860. We
stated in the FY 2019 IPPS/LTCH PPS final rule that based on the
limited data from the product's launch, approximately 80 percent of
VABOMERETM's usage would be in the inpatient hospital
setting, and approximately 20 percent of VABOMERETM's usage
may take place outside of the inpatient hospital setting. Therefore,
the average number of days of VABOMERETM administration in
the inpatient hospital setting is estimated at 80 percent of 14 days,
or approximately 11.2 days. As a result, the total inpatient cost for
VABOMERETM is $11,088 ($990 * 11.2 days). Under existing
Sec. 412.88(a)(2), we limit new technology add-on payments to the
lesser of 50 percent of the average cost of the technology or 50
percent of the costs in excess of the MS-DRG payment for the case. As a
result, the maximum new technology add-on payment for a case involving
the use of VABOMERETM is $5,544 for FY 2019.
With regard to the newness criterion for VABOMERETM, we
consider the beginning of the newness period to commence when
VABOMERETM received FDA approval (August 29, 2017). As
discussed previously in this section, in general, we extend new
technology add-on payments for an additional year only if the 3-year
anniversary date of the product's entry onto the U.S. market occurs in
the latter half of the upcoming fiscal year. Because the 3-year
anniversary date of the entry of VABOMERETM onto the U.S.
market (August 29, 2020) will occur during the second half of FY 2020,
we are proposing to continue new technology add-on payments for this
technology for FY 2020. Under the proposed change to the calculation of
the new technology add-on payment amount discussed in section II.H.9.
of the preamble of this proposed rule, we are proposing that the
maximum new technology add-on payment amount for a case involving the
use of VABOMERETM would be $7,207.20 for FY 2020; that is,
65 percent of the average cost of the technology. However, if we do not
finalize the proposed change to the calculation of the new technology
add-on payment amount, we are proposing that the maximum new technology
add-on payment for a case involving VABOMERETM would remain
at $5,544 for FY 2020.
As noted above, because there was no ICD-10-PCS code(s) to uniquely
identify the use of VABOMERETM, we indicated in the FY 2019
IPPS/LTCH PPS final rule that FY 2019 cases involving the use of
VABOMERETM that are eligible for the FY 2019 new technology
add-on payments would be identified using an NDC code. Subsequent to
the issuance of that final rule, new ICD-10-PCS codes XW033N5
(Introduction of Meropenem-vaborbactam Anti-infective into Peripheral
Vein, Percutaneous Approach, New Technology Group 5) and XW043N5
(Introduction of Meropenem-vaborbactam Anti-infective
[[Page 19281]]
into Central Vein, Percutaneous Approach, New Technology Group 5) were
finalized to identify cases involving the use of VABOMERETM,
effective October 1, 2019, as shown in Table 6B--New Procedure Codes,
associated with this proposed rule and available via the internet on
the CMS website at: http://www.cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. Therefore, for FY 2020,
we will use these two ICD-10-PCS codes (XW033N5 and XW043N5) to
identify cases involving the use of VABOMERETM that are
eligible for the new technology add-on payments.
While these newly approved ICD-10-PCS procedure codes can be used
to uniquely identify cases involving the use of VABOMERETM
for FY 2020, we are concerned that limiting new technology add-on
payments only to cases reporting these new ICD-10-PCS codes for FY 2020
could cause confusion because it is possible that some providers may
inadvertently continue to bill some claims with the NDC codes rather
than the new ICD-10-PCS codes. Therefore, for FY 2020, we are proposing
that in addition to using the new ICD-10-PCS codes to identify cases
involving the use of VABOMERETM, we would also continue to
use the NDC codes to identify cases and make the new technology add-on
payments. As a result, we are proposing that cases involving the use of
VABOMERETM that are eligible for new technology add-on
payments for FY 2020 would be identified by ICD-10-PCS codes XW033N5 or
XW043N5 or NDCs 65293-0009-01 or 70842-0120-01.
We are inviting public comments on our proposal to continue new
technology add-on payments for VABOMERETM for FY 2020 and
our proposals for identifying and making new technology add-on payments
for cases involving the use of VABOMERETM.
g. remed[emacr][supreg] System
Respicardia, Inc. submitted an application for new technology add-
on payments for the remed[emacr][supreg] System for FY 2019. According
to the applicant, the remed[emacr][supreg] System is indicated for use
as a transvenous phrenic nerve stimulator in the treatment of adult
patients who have been diagnosed with moderate to severe central sleep
apnea. The remed[emacr][supreg] System consists of an implantable pulse
generator, and a stimulation and sensing lead. The pulse generator is
placed under the skin, in either the right or left side of the chest,
and it functions to monitor the patient's respiratory signals. A
transvenous lead for unilateral stimulation of the phrenic nerve is
placed either in the left pericardiophrenic vein or the right
brachiocephalic vein, and a second lead to sense respiration is placed
in the azygos vein. Both leads, in combination with the pulse
generator, function to sense respiration and, when appropriate,
generate an electrical stimulation to the left or right phrenic nerve
to restore regular breathing patterns. On October 6, 2017, the
remed[emacr][supreg] System was approved by the FDA as an implantable
phrenic nerve stimulator indicated for the use in the treatment of
adult patients who have been diagnosed with moderate to severe CSA. The
device was available commercially upon FDA approval. Therefore, the
newness period for the remed[emacr][supreg] System is considered to
begin on October 6, 2017.
After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for the
remed[emacr][supreg] System and consideration of the public comments we
received in response to the FY 2019 IPPS/LTCH PPS proposed rule, we
approved the remed[emacr][supreg] System for new technology add-on
payments for FY 2019. Cases involving the use of the
remed[emacr][supreg] System that are eligible for new technology add-on
payments are identified by ICD-10-PCS procedures codes 0JH60DZ and
05H33MZ in combination with procedure code 05H03MZ (Insertion of
neurostimulator lead into right innominate vein, percutaneous approach)
or 05H43MZ (Insertion of neurostimulator lead into left innominate
vein, percutaneous approach). According to the application, the cost of
the remed[emacr][supreg] System is $34,500 per patient. Under existing
Sec. 412.88(a)(2), we limit new technology add-on payments to the
lesser of 50 percent of the average cost of the technology or 50
percent of the costs in excess of the MS-DRG payment for the case. As a
result, the maximum new technology add-on payment for a case involving
the use of the remed[emacr][supreg] System is $17,250 for FY 2019 (83
FR 41320).
With regard to the newness criterion for the remed[emacr][supreg]
System, we consider the beginning of the newness period to commence
when the remed[emacr][supreg] System was approved by the FDA on October
6, 2017. Because the 3-year anniversary date of the entry of the
remed[emacr][supreg] System onto the U.S. market (October 6, 2020) will
occur after FY 2020, we are proposing to continue new technology add-on
payments for this technology for FY 2020. Under the proposed change to
the calculation of the new technology add-on payment amount discussed
in section II.H.9. of the preamble of this proposed rule, we are
proposing that the maximum new technology add-on payment amount for a
case involving the use of the remed[emacr][supreg] System would be
$22,425 for FY 2020; that is, 65 percent of the average cost of the
technology. However, if we do not finalize the proposed change to the
calculation of the new technology add-on payment amount, we are
proposing that the maximum new technology add-on payment for a case
involving the remed[emacr][supreg] System would remain at $17,250 for
FY 2020. We are inviting public comments on our proposals to continue
new technology add-on payments for the remed[emacr][supreg] System for
FY 2020.
h. ZEMDRITM (Plazomicin)
Achaogen, Inc. submitted an application for new technology add-on
payments for ZEMDRITM (Plazomicin) for FY 2019. According to
the applicant, ZEMDRITM (Plazomicin) is a next-generation
aminoglycoside antibiotic, which has been found in vitro to have
enhanced activity against many multi-drug resistant (MDR) gram-negative
bacteria. The applicant received approval from the FDA on June 25,
2018, for use in the treatment of adults who have been diagnosed with
cUTIs, including pyelonephritis. After evaluation of the newness,
costs, and substantial clinical improvement criteria for new technology
add-on payments for ZEMDRITM and consideration of the public
comments we received in response to the FY 2019 IPPS/LTCH PPS proposed
rule, we approved ZEMDRITM for new technology add-on
payments for FY 2019 (83 FR 41334). Cases involving ZEMDRITM
that are eligible for new technology add-on payments are identified by
ICD-10-PCS procedure codes XW033G4 (Introduction of Plazomicin anti-
infective into peripheral vein, percutaneous approach, new technology
group 4) or XW043G4 (Introduction of Plazomicin anti-infective into
central vein, percutaneous approach, new technology group 4). In its
application, the applicant estimated that the average Medicare
beneficiary would require a dosage of 15 mg/kg administered as an IV
infusion as a single dose. According to the applicant, the WAC for one
dose is $330, and patients will typically require 3 vials for the
course of treatment with ZEMDRITM per day for an average
duration of 5.5 days. Therefore, the total cost of ZEMDRITM
per patient is $5,445. Under existing Sec. 412.88(a)(2), we limit new
technology add-on payments to the
[[Page 19282]]
lesser of 50 percent of the average cost of the technology or 50
percent of the costs in excess of the MS-DRG payment for the case. As a
result, the maximum new technology add-on payment for a case involving
the use of ZEMDRITM is $2,722.50 for FY 2019. With regard to
the newness criterion for ZEMDRITM, we consider the
beginning of the newness period to commence when ZEMDRITM
was approved by the FDA on June 25, 2018. Because the 3-year
anniversary date of the entry of ZEMDRITM onto the U.S.
market (June 25, 2021) will occur after FY 2020, we are proposing to
continue new technology add-on payments for this technology for FY
2020. Under the proposed change to the calculation of the new
technology add-on payment amount discussed in section II.H.9. of the
preamble of this proposed rule, we are proposing that the maximum new
technology add-on payment amount for a case involving the use of
ZEMDRITM would be $3,539.25 for FY 2020; that is, 65 percent
of the average cost of the technology. However, if we do not finalize
the proposed change to the calculation of the new technology add-on
payment amount, we are proposing that the maximum new technology add-on
payment for a case involving ZEMDRITM would remain at
$2,722.50 for FY 2020. We are inviting public comments on our proposals
to continue new technology add-on payments for ZEMDRITM for
FY 2020.
i. GIAPREZATM
The La Jolla Pharmaceutical Company submitted an application for
new technology add-on payments for GIAPREZATM for FY 2019.
GIAPREZATM, a synthetic human angiotensin II, is
administered through intravenous infusion to raise blood pressure in
adult patients who have been diagnosed with septic or other
distributive shock.
GIAPREZATM was granted a Priority Review designation
under FDA's expedited program and received FDA approval on December 21,
2017, for the use in the treatment of adults who have been diagnosed
with septic or other distributive shock as an intravenous infusion to
increase blood pressure. After evaluation of the newness, costs, and
substantial clinical improvement criteria for new technology add-on
payments for GIAPREZATM and consideration of the public
comments we received in response to the FY 2019 IPPS/LTCH PPS proposed
rule, we approved GIAPREZATM for new technology add-on
payments for FY 2019 (83 FR 41342). Cases involving
GIAPREZATM that are eligible for new technology add-on
payments are identified by ICD-10-PCS procedure codes XW033H4
(Introduction of synthetic human angiotensin II into peripheral vein,
percutaneous approach, new technology, group 4) or XW043H4
(Introduction of synthetic human angiotensin II into central vein,
percutaneous approach, new technology group 4). In its application, the
applicant estimated that the average Medicare beneficiary would require
a dosage of 20 ng/kg/min administered as an IV infusion over 48 hours,
which would require 2 vials. The applicant explained that the WAC for
one vial is $1,500, with each episode-of-care costing $3,000 per
patient. Under existing Sec. 412.88(a)(2), we limit new technology
add-on payments to the lesser of 50 percent of the average cost of the
technology or 50 percent of the costs in excess of the MS-DRG payment
for the case. As a result, the maximum new technology add-on payment
for a case involving the use of GIAPREZATM is $1,500 for FY
2019.
With regard to the newness criterion for GIAPREZATM, we
consider the beginning of the newness period to commence when
GIAPREZATM was approved by the FDA (December 21, 2017).
Because the 3-year anniversary date of the entry of
GIAPREZATM onto the U.S. market (December 21, 2020) would
occur after FY 2020, we are proposing to continue new technology add-on
payments for this technology for FY 2020. Under the proposed change to
the calculation of the new technology add-on payment discussed in
section II.H.9. of the preamble of this proposed rule, we are proposing
that the maximum new technology add-on payment amount for a case
involving the use of GIAPREZATM would be $1,950 for FY 2020;
that is, 65 percent of the average cost of the technology. However, if
we do not finalize the proposed change to the calculation of the new
technology add-on payment amount, we are proposing that the maximum new
technology add-on payment for a case involving GIAPREZATM
would remain at $1,500 for FY 2020. We are inviting public comments on
our proposals to continue new technology add-on payments for
GIAPREZATM for FY 2020.
j. Cerebral Protection System (Sentinel[supreg] Cerebral Protection
System)
Claret Medical, Inc. submitted an application for new technology
add-on payments for the Cerebral Protection System (Sentinel[supreg]
Cerebral Protection System) for FY 2019. According to the applicant,
the Sentinel Cerebral Protection System is indicated for the use as an
embolic protection (EP) device to capture and remove thrombus and
debris while performing transcatheter aortic valve replacement (TAVR)
procedures. The device is percutaneously delivered via the right radial
artery and is removed upon completion of the TAVR procedure. The De
Novo request for the Sentinel[supreg] Cerebral Protection System was
granted by FDA on June 1, 2017 (DEN160043).
After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for the
Sentinel[supreg] Cerebral Protection System and consideration of the
public comments we received in response to the FY 2019 IPPS/LTCH PPS
proposed rule, we approved the Sentinel[supreg] Cerebral Protection
System for new technology add-on payments for FY 2019 (83 FR 41348).
Cases involving the Sentinel[supreg] Cerebral Protection System that
are eligible for new technology add-on payments are identified by ICD-
10-PCS code X2A5312 (Cerebral embolic filtration, dual filter in
innominate artery and left common carotid artery, percutaneous
approach). In its application, the applicant estimated that the cost of
the Sentinel[supreg] Cerebral Protection System is $2,800. Under
existing Sec. 412.88(a)(2), we limit new technology add-on payments to
the lesser of 50 percent of the average cost of the technology or 50
percent of the costs in excess of the MS-DRG payment for the case. As a
result, the maximum new technology add-on payment for a case involving
the use of the Sentinel[supreg] Cerebral Protection System is $1,400
for FY 2019.
With regard to the newness criterion for the Sentinel[supreg]
Cerebral Protection System, we consider the beginning of the newness
period to commence when the FDA granted the De Novo request for the
Sentinel[supreg] Cerebral Protection System (June 1, 2017). As
discussed previously in this section, in general, we extend new
technology add-on payments for an additional year only if the 3-year
anniversary date of the product's entry onto the U.S. market occurs in
the latter half of the upcoming fiscal year. Because the 3-year
anniversary date of the entry of the Sentinel[supreg] Cerebral
Protection System onto the U.S. market (June 1, 2020) will occur in the
second half of FY 2020, we are proposing to continue new technology
add-on payments for this technology for FY 2020. Under the proposed
change to the calculation of the new technology add-on payment amount
discussed in section II.H.9. of the preamble of this proposed rule, we
are proposing that the maximum new technology add-on payment amount for
[[Page 19283]]
a case involving the use of the Sentinel[supreg] Cerebral Protection
System would be $1,820 for FY 2020; that is, 65 percent of the average
cost of the technology. However, if we do not finalize the proposed
change to the calculation of the new technology add-on payment amount,
we are proposing that the maximum new technology add-on payment for a
case involving the Sentinel[supreg] Cerebral Protection System would
remain at $1,400 for FY 2020. We are inviting public comments on our
proposals to continue new technology add-on payments for the
Sentinel[supreg] Cerebral Protection System for FY 2020.
k. The AQUABEAM System (Aquablation)
PROCEPT BioRobotics Corporation submitted an application for new
technology add-on payments for the AQUABEAM System (Aquablation) for FY
2019. According to the applicant, the AQUABEAM System is indicated for
the use in the treatment of patients experiencing lower urinary tract
symptoms caused by a diagnosis of benign prostatic hyperplasia (BPH).
The AQUABEAM System consists of three main components: A console with
two high-pressure pumps, a conformal surgical planning unit with trans-
rectal ultrasound imaging, and a single-use robotic hand-piece. The
applicant reported that the AQUABEAM System provides the operating
surgeon a multi-dimensional view, using both ultrasound image guidance
and endoscopic visualization, to clearly identify the prostatic adenoma
and plan the surgical resection area. Based on the planning inputs from
the surgeon, the system's robot delivers Aquablation, an autonomous
waterjet ablation therapy that enables targeted, controlled, heat-free
and immediate removal of prostate tissue used for the purpose of
treating lower urinary tract symptoms caused by a diagnosis of BPH. The
combination of surgical mapping and robotically-controlled resection of
the prostate is designed to offer predictable and reproducible
outcomes, independent of prostate size, prostate shape or surgeon
experience.
The FDA granted the AQUABEAM System's De Novo request on December
21, 2017, for use in the resection and removal of prostate tissue in
males suffering from lower urinary tract symptoms (LUTS) due to benign
prostatic hyperplasia. The applicant stated that the AQUABEAM System
was made available on the U.S. market immediately after the FDA granted
the De Novo request.
After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for the
AQUABEAM System and consideration of the public comments we received in
response to the FY 2019 IPPS/LTCH PPS proposed rule, we approved the
AQUABEAM System for new technology add-on payments for FY 2019 (83 FR
41355). Cases involving the AQUABEAM System that are eligible for new
technology add-on payments are identified by ICD-10-PCS code XV508A4
(Destruction of prostate using robotic waterjet ablation, via natural
or artificial opening endoscopic, new technology group 4). The
applicant estimated that the average Medicare beneficiary would require
the transurethral procedure of one AQUABEAM System per patient.
According to the application, the cost of the AQUABEAM System is $2,500
per procedure. Under existing Sec. 412.88(a)(2), we limit new
technology add-on payments to the lesser of 50 percent of the average
cost of the technology or 50 percent of the costs in excess of the MS-
DRG payment for the case. As a result, the maximum new technology add-
on payment for a case involving the use of the AQUABEAM System's
Aquablation System is $1,250 for FY 2019.
With regard to the newness criterion for the AQUABEAM System, we
consider the beginning of the newness period to commence on the date
the FDA granted the De Novo request (December 21, 2017). As noted above
and in the FY 2019 rulemaking, the applicant stated that the AQUABEAM
System was made available on the U.S. market immediately after the FDA
granted the De Novo request.
We note that in the FY 2019 IPPS/LTCH PPS final rule, we
inadvertently misstated the newness period beginning date as April 19,
2018 (83 FR 41351). As discussed in the FY 2019 IPPS/LTCH PPS final
rule (83 FR 41350), in its public comment in response to the FY 2019
IPPS/LTCH PPS proposed rule, the applicant explained that, while the
AQUABEAM System received approval from the FDA for its De Novo request
on December 21, 2017, local non-coverage determinations in the Medicare
population resulted in the first case being delayed until April 19,
2018. Therefore, the applicant believed that the newness period should
begin on April 19, 2018, instead of the date FDA granted the De Novo
request. In the final rule, we responded that with regard to the
beginning of the technology's newness period, as discussed in the FY
2005 IPPS final rule (69 FR 49003), the timeframe that a new technology
can be eligible to receive new technology add-on payments begins when
data begin to become available. While local non-coverage determinations
may limit the use of a technology in different regions in the country,
a technology may be available in regions where no local non-coverage
decision existed (with data beginning to become available). We also
explained that under our historical policy we do not consider how
frequently the medical service or technology has been used in the
Medicare population in our determination of newness (as discussed in
the FY 2006 IPPS final rule (70 FR 47349)). Consistent with this
response, and as indicated in the proposed rule and elsewhere in the
final rule, we believe the beginning of the newness period to commence
on the first day the AQUABEAM System was commercially available
(December 21, 2017). As noted, the later statement that the newness
period beginning date for the AQUABEAM System is April 19, 2018 was an
inadvertent error. As we indicated in the FY 2019 IPPS/LTCH PPS final
rule, we welcome further information from the applicant for
consideration regarding the beginning of the newness period.
Because the 3-year anniversary date of the entry of the AQUABEAM
System onto the U.S. market (December 21, 2020) will occur after FY
2020, we are proposing to continue new technology add-on payments for
this technology for FY 2020. Under the proposed change to the
calculation of the new technology add on payment amount discussed in
section II.H.9. of the preamble of this proposed rule, we are proposing
that the maximum new technology add-on payment amount for a case
involving the use of the AQUABEAM System would be $1,625 for FY 2020;
that is, 65 percent of the average cost of the technology. However, if
we do not finalize the proposed change to the calculation of the new
technology add-on payment amount, we are proposing that the maximum new
technology add-on payment for a case involving the AQUABEAM System
would remain at $1,250 for FY 2020. We are inviting public comments on
our proposals to continue new technology add-on payments for the
AQUABEAM System for FY 2020.
l. AndexXaTM (Andexanet alfa)
Portola Pharmaceuticals, Inc. (Portola) submitted an application
for new technology add-on payments for FY 2019 for the use of
AndexXaTM (Andexanet alfa).
AndexXaTM received FDA approval on May 3, 2018, and is
indicated for use in the treatment of patients who are
[[Page 19284]]
receiving treatment with rivaroxaban and apixaban, when reversal of
anticoagulation is needed due to life-threatening or uncontrolled
bleeding.
After evaluation of the newness, costs, and substantial clinical
improvement criteria for new technology add-on payments for
AndexXaTM and consideration of the public comments we
received in response to the FY 2019 IPPS/LTCH PPS proposed rule, we
approved AndexXaTM for new technology add-on payments for FY
2019 (83 FR 41362). Cases involving the use of AndexXaTM
that are eligible for new technology add-on payments are identified by
ICD-10-PCS procedure codes XW03372 (Introduction of Andexanet alfa,
Factor Xa inhibitor reversal agent into peripheral vein, percutaneous
approach, new technology group 2) or XW04372 (Introduction of Andexanet
alfa, Factor Xa inhibitor reversal agent into central vein,
percutaneous approach, new technology group 2). The applicant explained
that the WAC for 1 vial is $2,750, with the use of an average of 10
vials for the low dose and 18 vials for the high dose. The applicant
noted that per the clinical trial data, 90 percent of cases were
administered a low dose and 10 percent of cases were administered the
high dose. The weighted average between the low and high dose is an
average of 10.22727 vials. Therefore, the cost of a standard dosage of
AndexXaTM is $28,125 ($2,750 x 10.22727). Under existing
Sec. 412.88(a)(2), we limit new technology add-on payments to the
lesser of 50 percent of the average cost of the technology or 50
percent of the costs in excess of the MS-DRG payment for the case. As a
result, the maximum new technology add-on payment for a case involving
the use of AndexXaTM is $14,062.50 for FY 2019.
With regard to the newness criterion for AndexXaTM, we
consider the beginning of the newness period to commence when
AndexXaTM received FDA approval (May 3, 2018). Because the
3-year anniversary date of the entry of AndexXaTM onto the
U.S. market (May 3, 2021) will occur after FY 2020, we are proposing to
continue new technology add-on payments for this technology for FY
2020. Under the proposed change to the calculation of the new
technology add-on payment amount discussed in section II.H.9. of the
preamble of this proposed rule, we are proposing that the maximum new
technology add-on payment amount for a case involving the use of
AndexXaTM would be $18,281.25 for FY 2020; that is, 65
percent of the average cost of the technology. However, if we do not
finalize the proposed change to the calculation of the new technology
add-on payment amount, we are proposing that the maximum new technology
add-on payment for a case involving AndexXaTM would remain
at $14,062.50 for FY 2020. We are inviting public comments on our
proposals to continue new technology add-on payments for
AndexXaTM for FY 2020.
5. Proposed FY 2020 Applications for New Technology Add-On Payments
We received 18 applications for new technology add-on payments for
FY 2020. In accordance with the regulations under Sec. 412.87(c),
applicants for new technology add-on payments must have FDA approval or
clearance by July 1 of the year prior to the beginning of the fiscal
year for which the application is being considered. One applicant
withdrew its application prior to the issuance of this proposed rule. A
discussion of the 17 remaining applications is presented below.
a. AZEDRA[supreg] (Ultratrace[supreg] iobenguane Iodine-131) Solution
Progenics Pharmaceuticals, Inc. submitted an application for new
technology add-on payments for AZEDRA[supreg] (Ultratrace[supreg]
iobenguane Iodine-131) for FY 2020. (We note that Progenics
Pharmaceuticals, Inc. previously submitted an application for new
technology add-on payments for AZEDRA[supreg] for FY 2019, which was
withdrawn prior to the issuance of the FY 2019 IPPS/LTCH PPS final
rule.) AZEDRA[supreg] is a drug solution formulated for intravenous
(IV) use in the treatment of patients who have been diagnosed with
obenguane avid malignant and/or recurrent and/or unresectable
pheochromocytoma and paraganglioma. AZEDRA[supreg] contains a small
molecule ligand consisting of meta-iodobenzylguanidine (MIBG) and
\131\Iodine (\131\I) (hereafter referred to as ``\131\I-MIBG''). The
applicant noted that iobenguane Iodine-131 is also known as \131\I-
MIBG.
The applicant reported that pheochromocytomas and paragangliomas
are rare tumors with an incidence of approximately 2 to 8 people per
million per year.1 2 Both tumors are catecholamine-secreting
neuroendocrine tumors, with pheochromocytomas being the more common of
the two and comprising 80 to 85 percent of cases. While 10 percent of
pheochromocytomas are malignant, whereby ``malignant'' is defined by
the World Health Organization (WHO) as ``the presence of distant
metastases,'' paragangliomas have a malignancy frequency of 25
percent.3 4 Approximately one-half of malignant tumors are
pronounced at diagnosis, while other malignant tumors develop slowly
within 5 years.\5\ Pheochromocytomas and paragangliomas tend to be
indistinguishable at the cellular level and frequently at the clinical
level. For example catecholamine-secreting paragangliomas often present
clinically like pheochromocytomas with hypertension, episodic headache,
sweating, tremor, and forceful palpitations.\6\ Although
pheochromocytomas and paragangliomas can share overlapping
histopathology, epidemiology, and molecular pathobiology
characteristics, there are differences between these two neuroendocrine
tumors in clinical behavior, aggressiveness and metastatic potential,
biochemical findings and association with inherited genetic syndrome
differences, highlighting the importance of distinguishing between the
presence of malignant pheochromocytoma and the presence of malignant
paraganglioma. At this time, there is no curative treatment for
malignant pheochromocytomas and paragangliomas. Successful management
of these malignancies requires a multidisciplinary approach of
decreasing tumor burden, controlling endocrine activity, and treating
debilitating symptoms. According to the applicant, decreasing
metastatic tumor burden would address the leading cause of mortality in
this patient population, where the 5-year survival rate is 50 percent
for patients with untreated malignant pheochromocytomas and
paragangliomas.\7\ The applicant stated that controlling catecholamine
[[Page 19285]]
hypersecretion (for example, severe paroxysmal or sustained
hypertension, palpitations and arrhythmias) would also mean decreasing
morbidity associated with hypertension (for example, risk of stroke,
myocardial infarction and renal failure), and begin to address the 30-
percent cardiovascular mortality rate associated with malignant
pheochromocytomas and paragangliomas.
---------------------------------------------------------------------------
\1\ Beard, C.M., Sheps, S.G., Kurland, L.T., Carney, J.A., Lie,
J.T., ``Occurrence of pheochromocytoma in Rochester, Minnesota'',
pp. 1950-1979.
\2\ Stenstr[ouml]m, G., Sv[auml]rdsudd, K., ``Pheochromocytoma
in Sweden 1958-1981. An analysis of the National Cancer Registry
Data,'' Acta Medica Scandinavica, 1986, vol. 220(3), pp. 225-232.
\3\ Fishbein, Lauren, ``Pheochromocytoma and Paraganglioma,''
Hematology/Oncology Clinics 30, no. 1, 2016, pp. 135-150.
\4\ Lloyd, R.V., Osamura, R.Y., Kl[ouml]ppel, G., & Rosai, J.
(2017). World Health Organization (WHO) Classification of Tumours of
Endocrine Organs. Lyon, France: International Agency for Research on
Center (IARC).
\5\ Kantorovich, Vitaly, and Karel Pacak. ``Pheochromocytoma and
paraganglioma.'' Progress in Brain Research., 2010, vol. 182, pp.
343-373.
\6\ Carty, SE, Young, W.F., Elfky, A., ``Paraganglioma and
pheochromocytoma: Management of malignant disease,'' UpToDate.
Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease.
\7\ Kantorovich, Vitaly, and Karel Pacak. ``Pheochromocytoma and
paraganglioma.'' Progress in Brain Research., 2010, vol. 182, pp.
343-373.
---------------------------------------------------------------------------
The applicant reported that, prior to the introduction of
AZEDRA[supreg], controlling catecholamine activity in pheochromocytomas
and paragangliomas was medically achieved with administration of
combined alpha and beta-adrenergic blockade, and surgically with tumor
tissue reduction. Because there is no curative treatment for malignant
pheochromocytomas and paragangliomas, resecting both primary and
metastatic lesions whenever possible to decrease tumor burden \8\
provides a methodology for controlling catecholamine activity and
lowering cardiovascular mortality risk. Besides surgical removal of
tumor tissue for lowering tumor burden, there are other treatment
options that depend upon tumor type (that is, pheochromocytoma tumors
versus paraganglioma tumors), anatomic location, and the number and
size of the metastatic tumors. These treatment options include: (1)
Radiation therapy; (2) nonsurgical local ablative therapy with
radiofrequency ablation, cryoablation, and percutaneous ethanol
injection; (3) transarterial chemoembolization for liver metastases;
and (4) radionuclide therapy using metaiodobenzylguanidine (MIBG) or
somatostatin. Regardless of the method to reduce local tumor burden,
periprocedural medical care is needed to prevent massive catecholamine
secretion and hypertensive crisis.\9\
---------------------------------------------------------------------------
\8\ Noda, T., Nagano, H., Miyamoto, A., et al., ``Successful
outcome after resection of liver metastasis arising from an
extraadrenal retroperitoneal paraganglioma that appeared 9 years
after surgical excision of the primary lesion,'' Int J Clin Oncol,
2009, vol. 14, pp. 473.
\9\ Carty, SE, Young, W.F., Elfky, A., ``Paraganglioma and
pheochromocytoma: Management of malignant disease,'' UpToDate.
Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease.
---------------------------------------------------------------------------
The applicant stated that AZEDRA[supreg] specifically targets
neuroendocrine tumors arising from chromaffin cells of the adrenal
medulla (in the case of pheochromocytomas) and from neuroendocrine
cells of the extra-adrenal autonomic paraganglia (in the case of
paragangliomas).\10\ According to the applicant, AZEDRA[supreg] is a
more consistent form of 131I-MIBG compared to compounded
formulations of 131I-MIBG that are not approved by the FDA.
AZEDRA[supreg] (iobenguane I 131) (AZEDRA) was approved by the FDA on
July 30, 2018, and according to the applicant, is the first and only
drug indicated for the treatment of adult and pediatric patients 12
years and older who have been diagnosed with iobenguane scan positive,
unresectable, locally advanced or metastatic pheochromocytoma or
paraganglioma who require systemic anticancer therapy. Among local
tumor tissue reduction options, use of external beam radiation therapy
(EBRT) at doses greater than 40 Gy can provide local pheochromocytoma
and paraganglioma tumor control and relief of symptoms for tumors at a
variety of sites, including the soft tissues of the skull base and
neck, abdomen, and thorax, as well as painful bone metastases.\11\
However, the applicant stated that EBRT irradiated tissues are
unresponsive to subsequent treatment with 131I-MIBG
radionuclide.\12\ MIBG was initially used for the imaging of
paragangliomas and pheochromocytomas because of its similarity to
noradrenaline, which is taken up by chromaffin cells. Conventional MIBG
used in imaging expanded to off-label use in patients who had been
diagnosed with malignant pheochromocytomas and paragangliomas. Because
131I-MIBG is sequestered within pheochromocytoma and
paraganglioma tumors, subsequent malignant cell death occurs from
radioactivity. Approximately 50 percent of tumors are eligible for
treatment involving 131I-MIBG therapy based on having MIBG
uptake with diagnostic imaging. According to the applicant, despite
uptake by tumors, studies have also found that 131I-MIBG
therapy has been limited by total radiation dose, hematologic side
effects, and hypertension. While the pathophysiology of total radiation
dose and hematologic side effects are more readily understandable,
hypertension is believed to be precipitated by large quantities of non-
iodinated MIBG or ``cold'' MIBG being introduced along with radioactive
\131\I-MIBG therapy.\13\ The ``cold'' MIBG blocks synaptic reuptake of
norepinephrine, which can lead to tachycardia and paroxysmal
hypertension within the first 24 hours, the majority of which occur
within 30 minutes of administration and can be dose-limiting.\14\
---------------------------------------------------------------------------
\10\ Ibid.
\11\ Ibid.
\12\ Fitzgerald, P.A., Goldsby, R.E., Huberty, J.P., et al.,
``Malignant pheochromocytomas and paragangliomas: a phase II study
of therapy with high-dose 131I-metaiodobenzylguanidine (131I-
MIBG),'' Ann N Y Acad Sci, 2006, vol. 1073, pp. 465.
\13\ Loh, K.C., Fitzgerald, P.A., Matthay, K.K., Yeo, P.P.,
Price, DC, ``The treatment of malignant pheochromocytoma with
iodine-131 metaiodobenzylguanidine (\131\I-MIBG): a comprehensive
review of 116 reported patients,'' J Endocrinol Invest, 1997, vol.
20(11), pp. 648-658.
\14\ Gonias, S, et al., ``Phase II Study of High-Dose [\131\I
]Metaiodobenzylguanidine Therapy for Patients With Metastatic
Pheochromocytoma and Paraganglioma,'' J of Clin Onc, July 27, 2009.
---------------------------------------------------------------------------
The applicant asserted that its new proprietary manufacturing
process called Ultratrace[supreg] allows AZEDRA[supreg] to be
manufactured without the inclusion of unlabeled or ``cold'' MIBG in the
final formulation. The applicant also noted that targeted radionuclide
MIBG therapy to reduce tumor burden is one of two treatments that have
been studied the most. The other treatment is cytotoxic chemotherapy
and, specifically, Carboplatin, Vincristine, and Dacarbazine (CVD). The
applicant stated that cytotoxic chemotherapy is an option for patients
who experience symptoms with rapidly progressive, non-resectable, high
tumor burden, and that cytotoxic chemotherapy is another option for a
large number of metastatic bone lesions.\15\ According to the
applicant, CVD was believed to have an effect on malignant
pheochromocytomas and paragangliomas due to the embryonic origin being
similar to neuroblastomas. The response rates to CVD have been variable
between 25 percent and 50 percent.16 17 These patients
experience side effects consistent with chemotherapeutic treatment with
CVD, with the added concern of the precipitation of hormonal
complications such as hypertensive crisis, thereby requiring close
monitoring during cytotoxic chemotherapy.\18\ According to the
applicant, use of CVD relative to other tumor burden reduction options
is not
[[Page 19286]]
an ideal treatment because of nearly 100 percent recurrence rates, and
the need for chemotherapy cycles to be continually readministered at
the risk of increased systemic toxicities and eventual development of
resistance. Finally, there is a subgroup of patients that are
asymptomatic and have slower progressing tumors where frequent follow-
up is an option for care.\19\ Therefore, the applicant believed that
AZEDRA[supreg] offers cytotoxic radioactive therapy for the indicated
population that avoids harmful side effects that typically result from
use of low-specific activity products.
---------------------------------------------------------------------------
\15\ Carty, SE, Young, W.F., Elfky, A., ``Paraganglioma and
pheochromocytoma: Management of malignant disease,'' UpToDate.
Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease.
\16\ Niemeijer, N.D., Alblas, G., Hulsteijn, L.T., Dekkers, O.M.
and Corssmit, E.P. M., ``Chemotherapy with cyclophosphamide,
vincristine and dacarbazine for malignant paraganglioma and
pheochromocytoma: systematic review and meta[hyphen]analysis,''
Clinical endocrinology, 2014, vol 81(5), pp. 642-651.
\17\ Ayala-Ramirez, Montserrat, et al., ``Clinical Benefits of
Systemic Chemotherapy for Patients with Metastatic Pheochromocytomas
or Sympathetic Extra-Adrenal Paragangliomas: Insights from the
Largest Single Institutional Experience,'' Cancer, 2012, vol.
118(11), pp. 2804-2812.
\18\ Wu, L.T., Dicpinigaitis, P., Bruckner, H., et al.,
``Hypertensive crises induced by treatment of malignant
pheochromocytoma with a combination of cyclophosphamide,
vincristine, and dacarbazine,'' Med Pediatr Oncol, 1994, vol. 22(6),
pp. 389-392.
\19\ Carty, SE, Young, W.F., Elfky, A., ``Paraganglioma and
pheochromocytoma: Management of malignant disease,'' UpToDate.
Available at: https://www.uptodate.com/contents/paraganglioma-and-pheochromocytoma-management-of-malignant-disease.
---------------------------------------------------------------------------
The applicant reported that the recommended AZEDRA[supreg] dosage
and frequency for patients receiving treatment involving \131\I-MIBG
therapy for a diagnosis of avid malignant and/or recurrent and/or
unresectable pheochromocytoma and paraganglioma tumors is:
Dosimetric Dosing--5 to 6 micro curies (mCi) (185 to 222
MBq) for a patient weighing more than or equal to 50 kg, and 0.1 mCi/kg
(3.7 MBq/kg) for patients weighing less than 50 kg. Each recommended
dosimetric dose is administered as an IV injection.
Therapeutic Dosing--500 mCi (18.5 GBq) for patients
weighing more than 62.5 kg, and 8 mCi/kg (296 MBq/kg) for patients
weighing less than or equal to 62.5 kg. Therapeutic doses are
administered by IV infusion, in ~50 mL over a period of ~30 minutes
(100 mL/hour), administered approximately 90 days apart.
With respect to the newness criterion, the applicant indicated that
FDA granted Orphan Drug designation for AZEDRA[supreg] on January 18,
2006, followed by Fast Track designation on March 8, 2006, and
Breakthrough Therapy designation on July 26, 2015. The applicant's New
Drug Application (NDA) proceeded on a rolling basis, and was completed
on November 2, 2017. AZEDRA[supreg] was approved by the FDA on July 30,
2018, for the treatment of adult and pediatric patients 12 years and
older who have been diagnosed with iobenguane scan positive,
unresectable, locally advanced or metastatic pheochromocytoma or
paraganglioma who require systemic anticancer therapy through a New
Drug Approval (NDA) filed under Section 505(b)(1) of the Federal Food,
Drug and Cosmetic Act and 21 CFR 314.50. Currently, there are no
approved ICD-10-PCS procedure codes to uniquely identify procedures
involving the administration of AZEDRA[supreg]. We note that the
applicant submitted a request for approval for a unique ICD-10-PCS code
for the administration of AZEDRA[supreg] beginning in FY 2020.
As discussed earlier, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or similar mechanism of action, the applicant stated that while
AZEDRA[supreg] and low-specific activity conventional I-131 MIBG both
target the same transporter sites on the tumor cell surface, the
therapies' safety and efficacy outcomes are different. These
differences in outcomes are because AZEDRA[supreg] is manufactured
using the proprietary Ultratrace[supreg] technology, which maximizes
the molecules that carry the tumoricidal component (I-131 MIBG) and
minimizes the extraneous unlabeled component (MIBG, free ligands),
which could cause cardiovascular side effects. Therefore, according to
the applicant, AZEDRA[supreg] is designed to increase efficacy and
decrease safety risks, whereas conventional I-131 MIBG uses existing
technologies and results in a product that overwhelms the normal
reuptake system with excess free ligands, which leads to safety issues
as well as decreasing the probability of the \131\I-MIBG binding to the
tumor cells.
With regard to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant noted that there are
no specific MS-DRGs for the assignment of cases involving the treatment
of patients who have been diagnosed with pheochromocytoma and
paraganglioma. We believe that potential cases representing patients
who may be eligible for treatment involving the administration of
AZEDRA[supreg] would be assigned to the same MS-DRGs as cases
representing patients who receive treatment for a diagnosis of
iobenguane avid malignant and/or recurrent and/or unresectable
pheochromocytoma and paraganglioma. We also refer readers to the cost
criterion discussion below, which includes the applicant's list of the
MS-DRGs to which potential cases involving treatment with the
administration of AZEDRA[supreg] most likely would map.
With regard to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, according to the
applicant, AZEDRA[supreg] is the only FDA-approved drug indicated for
use in the treatment of patients who have been diagnosed with malignant
pheochromocytoma and paraganglioma tumors that avidly take up \131\I-
MIBG and are recurrent and/or unresectable. The applicant stated that
these patients face serious mortality and morbidity risks if left
untreated, as well as potentially suffer from side effects if treated
by available off-label therapies.
The applicant also contended that AZEDRA[supreg] can be
distinguished from other currently available treatments because it
potentially provides the following advantages:
AZEDRA[supreg] will have a very limited impact on normal
norepinephrine reuptake due to the negligible amount of unlabeled MIBG
present in the dose. Therefore, AZEDRA[supreg] is expected to pose a
much lower risk of acute drug-induced hypertension.
There is minimal unlabeled MIBG to compete for the
norepinephrine transporter binding sites in the tumor, resulting in
more effective delivery of radioactivity.
Current off-label therapeutic use of \131\I is compounded
by individual pharmacies with varied quality and conformance standards.
Because of its higher specific activity (the activity of a
given radioisotope per unit mass), AZEDRA[supreg] infusion times are
significantly shorter than conventional \131\I administrations.
Therefore, with these potential advantages, the applicant
maintained that AZEDRA[supreg] represents an option for the treatment
of patients who have been diagnosed with malignant and/or recurrent
and/or unresectable pheochromocytoma and paraganglioma tumors, where
there is a clear, unmet medical need.
For the reasons cited earlier, the applicant believed that
AZEDRA[supreg] is not substantially similar to other currently
available therapies and/or technologies and meets the ``newness''
criterion. We are inviting public comments on whether AZEDRA[supreg] is
substantially similar to other currently available therapies and/or
technologies and meets the ``newness'' criterion.
With regard to the cost criterion, the applicant conducted an
analysis using FY 2015 MedPAR data to demonstrate that AZEDRA[supreg]
meets the cost criterion.
The applicant searched for potential cases representing patients
who may be eligible for treatment involving AZEDRA[supreg] that had one
of the following ICD-9-CM diagnosis codes (which the applicant believed
is indicative of
[[Page 19287]]
diagnosis appropriate for treatment involving AZEDRA[supreg]): 194.0
(Malignant neoplasm of adrenal gland), 194.6 (Malignant neoplasm of
aortic body and other paraganglia), 209.29 (Malignant carcinoid tumor
of other sites), 209.30 (Malignant poorly differentiated neuroendocrine
carcinoma, any site), 227.0 (Benign neoplasm of adrenal gland), 237.3
(Neoplasm of uncertain behavior of paraganglia)--in combination with
one of the following ICD-9-CM procedure codes describing the
administration of a radiopharmaceutical: 00.15 (High-dose infusion
interleukin-2); 92.20 (Infusion of liquid brachytherapy radioisotope);
92.23 (Radioisotopic teleradiotherapy); 92.27 (Implantation or
insertion of radioactive elements); 92.28 (Injection or instillation of
radioisotopes). The applicant reported that the potential cases used
for this analysis mapped to MS-DRGs 054 and 055 (Nervous System
Neoplasms with and without MCC, respectively), MS-DRG 271 (Other Major
Cardiovascular Procedures with CC), MS-DRG 436 (Malignancy of
Hepatobiliary System or Pancreas with CC), MS-DRG 827
(Myeloproliferative Disorders or Poorly Differentiated Neoplasms with
Major O.R. Procedure with CC), and MS-DRG 843 (Other Myeloproliferative
Disorders or Poorly Differentiated Neoplastic Diagnosis with MCC). Due
to patient privacy concerns, because the number of cases under each MS-
DRG was less than 11 in total, the applicant assumed an equal
distribution between these 6 MS-DRGs. Based on the FY 2019 IPPS/LTCH
PPS final rule correction notice data file thresholds, the average
case-weighted threshold amount was $60,136. Using the identified cases,
the applicant determined that the average unstandardized charge per
case ranged from $21,958 to $152,238 for the 6 evaluated MS-DRGs. After
removing charges estimated to be associated with precursor agents, the
applicant used a 3-year inflation factor of 1.1436 (a yearly inflation
factor of 1.04574 applied over 3 years), based on the FY 2018 IPPS/LTCH
PPS final rule (82 FR 38527), to inflate the charges from FY 2015 to FY
2018. The applicant provided an estimated average of $151,000 per
therapeutic dose per patient, based on the wholesale acquisition cost
of the drug and the average dosage amount for most patients, with a
total cost per patient estimated to be approximately $980,000. After
including the cost of the technology, the applicant determined an
inflated average case-weighted standardized charge per case of
$1,078,631.
We are concerned with the limited number of cases the applicant
analyzed. However, we acknowledge the difficulty in obtaining cost data
for such a rare condition. We are inviting public comments on whether
the AZEDRA[supreg] technology meets the cost criterion.
With regard to substantial clinical improvement, the applicant
maintained that the use of AZEDRA[supreg] has been shown to reduce the
incidence of hypertensive episodes and use of antihypertensive
medications, reduce tumor size, improve blood pressure control, and
reduce secretion of tumor biomarkers. In addition, the applicant
asserted that AZEDRA[supreg] provides a treatment option for those
outlined in its indication patient population. The applicant asserted
that AZEDRA[supreg] meets the substantial clinical improvement
criterion based on the results from two clinical studies: (1) MIP-IB12
(IB12): A Phase I Study of Iobenguane (MIBG) I-131 in Patients With
Malignant Pheochromocytoma/Paraganglioma; \20\ and (2) MIP-IB12B
(IB12B): A Study Evaluating Ultratrace[supreg] Iobenguane I-131 in
Patients With Malignant Relapsed/Refractory Pheochromocytoma/
Paraganglioma. The applicant explained that the IB12B study is similar
to the IB12 study in that both studies evaluated two open-label,
single-arm studies. The applicant reported that both studies included
patients who had been diagnosed with malignant and/or recurrent and/or
unresectable pheochromocytoma and paraganglioma tumors, and both
studies assessed objective tumor response, biochemical tumor response,
overall survival rates, occurrence of hypertensive crisis, and the
long-term benefit of AZEDRA[supreg] treatment relative to the need for
antihypertensives. However, according to the applicant, the study
designs differed in dose regimens (1 dose administered to patients in
the IB12 study, and 2 doses administered to patients in the IB12B
study) and primary study endpoints. Differences in the designs of the
studies prevented direct comparison of study endpoints and pooling of
the data. In addition, the applicant stated that results from safety
data from the IB12 study and the IB12B study were pooled and used to
support substantial clinical improvement assertions. We note that
neither the IB12 study nor the IB12B study compared the effects of the
use of AZEDRA[supreg] to any of the other treatment options to decrease
tumor burden (for example, cytotoxic chemotherapy, radiation therapy,
and surgical debulking).
---------------------------------------------------------------------------
\20\ Noto, Richard B., et. al., ``Phase 1 Study of High-
Specific-Activity I-131 MIBG for Metastatic and/or Recurrent
Pheochromocytoma or Paraganglioma (IB12 Phase 1 Study),'' J Clin
Endocrinol Metab, vol. 103(1), pp. 213-220.
---------------------------------------------------------------------------
Regarding the data results from the IB12 study, the applicant
asserted that, based on the reported safety and tolerability, and
primary endpoint of radiological response at 12 months, high-specific-
activity I-131 MIBG may be an effective alternative therapeutic option
for patients who have been diagnosed with iobenguane-avid, metastatic
and/or recurrent pheochromocytoma and paraganglioma tumors for whom
there are no other approved therapies and for those patients who have
failed available treatment options. In addition, the applicant used the
exploratory finding of decreased or discontinuation of anti-
hypertensive medications relative to baseline medications as evidence
that AZEDRA[supreg] has clinical benefit and positive impact on the
long-term effects of hypertension induced norepinephrine producing
malignant pheochromocytoma and paraganglioma tumors. We understand that
the applicant used antihypertensive medications as a proxy to assess
the long-term effects of hypertension such as renal, myocardial, and
cerebral end organ damage. The applicant reported that it studied 15 of
the original IB12 study's 21-patient cohort, and found 33 percent (n=5)
had decreased or discontinuation of antihypertensive medications during
the 12 months of follow-up. However, the applicant did not provide
additional data on the incidence of renal insufficiency/failure,
myocardial ischemic/infarction events, or transient ischemic attacks or
strokes. Therefore, it is unclear to us if these five patients also had
decreased urine metanephrines, changed their diet, lost significant
weight, or if other underlying comorbidities that influence
hypertension were resolved, making it difficult to understand the
significance of this exploratory finding.
Regarding the applicant's assertion that the use of AZEDRA[supreg]
is safer and more effective than alternative therapies, we note that
the IB12 study was a dose-escalating study and did not compare current
therapies with the use of AZEDRA[supreg]. We also note the following:
(1) The average age of the 21 enrolled patients in the IB12 study was
50.4 years old (a range of 30 to 72 years old); (2) the gender
distribution was 61.9 percent (n=13) male and 38.1 percent (n=8)
female; and (3) 76.2 percent (n=16) were white, 14.3 percent (n=3) were
black or African American, and 9.5 percent (n=2) were Asian. We
[[Page 19288]]
agree with the study's conductor \21\ that the size of the study is a
limitation, and with a younger, predominately white, male patient
population, generalization of study results to a more diverse
population may be difficult. The applicant reported that one other
aspect of the patient population indicated that all 21 patients
received prior anti-cancer therapy for treatment of malignant
pheochromocytoma and paraganglioma tumors, which included the
following: 57.1 percent (n=12) received radiation therapy including
external beam radiation and conventional MIBG; 28.6 percent (n=6)
received cytotoxic chemotherapy (for example, CVD and other
chemotherapeutic agents); and 14.3 percent (n=3) received
Octreotide.\22\ Although this study's patient population illustrates a
population that has failed some of the currently available therapy
options, which may potentially support a finding of substantial
clinical improvement for those with no other treatment options, we are
unclear which patients benefited from treatment involving
AZEDRA[supreg], especially in view of the finding of a Fitzgerald, et
al. study cited earlier \23\ that concluded tissues previously
irradiated by EBRT were found to be unresponsive to subsequent
treatment with \131\I-MIBG radionuclide. It was not clear in the
application how previously EBRT-treated patients who failed EBRT fared
with the Response Evaluation Criteria in Solid Tumors (RECIST) scores,
biotumor marker results, and reduction in antihypertensive medications.
We also lacked information to draw the same correlation between
previously CVD-treated patients and their RECIST scores, biotumor
marker results, and reduction in antihypertensive medications.
---------------------------------------------------------------------------
\21\ Noto, Richard B., et al., ``Phase 1 Study of High-Specific-
Activity I-131 MIBG for Metastatic and/or Recurrent Pheochromocytoma
or Paraganglioma (IB12 Phase 1 Study),'' J Clin Endocrinol Metab,
vol. 103(1), pp. 213-220.
\22\ Ibid.
\23\ Fitzgerald, P.A., Goldsby, R.E., Huberty, J.P., et al.,
``Malignant pheochromocytomas and paragangliomas: a phase II study
of therapy with high-dose 131I-metaiodobenzylguanidine (131I-
MIBG).'' Ann N Y Acad Sci, 2006, vol. 1073, pp. 465.
---------------------------------------------------------------------------
The applicant asserted that the use of AZEDRA[supreg] reduces tumor
size and reduces the secretion of tumor biomarkers, thereby providing
important clinical benefits to patients. The IB12 study assessed the
overall best tumor response based on RECIST.\24\ Tumor biomarker
response was assessed as complete or partial response for serum
chromogranin A and total metanephrines in 80 percent and 64 percent of
patients, respectively. The applicant noted that both the overall best
tumor response based on RECIST and tumor biomarker response favorable
results are at doses higher than 500 mCi. We noticed that tumor burden
improvement, as measured by RECIST criteria, showed that none of the 21
patients achieved a complete response. In addition, although 4 patients
showed partial response, these 4 patients also experienced dose-
limiting toxicity with hematological events, and all 4 patients
received administered doses greater than 18.5 GBq (500 mCi). We also
note that, regardless of total administered activity (for example,
greater than or less than 18.5 GBq (500 mCi)), 61.9 percent (n=13) of
the 21 patients enrolled in the study had stable disease and 14.3
percent (n=2) of the 14 patients who received greater than administered
doses of 18.5 GBq (500 mCi) had progressive disease. Finally, we also
noticed that, for most tumor biomarkers, there were no dose
relationship trends. While we appreciate the applicant's contention
that there is no other FDA-approved drug therapy for patients who have
been diagnosed with \131\I-MIBG avid malignant and/or recurrent and/or
unresectable pheochromocytoma and paraganglioma tumors, we have
questions as to whether the overall tumor best response and overall
best tumor biomarker data results from the IB12 study support a finding
that the use of the AZEDRA[supreg] technology represents a substantial
clinical improvement.
---------------------------------------------------------------------------
\24\ Therasse, P., Arbuck, S.G., Eisenhauer, J.W., Kaplan, R.S.,
Rubinsten, L., Verweij, J., Van Blabbeke, M., Van Oosterom, A.T.,
Christian, M.D., and Gwyther, S.G., ``New guidelines to evaluate the
response to treatment in solid tumors,'' J Natl Cancer Inst, 2000,
vol. 92(3), pp. 205-16. Available at: http://www.eortc.be/Services/Doc/RECIST.pdf.
---------------------------------------------------------------------------
Finally, regarding the applicant's assertion that, based on the
IB12 study data, AZEDRA[supreg] provides a safe alternative therapy for
those patients who have failed other currently available treatment
therapies, we note that none of the patients experienced hypertensive
crisis, and that 76 percent (n=16) of the 21 patients enrolled in the
study experienced Grade III or IV adverse events. Although the
applicant indicated the adverse events were related to the study drug,
the applicant also noted that there was no statistically significant
difference between the greater than or less than 18.5 GBq administered
doses; both groups had adverse events rates greater than 75 percent.
Specifically, 5 of 7 patients (76 percent) who received less than or
equal to 18.5 GBq administered doses, and 11 of 14 patients (79
percent) who received greater than 18.5 GBq administered doses
experienced Grade III or IV adverse advents. The most common (greater
than or equal to 10 percent) Grade III and IV adverse events were
neutropenia, leukopenia, thrombocytopenia, nausea, and vomiting. We
also note that: (1) There were 5 deaths during the study that occurred
from approximately 2.5 months up to 22 months after treatment and there
was no detailed data regarding the 5 deaths, especially related to the
total activity received during the study; (2) there was no information
about which patients received prior radiation therapy with EBRT and/or
conventional MIBG relative to those who experienced Grade III or IV
adverse events; and (3) the total lifetime radiation dose was not
provided by the applicant. We are inviting public comments on whether
the safety data profile from the IB12 study supports a finding that the
use of AZEDRA[supreg] represents a substantial clinical improvement for
patients who received treatment with \131\I-MIBG for a diagnosis of
avid malignant and/or recurrent and/or unresectable pheochromocytoma
and paraganglioma tumors, given the risks for Grade III or IV adverse
events.
The applicant provided study data results from the IB12B study
(MIP-IB12B), an open-label, prospective 5-year follow-up, single-arm,
multi-center, Phase II pivotal study to evaluate the safety and
efficacy of the use of AZEDRA[supreg] for the treatment of patients who
have been diagnosed with malignant and/or recurrent pheochromocytoma
and paraganglioma tumors to support the assertion of substantial
clinical improvement. The applicant reported that the IB12B's primary
endpoint is the proportion of patients with a reduction (including
discontinuation) of all anti-hypertensive medication by at least 50
percent for at least 6 months. Seventy-four patients who received at
least 1 dosimetric dose of AZEDRA[supreg] were evaluated for safety and
68 patients who received at least 1 therapeutic dose of AZEDRA[supreg],
each at 500 mCi (or 8 mCi/kg for patients weighing less than or equal
to 62.5 kg), were assessed for specific clinical outcomes. The
applicant asserted that results from this prospective study met the
primary endpoint (reduction or discontinuation of anti-hypertensive
medications), as well as demonstrated strong supportive evidence from
key secondary endpoints (overall tumor response, tumor biomarker
response, and overall survival rates) that confers important clinical
relevance to patients
[[Page 19289]]
who have been diagnosed with malignant pheochromocytoma and
paraganglioma tumors. The applicant also indicated that the use of
AZEDRA[supreg] was shown to be generally well tolerated at doses
administered at 8 mCi/kg. We note that the data results from the IB12B
study did not have a comparator arm, making it difficult to interpret
the clinical outcome data relative to other currently available
therapies.
As discussed for the IB12 study, the applicant reported that
antihypertension treatment was a proxy for effectiveness of the use of
AZEDRA[supreg] on norepinephrine induced hypertension producing tumors.
In the IB12B study, 25 percent (17/68) of patients met the primary
endpoint of having a greater than 50 percent reduction in anti-
hypertensive agents for at least 6 months. The applicant further
indicated that an additional 16 patients showed a greater than 50
percent reduction in anti-hypertensive agents for less than 6 months,
and by pooling data results from these 33 patients the applicant
concluded that 49 percent (33/68) of patients achieved a greater than
50 percent reduction at any time during the study's 12-month follow-up
period. The study's primary endpoint data also revealed that 11 percent
of the 88 patients who received a therapeutic dose of AZEDRA[supreg]
experienced a worsening of preexisting hypertension defined as an
increase in systolic blood pressure to >=160 mmHg with an increase of
20 mmHg or an increase in diastolic blood pressure >= 00 mmHg with an
increase of 10 mmHg. All changes in blood pressure occurred within the
first 24 hours post infusion. The applicant further compared its data
results from the IB12B study regarding antihypertension medication and
the frequency of post-infusion hypertension with published studies on
MIBG and CVD therapy. The applicant noted a retrospective analysis of
CVD therapy of 52 patients who had been diagnosed with metastatic
pheochromocytoma and paraganglioma tumors that found only 15 percent of
CVD-treated patients achieved a 50-percent reduction in anti-
hypertensive agents. The applicant also compared its data results for
post-infusion hypertension with literature reporting on MIBG and found
14 and 19 percent (depending on the study) of patients receiving MIBG
experience hypertension within 24 hours of infusion. Comparatively, the
applicant stated that the use of AZEDRA[supreg] had no acute events of
hypertension following infusion. We are inviting public comments on
whether these data results regarding hypertension support a finding
that the use of the AZEDRA[supreg] technology represents a substantial
clinical improvement, and if anti-hypertensive medication reduction is
an adequate proxy for improvement in renal, cerebral, and myocardial
end organ damage.
Regarding reduction in tumor burden (as defined by RECIST scores),
the applicant indicated that at the conclusion of the IB12B study's 12-
month follow-up period, 23.4 percent (n=15) of the 68 patients showed a
partial response, 68.8 percent (n=44) of the 68 patients achieved
stable disease, and 4.7 percent (n=3) of the 68 patients showed
progressive disease. None of the patients showed completed response.
The applicant maintained that achieving stable disease is important for
patients who have been treated for malignant pheochromocytoma and
paraganglioma tumors because this is a progressive disease without a
cure at this time. The applicant also indicated that literature shows
that stable disease is maintained in approximately 47 percent of
treatment na[iuml]ve patients who have been diagnosed with metastatic
pheochromocytoma and paraganglioma tumors at 1 year due to the indolent
nature of the disease.\25\ In the IB12B study, the data results equated
to 23 percent of patients achieving partial response and 69 percent of
patients achieving stable disease. According to the applicant, this
compares favorably to treatment with both conventional radiolabeled
MIBG and CVD chemotherapy.
---------------------------------------------------------------------------
\25\ Hescot, S., Leboulleux, S., Amar, L., Vezzosi, D., Borget,
I., Bournaud-Salinas, C., de la Fouchardiere, C., Lib[eacute], R.,
Do Cao, C., Niccoli, P., Tabarin, A., ``One-year progression-free
survival of therapy-naive patients with malignant pheochromocytoma
and paraganglioma,'' The J Clin Endocrinol Metab, 2013, vol. 98(10),
pp. 4006-4012.
---------------------------------------------------------------------------
The applicant stated that the data results demonstrated effective
tumor response rates. The applicant reported that the IB12 and IB12B
study data showed overall tumor response rates of 80 percent and 92
percent, respectively. In addition, the applicant contended that the
study data across both trials show that patients demonstrated improved
blood pressure control, reductions in tumor biomarker secretion, and
strong evidence in overall survival rates. The overall median time to
death from the first dose was 36.7 months in all treated patients.
Patients who received 2 therapeutic doses had an overall median
survival rate of 48.7 months, compared to 17.5 months for patients who
only received a single dose. We note that the IB12B study reported 12-
month Kaplan-Meier estimate of survival of 91 percent, while the drug
dosing study IB12 reported overall subject survival of 86 percent at 12
months, 62 percent at 24 months, 38 percent at 36 months, and 4.8
percent at 48 months. We also note that only 45 of 68 patients who
received at least 1 therapeutic dose completed the 12-month efficacy
phase.
The applicant indicated that comparison of the IB12B study data
regarding overall survival rate with historical data is difficult due
to the differences in the retrospective nature of the published
clinical studies and heterogeneous patient characteristics, especially
when overall survival is calculated from the time of initial diagnosis.
We agree with the applicant regarding the difficulties in comparing the
results of the published clinical studies, and also believe that the
differences in these studies may make it more difficult to evaluate
whether the use of the AZEDRA[supreg] technology improves overall
survival rates relative to other therapies.
We acknowledge the challenges with constructing robust clinical
studies due to the extremely rare occurrence of patients who have been
diagnosed with pheochromocytoma and paraganglioma tumors. However, we
are concerned that because the data for both of these studies is mainly
based upon retrospective studies and small, heterogeneous patient
cohorts, it is difficult to draw precise conclusions regarding
efficacy. Only very limited nonpublished data from two, single-arm,
noncomparative studies are available to evaluate the safety and
effectiveness of AZEDRA[supreg], leading to a comparison of outcomes
with historical controls.
We are inviting public comments on whether the use of the
AZEDRA[supreg] technology meets the substantial clinical improvement
criterion, including with respect to the specific concerns we have
raised. We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
AZEDRA[supreg] or at the New Technology Town Hall meeting.
b. CABLIVI[supreg] (caplacizumab-yhdp)
The Sanofi Company submitted an application for new technology add-
on payments for CABLIVI[supreg] (caplacizumab-yhdp) for FY 2020. The
applicant described CABLIVI[supreg] as a humanized bivalent nanobody
consisting of two identical building blocks joined by a tri alanine
linker, which is administered through intravenous and subcutaneous
[[Page 19290]]
injection to inhibit microclot formation in adult patients who have
been diagnosed with acquired thrombotic thrombocytopenic purpura
(aTTP). The applicant stated that aTTP is a life-threatening, immune-
mediated thrombotic microangiopathy characterized by severe
thrombocytopenia, hemolytic anemia, and organ ischemia with an
estimated 3 to 11 cases per million per year in the U.K. and
U.S.26 27 28 Further, the applicant stated that aTTP is an
ultra-orphan disease caused by inhibitory autoantibodies to von
Willebrand Factor-cleaving protease (vWFCP) also known as ``a
disintegrin and metalloprotease with thrombospondin type 1 motif,
member 13 (ADAMTS13),'' resulting in a severe deficiency in WFCP. The
applicant further explained that von Willebrand Factor (vWF) is a key
protein in hemostasis and is an adhesive, multimeric plasma
glycoprotein with a pivotal role in the recruitment of platelets to
sites of vascular injury. According to the applicant, more than 90
percent of circulating vWF is expressed by endothelial cells and
secreted into the systemic circulation as ultra-large von Willebrand
Factor (ULvWF) multimers. The applicant stated that decreased ADAMTS13
activity leads to an accumulation of ULvWF multimers, which bind to
platelets and induce platelet aggregation. According to the applicant,
the consumption of platelets in these microthrombi causes severe
thrombocytopenia, tissue ischemia and organ dysfunction (commonly
involving the brain, heart, and kidneys) and may result in acute
thromboembolic events such as stroke, myocardial infarction, venous
thrombosis, and early death. The applicant indicated that the
aforementioned tissue and organ damage resulting from the ischemia
leads to increased levels of lactate dehydrogenase (LDH), troponins,
and creatinine (organ damage markers) and that faster normalization of
these organ damage markers and platelet counts is believed to be linked
with faster resolution of the ongoing microthrombotic process and the
associated tissue ischemia. According to the applicant, in diagnoses of
aTTP there is no consensual, validated surrogate marker that defines
the subpopulation at greatest risk of death or significant morbidity.
Therefore, the applicant stated that all patients who have been
diagnosed with aTTP should be considered severe cases and treated in
order to prevent death and significant morbidity.
---------------------------------------------------------------------------
\26\ Scully, M., et al., ``Regional UK TTP registry: correlation
with laboratory ADAMTS 13 analysis and clinical Features,'' Br. J.
Haematol., 2008, vol. 142(5), pp. 819-26.
\27\ Reese, J.A., et al., ``Children and adults with thrombotic
thrombocytopenic purpura associated with severe, acquired Adamts13
deficiency: comparison of incidence, demographic and clinical
features,'' Pediatr. Blood Cancer, 2013, vol. 60(10), pp. 1676-82.
\28\ Terrell, D.R., et al., ``The incidence of thrombotic
thrombocytopenic purpura-hemolytic uremic syndrome: all patients,
idiopathic patients, and patients with severe ADAMTS-13
deficiency,'' J. Thromb. Haemost., 2005, vol. 3(7), pp. 1432-6.
---------------------------------------------------------------------------
The applicant explained that the two standard-of-care (SOC)
treatment options for a diagnosis of aTTP are plasma exchange (PE), in
which a patient's blood plasma is removed through apheresis and is
replaced with donor plasma, and immunosuppression (for example,
corticosteroids and increasingly also rituximab), which is often
administered as adjunct to plasma exchange in the treatment for a
diagnosis of aTTP.29 30 According to the applicant, despite
the current SOC treatment options, acute aTTP episodes are still
associated with a mortality rate of up to 20 percent, which generally
occurs within the first weeks of diagnosis. The applicant asserted
that, although the 20-percent mortality rate reflects substantial
improvement because of PE treatment, in spite of greater understanding
of disease pathogenesis and the use of newer immunosuppressants, the
mortality rate has not been further
improved.31 32 33 34 35 36 The applicant also noted that
another important limitation of the currently available therapies (PE
and immunosuppression) is the delayed onset of effect of days to weeks
of these therapies because such therapies do not directly address the
pathophysiological platelet aggregation that leads to the formation of
microthrombi, which is ultimately associated with death or with the
severe outcomes reported with diagnoses of aTTP. The applicant
explained that despite current treatment, exacerbation and relapse
occur and frequently lead to hospitalization and the need to restart
daily PE treatment and optimize immunosuppression. In addition, the
applicant noted that patients may experience exacerbations after
discontinuing plasma exchange treatment due to continuing formation of
microthrombi as a result of unresolved underlying autoimmune disease,
and patients remain at risk of thrombotic complications or early death
until the episode is completely resolved.\37\
---------------------------------------------------------------------------
\29\ Scully, M., et al., ``Guidelines on the diagnosis and
management of thrombotic thrombocytopenic purpura and other
thrombotic microangiopathies,'' Br. J. Haematol., 2012, vol. 158(3),
pp. 323-35.
\30\ George, J.N., ``Corticosteroids and rituximab as adjunctive
treatments for thrombotic thrombocytopenic Purpura,'' Am. J.
Hematol., 2012, vol. 87 Suppl 1, pp. S88-91.
\31\ Form for Notification of a Compassionate Use Programme to
the Paul-Ehrlich-Institut.
\32\ Benhamou, Y., et al., ``Cardiac troponin-I on diagnosis
predicts early death and refractoriness in acquired thrombotic
thrombocytopenic purpura. Experience of the French Thrombotic
Microangiopathies Reference Center,'' J. Thromb. Haemost., 2015,
vol. 13(2), pp. 293-302.
\33\ Han, B., et al., ``Depression and cognitive impairment
following recovery from thrombotic thrombocytopenic purpura,'' Am.
J. of Hematol., 2015, vol. 90(8), pp. 709-14.
\34\ Rajan, S.K., ``BMJ Best Practice; Thrombotic
thrombocyopenic purpura,'' May 27, 2016.
\35\ Goel, R., et al., ``Prognostic risk-stratified score for
predicting mortality in hospitalized patients with thrombotic
thrombocytopenic purpura: nationally representative data from 2007
to 2012,'' Transfusion, 2016, vol. 56(6), pp. 1451-8.
\36\ Rock, G.A., Shumak, K.H., Buskard, N.A., et al.,
``Comparison of plasma exchange with plasma infusion in the
treatment of thrombotic thrombocytopenic purpura. Canadian Apheresis
Study Group,'' N Engl J Med, 1991, vol. 325, pp. 393-397.
\37\ Goel, R., et al., ``Prognostic risk-stratified score for
predicting mortality in hospitalized patients with thrombotic
thrombocytopenic purpura: nationally representative data from 2007
to 2012,'' Transfusion, 2016, vol. 56(6), pp. 1451-8.
---------------------------------------------------------------------------
According to the information provided by the applicant,
CABLIVI[supreg] is administered as an adjunct to PE treatment and
immunosuppressive therapy immediately upon diagnosis of aTTP through a
bolus intraveneous injection for the first dose and subcutaneous
injection for all subsequent doses. The recommended treatment regimen
and dosage of CABLIVI[supreg] consists of administering 10 mg on the
first day of treatment via intravenous injection prior to the standard
plasma exchange treatment. After completion of PE treatment on the
first day, a 10 mg subcutaneous injection is administered. After the
first day, and for the rest of the plasma exchange treatment period, a
daily 10 mg subcutaneous injection is administered following each day's
PE treatment. After the PE treatment period is completed, a daily 10 mg
subcutaneous injection is administered for 30 days. If the underlying
immunological disease (aTTP) is not resolved, the treatment period
should be extended beyond 30 days and be accompanied by optimization of
immunosuppression (another SOC treatment option, in addition to PE
treatment). According to the applicant and as discussed later, the use
of CABLIVI[supreg] produces faster normalization of platelet count
response compared to that of SOC treatment options alone. The applicant
indicated that this contributes to a decrease in the
[[Page 19291]]
length of the SOC treatment period with respect to the number of days
of PE treatment, the mean length of intensive care unit stays, and the
mean length of hospitalizations.
With respect to the newness criterion, CABLIVI[supreg] received FDA
approval on February 6, 2019, for the treatment of adult patients who
have been diagnosed with aTTP, in combination with plasma exchange and
immunosuppressive therapy. According to information provided by the
applicant, CABLIVI[supreg] was previously granted Fast Track and Orphan
Drug designations in the United States for the treatment of aTTP by the
FDA and Orphan Drug designation in Europe for the treatment of aTTP.
Currently, there are no ICD-10-PCS procedure codes to uniquely identify
procedures involving CABLIVI[supreg]. We note that the applicant
submitted a request for approval for a unique ICD-10-PCS procedure code
for the administration of CABLIVI[supreg] beginning in FY 2020.
As discussed above, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, CABLIVI[supreg] is a first-in-class therapy
with an innovative mechanism of action. The applicant explained that
CABLIVI[supreg] binds to the A1 domain of vWF and specifically inhibits
the interaction between vWF and platelets. Furthermore, the applicant
indicated that in patients who have been diagnosed with aTTP,
proteolysis of ULvWF multimers by ADAMTS13 is impaired due to the
presence of inhibiting or clearing anti-ADAMTS13 auto-antibodies,
resulting in the persistence of the constitutively active A1 domain
and, as a consequence, platelets spontaneously bind to ULvWF and
generate microvascular blood clots in high shear blood vessels. The
applicant noted that CABLIVI[supreg] is able to interact with vWF in
both its active (that is, ULvWF multimers or normal multimers activated
through immobilization or shear stress) and inactive forms (that is,
multimers prior to conformational change of the A1 domain), thereby
immediately blocking the interaction of vWF with the platelet receptor
(GPIb-IX-V) and further preventing spontaneous interaction of ULvWF
with platelets that would lead to platelet microthrombi formation in
the microvasculature, local schemia and platelet consumption. The
applicant highlighted that this immediate platelet-protective effect
differentiates CABLIVI[supreg] from slower-acting therapies, such as PE
and immunosuppressants, which need days to exert their effect. The
applicant explained that PE acts by removing ULvWF and the circulating
auto-antibodies against ADAMTS13, thereby replenishing blood levels of
ADAMTS13, while immunosuppressants aim to stop or reduce the formation
of auto-antibodies against ADAMTS13.
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant believed that
potential cases representing patients who may be eligible for treatment
involving CABLIVI[supreg] would be assigned to the same MS- DRGs as
cases representing patients who receive SOC treatment for a diagnosis
of aTTP. As explained below in the discussion of the cost criterion,
the applicant believed that potential cases representing patients who
may be eligible for treatment involving CABLIVI[supreg] would be
assigned to MS-DRGs that contain cases representing patients who were
diagnosed with aTTP and received therapeutic PE procedures during
hospitalization.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, according to the
applicant, there are no other specific therapies approved for the
treatment of patients diagnosed with aTTP. As stated earlier, according
to the applicant, patients who have been diagnosed with aTTP have two
currently available SOC treatment options: PE, in which a patient's
blood plasma is removed through apheresis and is replaced with donor
plasma, and immunosuppression (for example, corticosteroids and
increasingly rituximab), which is administered as an adjunct to PE in
the treatment of aTTP. The applicant further explained that
immunosuppression consisting of glucocorticoids is often administered
as adjunct to PE in the initial treatment of a diagnosis of
aTTP,38 39 but their use is based on historical evidence
that some patients with limited symptoms might respond to
corticosteroids alone.40 41 The applicant noted that there
have been no studies specifically comparing treatment involving the
combination of PE with corticosteroids, versus PE alone; that they are
not specifically approved for the treatment of a diagnosis of aTTP, and
that other immunosuppressive agents used to treat a diagnosis of aTTP,
such as rituximab, have not been studied in properly controlled,
double-blind studies. The applicant also noted that rituximab, aside
from not being licensed for the treatment of a diagnosis of aTTP, is
not fully effective during the first 2 weeks of treatment, with a
reported delay of onset of its effect that may extend up to 27 days,
with at least 3 to 7 days needed to achieve adequate B-cell depletion
(given the B-cells may also contain ADAMTS13 antibodies), and even
longer to restore ADAMTS13 activity levels.42 43
---------------------------------------------------------------------------
\38\ Scully, M., et al., ``Guidelines on the diagnosis and
management of thrombotic thrombocytopenic purpura and other
thrombotic microangiopathies,'' Br. J. Haematol., 2012, vol. 158(3),
pp. 323-35.
\39\ George, J.N., ``Corticosteroids and rituximab as adjunctive
treatments for thrombotic thrombocytopenic Purpura,'' Am. J.
Hematol., 2012, vol. 87 Suppl 1, pp. S88-91.
\40\ Bell, W.R., et al., ``Improved survival in thrombotic
thrombocytopenic purpura-hemolytic uremic Syndrome. Clinical
experience in 108 patients,'' N. Engl. J. Med., 1991, vol. 325(6),
pp. 398-403.
\41\ Phillips, E.H., et al., ``The role of ADAMTS-13 activity
and complement mutational analysis in differentiating acute
thrombotic microangiopathies,'' J. Thromb. Haemost., 2016, vol.
14(1), pp. 175-85.
\42\ Coppo, P., ``Management of thrombotic thrombocytopenic
purpura,'' Transfus Clin Biol., Sep 2017, vol. 24(3), pp. 148-153.
\43\ Froissart, A., et al., ``Rituximab in autoimmune thrombotic
thrombocytopenic purpura: A success story,'' Eur. J. Intern. Med.,
2015, vol. 26(9), pp. 659-65.
---------------------------------------------------------------------------
Based on the applicant's statements as summarized above, the
applicant believes that CABLIVI[supreg] provides a new treatment option
for patients who have been diagnosed with aTTP. However, it is not
clear that CABLIVI[supreg] would involve the treatment of a different
type of disease or a different patient population. As stated earlier,
according to the applicant, patients who have been diagnosed with aTTP
have two SOC treatment options for a diagnosis of aTTP: PE, in which a
patient's blood plasma is removed through apheresis and is replaced
with donor plasma, and immunosuppression (for example, corticosteroids
and increasingly also rituximab), which is administered as an adjunct
to PE in the initial treatment for a diagnosis of aTTP. Therefore, it
appears that CABLIVI[supreg] is used to treat the same or similar type
of disease (a diagnosis of aTTP) and a similar patient population as
currently available treatment options.
We are inviting public comments on whether CABLIVI[supreg] is
substantially similar to other technologies and whether CABLIVI[supreg]
meets the newness criterion.
[[Page 19292]]
With regard to the cost criterion, the applicant conducted the
following analysis to demonstrate that the technology meets the cost
criterion. In order to identify the range of MS-DRGs that cases
representing potential patients who may be eligible for treatment using
CABLIVI[supreg] may map to, the applicant identified all MS-DRGs for
patients who had been hospitalized for a diagnosis of aTTP.
Specifically, the applicant searched the FY 2017 MedPAR file for
Medicare fee-for-service inpatient hospital claims submitted between
October 1, 2016 and September 30, 2017, and identified potential cases
by ICD-10-CM diagnosis code M31.1 (Thrombotic microangiopathy) and ICD-
10-PCS procedure codes 6A550Z3 (Pheresis of plasma, single) and 6A551Z3
(Pheresis of plasma, multiple). The applicant noted that it excluded
cases with an ICD-10-CM diagnosis code of D59.3 (Hemolytic-uremic
syndrome).
This resulted in 360 cases spanning 61 MS-DRGs, with approximately
67.2 percent of all potential cases mapping to the following 5 MS-DRGs:
------------------------------------------------------------------------
MS-DRG MS-DRG title
------------------------------------------------------------------------
MS-DRG 545.......................... Connective Tissue Disorders with
MCC.
MS-DRG 546.......................... Connective Tissue Disorders
without CC.
MS-DRG 547.......................... Connective Tissue Disorders
without CC/MCC.
MS-DRG 682.......................... Renal Failure with MCC.
MS-DRG 698.......................... Other Kidney and Urinary Tract
Diagnoses with MCC.
------------------------------------------------------------------------
Using the 242 identified cases that mapped to the top 5 MS-DRGs
above, the average case-weighted unstandardized charge per case was
$188,765. The applicant then standardized the charges and then removed
historic charges for items that are expected to be avoided for patients
who receive treatment involving CABLIVI[supreg]. The applicant
determined that 31 percent of historical routine bed charges, 65
percent of historical ICU charges, and 38 percent of historical blood
administration charges (which includes charges for therapeutic PE)
would be reduced because of the use of CABLIVI[supreg], based on the
findings from the Phase III clinical study HERCULES. The applicant
indicated it used the FY 2017 MedPAR file to determine the appropriate
amount of charges to remove. The applicant then inflated the adjusted
standardized charges by 8.864 percent utilizing the 2-year inflation
factor published by CMS in the FY 2019 IPPS/LTCH PPS final rule to
adjust the outlier threshold (83 FR 41722). (We note that this figure
was revised in the FY 2019 IPPS/LTCH PPS final rule correction notice.
The corrected final 2-year inflation factor is 1.08986 (83 FR 49844).
We further note that even when using the corrected final rule values to
inflate the charges, the average case-weighted standardized charge per
case exceeded the average case-weighted threshold amount.) The
applicant explained that the anticipated price for CABLIVI[supreg]'s
indication for the treatment of patients who have been diagnosed with
aTTP, in combination with plasma exchange and immunosuppressive
therapy, has yet to be determined and, therefore, no charges for
CABLIVI[supreg] were added in the analysis. Based on the FY 2019 IPPS/
LTCH PPS final rule correction notice data file thresholds for FY 2020,
the applicant determined the average case-weighted threshold amount was
$49,904. The final inflated average case-weighted standardized charge
per case was $145,543. Because the final inflated average case-weighted
standardized charge per case exceeds the average case-weighted
threshold amount, the applicant maintained that the technology meets
the cost criterion. We are inviting public comments on whether
CABLIVI[supreg] meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that it believes that CABLIVI[supreg] represents a
substantial clinical improvement compared to the use of currently
available treatments (PE and immunosuppressants) because it: (1)
Significantly reduces time to platelet count response, which is
consistent with the halting of platelet consumption in microthrombi;
(2) significantly reduces the number of patients with aTTP-related
death, recurrence of aTTP-related episodes, or a major thromboembolic
event; (3) reduces mortality; (4) reduces the proportion of patients
with recurrence of aTTP diagnoses; (5) reduces the proportion of
patients who develop refractory disease; (6) reduces the number of days
of PE; (7) reduces the mean length of intensive care unit stay and the
mean length of hospitalization; and (8) shows a trend of more rapid
normalization of organ damage markers. The applicant provided further
detail regarding these assertions, referencing the results of Phase II
and Phase III studies and an integrated efficacy analysis of both
studies.
The applicant reported that the Phase II study was a randomized,
single-blind, placebo controlled study entitled ALX-0681-2.1/10 (TITAN)
that examined the efficacy and safety of the use of CABLIVI[supreg]
compared to a placebo, with the primary endpoint being achievement of a
statistically significant reduction in time to platelet count response.
Seventy-five patients, 66 of which were white, (19 to 72 years old,
with a mean of 41.6 years old; 44 women and 31 men) with an episode of
aTTP were randomized 1:1 to receive either CABLIVI[supreg] (n=36) or
placebo (n=39), in addition to daily PE.\44\ Patients received their
first dose of CABLIVI[supreg] administered through intravenous
injection prior to the first PE, followed by daily doses administered
subcutaneously after each PE. After discontinuing PE, daily doses of
CABLIVI[supreg] administered through subcutaneous injection were
continued for 30 days. The median treatment duration with
CABLIVI[supreg] was 36 days.
---------------------------------------------------------------------------
\44\ Peyvandi, F., Scully, M., Kremer Hovinga, J.A., Cataland,
S., Kn[ouml]bl, P., Wu, H., Artoni, A., Westwood, J.P., Mansouri
Taleghani, M., Jilma, B., Callewaert, F., Ulrichts, H., Duby, C.,
Tersago, D., TITAN Investigators, ``Caplacizumab for Acquired
Thrombotic Thrombocytopenic Purpura,'' N Engl J Med., February 11,
2016, vol. 374(6), pp. 511-22. PMID: 26863353.
---------------------------------------------------------------------------
According to the applicant, significantly more patients in the
treatment arm met the primary endpoint [95 percent Confidence Interval
(CI) (3.78, 1.28)]. The applicant indicated that the time to platelet
count response improvement constitutes a significant substantial
clinical improvement because it demonstrated that patients treated with
CABLIVI[supreg] were 2.2 times more likely to achieve an acceptable
time to platelet count response than patients receiving treatment with
the placebo. Additionally, the applicant noted that exacerbation of
aTTP occurred in fewer patients who were treated with CABLIVI[supreg]
(8.3 percent) than placebo (28.2 percent). During the 1-month follow-up
period, 8 relapses (defined as a recurrence more than 30 days after
discontinuing PE) occurred in the CABLIVI[supreg] group with 7 of the
relapses occurring within 10 days of
[[Page 19293]]
discontinuing the study drug. In all seven of the relapses, ADAMTS13
activity was still severely suppressed at the end of the treatment
period, evidence of ongoing underlying immunological disease and
indicating an imminent risk of another relapse. The applicant explained
that according to post-hoc analyses, the group of patients who were
treated with CABLIVI[supreg] compared to placebo showed a decrease in
the percentage of patients with refractory disease (0 percent versus
10.8 percent), a reduction in the number of days of PE (7.7 days versus
11.7 days) and a trend to more rapid normalization of organ damage
markers (lactate dehydrogenase, cardiac troponin I and serum
creatinine). Finally, the applicant noted that there were no deaths in
the group of patients who were treated with CABLIVI[supreg]. However, 2
of the 39 placebo-treated patients (5.1 percent) died.
The applicant explained that the Phase III study was a randomized,
double-blind, placebo controlled study entitled ALX0681-C301 (HERCULES)
that examined the efficacy and safety of the use of CABLIVI[supreg]
compared to a placebo, with the primary endpoint being achievement of a
statistically significant reduction in time to platelet count response.
One hundred forty-five patients (18 to 79 years old, with a mean of 46
years old, 100 women and 45 men), with an episode of aTTP were
randomized 1:1 to receive either CABLIVI[supreg] (n=72) or placebo
(n=73) in addition to daily PE and immunosuppression.\45\ The applicant
explained that patients received a single 10 mg CABLIVI[supreg]
intravenous injection or placebo prior to the first PE, followed by a
daily CABLIVI[supreg] 10 mg subcutaneous injection or placebo after
completion of PE, for the duration of the daily PE treatment period and
for 30 days thereafter. According to the applicant, if at the end of
this treatment period (daily PE treatment period and 30 days after)
there was evidence of persistent underlying immunological disease
activity (indicative of an imminent risk for recurrence), treatment
could be extended weekly for a maximum of 4 weeks, together with
optimization of immunosuppression. The applicant indicated that
patients who experienced a recurrence while undergoing study drug
treatment were switched to open-label CABLIVI[supreg] and they were
again treated for the duration of daily PE treatment and for 30 days
thereafter. If at the end of this treatment period (daily PE treatment
period and 30 days after) there was evidence of ongoing underlying
immunological disease, open-label treatment with CABLIVI[supreg] could
be extended weekly for a maximum of 4 weeks, together with optimization
of immunosuppression. Patients were followed for 28 days after
discontinuation of treatment. Upon recurrence during the follow-up
period (that is, after all study drug treatment had been discontinued),
there was no re-initiation of the study drug because recurrence at this
point was treated according to the SOC. The median treatment duration
with CABLIVI[supreg] in the double-blind period was 35 days.
---------------------------------------------------------------------------
\45\ Scully, M., et al., ``Treatment of Acquired Thrombotic
Thrombocytopenic Purpura with Caplacizumab,'' N. Engl. J. Med., (In
Press).
---------------------------------------------------------------------------
According to the applicant, patients in the treatment arm were more
likely to achieve platelet count response at any given time point,
compared to the placebo [95 percent CI (1.1, 2.2)]. The applicant
believed that this constitutes a significant substantial clinical
improvement because patients who were treated with CABLIVI[supreg] were
1.55 times more likely to achieve platelet count response at any given
time point, compared to placebo. The applicant also indicated that,
compared to placebo, treatment with CABLIVI[supreg] resulted in a 74
percent reduction in the number of patients with aTTP-related death,
recurrence of aTTP diagnosis, or a major thromboembolic event, during
the study drug treatment period (p<0.0001).
The applicant noted that the proportion of patients with a
recurrence of an aTTP diagnosis in the Phase III study period (that is,
the drug treatment period plus the 28-day follow-up after
discontinuation of the drug treatment) was 67 percent lower in the
CABLIVI[supreg] group (12.7 percent) compared to the placebo group
(38.4 percent) (p<0.001). The applicant also indicated that in all 6
patients in the CABLIVI[supreg] group who experienced a recurrence of
an aTTP diagnosis during the follow-up period (that is, a relapse),
ADAMTS13 activity levels were less than 10 percent at the end of the
study drug treatment, indicating that the underlying immunological
disease was still active at the time CABLIVI[supreg] was discontinued.
Furthermore, the applicant stated that there were no patients who were
treated with CABLIVI[supreg] that had refractory disease (defined as
absence of platelet count doubling after 4 days of standard treatment
and elevated LDH), compared to 3 patients (4.2 percent) who had
refractory disease that were treated with placebo. The applicant also
explained that a trend to faster normalization of the organ damage
markers lactate dehydrogenase, cardiac troponin I and serum creatinine
was observed in patients who were treated with CABLIVI[supreg]. The
applicant noted that during the study drug treatment, there were no
deaths in patients who were treated with CABLIVI[supreg], while 3 of
the 73 placebo-treated patients (4.1 percent) died. Finally, the
applicant stated that during the Phase III study drug treatment period,
treatment with CABLIVI[supreg] resulted in a 38 percent reduction in
the mean number of PE treatment days versus placebo (reduction of 3.6
days) and a 41 percent reduction in the mean volume of PE (reduction of
14.6L). Furthermore, treatment with CABLIVI[supreg] resulted in a 65
percent reduction in the mean length of ICU stay (reduction of 6.3
days) and a 31 percent reduction in the mean length of hospitalization
(reduction of 4.5 days) during the Phase III study drug treatment
period.
The applicant submitted integrated data from the blinded periods of
the Phase II and Phase III studies that show a statistically
significant difference in favor of CABLIVI[supreg] (n=108) in time to
platelet count response compared to placebo (n=112). The applicant
indicated that patients who were treated with CABLIVI[supreg] were 1.65
times more likely to achieve platelet count response at any given time
point during the blinded period than patients who were treated with
placebo (95 percent CI: 1.23, 2.20; p<0.001). Additionally, according
to the applicant, integrated data from the blinded periods of the Phase
II and Phase III studies showed that compared to placebo, treatment
with CABLIVI[supreg] resulted in a 72.6 percent reduction in the
percentage of patients with aTTP-related death, a recurrence of a aTTP
diagnosis, or at least one treatment-emergent major thromboembolic
event during the blinded treatment period (p<0.0001). More
specifically, the applicant indicated that during the blinded treatment
period no aTTP-related deaths occurred in the CABLIVI[supreg] group
compared to 4 aTTP-related deaths in the placebo group (p<0.05),
treatment with CABLIVI[supreg] resulted in an 84.0 percent reduction in
the proportion of patients with a recurrence of a aTTP diagnosis
(exacerbation, relapse) during the blinded treatment period (p<0.0001),
and treatment with CABLIVI[supreg] resulted in a reduction of 40.8
percent in the proportion of patients with at least one treatment-
emergent major thromboembolic event during the blinded treatment
period.
According to the applicant, pooled data from the two studies showed
that none of the patients who were treated with CABLIVI[supreg]
developed refractory disease (that is, absence of platelet count
doubling after 4 days of standard
[[Page 19294]]
treatment and elevated LDH) compared to 7 patients (6.3 percent; 7/112)
who were treated with placebo during the blinded period (p<0.01).
Finally, the applicant noted that across both studies, treatment with
CABLIVI[supreg] resulted in a 37.5 percent reduction in the mean number
of days of PE treatment (reduction of 3.9 days).
Although the applicant asserts that CABLIVI[supreg] represents a
substantial clinical improvement compared to the use of currently
available treatments (PE and immunosuppressants), we are concerned that
the Phase II TITAN and Phase III HERCULES studies may not provide
enough evidence to support that the use of CABLIVI[supreg] represents a
substantial clinical improvement.
Regarding the Phase II TITAN study, we are concerned that because
66 of the 75 patients in the study population were white, the results
of the study may not be generalizable to a more diverse population that
may be at risk for diagnosis of aTTP. Additionally, we note that
CABLIVI[supreg] was associated with fewer aTTP exacerbations during
therapy, but was associated with more aTTP exacerbations after therapy
was discontinued, suggesting a lack of effect on long-term anti-
ADAMTS13 antibody levels. Although this is consistent with
CABLIVI[supreg]'s mechanism of action, we are concerned that without
long-term data to determine the impact of adjunct use of
CABLIVI[supreg] on exacerbations and relapse it may be difficult to
determine if the use of CABLIVI[supreg] represents a substantial
clinical improvement over existing therapy.
Based on data from the Oklahoma TTP-HUS Registry, the incidence of
aTTP is approximately three cases per 1 million adults per year.\46\
Additionally, the median age for a diagnosis of aTTP is 41, with a wide
range between 9 years old and 78 years old. We acknowledge the
challenges with constructing robust clinical studies due to the
extremely rare occurrence of patients who have been diagnosed with
aTTP. However, regarding the Phase III HERCULES study, we are
nonetheless concerned that the study population was small, 145 people.
Additionally, it is unclear if the response rate may differ in those
who have a de novo diagnosis versus those with recurrent disease. We
note that PE treatment alone has been attributed to an 80 percent
survival rate,\47\ and because CABLIVI[supreg] is given in combination
with or after SOC therapies, we are concerned that we may not have
sufficient information to determine the extent to which the study
results are attributable to the use of CABLIVI[supreg]. Furthermore,
with the follow-up period for the Phase III HERCULES study being only
28 days, we are concerned that there is a lack of long-term data. In
the absence of long-term data, we are concerned about the impact of the
use of CABLIVI[supreg] on the relapse rate beyond the overall study
period, including the 28-day follow-up period.
---------------------------------------------------------------------------
\46\ Reese, J.A., Muthurajah, D.S., Kremer-Hovinga, J.A.,
Vesely, S.K., Terrell, D.R., George, J.N., ``Children and adults
with thrombotic thrombocytopenic purpura associated with severe,
acquired Adamts13 deficiency: comparison of incidence, demographic
and clinical features,'' Pediatr Blood Cancer, October 2013, vol.
60(10), pp. 1676-82, Epub June 1, 2013.
\47\ Rock, G.A., Shumak, K.H., Buskard, N.A., et al.,
``Comparison of plasma exchange with plasma infusion in the
treatment of thrombotic thrombocytopenic purpura. Canadian Apheresis
Study Group,'' N Engl J Med, 1991, vol. 325, pp. 393-397.
---------------------------------------------------------------------------
Finally, although both the Phase II and III studies consisted of
key secondary endpoints such as death or major thromboembolic events,
we are concerned that these endpoints were not clearly defined. We also
are concerned that the studies did not appear to account for other
clearly defined endpoints such as heart attack, stroke, a bleeding
episode, and power calculations for the expected differences in such
endpoints that would be biologically important.
We are inviting public comments on whether CABLIVI[supreg] meets
the substantial clinical improvement criterion.
Below we summarize and respond to a written comment we received in
response to the New Technology Town Hall meeting notice published in
the Federal Register regarding the substantial clinical improvement
criterion for CABLIVI[supreg].
Comment: The applicant stated that during the New Technology Town
Hall meeting questions were asked regarding the design of the Phase III
HERCULES study, specifically regarding treatments that were
administered during the different arms of the study. To address those
questions, the applicant summarized the methodology of the Phase III
HERCULES study by indicating that 145 patients with an acute episode of
aTTP who had received one PE treatment were randomized 1:1 to placebo
(73 patients), or 10 mg of CABLIVI[supreg] (72 patients), in addition
to receiving daily PE treatment and corticosteroids. The applicant
explained that a single intravenous dose of 10 mg of the study drug was
given before the first PE performed during the study and a single 10 mg
subcutaneous dose was given the same day following completion of that
day's PE treatment. The applicant further stated that a subcutaneous
dose was given daily during the PE treatment period and 30 days
thereafter. The applicant noted that, if at the end of this period
there was evidence of ongoing disease, such as suppressed ADAMTS13
activity, investigators were encouraged to extend the blinded treatment
for a maximum of 4 weeks in combination with optimization of
immunosuppression. In addition, the applicant indicated that all
patients entered a 28-day treatment-free follow-up period after the
last dose of the study drug. The applicant explained that the primary
endpoint was time to platelet count response, defined as platelet count
greater than or equal to 150 x 10/L with discontinuation of daily PE
treatment within 5 days. Further, the applicant stated that there were
four key secondary endpoints, hierarchically ranked: (1) The proportion
of patients with aTTP-related death, aTTP recurrence, or at least one
major thromboembolic event during the study drug treatment period (a
blinded, independent committee adjudicated aTTP-related deaths and
major thromboembolic events); (2) the proportion of patients with a
recurrence during the entire study period, including the follow-up
period; (3) the proportion of patients with refractoriness to therapy,
defined as absence of platelet count doubling after 4 days of treatment
and LDH still above normal; and (4) the time to normalization of 3
organ damage markers: LDH, cardiac troponin I and serum creatinine.
Response: We appreciate the information provided by the applicant.
We will take this information into consideration when deciding whether
to approve new technology add-on payments for CABLIVI[supreg] for FY
2020.
c. CivaSheet[supreg]
CivaTech Oncology, Inc. submitted an application for new technology
add-on payments for CivaSheet[supreg] for FY 2020. CivaSheet[supreg]
received FDA clearance of a 510(k) premarket notification on August 29,
2014. CivaSheet[supreg] was approved as a ``sealed source'' by the
Nuclear Regulatory Commission (NRC) and added to the Registry of
Radioactive Sealed Source and Devices on October 24, 2014. On May 9,
2018, CivaSheet[supreg] was registered by the American Association of
Physicists in Medicine (AAPM) on the ``Joint AAPM/IROC Houston Registry
of Brachytherapy Sources Complying with AAPM Dosimetric
Prerequisites.'' According to the applicant, inclusion on this AAPM
registry is a long-standing requirement imposed on brachytherapy
sources used
[[Page 19295]]
in all National Cancer Institute clinical trials and that all other
available brachytherapy sources are included on this registry.
According to the applicant, CivaSheet[supreg] was not commercially
distributed among IPPS hospitals until May 2018, after meeting the
requirements for inclusion in the AAPM registry. Therefore, according
to the applicant the ``newness'' period for the CivaSheet[supreg], if
approved for FY 2020 new technology add-on payments, should commence on
May 9, 2018. Based on this information, we believe the newness period
for CivaSheet[supreg] would begin on May 9, 2018. However, we are
seeking public comments on whether inclusion on the AAPM registry is an
appropriate indicator of the first availability of the
CivaSheet[supreg] brachytherapy sources on the U.S. market and whether
the date of inclusion on the AAPM registry is appropriate to consider
as the beginning of the newness period for CivaSheet[supreg].
CivaSheet[supreg] is intended for medical purposes to be placed
into a body cavity or tissue as a source for the delivery of radiation
therapy. CivaSheet[supreg] is indicated for use as a brachytherapy
source for the treatment of selected localized tumors. The device may
be used either for primary treatment or for the treatment of residual
disease after excision of the primary tumor. CivaSheet[supreg] may be
used concurrently, or sequentially, with other treatment modalities,
such as external beam radiation therapy or chemotherapy. We note that
the applicant has submitted a request for approval for a unique ICD-10-
PCS procedure code to describe procedures involving the use the
CivaSheet[supreg] device, beginning in FY 2020.
As discussed previously, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and, therefore, would not be
considered ``new'' for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, CivaSheet[supreg] does not have a similar
mechanism of action in comparison to existing brachytherapy
technologies. The applicant asserted that the unique construction and
configuration of the CivaSheet[supreg] device permits delivery of
radiation intra-operatively in a highly targeted fashion. The applicant
explained that the CivaSheet[supreg] is cut to size in the operation
room (OR) and conformed to the patient's anatomy and surgical site,
which allows radiation to be delivered to the resected tumor bed
margins at the time of the original surgery. The applicant further
explained that, it is generally believed that ``hot'' spots should be
avoided in the delivery of radiotherapy because they lead to
complications, citing the finding that ``[i]n brachytherapy, dose
homogeneity is difficult to achieve, but efforts to minimize ``hot''
spots have been regarded as virtuous and implant-planning guidelines
were developed to assist in this regard.'' \48\ The applicant stated
that implants are rarely geometrically perfect and, to avoid under-
dosing some parts of the target volume, it may be necessary to create
``hot spots'' in other parts of the anatomy. However, as a result, a
``hotter'' dose compared to that achievable with external beam
technologies can be delivered to the intended area. In contrast, the
applicant indicated that CivaSheet[supreg]'s unidirectional
configuration substantially reduces the dose delivered to neighboring
radiosensitive structures. The applicant further stated that other
forms of radiation delivery do not have these capabilities, and no
other shielded low-dose radiation (LDR) sources are currently available
on the market. According to the applicant, external beam radiation
generally cannot be delivered intra-operatively, partly because dosage
requirements make this impractical and potentially risky and because
appropriate aiming cannot be computed in the timeframe of a performed
surgery.
---------------------------------------------------------------------------
\48\ Bhadrasain, M.D., Vikram, Shivaji, Ph.D., Deore, Beitler,
M.D., Jonathan J., Sood, M.D., Brij, Mullokandov, Ph.D., Eduard,
Kapulsky, Ph.D., Alexander, Fontenla, Ph,d, Doracy P, ``The
relationship between dose heterogeneity (``hot'' spots) and
complications following high-dose rate brachytherapy,'' Int. J.
Radiation Oncology Biol. Phys., 1999, vol. 43, no. 5, pp. 983-987.
---------------------------------------------------------------------------
The applicant believed that, in the absence of the use of the
CivaSheet[supreg] device, a patient requiring radiation therapy to
accompany surgery would most likely receive radiation therapy as an
outpatient service following the inpatient hospitalization after
surgery. Moreover, the applicant stated that not only does this
typically require multiple, fractionated treatments, in some cases,
outpatient external beam radiation may not be possible due to excessive
toxicity to normal surrounding tissues. According to the applicant,
radiation therapy can be delivered intra-operatively directly to
surgical margins through use of a linear accelerator. However, the
applicant stated that these technologies deliver radiation in a single
``flash,'' whereas the CivaSheet[supreg] device enables the delivery of
radiation over time, increasing the efficacy of the radiation therapy.
Further, the applicant stated that external beam radiation devices
have a fixed ball or cone-shaped applicator, which does not necessarily
conform well to the irregular shapes of surgical cavities or permit
effective screening of adjacent tissues. Additionally, the applicant
stated that this form of radiation therapy requires a specialized
linear accelerator and a specially shielded operating room, which the
applicant believes restricts its use to IPPS-exempt cancer centers.
The applicant further stated that, in the past, cylindrical
brachytherapy seeds have been used with various mesh products as a form
of intra-operative radiation therapy (IORT). However, according to the
applicant, the use of cylindrical brachytherapy seeds used with various
mesh products has not developed as part of standard clinical practice.
According to the applicant, patients treated with previous cylindrical
brachytherapy seeds faced considerable challenges with toxicity from
the unfocused, unshielded seed sources when placed in proximity of
sensitive organs.\49\ Additionally the surgical meshes previously used
were not designed to maximize source orientation and spacing, and also
ran the risk of source dispersion as the mesh degraded.\50\
---------------------------------------------------------------------------
\49\ Rivard, Mark J., ``Low energy brachytherapy sources for
pelvic sidewall treatment,'' abstract presented at the ABS 2016
Annual Meeting.
\50\ Seneviratne, Danushka, et al., ``The CivaSheet: The new
frontier of intraoperative radiation therapy or a pricer alternative
to LDR brachytherapy,'' Advances in Radiation Oncology, 2018, vol.
3, pp. 87-91.
---------------------------------------------------------------------------
The applicant maintains that the CivaSheet[supreg] is the first
low-dose radiation (LDR) brachytherapy device designed specifically for
the delivery of IORT. CivaSheet[supreg]'s individual brachytherapy
sources are flat with a gold shielding on one side of the seed, a
design that focuses radiation in one direction, in contrast to the
cylindrical shape of LDR brachytherapy seeds, which emit radiation in
all directions. According to the applicant, properties of the flat,
gold-shielded sources and the bioabsorbable polymer encapsulation make
the CivaSheet[supreg] uniquely suited for intra-operative delivery. As
such, the applicant asserted that the CivaSheet[supreg] does not have a
similar mechanism of action when compared to existing LDR
brachytherapies.
With regard to the second criterion, whether a product is assigned
to the same or similar MS-DRG, the applicant
[[Page 19296]]
asserted that patients who may be eligible for treatment using the
CivaSheet[supreg] include hospitalized patients having tumors removed
from the pancreas, colon and anus, pelvic area, head and neck, soft
tissue sarcomas, non-small-cell lung cancer, ocular melanoma, atypical
meningioma and retroperitoneum and that cases involving the use of the
CivaSheet[supreg] would map primarily into the following MS-DRGs:
------------------------------------------------------------------------
MS-DRG MS-DRG title
------------------------------------------------------------------------
11........................ Tracheostomy for Face, Mouth and Neck
Diagnoses or Laryngectomy with MCC.
12........................ Tracheostomy for Face, Mouth and Neck
Diagnoses or Laryngectomy with CC.
13........................ Tracheostomy for Face, Mouth and Neck
Diagnoses or Laryngectomy without CC/MCC.
129....................... Major Head and Neck Procedures with CC/MCC
or Major Device.
130....................... Major Head and Neck Procedures without CC/
MCC.
133....................... Other Ear, Nose, Mouth and Throat O.R.
Procedures with CC/MCC.
134....................... Other Ear, Nose, Mouth and Throat O.R.
Procedures without CC/MCC.
326....................... Stomach, Esophageal and Duodenal Procedures
with MCC.
327....................... Stomach, Esophageal and Duodenal Procedures
with CC.
328....................... Stomach, Esophageal and Duodenal Procedures
without CC/MCC.
329....................... Major Small and Large Bowel Procedures with
MCC.
330....................... Major Small and Large Bowel Procedures with
CC.
331....................... Major Small and Large Bowel Procedures
without CC/MCC.
332....................... Rectal Resection with MCC.
334....................... Rectal Resection without CC/MCC.
405....................... Pancreas, Liver and Shunt Procedures with
MCC.
406....................... Pancreas, Liver and Shunt Procedures with
CC.
407....................... Pancreas, Liver and Shunt Procedures without
CC/MCC.
576....................... Skin Graft Except for Skin Ulcer or
Cellulitis with MCC.
577....................... Skin Graft Except for Skin Ulcer or
Cellulitis with CC.
578....................... Skin Graft Except for Skin Ulcer or
Cellulitis without CC/MCC.
653....................... Major Bladder Procedures with MCC.
654....................... Major Bladder Procedures with CC.
734....................... Pelvic Evisceration, Radical Hysterectomy
and Radical Vulvectomy with CC/MCC.
735....................... Pelvic Evisceration, Radical Hysterectomy
and Radical Vulvectomy without CC/MCC.
736....................... Uterine and Adnexa Procedures for Ovarian or
Adnexal Malignancy with MCC.
739....................... Uterine, Adnexa Procedures for Non-Ovarian/
Adnexal Malignancy with MCC.
740....................... Uterine, Adnexa Procedures for Non-Ovarian/
Adnexal Malignancy with CC.
741....................... Uterine, Adnexa Procedures for Non-Ovarian/
Adnexal Malignancy without CC/MCC.
826....................... Myeloproliferative Disorders or Poorly
Differentiated Neoplasms with Major O.R.
Procedure with MCC.
827....................... Myeloproliferative Disorders or Poorly
Differentiated Neoplasms with Major O.R.
Procedure with CC.
828....................... Myeloproliferative Disorders or Poorly
Differentiated Neoplasms with Major O.R.
Procedure without CC/MCC.
------------------------------------------------------------------------
We believe that cases involving the use of existing technologies
would be assigned to these same MS-DRGs listed above.
With regard to the third criterion, whether the use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, according to the
applicant, clinical conditions that may require use of the
CivaSheet[supreg] include treatment of the same patient population as
those who have been diagnosed with a variety of types of cancer,
including pancreatic cancer, colorectal cancer, anal cancer, pelvic
area/gynecological cancer, retroperitoneal sarcoma and head and neck
cancers.
The applicant asserted that the CivaSheet[supreg] device is not
substantially similar to any existing technology because it uses a
unique mechanism of action, when compared to existing LDR brachytherapy
technologies, to achieve a therapeutic outcome and, therefore, meets
the newness criterion.
We are inviting public comments on whether the CivaSheet[supreg]
device meets the newness criterion.
With regard to the cost criterion, the applicant conducted the
following analysis to demonstrate that the technology meets the cost
criterion. To determine the MS-DRGs that potential cases representing
patients who may be eligible for treatment involving CivaSheet[supreg]
would map to, the applicant identified all MS-DRGs for cases that
included ICD-10-CM diagnosis codes for either pancreatic cancer,
colorectal cancer, anal cancer, pelvic area/gynecological cancer,
retroperitoneal sarcoma and head and neck cancers as a primary or
secondary diagnosis. Based on the FY 2017 MedPAR Hospital Limited Data
Set (LDS), the applicant identified a total of 22,835 potential cases.
The applicant limited its analyses to the most relevant 32 MS-DRGs,
which represented 80 percent of all the cases. The applicant excluded
the following cases: Statistical outliers which the applicant defined
as 3 standard deviations from the geometric mean, HMO cases and claims
submitted only for graduate medical education payments and cases at
hospitals that were not included in the FY 2019 IPPS/LTCH PPS final
rule impact file (the applicant noted that these are predominately
cancer hospitals not subject to the IPPS). After applying the trims
above, the applicant identified 17,173 remaining cases.
Using the 17,173 cases, the applicant determined an average case-
weighted unstandardized charge per case of $122,565. The applicant
standardized the charges for each case and inflated each case's charges
from FY 2017 to FY 2019 by applying the outlier charge inflation factor
of 1.085868 from the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20581).
The applicant indicated that the current average cost of the
CivaSheet[supreg] device is $24,132.86. The applicant then added
charges for CivaSheet[supreg] by taking the cost of the device and
converting it to a charge by dividing the costs by the national average
CCR of 0.309 for implants from the FY 2019 IPPS/LTCH PPS final rule (83
FR 41273). The applicant calculated an average case-weighted
standardized charge per case of $188,897 using the percent distribution
of MS-DRGs as case weights. Based on this analysis, the applicant
determined that the final inflated average case-weighted
[[Page 19297]]
standardized charge per case for CivaSheet[supreg] exceeded the average
case-weighted threshold amount of $87,446 by $101,451.
We note that the inflation factor used by the applicant was the
proposed 2-year inflation factor, which was discussed in the FY 2019
IPPS/LTCH PPS final rule summation of the calculation of the FY 2019
IPPS outlier charge inflation factor for the proposed rule (83 FR 41718
through 41722). The final 2-year inflation factor published in the FY
2019 IPPS/LTCH PPS final rule was 1.08864 (83 FR 41722), which was
revised in the FY 2019 IPPS/LTCH PPS final rule correction notice to
1.08986 (83 FR 49844). However, we note that even when using either the
final rule values or the corrected final rule values published in the
correction notice to inflate the charges, the final inflated average
case-weighted standardized charge per case for CivaSheet[supreg] would
exceed the average case-weighted threshold amount. We are inviting
public comments on whether the CivaSheet[supreg] meets the cost
criterion.
With regard to the substantial clinical improvement criterion, the
applicant asserted that CivaSheet[supreg] represents a substantial
clinical improvement over existing technologies because it provides the
following: (1) Improved local control of different cancers; \51\ (2)
reduced rate of device-related complications; \52\ (3) reduced rate of
radiation toxicity; \53\ (4) decreased future hospitalizations; \54\
(5) decreased rate of subsequent therapeutic interventions; \55\ (6)
improvement in back pain and appetite in pancreatic cancer patients
\56\ and (7) improved local control for pancreatic cancer patients.\57\
---------------------------------------------------------------------------
\51\ Castaneda SA, Emrich J, Bowne WB, Kemmerer EJ, Sangani R,
Khalili M, Rivard MJ, Poli J. ``Clinical outcomes using a novel
directional Pd-103 brachytherapy device: 20-month report of a
patient with leiomyosarcoma of the pelvic sidewall.'' ACRO 2018
Annual Meeting.
\52\ Seneviratne, D., McLaughlin, C., Todor, D., Kaplan, B.,
Fields, E., ``The CivaSheet: The new frontier of intraoperative
radiation therapy or a pricier alternative to LDR brachytherapy?,''
Advances in Radiation Oncology, 2018, vol. 3, pp. 87-91.
\53\ Howell, K.J., Meyer, J.E., Rivard, M.J., et al., ``Initial
Clinical Experience with Directional LDR Brachytherapy for
Retroperitoneal Sarcoma,'' submitted Int J of Rad Onc Biol Phys,
2018.
\54\ Cavanaugh, S.X., Rothley, D.J., Richman, C., ``Directional
LDR Intraoperative Brachytherapy for Head and Neck Cancer,''
Presented at ABS 2017 Annual Meeting.
\55\ On file at CivaTech.
\56\ Ibid.
\57\ Yoo, S.S., Todor, D.A., Myers, J.M., Kaplan, B.J., Fields,
E.C., ``Widening the therapeutic window using an implantable, uni-
directional LDR brachytherapy sheet as a boost in pancreatic
cancer,'' ASTRO 2018 Annual Meeting San Antonio, TX.
---------------------------------------------------------------------------
With regard to improved local control of different cancers, the
applicant provided the clinical outcomes results of a 20-month report
of a patient who had been diagnosed with leiomyosarcoma of the pelvic
sidewall.\58\ According to the report, the purpose of the report was to
document the experience of using the CivaSheet[supreg] implant as
adjuvant intraoperative treatment in a patient who had been diagnosed
with locally advanced leiomyosarcoma of the lateral pelvic sidewall.
The patient analyzed in this report is a 62-year-old African American
male who was found to have a mass incidentally in the left pelvic
sidewall. The patient presented with lower abdominal pain, hematuria,
and lower left flank pain radiating to the left groin. A CT scan
revealed a mass in the left pelvic sidewall that measured 8.1 x 6.4 x
3.7 cm, with encasement of the left common iliac vein and no distant
metastasis. A biopsy revealed a high-grade leiomyosarcoma. Given his
advanced clinical stage and iliac vein encasement, neoadjuvant pelvic
radiotherapy with IMRT, surgical resection with reconstruction, and a
boost with intraoperative LDR brachytherapy were performed. The patient
was treated with pelvic IMRT (50.4 Gy/28 fractions). The patient then
underwent gross total resection and the CivaSheet[supreg] was implanted
intraoperatively. The patient recovered well from the interventions,
according to the report. At 20 months after implantation of the LDR
brachytherapy device, clinical evaluations and CT imaging surveillance
demonstrated no evidence of residual disease, according to the report.
---------------------------------------------------------------------------
\58\ Castaneda, S.A., Emrich, J., Bowne, W.B., Kemmerer, E.J.,
Sangani, R., Khalili, M., Rivard, M.J., Poli, J., ``Clinical
outcomes using a novel directional Pd-103 brachytherapy device: 20-
month report of a patient with leiomyosarcoma of the pelvic
sidewall,'' ACRO 2018 Annual Meeting.
---------------------------------------------------------------------------
With regard to reducing the rate of device-related complications,
the applicant summarized four case series. In the four case series, the
CivaSheet[supreg] device was used to treat: (1) Axillary squamous cell
carcinoma; \59\ (2) retroperitoneal sarcoma; 60 61 62 (3)
gastric signet ring adenocarcinoma; (4) pancreatic cancer; and (5)
other abdominal malignancies. There were 13 patients associated with
these 4 case series.
---------------------------------------------------------------------------
\59\ Seneviratne, D., McLaughlin, C., Todor, D., Kaplan, B.,
Fields, E., ``The CivaSheet: The new frontier of intraoperative
radiation therapy or a pricier alternative to LDR brachytherapy?,''
Advances in Radiation Oncology, 2018, vol. 3, pp. 87-91.
\60\ Zhen, H., Turian, J.V., Sen, N., et al.,''Initial clinical
experience using a novel Pd-103 surface applicator for the treatment
of retroperitoneal and abdominal wall malignancies,'' Advances in
Radiation Oncology, 2018, vol. 3, pp. 216-220.
\61\ Howell, K.J., Meyer, J.E., Rivard, M.J., et al., ``Initial
Clinical Experience with Directional LDR Brachytherapy for
Retroperitoneal Sarcoma,'' submitted Int J of Rad Onc Biol Phys,
2018.
\62\ Turian, J.V., ``Emerging Technologies for IORT:
Unidirectional Planar Brachytherapy Sources,'' Presented at AAPM
2017 Annual Meeting.
---------------------------------------------------------------------------
Seneviratne, et al.'s case series report documented experience with
the use of the CivaSheet[supreg] device in a 78 year old male patient
who had been diagnosed with axillary squamous cell carcinoma. According
to the case series report, prior to surgery a dose of 58 Gy, prescribed
to the 95 percent isodose line (5 percent), was delivered
in 2 Gy fractions with 3-dimensional conformal EBRT with concurrent
weekly administration of cisplatin 40 mg/m2 at an outside facility.
Magnetic resonance imaging scans obtained 3 months post-treatment
revealed that the mass had decreased in size to 3.8 cm x 2.5 cm x 3.9
cm, but maintained encasement of the axillary artery, axillary vein,
and several inferior branches of the brachial plexus. Concerns with
regard to increased toxicity to the axillary structures discouraged
further EBRT, and the CivaSheet[supreg] device was implanted
immediately post tumor resection. Given that microscopic disease within
formerly irradiated tissue was being treated, a prescription dose of 20
Gy at 5 mm from the surface of the mesh was considered adequate because
of its delivery of a biologically effective dose (BED)-10 of 39.8 Gy
and equivalent dose (EQD)-2 of 33.2 Gy to the tumor bed, while limiting
the D2cc for the brachial plexus to a BED3 of 27.9 Gy and EQD2 of 16.7
Gy, based on post implant analysis. According to the Seneviratne, et
al. analysis, this approach allowed for a significantly limited dose to
be delivered to the brachial plexus. A composite dose constraint of
D2cc of 75 Gy was selected on the basis of recent data showing elevated
clinical brachial plexopathy rates beyond this threshold. This
constraint was met with an estimated composite EQD2 of 74.7 Gy, which,
according to the applicant, would not have been obtainable with EBRT to
a tumor bed EQD2 of greater than or equal to 30 Gy. The patient was
discharged on the same day with instructions on wound care and
radiation safety. According to the applicant, the incision healed well,
with no signs of infection, seroma, or lymphadenopathy during monthly
follow-up visits. At the 8-month follow-up visit, the patient was
documented to only have minor shoulder pain. Seneviratne, et al., also
discussed their views on the advantages of the use of
[[Page 19298]]
the CivaSheet[supreg] device, which include its bio-absorbability, ease
of visualization with imaging, potential for intra-operative
customization, ability to complement various treatment approaches
including EBRT and surgical resection, and ease of implantation with
minimal training.
To further substantiate its assertions of a reduced rate of device-
related complications regarding the CivaSheet[supreg] device, the
applicant stated that its malleability is likely to be particularly
useful in treating irregularly shaped surgical cavities, such as those
created after breast lumpectomies or pelvic side wall resections.
According to the applicant, the CivaSheet[supreg] device also overcomes
several shortcomings observed even among those LDR mesh devices that
use the same isotope. According to the applicant, as the vicryl sutures
of traditional LDR mesh devices bend and curve around irregular
surfaces during placement, the spacing and orientation of the
radioactive seeds may be altered, leading to unpredictable variations
in isodose geometry. The applicant stated that, in contrast, the
polymer encapsulation of the Pd-103 Civa seeds before embedding within
the membrane allows the sources to maintain their orientation in space
and deliver radiation in accordance with the predetermined geometry.
According to the applicant, additionally, unlike older LDR mesh devices
that run the risk of source dispersion after mesh degradation, the
polymer encapsulation allows the seeds to maintain their placement even
as the membrane is absorbed over time. In this same case study,
Seneviratne, et al., stated that a 3-month post implantation imaging of
the CivaSheet[supreg] device demonstrated that the radioactive source
geometry had remained stable since the initial implantation.
The applicant also provided Howell, et al.'s case series results of
six patients diagnosed with recurrent retroperitoneal sarcoma who had
been treated with the use of the CivaSheet[supreg] device to support
its claims of reduced rate of toxicity and improved local control.
Similar to the Seneviratne, et al. case series report, Howell, et al.'s
case series' report also noted concerns regarding prior EBRT, costs
associated with intra-operative radiation therapy both for the patient
and the hospital, and concerns of at-risk surrounding anatomic
structures. Given these concerns, Howell, et al.'s case series report
also investigated LDR brachytherapy using CivaSheet[supreg]. Amongst
the six patients observed, five patients had diagnoses of recurrent
disease in the retroperitoneum or pelvic side wall; one patient had a
diagnosis of locally-advanced leiomyosarcoma with no previous
treatment. Regarding prior treatment, two patients had prior EBRT at
first diagnosis. Four patients received neoadjuvant EBRT prior to
surgery in addition to treatment involving CivaSheet[supreg]
brachytherapy. The LDR brachytherapy dose was determined using
radiobiological calculations of biological effective dose (BED) based
on the linear-quadratic model and EQD2 values. An LDR brachytherapy
dose of 20 to 60 Gy (36 Gy mean) was administered, corresponding to BED
values of 15 to 53 Gy (29 Gy mean) and EQD2 values of 12 to 43 Gy (23
Gy mean). Because the goal was to provide a conformal radiation boost
for an additional 15 to 20 Gy EQD2, the prescribed absorbed doses were
considered appropriate. All patients were followed by CT scan to assess
implant migration, observed radiation-related toxicities, and evidence
for local recurrence between 2.5 weeks and 3 months. No evidence of
implant migration or radiation-related toxicities was found. Based on
these results, the study concluded that LDR directional brachytherapy
delivered a targeted dose distribution that was successfully used to
treat retroperitoneal sarcoma, and that the utilized device is an
important option for the treatment of patients who have been diagnosed
with retroperitoneal sarcoma having close/positive surgical margins
and/or in combination with EBRT to optimize local control.
Two other case series, by Zhen, H. et al.,\63\ and Turian, et
al.,\64\ were submitted by the applicant to support the assertion of
reduced rate of device-related complications. Both case series assessed
the use of LDR brachytherapy using the CivaSheet[supreg] device in the
tumor bed given the same clinical challenges outlined in case series
observed and investigated in the Seneviratne, et al., and Howell, et
al. analyses in patients previously treated with chemoradiation
protocols and in patients who had been diagnosed with recurrent tumors
close to important functional tissues. Both case series assessed LDR
brachytherapy using the CivaSheet[supreg] device in the treatment of
different cancers like retroperitoneal sarcomas, pancreatic cancers,
and gastric singnet ring adenocarcinoma or other abdominal carcinomas.
Both case series followed the patients with CT imaging sometime between
2.5 weeks and 86 weeks. Both case series' study concluded that LDR
brachytherapy with the use of the CivaSheet[supreg] device was a
feasible alternative treatment modality for the cancers treated in each
case series. According to Zhen, et al., an advantage of using the
CivaSheet[supreg] device is that the CivaDot sheets can be easily cut
to any size and shape at the time of implant. The author further stated
that the CivaDot sheet is malleable and can conform to curved surfaces.
This device characteristic, according to the author, gives the
physician more flexibility to treat tumor beds with irregular shapes
and surface curvatures compared with electron beam cylindrical
applicators, thereby reducing the rate of device-related complications.
However, the analysis by Zhen, et al. also indicated that a limitation
in dosimetric evaluation using CT imaging is related to the inability
to identify the orientation of the individual CivaDot mainly because of
limited resolution and metal artifact caused by the gold plating.
CivaDot orientation is inferred from the fact that all dots are
embedded in a membrane that is sutured to the tumor bed and because the
post-implant CT scan shows the shape of the CivaSheet[supreg] seeds
being maintained. Also, Zhen, et al. noted that surgical clips could be
mistakenly identified as CivaDots. The analysis by Zhen, et al.
recommended that the use of surgical clips should be minimized.
---------------------------------------------------------------------------
\63\ Zhen, H., Turian, J.V., Sen, N., et al.,''Initial clinical
experience using a novel Pd-103 surface applicator for the treatment
of retroperitoneal and abdominal wall malignancies'', Advances in
Radiation Oncology, 2018, vol. 3, pp. 216-220.
\64\ Turian, J.V., ``Emerging Technologies for IORT:
Unidirectional Planar Brachytherapy Sources,'' Presented at AAPM
2017 Annual Meeting.
---------------------------------------------------------------------------
With regard to the reduced rate of toxicity, the applicant provided
a clinical case series by Howell, et al.\65\ to show that shielding
healthy tissues while irradiating the tumor bed after surgical
resection was achieved by providing a conformal radiotherapy, a novel
Pd-103 low-dose rate (LDR) brachytherapy device. Methods and materials
of the case include the following: The LDR brachytherapy device was
considered for patients who had been diagnosed with recurrent
retroperitoneal sarcoma, had received prior radiotherapy to the area,
and/or had anatomy concerning for high-risk margins predicted for
recurrence after resection. The case series included the clinical
conclusions for five patients who had been diagnosed with recurrent
disease in the retroperitoneum or pelvic side wall, one patient who had
been diagnosed with locally-advanced leiomyosarcoma with no previous
treatment, two patients who had prior
[[Page 19299]]
EBRT at first diagnosis, and four patients who received neoadjuvant
EBRT prior to surgery in combination with brachytherapy. The LDR
brachytherapy dose was determined using radiobiological calculations of
biological effective dose (BED) based on the linear-quadratic model and
EQD2 values. An LDR brachytherapy dose of 20 to 60 Gy (36 Gy mean) was
administered, corresponding to BED values of 15 to 53 Gy (29 Gy mean)
and EQD2 values of 12 to 43 Gy (23 Gy mean). Because the goal was to
provide a conformal radiation boost for an additional 15 to 20 Gy EQD2,
the prescribed absorbed doses were considered appropriate. According to
the applicant, results showed that radiation was delivered to the at-
risk tissues with minimal irradiation of adjacent healthy structures or
structures occupying the surgical cavity after tumor resection.
According to the applicant, clinical outcomes indicated feasibility for
surgical implantation and promising results in comparison to current
standards-of-care. The device did not migrate over the course of
follow-up and there were no observed radiation-related toxicities.
---------------------------------------------------------------------------
\65\ Howell, K.J., Meyer, J.E.,Rivard, M.J. et al., ``Initial
Clinical Experiences with Directional LDR Brachytherapy for
Retroperitoneal Sarcomo, submitted to Int J of Rad Onc Biol Phys,
2018.
---------------------------------------------------------------------------
The Howell, et al. clinical case series concluded that LDR
directional brachytherapy delivered a targeted dose distribution that
was successfully used to treat retroperitoneal sarcoma and that the
utilized device is an important option for the treatment of patients
who have been diagnosed with retroperitoneal sarcoma having close/
positive surgical margins and/or in combination with EBRT to optimize
local control.
The applicant also cited three additional case series to support
their assertions of reduced rate of device-related complications and
reduced rate of radiation toxicity. The first is on file at CivaTech in
which they indicated that more than 60 patients, since 2015, had
CivaSheet[supreg] implanted with no reported device-related toxicity in
patients previously treated with maximal EBRT. No other details were
provided by the applicant. The second case series by Taunk, et al.\66\
assessed the use of CivaSheet[supreg] in three patients who had been
diagnosed with colorectal adenocarcinoma who had undergone prior
induction chemotherapy and neoadjuvant chemoradiation.
CivaSheet[supreg] was placed in the tumor bed and patients were
followed with CT imaging to assess implant migration, 30- and 90-day
radiation toxicity and local recurrence. One patient was deemed not a
feasible candidate because the CivaSheet[supreg] could not be uniformly
opposed to the sacrum due to the degree of concavity. The other two
patients underwent successful CivaSheet[supreg] implantation, and at 30
days showed stability of the device and no apparent toxicity. In the
final additional case series from Rivard, et al.,\67\ a single patient
who had been diagnosed with pelvic side wall cancer (type not
indicated) was implanted with CivaSheet[supreg] and the
CivaSheet[supreg] dose distributions were compared to those of
conventional low-dose rate, low-energy photon-emitting brachytherapy
seeds (that is, palladium 103, Iodine-125, and Cesium-131). According
to the applicant, results suggest gold-shielding CivaDots attenuate
radiation for directional brachytherapy and CivaSheet[supreg] provides
a therapeutic target dose, while substantially minimizing critical
structure doses. In this specific case study, the applicant stated that
the use of CivaSheet[supreg] showed decreased radiation to adjacent
organs, such as the bowel and the bladder.
---------------------------------------------------------------------------
\66\ Taunk, N.K., Cohen, G., Taggar, A.S., et al., ``Preliminary
Clinical Experience from a Phase I Feasibility Study of a Novel
Permanent Unidirectional Intraoperative Brachytherapy Device,'' ABS
2017 Annual Meeting.
\67\ Rivard, M.J., ``Low-energy brachytherapy sources for pelvic
sidewall treatment,'' Presented at ABS 2016 Annual Meeting.
---------------------------------------------------------------------------
With regard to decreasing the number of future hospital visits, the
applicant provided a poster presentation presented at the American
Brachytherapy Society 2017 Annual Meeting. The purpose of this study
was to investigate the feasibility of using intra-operative directional
brachytherapy for the treatment of squamous cell carcinoma of the
oropharynx. The study included a single patient who had received a
prior course of external beam radiation therapy of 70 Gy in 2015. Due
to positive margins near the carotid after the resection, and the
increased risk of additional external radiation, brachytherapy was
considered as a treatment option. CivaSheet[supreg] was used for the
implant. The Pd-103 sources were spaced 8 mm apart on a rectangular
grid. Unidirectional dose was achieved by a 0.05 mm thick gold disk-
shaped foil on the reverse side of each source. A dose of 120 Gy at 5
mm depth was prescribed. After the resection, the entire polymer sheet
was placed on the treatment area to determine the needed dimensions.
The CivaSheet[supreg] device was then removed and cut to size with
scissors leaving 26 Pd-103 sources remaining. The surgeon used 3.0
vicryl sutures for attachment in a concave shape over the carotid
artery, where there was a positive margin. The gold foil was positioned
to protect the neck flap and closure. The surgical team completed the
procedure and the patient recovered without any complications.
Results of the study showed that the sources remained in position
in a concave array pattern. Due to the dose fall-off of Pd-103, the
calculated dose to critical structures was minimized. Because the
surgical implant of the CivaDot sheet proceeded as expected with no
complications and the post-implant plan indicated that the
CivaSheet[supreg] remained in position with the radioactive side
contacting the treatment area, the applicant asserts that future
hospital visits will be decreased because the patient will not return
for EBRT.
With regard to decreases in the rate of subsequent therapeutic
interventions, the applicant stated that the standard-of-care for most
patients undergoing surgery is typically preceded or followed by a form
of external beam radiation therapy. A typical course of intensity
modulated radiation therapy (IMRT) is 25 to 30 fractions (separate
treatments) delivered over the course of 3 to 6 weeks. The applicant
stated that, for some patients, CivaSheet[supreg] will be the only form
of radiation therapy they will receive. CivaSheet[supreg] is implanted
in one procedure and radiation is locally delivered over the course of
several weeks, while the sources provide a continuous dose and later
decay. The device is not removed and no additional follow-up visits are
required for the patient to receive therapeutic intervention. According
to the applicant, use of CivaSheet[supreg] can avoid the time and
expense of dozens of radiation therapy visits over the course of
several weeks as compared to EBRT. The applicant further stated that
the published clinical data provided with its application \68\ shows
that the use of CivaSheet[supreg] is an effective and safe
combinational treatment to external beam radiation therapy. According
to the applicant, radiation oncologists can use CivaSheet[supreg] to
increase the dose of radiation that can be delivered to a tumor margin,
without increasing toxicity and that this may reduce the odds that a
patient experiences cancer recurrence.69 70 71 The applicant
also
[[Page 19300]]
asserted that the targeted radiation approach has demonstrated no toxic
effects for patients. The applicant further stated that other forms of
radiation have a known rate of complications and toxicity that result
in the need for additional therapies and interventions (for example,
topical creams for skin reddening, and medicine for pain). The
applicant indicated that there has been no change in concomitant
medications prescribed because of the use of the CivaSheet[supreg]
implant either on or off trial. The applicant did not link these claims
to any of the studies provided with its application. In addition, the
applicant asserts that, of the case studies they provided, there have
been no instances of therapeutic interventions to resolve an issue that
was induced by the use of the CivaSheet[supreg] device to deliver
radiation.72 73 74
---------------------------------------------------------------------------
\68\ Taunk, N.K., Cohen, G., Taggar, A.S., et al., ``Preliminary
Clinical Experience from a Phase I Feasibility Study of a Novel
Permanent Unidirectional Intraoperative Brachytherapy Device,'' ABS
2017 Annual Meeting.
\69\ Rivard, Mark J., ``Low energy brachytherapy sources for
pelvic sidewall treatment,'' abstract presented at the ABS 2016
Annual Meeting.
\70\ Yoo, S.S., Todor, D.A., Myers, J.M., Kaplan, B.J., Fields,
E.C., ``Widening the therapeutic window using an implantable, uni-
directional LDR brachytherapy sheet as a boost in pancreatic
cancer,'' ASTRO 2018 Annual Meeting San Antonio, TX.
\71\ Howell, K.J., Meyer, J.E., Rivard, M.J., et al., ``Initial
Clinical Experience with Directional LDR Brachytherapy for
Retroperitoneal Sarcoma,'' submitted Int J of Rad Onc Biol Phys,
2018.
\72\ Ibid.
\73\ Rivard, Mark J., ``Low energy brachytherapy sources for
pelvic sidewall treatment,'' abstract presented at the ABS 2016
Annual Meeting.
\74\ Yoo, S.S., Todor, D.A., Myers, J.M., Kaplan, B.J., Fields,
E.C., ``Widening the therapeutic window using an implantable, uni-
directional LDR brachytherapy sheet as a boost in pancreatic
cancer,'' ASTRO 2018 Annual Meeting San Antonio, TX.
---------------------------------------------------------------------------
With regard to improvement in back pain and appetite (compared to
baseline) in pancreatic cancer patients, the applicant asserted that
patients answered standardized, international questionnaire EORTC QLQ-
C30 and PANC26 and that these results are on file at CivaTech. The
applicant provided the baseline, 70 days post-operative and 98 days
postoperative patient responses to ``Have you ever had back pain?''
Baseline response: 1.5; 70 days post-operative response: 1.0 and 98
days post-operative response: 1.0. The applicant also provided
baseline, 70 days post-operative and 98 days post-operative patient
responses to ``Were you restricted in the amounts of food you could eat
as a result of your disease or treatment?'' Baseline response: 2.5; 70
days postoperative response: 1.0 and 98 days postoperative response:
1.0. (Response Values: 1.0 = ``Not at all''; 2.0 = ``A little''; 3.0 =
``Quite a bit''; 4.0 = ``Very much'').
With regard to improved local control for pancreatic cancer
patients, the applicant provided the results of a dosimetric study
entitled, ``Widening the Therapeutic Window Using an Implantable, Uni-
directional LDR Brachytherapy Sheet as a Boost in Pancreatic Cancer
Case Series,'' a poster presented at the ASTRO 2018 Annual Meeting.
According to background information in the applicant's poster,
pancreatic patients often undergo neoadjuvant chemotherapy and
chemoradiation in preparation for surgical resection of the tumor. In
addition, oftentimes after neoadjuvant therapy there are inflammatory
changes that, unfortunately, hinder pre-operative imaging and create
the potential for unreliable determination of tumor resection.
Accompanying the potentially unreliable determination of tumor
resectability are patient concerns when positive retroperitoneal
margins have close proximity to major vasculature. The applicant noted
that additional EBRT boost, initiated post operatively, is an option,
but difficult given bowel constraints and the difficulty in identifying
the area at highest risk. Given these constraints associated with
treating pancreatic cancers, the purpose of this study was to
demonstrate the ability of the LDR brachytherapy CivaSheet[supreg]
device to deliver a focal high-dose boost, targeted to the area at
highest risk in patients who received neoadjuvant chemoradiation. This
dosimetric case series consisted of four patients who had been
diagnosed with borderline resectable pancreatic cancer who received
neoadjuvant FOLFIRINOX followed by gemcitabine-based
chemoradiotherapy (chemoRT) to 50.4 Gy in 28 fractions with dose
prescribed to the gross tumor plus a 1 cm margin. According to the
poster provided by the applicant, after neoadjuvant therapy, the
multidisciplinary team was concerned for close or positive margin
resection. Using the CivaSheet[supreg] device, a 38 Gy EQD2 dose to 5
mm depth was implanted in these patients and a total dose of 88.4 Gy
was delivered to the targeted tissue. Post-operatively, patients had a
CT scan to identify the tumor bed contour, as well as the contour of
surrounding at-risk organs; the small bowel (SB) was contoured as the
bowel bag and included the entire peritoneal cavity. Following the CT
scan, brachytherapy plans, as well as EBRT boost plans, were created
for each patient. A dose-volume histogram (DVH) from initial 3D
treatment plans for all patients showed the SB volume receiving 45 Gy
(V45) was a median of 78.2 cc (range 61.7-107.1 ccs) and maximum bowel
doses were a median of 53.2 Gy, range 53.1-53.6 Gy. According to the
applicant, the V45 for SB should be less than 195 cc, with a maximum of
less than or equal to 58 Gy to prevent SB obstruction, fistula and
perforation. According to the applicant, with the CivaSheet[supreg]
device, the boost dose was dramatically increased while SB exposure was
marginal at about 1/10th of the prescription dose. For the target, the
CivaSheet[supreg] delivered the prescription dose to 5 mm depth with a
large inhomogeneous dose throughout the tumor bed with the minimum dose
of 38 Gy. Dosimetric comparison of a CivaSheet[supreg] tumor bed boost
and a Stereotactic Body Radiation Therapy (SBRT) tumor bed boost to the
SB was 9.6 Gy compared to 24 Gy for external beam plan. According to
the applicant, the conclusions from this case series are that applying
a brachytherapy uni-directional source to the area at highest risk can
serve to improve the therapeutic index by improving the local control
and minimizing toxicities in pancreatic cancer patients after
neoadjuvant therapy.
With regard to whether CivaSheet[supreg] represents a substantial
clinical improvement relative to other brachytherapy technologies
currently available, we are concerned that all of the supporting data
appear to be feasibility studies substantiating the use of the
CivaSheet[supreg] in different cancers and difficult anatomic
locations. We also are concerned that there do not appear to be any
comparisons to other current treatments, nor any long-term follow-up
with comparisons to currently available therapies. We are inviting
public comments on whether CivaSheet[supreg] meets the substantial
clinical improvement criterion.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for the
CivaSheet[supreg] or at the New Technology Town Hall meeting.
d. CONTEPOTM (Fosfomycin for Injection)
Nabriva Therapeutics U.S., Inc. submitted an application for new
technology add-on payments for CONTEPOTM for FY 2020.
CONTEPOTM is intended to treat complicated urinary tract
infections (cUTIs) caused by multi-drug resistant (MDR) pathogens in
hospitalized patients. CONTEPOTM has not yet received FDA
approval. The FDA has accepted the applicant's New Drug Application
(NDA) using its Priority Review expedited program.
Complicated urinary tract infections are characterized by chills,
rigors, or fever (temperature of greater than or equal to 38.0 [deg]C);
elevated white blood cell count (greater than 10,000/mm\3\), or
[[Page 19301]]
left shift (greater than 15 percent immature PMNs); nausea or vomiting;
dysuria, increased urinary frequency, or urinary urgency; and lower
abdominal pain or pelvic pain. A related condition, acute
pyelonephritis (AP), is characterized by chills, rigors, or fever
(temperature of greater than or equal to 38.0 [deg]C); elevated white
blood cell count (greater than 10,000/mm\3\), or left shift (greater
than 15 percent immature PMNs); nausea or vomiting; dysuria, increased
urinary frequency, or urinary urgency; flank pain; and costo-vertebral
angle tenderness on physical examination. Risk factors for infection
with drug-resistant organisms do not, on their own, indicate a
cUTI.\75\ The applicant stated that CONTEPOTM would offer a
new potential first-line treatment for patients with cUTIs suspected to
be caused by MDR pathogens in the United States.
---------------------------------------------------------------------------
\75\ Hooton, T. and Kalpana, G., 2018, ``Acute complicated
urinary tract infection (including pyelonephritis) in adults,'' In
A. Bloom (Ed.), UpToDate. Available at: https://www.uptodate.com/contents/acute-complicated-urinary-tract-infectionincluding-pyelonephritis-in-adults.
---------------------------------------------------------------------------
The applicant stated that CONTEPOTM is an epoxide
intravenous antibiotic that eradicates bacteria by inhibiting the
bacteria's ability to form cell walls, which are critical for a cell's
survival and growth. The applicant asserted that CONTEPOTM
offers a broad spectrum of bactericidal Gram-negative and Gram-positive
activity, including activity against Extended-spectrum [beta]-lactamase
(ESBL)-producing Enterobacteriaceae, as well as other contemporary MDR
organisms.
The applicant noted that there are currently no ICD-10-PCS
procedure codes that could be used to uniquely identify the use of
CONTEPOTM. However, the applicant stated that potential
cases representing patients who may be eligible to receive treatment
through the administration of CONTEPOTM could be identified
with ICD-10-PCS codes 3E03329 (Introduction of Other Anti-infective
into Peripheral Vein, Percutaneous Approach) or 3E04329 (Introduction
of Other Anti-infective into Central Vein, Percutaneous Approach). The
applicant has submitted a request for approval for a new ICD-10-PCS
procedure code to uniquely identify CONTEPOTM administration
in FY 2020.
The applicant has recommended that CONTEPOTM be
administered as follows: 6 g every 8 hours by intravenous (IV) infusion
over 1 hour for up to 14 days for patients 18 years of age or older,
with an estimated creatinine clearance (CrCl) greater than or equal to
50 mL/min. Dosage adjustment is required for patients whose creatinine
clearance is 50 mL/min or less.
As discussed earlier, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether the product uses a
similar mechanism of action, the applicant stated that
CONTEPOTM's mechanism of action differentiates it from other
approved injectable antibiotics. The applicant reports that
CONTEPOTM, as an injectable epoxide and sole antibiotic
class member, inhibits an early step in peptidoglycan biosynthesis by
covalently binding to MurA, an enzyme that catalyzes the first
committed critical step in a bacteria's ability to form a cell wall
and, therefore, the cell's survival and growth. The applicant indicated
that CONTEPOTM's mechanism of action is unique in comparison
to all other injectable antibiotics by working at a different and
earlier stage of cell wall synthesis inhibition, such that the cell
wall lacks suitable integrity and the bacteria die quickly. The
applicant further stated that because of this unique mechanism of
action, CONTEPOTM lacks cross resistance with other existing
classes of intravenous antibiotics.
With respect to the second criterion, whether the product is
assigned to the same or a different MS-DRG, the applicant asserted that
patients who may be eligible to receive treatment involving
CONTEPOTM include hospitalized patients who have been
diagnosed with a cUTI. The applicant noted that the relevant existing
ICD-10-PCS procedure codes (3E3329 and 3E04329) map to many existing
MS-DRGs. The applicant lists the most common of these MS-DRGs as MS-DRG
871 (Septicemia or Severe Sepsis without MV >96 Hours with MCC); MS-DRG
690 (Kidney and Urinary Tract Infections without MCC); MS-DRG 698
(Other Kidney and Urinary Tract Diagnoses with MCC); MS-DRG 872
(Septicemia or Severe Sepsis without MV >96 hours without MCC); MS-DRG
689 (Kidney and Urinary Tract Infections with MCC); MS-DRG 699 (Other
Kidney and Urinary Tract Diagnoses with CC); MS-DRG (683 Renal Failure
with CC); MS-DRG 682 (Renal Failure with MCC); MS-DRG 853 (Infectious
and Parasitic Diseases with O.R. Procedure with MCC); and MS-DRG 291
(Heart Failure and Shock with MCC). Cases involving the use of
CONTEPOTM would likely be assigned to the same MS-DRGs to
which cases involving treatment with comparator drugs are assigned.
With respect to the third criterion, whether the use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
asserted that the use of CONTEPOTM would treat a different
patient population than existing and currently available treatment
options. While many drugs treat the broad population of patients who
have been diagnosed with cUTIs, the applicant asserts that increasing
rates of Enterobacteriaceae resistance to fluoroquinolones and ESBLs
have limited both classes use as first-line therapies among inpatients
with infections caused by suspected or confirmed MDR pathogens. The
applicant cited a study, which estimates the prevalence of drug
resistance among uropathogens isolated from hospitalized patients in
the United States. According to the study, there is a more than a two-
fold increase in ESBL-producing E. coli (from 3.3 percent to 8
percent), ESBL-producing K. pneumoniae (from 9.1 percent to 18.6
percent), and CRE (from 0 percent to 2.3 percent) causing UTIs in the
period between 2000 and 2009.\76\ The applicant further asserts that
the use of CONTEPOTM will also treat a different diseased
patient population than the currently available therapies. According to
the applicant, CONTEPOTM's unique mechanism of action
amongst injectable antibiotics and novel class allows the use of
CONTEPOTM to reach different and expanded patient
populations, particularly those patients who have been diagnosed with a
cUTI that may have pathogens resistant or suspected resistance to ESBL
and CRE, or fluoroquinolone resistance. Further, the applicant stated
that CONTEPOTM's stewardship value to clinicians is as a
carbapenem-sparing potential therapy that may result in real world
reductions in CRE resistance, further sparing a last-line of defense
for critically ill patient populations, which due to unique resistance
profiles, the applicant asserts constitute a different population than
is currently treated.
---------------------------------------------------------------------------
\76\ Shorr, A.F., Zilberberg, M.D., Micek, S.T., Kollef, M.H.,
``Prediction of Infection Due to Antibiotic-Resistant Bacteria by
Select Risk Factors for Health Care-Associated Pneumonia,'' Arch
Intern Med, 2008, vol. 168(20), pp. 2205-10.
---------------------------------------------------------------------------
Based on the applicant's statements as summarized above, the
applicant believes that CONTEPOTM is not substantially
similar to any existing intravenous antibiotic treatment. However, we
are concerned with respect to the first criterion as to whether the
mechanism of action described by the
[[Page 19302]]
applicant is unique to CONTEPOTM or whether it may be
similar to other drugs that inhibit cell wall development, including
penicillins, cephalosporins, and carbapenems. With respect to the
second criterion, we believe that potential cases involving the use of
CONTEPOTM would be assigned to the same MS-DRGs as cases
involving comparator antibiotics. Finally, with respect to the third
criterion, we are concerned whether CONTEPOTM treats a
unique patient population, as the applicant asserts. While the variety
of antibiotic resistance patterns certainly warrants a varied
armamentarium for clinicians, there are many existing antimicrobials
that are approved to generally treat cUTIs and MDR pathogens. We are
concerned as to whether hospitalized patients who have been diagnosed
with cUTIs, including those with MDR pathogens, would constitute a
unique patient population, given that there are existing treatment
options for these patients. This concern as to whether the technology
may be considered to treat a new patient population seems particularly
relevant for an antibiotic due to the evolving nature of global
bacterial resistance patterns, and, specifically, the applicant's
assertion that the use of CONTEPOTM would be a new tool in
the growing battle against MDR bacteria infections. We are inviting
public comments on whether CONTEPOTM is substantially
similar to any existing technologies and whether it meets the newness
criterion, including with respect to the concerns we have raised.
With regard to the cost criterion, the applicant used the FY 2017
MedPAR Limited Data Set (LDS) to assess the MS-DRGs to which potential
cases representing hospitalized patients who may be eligible for
treatment involving CONTEPOTM would most likely be mapped.
According to the applicant, CONTEPOTM is anticipated to be
indicated for the treatment of hospitalized patients who have been
diagnosed with cUTIs. The applicant identified 199 ICD-10-CM diagnosis
code combinations that identify hospitalized patients who have been
diagnosed with a cUTI. Searching the FY 2017 MedPAR data file for these
ICD-10-CM diagnosis codes resulted in a total of 508,821 potential
cases that span 559 unique MS-DRGs, 510 of which contained more than 10
cases. The applicant excluded MS-DRGs with minimal volume (that is, 10
cases or less) from the cohort of the analysis (a total of 201 cases
and 49 MS-DRGs), and this resulted in a total of 508,620 cases across
461 MS-DRGs.
Using 100 percent of the potential cases (508,620), the applicant
determined an average case-weighted unstandardized charge per case of
$59,009. The applicant standardized the charges for each case and
inflated each case's charges by applying the FY 2019 IPPS/LTCH PPS
final rule outlier charge inflation factor of 1.08864 (83 FR 41722).
(We note that the 2-year inflation factor was revised in the FY 2019
IPPS/LTCH PPS final rule correction notice to 1.08986 (83 FR 49844).
However, we further note that even when using the corrected final rule
values to inflate the charges, the average case-weighted standardized
charge per case for each scenario exceeded the average case-weighted
threshold amount.) The applicant examined associated charges per MS-DRG
and removed charges for potential antibiotics that may be replaced by
the use of CONTEPOTM. Specifically, the applicant identified
5 antibiotics currently used for the treatment of patients who have
been diagnosed with a cUTI and calculated the cost of each of these
drugs for administration over a 14-day inpatient hospitalization.
Because patients who have been diagnosed with a cUTI would typically
only be treated with one of these antibiotics at a time, the applicant
estimated an average of the 14-day cost for the 5 antibiotics. The
applicant then took this cost and converted it to a charge by dividing
the costs by the national average CCR of 0.191 for drugs from the FY
2019 IPPS/LTCH PPS final rule (83 FR 41273). The applicant calculated
an average case-weighted standardized charge per case of $71,333 using
the percent distribution of MS-DRGs as case-weights. Based on this
analysis, the applicant determined that the final inflated average
case-weighted standardized charge per case for CONTEPOTM
exceeded the average case-weighted threshold amount of $52,203 by
$19,130.
Because of the large number of cases included in this cost
analysis, the applicant conducted sensitivity analyses. In these
analyses, the applicant repeated the cost analysis above using only the
top 75 percent of cases, the top 20 MS-DRGs, and the top 10 MS-DRGs. In
these three additional sensitivity analyses, the final inflated average
case-weighted standardized charge per case for CONTEPOTM
exceeded the average case-weighted threshold amount by $14,949,
$14,230, and $13,620, respectively. We are inviting public comments on
whether CONTEPOTM meets the cost criterion.
With regard to the substantial clinical improvement criterion, the
applicant asserted that the results from the CONTEPOTM
clinical trial clearly establish that CONTEPOTM represents a
substantial clinical improvement in the treatment of antibiotic
resistant infections as compared to currently available treatments.
Specifically, the applicant asserted that the use of
CONTEPOTM offers a treatment option for a patient population
unresponsive to, or ineligible for, currently available treatments, and
the use of CONTEPOTM significantly improves clinical
outcomes for this patient population compared to currently available
treatments. The applicants cited the ZEUS Study, a multi-center,
randomized, parallel-group, double-blind Phase II/III trial of 464
patients designed to evaluate safety, tolerability, efficacy and
pharmacokinetics of the use of CONTEPOTM in the treatment of
hospitalized adults who have been diagnosed with a cUTI or AP at 92
global sites in 16 countries. Hospitalized adults who have been
diagnosed with suspected or microbiologically confirmed cUTI/AP were
randomized 1:1 to receive treatment with either CONTEPOTM or
piperacillin-tazobactam (PIP-TAZ) for a fixed 7-day course (no oral
switch); patients who had been diagnosed with concomitant bacteremia
could receive up to 14 days. Diagnosis was based on pyuria and cUTI or
AP with at least two of the following signs and symptoms: Chills,
rigors, or warmth associated with fever, nausea or vomiting, dysuria,
lower abdominal pain or pelvic pain, or acute flank pain. Patients who
had been diagnosed with a cUTI had at least one of the following: Use
of intermittent or indwelling bladder catheterization, functional or
anatomical abnormality of urogenital tract, complete or partial
obstructive uropathy, azotemia or chronic urinary retention in men.
Baseline urine culture specimen was obtained within 48 hours prior to
randomization. Indwelling bladder catheters were required to be removed
or replaced, unless considered unsafe or contraindicated, before or
within 24 hours after randomization.
The applicant stated that the primary endpoint of the ZEUS Study
was to demonstrate that CONTEPOTM was non-inferior to PIP-
TAZ in overall success based on clinical cure (complete resolution or
significant improvement of signs and symptoms such that no further
antimicrobial therapy is warranted) and microbiologic eradication
(baseline pathogen was reduced to <10\4\ CFU/mL on urine culture and if
applicable, negative on repeat blood culture) in the microbiologic
modified intent-to-treat
[[Page 19303]]
(m-MITT) population at the test-of-cure visit (TOC), which occurred on
the 19th to 21st day after completion of a fixed 7 days of treatment
with the study drug, or up to 14 days of treatment for patients
diagnosed with concurrent bacteremia to comply with current treatment
guidelines in these patients.
Patients with any missing or presumed eradications post-baseline
urine sample were classified as indeterminates, and conservatively
deemed as failures in overall success analysis.77 78 The
applicant also reported that the study had two secondary endpoints.
Secondary objectives were to compare: (1) Clinical cure rates in the
two treatment groups in the MITT, m-MITT, Clinical Evaluable (CE), and
Microbiologic Evaluable (ME) populations at TOC, and (2)
microbiological eradication rates in m-MITT and ME populations at TOC.
---------------------------------------------------------------------------
\77\ Eckburg, et al., ``Phenotypic Antibiotic Resistance in
ZEUS: Multi-center, Randomized, Double-Blind Phase II/III Study of
ZTI-01 versus Piperacillin-Tazobactam (P-T) in the Treatment of
Patients with Complicated Urinary Tract Infections (cUTI) including
Acute Pyelonephritis (AP) Poster,'' 2017.
\78\ Kaye, et al., ``Intravenous Fosfomycin (ZTI-01) for the
Treatment of Complicated Urinary Tract Infections (cUTI) including
Acute Pyelonephritis (AP): Results from a Multi-center, Randomized,
Double-Blind Phase II/III Study in Hospitalized Adults (ZEUS),''
2017.
---------------------------------------------------------------------------
The applicant also included evidence from a post-hoc study wherein
all pathogens isolated from patients who had a baseline and TOC
pathogen underwent blinded, post-hoc, pulsed-field gel electrophoresis
(PFGE) molecular typing analysis. Microbiologic outcome was also
defined utilizing the PFGE results, whereby microbiologic persistence
required the same genus and species of baseline and post-baseline
pathogens, as well as PFGE-confirmed genetic identity.
The applicant stated that the ZEUS Study met its primary objective
of showing non-inferiority of CONTEPOTM compared to PIP-TAZ
with overall success rates (that is, clinical cure and microbiological
eradication of baseline pathogen) of 64.7 percent (119/184
CONTEPOTM patients) versus 54.5 percent (97/178 PIP-TAZ
patients) in the m-MITT population at TOC (treatment difference 10.2
percent, 95 percent CI: -0.4, 20.8). We note that, based on the 95
percent confidence interval reported at the primary endpoint,
CONTEPOTM's success rates were not found to be different
from PIP-TAZ in a statistically significant manner. The applicant
reports that the identity and frequency of pathogens recovered at
baseline from patients in the ZEUS Study were similar in both the
CONTEPOTM and PIP-TAZ treatment groups. The most common
pathogens identified were Enterobacteriaceae, identified in 96.2
percent of the CONTEPOTM patients and 94.9 percent of the
PIP-TAZ patients, including E. coli, identified in 72.3 percent of the
CONTEPOTM patients and 74.7 percent of the PIP-TAZ patients;
K. pneumoniae, identified in 14.7 percent of the CONTEPOTM
patients and 14.0 percent of the PIP-TAZ patients; Enterobacter cloacae
species complex, identified in 4.9 percent of the CONTEPOTM
patients and 1.7 percent of the PIP-TAZ patients; and Proteus
mirabilis, identified in 4.9 percent of the CONTEPOTM
patients and 2.8 percent of the PIP-TAZ patients. Gram-negative aerobes
other than Enterobacteriaceae included Pseudomonas aeruginosa, which
was identified in 4.3 percent of the CONTEPOTM patients and
5.1 percent of the PIP-TAZ patients, and Acinetobacter baumannii-
calcoaceticus species complex, identified in 1.1 percent of the
CONTEPOTM patients and none of the PIP-TAZ patients. The
applicant indicated that these pathogens are representative of the
pathogens that have been recovered in other studies of patients who
have been diagnosed with a cUTI or AP.
In terms of secondary endpoints, the applicant stated that clinical
cure rates were greater than 90 percent in both treatment groups at TOC
in the MITT, m-MITT, CE, and ME analysis groups. In addition to the
findings discussed above, with the post-hoc analysis adjusting for PFGE
results in both treatment arms, CONTEPOTM demonstrated a
10.5 percent treatment difference compared to PIP-TAZ with a
microbiological response rate of 70.7 percent versus 60.1 percent,
respectively, in the m-MITT population at TOC (95 percent CI: 0.2,
20.8). The applicant indicated that by specifying the genus and species
of the bacteria present at the start of treatment, the post-hoc PFGE
analysis shows that when measuring microbiological eradication rates
CONTEPOTM demonstrated a positive difference significant at
the 95 percent confidence level.\79\
---------------------------------------------------------------------------
\79\ Skarinsky, et al., ``Per Pathogen Outcomes from the ZEUS
study, a Multi-center, Randomized, Double-Blind Phase II/III Study
of ZTI-01 (fosfomycin for injection) versus Piperacillin-Tazobactam
(P-T) in the Treatment of Patients with Complicated Urinary Tract
Infections (cUTI) including Acute Pyelonephritis (AP),'' 2017.
---------------------------------------------------------------------------
With respect to safety, the applicant reports that in the ZEUS
Study a total of 42.1 percent of the CONTEPOTM patients and
32.0 percent of the PIP-TAZ patients experienced at least one
treatment-emergent adverse event, or TEAE. Most TEAEs were mild or
moderate in severity, and severe TEAEs were uncommon (2.1 percent of
the CONTEPOTM patients and 1.7 percent of the PIP-TAZ
patients). The most common TEAEs in both treatment groups were
transient, asymptomatic laboratory abnormalities and gastrointestinal
events. Treatment-emergent serious adverse events, or SAEs, were
uncommon in both treatment groups. There were no deaths in the study
and one SAE in each treatment group was deemed related to the study
drug (hypokalemia in a CONTEPOTM patient and renal
impairment in a PIP-TAZ patient), leading to study drug discontinuation
in the PIP-TAZ patient. Study drug discontinuations due to TEAEs were
infrequent and similar between treatment groups (3.0 percent of
CONTEPOTM patients and 2.6 percent of PIP-TAZ patients). The
applicant further stated that the most common laboratory abnormality
TEAEs were increases in the levels of alanine aminotransferase (8.6
percent of CONTEPOTM patients and 2.6 percent of PIP-TAZ
patients) and aspartate transaminase (7.3 percent of
CONTEPOTM patients and 2.6 percent of PIP-TAZ patients).
None of the aminotransferase elevations were symptomatic or treatment-
limiting, and none of the patients met the criteria for Hy's Law (a
method of assessing a patient's risk of fatal drug-induced liver
injury). Outside of the United States, elevated liver aminotransferases
are listed among undesirable effects in labeling for the use of IV
fosfomycin. Finally, the applicant stated that hypokalemia occurred in
71 of the 232 (30.6 percent) CONTEPOTM patients and 29 of
the 230 (12.6 percent) PIP-TAZ patients. Most decreases in potassium
levels were mild to moderate in severity. Shifts in potassium levels
from normal at baseline to hypokalemia, as determined by worst post-
baseline hypokalemia values, were more frequent in the patients in the
CONTEPOTM group than the patients in the PIP-TAZ group for
mild (17.7 percent compared to 11.3 percent), moderate (11.2 percent
compared to 0.9 percent), and severe (1.7 percent compared to 0.4
percent) categories of hypokalemia. Hypokalemia was deemed a TEAE in
6.4 percent of the patients receiving CONTEPOTM and 1.3
percent of the patients receiving PIP-TAZ, and all cases were transient
and asymptomatic. The applicant noted that post-baseline QT intervals
calculated using Fridericia's formula, or QTcF, of greater than 450 to
less than
[[Page 19304]]
or equal to 480 msec (baseline QTcF of less than or equal to 450 msec)
occurred at a higher frequency in CONTEPOTM patients (7.3
percent) compared to PIP-TAZ patients (2.5 percent). In the
CONTEPOTM arm, these results appear to be associated with
the hypokalemia associated with the salt load of the IV formulation.
Only 1 patient in the PIP-TAZ group had a baseline QTcF of less than or
equal to 500 msec and a post-baseline QTcF of greater than 500 msec.
In addition to the assertions of clinical improvement based on its
pivotal study, the applicant stated that CONTEPO\TM\ provides a broad
spectrum of in vitro activity against a variety of clinically important
MDR Gram-negative pathogens, including ESBL-producing
Enterobacteriaceae, CRE, and Gram-positive pathogens, including
methicillin-resistant Staphylococcus aureus, or MRSA, and vancomycin-
resistant enterococci.80 81 82 83 The applicant also
believes that CONTEPO\TM\, due to its unique mechanism of action, has
demonstrated synergistic or additive activity in in vitro studies when
used in combination with other antibiotic classes in preclinical
studies.84 85 86 The applicant further stated that the use
of CONTEPO\TM\ has the potential to spare the use of carbapenems and
other last-line therapies and, thereby, has the potential to reduce the
development of resistance to existing antibiotic classes.\87\
Additionally, the applicant believes that the use of CONTEPO\TM\ has
the potential to reduce patients' hospital lengths of stay and patient
morbidity due to the ability to provide early appropriate therapy in
patients who have been diagnosed with suspected or confirmed MDR
pathogens.88 89 The applicant also stated that the submitted
literature provides cases wherein the use of CONTEPO\TM\ could provide
an important treatment option for patients who have been diagnosed with
infections caused by pathogens resistant to all other available IV
antibiotics.90 91 Finally, the applicant asserted that the
use of CONTEPO\TM\ has immunomodulating activities that potentially may
improve outcomes for serious infections,\92\ and may protect against
gentamicin induced nephrotoxicity.\93\
---------------------------------------------------------------------------
\80\ Flamm, R., et al., ``Activity of fosfomycin when tested
against US contemporary bacterial isolates,'' Diagnostic
Microbiology and Infectious Disease, 2018.
\81\ Mendes, R.E., et al., ``Molecular Characterization of
Clinical Trial Isolates Exhibiting Increased MIC Results during
Fosfomycin (ZTI-01) Treatment in a Phase II/III Clinical Trial for
Complicated Urinary Tract Infections (ZEUS),'' 2018.
\82\ Rhomberg, P., et al., ``Evaluation of Fosfomycin Activity
When Combined with Selected Antimicrobial Agents and Tested against
Bacterial Isolates Using Checkerboard Methods,'' 2017.
\83\ Falagas, M., et al., ``Antimicrobial susceptibility of
multidrug-resistant (MDR) and extensively drug-resistant (XDR)
Enterobacteriaceae isolates to fosfomycin,'' International Journal
of Antimicrobial Agents, 2010.
\84\ Flamm, R., et al., ``Time Kill Analyses of Concerning Gram-
Negative Bacteria with Fosfomycin Alone and in Combination with
Select Antimicrobial Agents,'' 2017.
\85\ Avery & Nicolau, ``In Vitro Synergy of Fosfomycin and
Parenteral Antimicrobials Against Carbapenem-Nonsusceptible
Pseudomonas aeruginosa,'' 2018.
\86\ Albiero, J., et al., ``Pharmacodynamic Evaluation of the
Potential Clinical Utility of Fosfomycin and Meropenem in
Combination Therapy against KPC-2-Producing Klebsiella pneumonia,''
Antimicrobial Agents and Chemotherapy, 2016.
\87\ Hayden, M.K. & Won, S.Y., ``Carbapenem-Sparing Therapy for
Extended-Spectrum [beta]-Lactamase-Producing E coli and Klebsiella
pneumoniae Bloodstream Infection,'' JAMA, 2018.
\88\ Mocarski, et al., ``Economic Burden Associated with Key
Gram-negative Pathogens among Patients with Complicated Urinary
Tract Infections across US Hospitals,'' 2014.
\89\ Lodise, et al., ``Carbapenem-resistant Enterobacteriaceae
(CRE) or Delayed Appropriate Therapy (DAT)--Does One Affect Outcomes
More Than the Other Among Patients With Serious Infections Due to
Enterobacteriaceae?,'' 2017.
\90\ Chen, L., et al., ``Pan-Resistant New Delhi Metallo-Beta-
Lactamase-Producing Klebsiella pneumonia--Washoe County, Nevada,
2016,'' 2017.
\91\ Rios, P., et al., ``Extensively drug-resistant (XDR)
Pseudomonas aeruginosa identified in Lima, Peru co-expressing a VIM-
2 metallo-blactamase, OXA-1 b-lactamase and GES-1 extended-spectrum
b-lactamase,'' JMM Case Reports, 2018.
\92\ Zeitlinger, et al., ``Immunomodulatory effects of
fosfomycin in an endotoxin model in human blood.'' Journal of
Antimicrobial Chemotherapy, 2007.
\93\ Yanagida, et al., ``Protective effect of fosfomycin on
gentamicin-induced lipid peroxidation of rat renal tissue,'' Chem
Biol Interact, 2004.
---------------------------------------------------------------------------
We have several concerns regarding whether CONTEPO\TM\ meets the
substantial clinical improvement criterion. First, we are concerned
that we are unable to identify if any of the patients enrolled in the
ZEUS Study were from the United States. As we have noted in previous
rulemaking (83 FR 41309), given the geographic variability of
antibiotic resistance, we are unsure to what extent results from
studies utilizing an international cohort of patients generate
inferences that are applicable to the U.S. context and, in particular,
to the Medicare-eligible population.
Second, we are unsure if PIP-TAZ is the only proper comparator for
CONTEPO\TM\, or if other treatments should have been considered as
well. There are a number of additional antimicrobials with similar
indications that are available for patients who have been diagnosed
with cUTIs. Such treatments might include meropenem-vaborbactam or
plazomicin. Prior studies include a meta-analysis of 10 studies (7
randomized) comparing the clinical efficacy of IV fosfomycin against
other antibiotics including sulbenicillin, sulbactam/cefoperazone,
cefotaxime, fosfomycin/colistin, and minocycline/cefuzonam. This meta-
analysis did not observe a difference in clinical efficacy between
fosfomycin and respective comparators (odds ratio (OR) 1.44, 95 percent
CI (0.96, 2.15)) irrespective of monotherapy (OR 1.41, 95 percent CI
(0.83, 2.39)) or combination therapy (OR 1.48, 95 percent CI (0.81,
2.71.)). The same results were obtained when studies with poor quality
were excluded (OR 1.45, 95 percent CI (0.94, 2.24)).\94\
---------------------------------------------------------------------------
\94\ Grabien, et al., ``Intravenous fosfomycin--Back to the
Future; Systematic Review and Meta-analysis of the Clinical
Literature,'' Clinical Microbiology and Infection, 2017.
---------------------------------------------------------------------------
Third, we have two methodological concerns regarding the
applicant's assertions based on the ZEUS Study. There does not appear
to be any statistical comparison of the patients in each arm in terms
of demographics and, therefore, it is difficult to assess whether the
two intervention arms are balanced as the applicant inferred. We
acknowledge that use of a double-blinded, randomized study design
(which was used in the ZEUS Study) should minimize bias and control for
unmeasured variables between treatment arms. However, we are concerned
about a lack of detail on the different dropout rates of patients
within each arm of the ZEUS Study, including data on causes and
treatment of patients that dropped out and any bias that might
introduce. We also are concerned that the ZEUS Study did not
demonstrate a superior clinical outcome with statistical significance
in its primary endpoint. Rather, the applicant is asserting the
technology represents a substantial clinical improvement on the basis
of meeting a secondary endpoint, the cure rates based on additional
PFGE analysis. In addition, we are concerned that the use of m-MITT,
rather than ITT, may have biased the results upwards by focusing on a
subset of the treatment group, rather than the entire random
sample.\95\
---------------------------------------------------------------------------
\95\ Beckett, R.D., Loeser, K.C., Bowman, K.R., Towne, T.G.,
``Intention-to-treat and transparency of related practices in
randomized, controlled trials of anti-infectives,'' BMC Med Res
Methodol, 2016, vol. 16(1), pp. 106, Published August 24, 2016,
doi:10.1186/s12874-016-0215-2.
---------------------------------------------------------------------------
Finally, we are concerned that many of the assertions the applicant
has made regarding the efficacy of CONTEPOTM on MDR gram-
negative pathogens and broader public health benefits come from in
vitro studies or may be speculative in nature. It may be helpful
[[Page 19305]]
to have further evidence, particularly prospectively collected and
tested clinical data, to support the assertions that the use of
CONTEPOTM reduces hospital lengths of stay and patient
morbidity, and enhances antibiotic stewardship.
We are inviting public comments on whether CONTEPOTM
meets the substantial clinical improvement criterion.
Below we summarize and respond to a written public comment received
in response to the New Technology Town Hall meeting notice published in
the Federal Register regarding the substantial clinical improvement
criterion for CONTEPOTM.
Comment: In response to a question presented at the New Technology
Town Hall meeting, the applicant explained why the post-hoc reanalysis
of the primary endpoint (overall success, a composite of clinical cure
and microbiologic eradication) from the ZEUS Study using pulse-field
gel electrophoresis, which the applicant asserted demonstrated a
statistically significant difference between CONTEPOTM and
PIP-TAZ, is clinically important. The applicant stated that the post-
hoc analysis was able to differentiate the patients who had eradication
of the identified and treated baseline pathogen from those patients who
developed or were likely to develop another infection from a newly
acquired pathogen (different strain) following the ~2-week period
between the end of IV therapy and the test-of-cure evaluation. However,
the applicant indicated that there are many reasons why patients may
acquire another pathogen and/or develop new infections after completing
IV therapy, including indwelling urinary catheters or instrumentation
(for example, nephrostomy tubes, ureteric stents, etc.) or anatomical
abnormalities. The applicant stated that because of these confounding
factors, the PFGE reanalysis allowed for the differentiation of the
true persistence of the same pathogen that was present at baseline from
a different pathogen that might look the same, but was clearly
genetically distinct.
Response: We appreciate the applicant's further explanation of the
PFGE analysis. We will take this information into consideration when
deciding whether to approve new technology add-on payments for
CONTEPOTM.
e. DuraGraft[supreg] Vascular Conduit Solution
Somahlution, Inc. submitted an application for new technology add-
on payments for DuraGraft[supreg] for FY 2020. (We note that the
applicant previously submitted applications for new technology add-on
payments for DuraGraft[supreg] for FY 2018 and FY 2019, which were
withdrawn.) According to the applicant, DuraGraft[supreg] is designed
to protect the endothelium of the vein graft by mitigating ischemic
reperfusion injury (IRI), the basis of vein graft disease (VGD) and
vein graft failure (VGF), both of which are intimately linked to graft
and patient outcomes.\96\ \97\ \98\ According to the applicant,
specific VGD and VGF clinical outcomes affected by the use of
DuraGraft[supreg] include reductions in myocardial infarction (MI),
repeat revascularization and major adverse cardiovascular events
(MACE). The applicant stated that DuraGraft[supreg] is a preservation
solution, not a storage solution, used during standard graft handling,
flushing, and bathing steps.
---------------------------------------------------------------------------
\96\ Salvadori, M., Rosso, G., and Bertoni, E., ``Update on
Ischemia-reperfusion Injury in Kidney Transplantation: Pathogenesis
and Treatment,'' World Transplant, June 24, 2015, vol. 5(2), pp. 52-
67.
\97\ Osgood, M.J., Hocking, K.M., Voskresensky, I.V., et al.,
``Surgical vein graft preparation promotes cellular dysfunction,
oxidative stress, and intimal hyperplasia in human saphenous vein,''
J Vasc Surg, 2014, vol. 60, pp. 202-211.
\98\ Shuhaiber, J.H., Evans, A.N., Massad, M.G., and Geha, A.S.,
``Mechanisms and Future Directions for Prevention of Vein Graft
Failure in Coronary Bypass Surgery,'' European Journal of Cardio-
Thoracic Surgery, vol. 22, Issue 3, September 1, 2002, pp. 387-396.
---------------------------------------------------------------------------
The applicant indicated that vein graft endothelial damage is the
principal mediator of VGD following grafting in bypass surgeries.\99\
\100\ According to the applicant, the endothelium can be destroyed or
damaged intraoperatively through the acute physical stress of
harvesting, storage, and handling, and through more insidious processes
such as those associated with ischemic injury, metabolic stress and
oxidative damage. The applicant also noted that vein graft solutions
can independently damage the endothelium during the harvesting and
storage stages prior to vein grafting. The applicant also referred to
more recent information to depict that damage associated with the use
of graft storage solutions has the highest correlation with the
development of 12-month VGF following coronary artery bypass grafting
(CABG).\101\ More specifically regarding vein graft solutions, the
applicant asserted that there are two processes associated with current
vein graft solutions that lead to IRI and ultimately VGD: (1) Current
vein graft solutions cause ``solution damage;'' and (2) current vein
graft solutions do not protect against IRI, the basis for VGD.\102\
\103\ \104\ \105\ \106\ \107\ \108\ According to the applicant, current
vein graft solutions are used to flush and store vascular grafts during
the ex vivo ischemic interval of the surgical procedure. However, these
solutions do not protect the graft from ischemia reperfusion injury and
have no preservation ability. Further, the applicant asserted that some
of the solutions are incompatible with graft tissue resulting in
ischemic damage that is compounded by ``solution damage''.\109\ \110\
\111\
---------------------------------------------------------------------------
\99\ Harskamp, R.E., Alexander, J.H., Schulte, P.J., Brophy,
C.M., Mack, M.J., Peterson, E.D., Williams, J.B., Gibson, C.M.,
Califf, R.M., Kouchoukos, N.T., Harrington, R.A., Ferguson, Jr.,
T.B., Lopes, R.D., ``Vein Graft Preservation Solutions, Patency, and
Outcomes After Coronary Artery Bypass Graft Surgery Follow-up From
PREVENT IV Randomized Clinical Trial,'' JAMA Surg., 2014, vol.
149(8), pp. 798-805.
\100\ Testa, L., Bedogni, F., ``Treatment of Saphenous Vein
Graft Disease: Never Ending Story of the Eternal Return,'' Res
Cardiovasc Med., 2014, vol. 3(3), e21092.
\101\ Ibid.
\102\ Shinjo, H., et al., ``Effect of irrigation solutions for
arthroscopic surgery on intraarticular tissue: comparison in human
meniscus-derived primary cell culture between lactate Ringer's
solution and saline solution,'' Journal of Orthopaedic Research,
2002, vol. 20, pp. 1305-1310.
\103\ Breborowicz, A. and Oreopoulos, D.G., ``Is normal saline
harmful to the peritoneum?'', Perit Dial Int., 2005 Apr; 25 Suppl
4:S67-70.
\104\ Pusztaszeri, M.P., Seelentag, Walter, Bosman, F.T.,
``Immunohistochemical Expression of Endothelial Markers CD31, CD34,
von Willebrand Factor, and Fli-1 in Normal Human Tissues,'' Journal
of Histochemistry & Cytochemistry, 2006, vol. 54(4), pp. 385-395.
\105\ Polubinska, A., et al., ``Normal Saline induces oxidative
stress in peritoneal mesoyhelial cells,'' Journel of Pediatric
Surgery, 2008, vol. 43, pp. 1821-1826.
\106\ Sengupta, S., Prabhat, K., Gupta, V., Vij, H., Vij, R.,
Sharma, V., ``Artefacts Produced by Normal Saline When Used as a
Holding Solution for Biopsy Tissues in Transit,'' J. Maxillofac.
Oral Surg., (Apr-June 2014), vol. 13(2), pp. 148-151.
\107\ Wilbring, M., Tugtekin, S.M., Zatschler, B., Ebner, A.,
Reichenspurner, H., Matschke, K., Deussen, A., ``Even short-time
storage in physiological saline solution impairs endothelial
vascular function of saphenous vein grafts,'' Eur J Cardiothorac
Surg., 2011 Oct, vol. 40(4), pp. 811-815.
\108\ Weiss, D.R., et al., ``Extensive deendothelialization and
thrombogenicity in routinely prepared vein grafts for coronary
bypass operations: facts and remedy,'' Int J Clin Exp Med, 2009,
vol. 2, pp. 95-113.
\109\ Weiss, D.R., et al., ``Extensive deendothelialization and
thrombogenicity in routinely prepared vein grafts for coronary
bypass operations: facts and remedy,'' Int J Clin Exp Med, 2009,
vol. 2, pp. 95-113.
\110\ Ibid.
\111\ Thatte, H.S., Biswas, K.S., Najjar, S.F., Birjiniuk, V.,
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon
Microscopic valuation of Saphenous Vein Endothelium and Its
Preservation With a New Solution, GALA,'' Annals Thoracic Surgery,
2003, vol. 75, pp. 1145-52.
---------------------------------------------------------------------------
The applicant explained that there are two mechanisms leading to
VGD: (1) Endothelial damage associated with the
[[Page 19306]]
harvesting and storage processes; and (2) VGD pathophysiological
changes that occur in damaged vein grafts following reperfusion at the
time of graft anastomosis. According to the applicant, these changes
are apparent within minutes to hours of grafting and are manifested as
endothelial dysfunction, death and/or denudation and include pro-
inflammatory, pro-thrombogenic and aberrant proliferative changes
within the graft. The applicant further characterized these changes as
initial endothelial reperfusion phase responses, which set in motion a
damage-response domino-like effect thereby perpetuating a cycle of
prolonged reperfusion phase injury with subsequent VGD.
The applicant further noted that endothelial dysfunction and
inflammation results not only in the diminished ability of the graft to
respond appropriately to new blood flow patterns, but also may thwart
positive adaptive vein graft remodeling. According to the applicant,
this is because proper vein graft remodeling is dependent upon a
functional endothelial response to shear stress that involves the
production of remodeling factors by the endothelium including nitro
vasodilators, prostaglandins, lipoxyoxygenases, hyperpolarizing factors
and other growth factors.\112\ Therefore, damaged, missing and/or
dysfunctional endothelial cells prevent graft adaption, which makes the
graft susceptible to shear mediated endothelial damage. The applicant
explained that the collective damage results in intimal hyperplasia or
graft wall thickening that is the basis for atheroma development,
stenosis and subsequent lumen narrowing leading to the end state of
VGD, VGF.\113\ The applicant also noted that the pathologic changes
leading to VGD, occlusion and loss of vasomotor function, are well
documented.\114\ \115\ \116\ \117\ \118\ \119\ \120\ Presenting an
intact functional endothelial layer at the time of grafting is,
therefore, critical to protecting the graft and its associated
endothelium from damage that occurs post-grafting, in turn conferring
protection against graft failure.\121\ The applicant stated that given
the low success rate of VGF intervention after surgery (for example,
percutaneous coronary intervention and saphenous vein graft
intervention \122\), addressing graft endothelial protection at the
time of surgery is critical.
---------------------------------------------------------------------------
\112\ Owens, C.D., ``Adaptive changes in autogenous vein grafts
for arterial reconstruction: Clinical Implications,'' J Vasc Surg.,
2010 March; vol. 51(3), pp. 736-746.
\113\ Murphy, G.J. and Angelini, G.D., ``Insights into the
pathogenesis of vein graft disease: lessons from intravascular
ultrasound,'' Cardiovascular Ultrasound, 2004, 2:8.
\114\ Verrier, E.D., Boyle, E.M., ``Endothelial cell injury in
cardiovascular surgery: an overview,'' AnnThorac Surg, 1996, vol.
64, pp. S2-S8.
\115\ Harskamp, R.E., Lopes, R.D., Baisden, C.E., et al.,
``Saphenous vein graft failure after coronary artery bypass surgery:
pathophysiology, management, and future directions,'' Ann Surg.,
2013 May, vol. 257(5), pp. 824-33.
\116\ Sellke, F.W., Boyle, E.M., Verrier, E.D., ``The
pathophysiology of vasomotor dysfunction,'' Ann Thorac Surg, 1996,
vol. 64, pp. S9-S15.
\117\ Motwani, J.G., Topol, E.J., ``Aortocoronary saphenous vein
graft disease: pathogenesis, predisposition and prevention,''
Circulation, 1998, vol. 97(9), pp. 916-31.
\118\ Mills, N.L., Everson, C.T., ``Vein graft failure,'' Curr
Opin Cardiol, 1995, vol. 10, pp. 562-8.
\119\ Davies, M.G., Hagen, P.O., ``Pathophysiology of vein graft
failure: a review,'' Eur J Vasc Endovasc Surg, 1995, vol. 9, pp. 7-
18.
\120\ Edmunds, L.H., ``Techniques of myocardial
revascularization. In: Edmunds LH, ed. Cardiac surgery in the
adult,'' New York: McGraw-Hill, 1997, pp. 481-534.
\121\ Kim FY, Marhefka G, Ruggiero NJ, et al. Saphenous vein
graft disease: review of pathophysiology, prevention, and treatment.
Cardiol Rev, 2013;21(2):101-9.
\122\ Testa, L., Bedogni, F., ``Treatment of Saphenous Vein
Graft Disease: Never Ending Story of the Eternal Return,'' Res
Cardiovasc Med., 2014, vol. 3(3), e21092.
---------------------------------------------------------------------------
With respect to the newness criterion, DuraGraft[supreg] has not
received FDA approval as of the time of the development of this
proposed rule. The applicant indicated that it anticipates FDA approval
of its premarket application by July 1, 2019. The applicant also
indicated that ICD-10-PCS code XY0VX83 (Extracorporeal introduction of
endothelial damage inhibitor to vein graft, New Technology Group 3)
would identify procedures involving the use of the DuraGraft[supreg]
technology.
As discussed earlier, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would, therefore, not be
considered ``new'' for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, there are currently no other treatment
options available with the same mechanism of action as that of
DuraGraft[supreg]. According to the applicant, the currently available
vein graft solutions, which consist of saline, buffered saline, blood,
and electrolyte solutions, are not preservation solutions but
``storage'' solutions that do not protect the graft vascular
endothelium nor mitigate IRI, the basis of VGD.\123\ \124\ \125\ \126\
The applicant stated that these solutions are used merely to keep
grafts wet from the time they are harvested until the time they are
used in CABG. According to the applicant, exposure of saphenous vein
grafts to these solutions has been shown to cause significant damage to
the graft within minutes.\127\ \128\ \129\ \130\
---------------------------------------------------------------------------
\123\ Salvadori, M., Rosso, G., and Bertoni, E., ``Update on
Ischemia-reperfusion Injury in Kidney Transplantation: Pathogenesis
and Treatment,'' World Transplant, June 24, 2015, vol. 5(2), pp. 52-
67.
\124\ Lee, J.C. and Christie, J.D., ``Primary Graft
Dysfunction,'' Proc Am Thorac Soc., 2009, vol. 6, pp 39-46.
\125\ Osgood, M.J., Hocking, K.M., Voskresensky, I.V., et al.,
``Surgical vein graft preparation promotes cellular dysfunction,
oxidative stress, and intimal hyperplasia in human saphenous vein,''
J Vasc Surg, 2014, vol. 60, pp. 202-211.
\126\ Shuhaiber, J.H., Evans, A.N., Massad, M.G., and Geha,
A.S., ``Mechanisms and Future Directions for Prevention of Vein
Graft Failure in Coronary Bypass Surgery,'' European Journal of
Cardio-Thoracic Surgery, vol. 22, Issue 3, September 1, 2002, pp.
387-396.
\127\ Weiss, D.R., et al., ``Extensive deendothelialization and
thrombogenicity in routinely prepared vein grafts for coronary
bypass operations: facts and remedy,'' Int J Clin Exp Med, 2009,
vol. 2, pp. 95-113.
\128\ Wilbring, M., Tugtekin, S.M., Zatschler, B., Ebner, A.,
Reichenspurner, H., Matschke, K., Deussen, A., ``Even short-time
storage in physiological saline solution impairs endothelial
vascular function of saphenous vein grafts,'' Eur J Cardiothorac
Surg., 2011 Oct, vol. 40(4), pp. 811-815.
\129\ Tsakok, M., Montgomery-Taylor, S. and Tsakok, T.,
``Storage of saphenous vein grafts prior to coronary artery bypass
grafting: is autologous whole blood more effective than saline in
preserving graft function?'' Inter Cardiovasc Thorac Surg, 2012,
vol. 15, pp. 720-25.
\130\ Thatte, H.S., Biswas, K.S., Najjar S.F., Birjiniuk, V.,
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon
Microscopic valuation of Saphenous Vein Endothelium and Its
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery,
2003, vol. 75, pp. 1145-52.
---------------------------------------------------------------------------
The applicant explained that DuraGraft[supreg] is a formulated
``preservation'' solution that can be used during handling, flushing,
and bathing steps without changing standard surgical practice.
According to the applicant, the handling step includes using an
atraumatic surgical technique, avoiding over pressurization and
checking for leakage, excessive handling and distortion. The applicant
further noted that vascular segments (that become vascular grafts) are
comprised of a number of different cell types that function together in
an integrated manner post-grafting and, therefore, protection of all
cell types during graft flushing and storage is critical for
maintenance of graft viability and normal graft functioning.
The applicant indicated that DuraGraft[supreg] separates itself
from current vein graft solutions through its unique
[[Page 19307]]
composition of ingredients, a physiologic saline solution that combines
free radical scavengers and antioxidants (glutathione, ascorbic acid)
and nitric oxide synthase substrate (L-arginine), as discussed later in
this section. According to a summary of ex vivo performance data and
studies provided by the applicant, the use of DuraGraft[supreg] has
been shown to preserve vascular graft viability, as well as graft
functional and structural integrity during ex vivo storage and
flushing.\131\ \132\ \133\ The applicant noted that these studies
evaluated graft cellular viability and structural integrity and
assessed molecular and biochemical markers of normal endothelial
functioning. Specifically, endothelial and smooth muscle cells were
assessed.
---------------------------------------------------------------------------
\131\ Thatte, H.S., Biswas, K.S., Najjar S.F., Birjiniuk, V.,
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon
Microscopic valuation of Saphenous Vein Endothelium and Its
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery,
2003, vol. 75, pp. 1145-52.
\132\ Hussaini, B.E., Lu, X.G., Wolfe, A., Thatte, H.S.,
``Evaluation of Endoscopic Vein extraction on Structural and
Functional Viability of Saphenous Vein Endothelium,'' J Cardothorac
Surg, 2011, vol. 6, pp. 82-89.
\133\ Rousou, L.J., Taylor, K.B., Lu, X.G., et al., ``Saphenous
vein conduits harvested by endoscopic technique exhibit structural
and functional damage,'' Ann Thorac Surg, 2009, vol. 87, pp. 62-70.
---------------------------------------------------------------------------
All veins used in these studies were collected from patients
undergoing cardiac bypass surgery at the Boston VA or Saint Joseph's
Hospital of Atlanta. Veins were harvested using the ``Open Saphenous
Vein Harvest'' (OSVH) technique.\134\ \135\ \136\ Segments of the
collected veins not being used for the bypass surgery were used for the
performance bench studies.
---------------------------------------------------------------------------
\134\ Ibid.
\135\ Hussaini, B.E., Lu, X.G., Wolfe, A., Thatte, H.S.,
``Evaluation of Endoscopic Vein extraction on Structural and
Functional Viability of Saphenous Vein Endothelium,'' J Cardothorac
Surg, 2011, vol. 6, vol. 82-89.
\136\ Thatte, H.S., Biswas, K.S., Najjar, S.F., Birjiniuk, V.,
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon
Microscopic valuation of Saphenous Vein Endothelium and Its
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery,
2003, vol. 75, pp. 1145-52.
---------------------------------------------------------------------------
According to the applicant, viability studies conducted in
conjunction with multi-photon microscopy demonstrated a protective
effect from the use of DuraGraft[supreg] on vascular endothelial
viability and graft structural integrity for storage times of up to 5
hours at room temperature (21 [deg]C).\137\ The applicant also stated
that, conversely, vascular segments were not able to be maintained in a
viable condition when stored for as short a time as 15 minutes in
standard-of-care solutions consistent with what has been published by
others. According to the applicant, DuraGraft[supreg] demonstrated its
ability to preserve the viability, structure and function of
endothelium in radial and internal mammary arteries, as well as
saphenous veins for extended periods.\138\
---------------------------------------------------------------------------
\137\ Ibid.
\138\ Ibid.
---------------------------------------------------------------------------
According to the information submitted by the applicant, the
ingredients found in DuraGraft[supreg] play a primary role in
DuraGraft[supreg] exhibiting a different mechanism of action from other
solutions that are commonly used to treat the same disease process and
patient population. According to the study cited by the applicant, the
rapid loss of endothelial cell structural and functional integrity in
saphenous veins stored in standard storage solutions can be avoided by
incorporating a physiologic saline solution that combines free radical
scavengers and antioxidants (glutathione, ascorbic acid) and nitric
oxide synthase substrate (L-arginine) providing a favorable environment
and cellular support during ex vivo storage.\139\ The same study also
indicated that these three ingredients were chosen because of their
putative effect on endothelial cell function and that their use may act
synergistically to enhance the cell preservation properties of the
solution. The authors of the study asserted that glutathione increases
L-arginine transport in endothelial cells and may lead to the formation
of biologically active S-nitrosoglutathione and to the stimulation of
endothelial nitric oxide synthase (eNOS) activity, nitric oxide
generation, and coronary vasodilatation. According to the authors,
ascorbic acid also increases eNOS activity by preserving endothelium-
derived nitric oxide bioactivity by possibly scavenging superoxide
anions and preventing oxidative destruction of tetrahydrobiopterin, an
eNOS cofactor. Furthermore, according to the study, the presence of
ascorbic acid in a physiologic saline solution may prevent the
oxidation of this eNOS cofactor during vessel storage and help maintain
eNOS function and nitric oxide generation in vascular endothelium. The
study authors also noted that ascorbic acid, by its reducing property,
may assist sustained long-term release of nitric oxide from these
compounds in vessels preserved in a physiologic saline solution and,
therefore, help maintain the patency and tone of the vessels during
storage. Additionally, according to the authors of the study, ascorbic
acid mediated reversal of endothelial dysfunction, reduced platelet
activation and leukocyte adhesion, inhibited smooth muscle cell
proliferation and lipid peroxidation, and increased prostacyclin
production which have been demonstrated in numerous cardiovascular
pathologies. Finally, the authors stated that L-arginine is a known
substrate of nitric oxide synthase and has been shown to decrease
neutrophil-endothelial cell interactions in inflamed vessels.\140\
---------------------------------------------------------------------------
\139\ Thatte, H.S., Biswas, K.S., Najjar, S.F., Birjiniuk, V.,
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon
Microscopic valuation of Saphenous Vein Endothelium and Its
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery,
2003, vol. 75, pp. 1145-52.
\140\ Ibid.
---------------------------------------------------------------------------
Regarding the second criterion, whether a product is assigned to
the same or different MS-DRG, according to the applicant, cases
involving patients who may be eligible to receive treatment involving
DuraGraft[supreg] would be assigned to the same MS-DRGs as patients who
received treatment involving heparinized blood, saline, and electrolyte
solutions.
Regarding the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
indicated that heparinized blood, saline and electrolyte solutions
involve treatment of the same disease process and the same patient
population as DuraGraft[supreg].
Based on the applicant's statements presented above, we are
concerned that the mechanism of action of DuraGraft[supreg] may be the
same or similar to other vein graft storage solutions. Specifically, we
are concerned that current solutions used in vein graft surgical
procedures may be similar to DuraGraft[supreg] in composition and
treatment indication and, therefore, have the same or similar mechanism
of action. We are inviting public comments on whether the
DuraGraft[supreg] meets the newness criterion.
With regard to the cost criterion, the applicant conducted the
following analysis to demonstrate that the technology meets the cost
criterion. In order to identify the range of MS-DRGs that cases
representing potential patients who may be eligible for treatment using
DuraGraft[supreg] may map to, the applicant identified all MS-DRGs for
patients who underwent CABG. Specifically, the applicant searched the
FY 2017 MedPAR file for Medicare fee-for-service inpatient hospital
claims submitted between October 1, 2016 and September 30, 2017, and
identified potential cases that may be eligible for treatment using
DuraGraft[supreg] by the following ICD-10-PCS procedure codes:
[[Page 19308]]
------------------------------------------------------------------------
ICD-10-PCS procedure code Code description
------------------------------------------------------------------------
021009W................... Bypass coronary artery, one artery from
aorta with autologous venous tissue, open
approach.
02100AW................... Bypass coronary artery, one artery from
aorta with autologous arterial tissue, open
approach.
021049W................... Bypass coronary artery, one artery from
aorta with autologous venous tissue,
percutaneous endoscopic approach.
02104AW................... Bypass coronary artery, one artery from
aorta with autologous arterial tissue,
percutaneous endoscopic approach.
021109W................... Bypass coronary artery, two arteries from
aorta with autologous venous tissue, open
approach.
02110AW................... Bypass coronary artery, two arteries from
aorta with autologous arterial tissue, open
approach.
021149W................... Bypass coronary artery, two arteries from
aorta with autologous venous tissue,
percutaneous endoscopic approach.
02114AW................... Bypass coronary artery, two arteries from
aorta with autologous arterial tissue,
percutaneous endoscopic approach.
021209W................... Bypass coronary artery, three arteries from
aorta with autologous venous tissue, open
approach.
02120AW................... Bypass coronary artery, three arteries from
aorta with autologous arterial tissue, open
approach.
021249W................... Bypass coronary artery, three arteries from
aorta with autologous venous tissue,
percutaneous endoscopic approach.
02124AW................... Bypass coronary artery, three arteries from
aorta with autologous arterial tissue,
percutaneous endoscopic approach.
021309W................... Bypass coronary artery, four or more
arteries from aorta with autologous venous
tissue, open approach.
02130AW................... Bypass coronary artery, four or more
arteries from aorta with autologous
arterial tissue, open approach.
021349W................... Bypass coronary artery, four or more
arteries from aorta with autologous venous
tissue, percutaneous endoscopic approach.
02134AW................... Bypass coronary artery, four or more
arteries from aorta with autologous
arterial tissue, percutaneous endoscopic
approach.
------------------------------------------------------------------------
This resulted in potential eligible cases spanning 100 MS-DRGs,
with approximately 93 percent of all of these potential cases, 66,553,
mapping to the following 10 MS-DRGs:
------------------------------------------------------------------------
MS-DRG MS-DRG title
------------------------------------------------------------------------
MS-DRG 003................ Extracorporeal Membrane Oxygenation (ECMO)
or Tracheostomy with Mechanical Ventilation
>96 Hours or Principal Diagnosis Except
Face, Mouth & Neck with Major Operating
Room Procedure.
MS-DRG 216................ Cardiac Valve and Other Major Cardiothoracic
Procedures with Cardiac Catheterization
with MCC.
MS-DRG 219................ Cardiac Valve and Other Major Cardiothoracic
Procedures without Cardiac Catheterization
with MCC.
MS-DRG 220................ Cardiac Valve and Other Major Cardiothoracic
Procedures without Cardiac Catheterization
with CC.
MS-DRG 228................ Other Cardiothoracic Procedures with MCC.
MS-DRG 229................ Other Cardiothoracic Procedures without CC.
MS-DRG 233................ Coronary Bypass with Cardiac Catheterization
with MCC.
MS-DRG 234................ Coronary Bypass with Cardiac Catheterization
without MCC.
MS-DRG 235................ Coronary Bypass without Cardiac
Catheterization with MCC.
MS-DRG 236................ Coronary Bypass without Cardiac
Catheterization without MCC.
------------------------------------------------------------------------
Using the 66,553 identified cases, the average case-weighted
unstandardized charge per case was $212,885. The applicant then
standardized the charges. The applicant did not remove charges for any
current treatment because the applicant indicated that there are no
other current treatment options available. The applicant noted that it
did not provide an inflation factor to project future charges. The
applicant added $2,751 in charges for the costs of the
DuraGraft[supreg] technology. This charge was created by assuming the
DuraGraft[supreg] technology will cost $850 per unit as estimated by
the applicant, and by applying the national average CCR for implantable
devices of 0.309 from the FY 2019 IPPS/LTCH PPS final rule (83 FR
41273) to the cost of the device. According to the applicant, no
further charges or related charges were added. Based on the FY 2019
IPPS/LTCH PPS final rule correction notice data file thresholds, the
average case-weighted threshold amount was $172,965. The final average
case-weighted standardized charge per case was $195,799. Because the
final average case-weighted standardized charge per case exceeds the
average case-weighted threshold amount, the applicant maintained that
the technology meets the cost criterion. We are inviting public
comments on whether DuraGraft[supreg] meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that the use of DuraGraft[supreg] significantly
reduces clinical complications, such as MI, repeat revascularization
and MACE, associated with VGF following CABG surgery. The applicant
cited the following studies and report, each of which is summarized
below, to substantiate its assertions regarding substantial clinical
improvement: (1) Project of Ex-vivo Vein Graft Engineering via
Transfection (PREVENT IV) Subanalysis; (2) European Retrospective Pilot
Study (unpublished); (3) U.S. Department of Veterans Affairs (USDVA)
Hospital Retrospective Study; and (4) the SWEDEHEART 2016 Annual
Report.
PREVENT IV is a prospective study that enrolled 3,000 patients and
included protocol driven angiograms at 12 months post-CABG, as opposed
to clinically-driven angiograms to evaluate the true incidence of VGF
following CABG surgery where standard-of-care solutions were used.\141\
Harskamp, et al. conducted subanalyses of the study data and found from
dozens of factors evaluated for impact on the development of 12-month
VGF (VGF was defined as a stenosis of the vein graft diameter of 75
percent or greater) that exposure to solutions used in PREVENT IV
(saline, blood, or buffered saline) for intra-operative graft wetting
and storage have the largest correlation with the development of
VGF.142 143
[[Page 19309]]
According to the applicant, short-term exposure of free vascular grafts
to these solutions is routine in CABG operations, where 10 minutes to 3
hours may elapse between the vein harvest and
reperfusion.144 145 According to Harskamp, et al., the
results of the PREVENT IV study showed that the majority of patients
had grafts preserved in saline, 1,339 patients (44.4 percent), followed
by 971 patients (32.2 percent) with grafts preserved in blood, and 507
patients (16.8 percent) with grafts preserved in buffered saline. One-
year VGF rates were much lower in the patients who were treated in the
buffered saline group than in the patients who were treated in the
saline group (patient-level odds ratio [OR], 0.59 [95 percent CI, 0.45-
0.78; P<.001]; graft-level OR, 0.63 [95 percent CI, 0.49-0.79; P<.001])
or in the patients who were treated in the blood group (patient-level
OR, 0.62 [95 percent CI, 0.46-0.83; P=.001]; graft-level OR, 0.63 [95
percent CI, 0.48-0.81; P<.001]), and the use of buffered saline
solution also tended to be associated with a lower 5-year risk for
death, MI or subsequent revascularization compared with saline (hazard
ratio, 0.81 [95 percent CI, 0.46-0.83; P=.001]; graft-level OR, 0.63
[95 percent CI, 0.48-0.81; P<.001]).\146\ The applicant asserted that
the results from the PREVENT IV subanalyses support the notion that
unlike DuraGraft[supreg], standard-of-care solutions heparinized saline
and heparinized autologous blood used for intra-operative graft wetting
and storage, were never designed to protect vascular grafts and have
also demonstrated an inability to protect against ischemic injury,
actively harming the graft endothelium as
well.147 148 149 150
---------------------------------------------------------------------------
\141\ Alexander, J.H., Hafley, G., Harrington, R.A., et al.,
``Efficacy and safety of Edifoligide, an E2F Transcription Factor
Decoy, for Prevention of Vein Graft Failure Following Coronary
Artery Bypass Graft Surgery: PREVENT IV: A Randomized Controlled
Trial,'' JAMA, 2005, vol. 294, pp. 2446-54.
\142\ Harskamp, R.E., Alexander, J.H., Schulte, P.J., Brophy,
C.M., Mack, M.J., Peterson, E.D., Williams, J.B., Gibson, C.M.,
Califf, R.M., Kouchoukos, N.T., Harrington, R.A., Ferguson, Jr.,
T.B., Lopes, R.D., ``Vein Graft Preservation Solutions, Patency, and
Outcomes After Coronary Artery Bypass Graft Surgery Follow-up From
PREVENT IV Randomized Clinical Trial,'' JAMA Surg., 2014, vol.
149(8), pp. 798-805.
\143\ Hess, C.N., Lopes, R.D., Gibson, C.M., et al., ``Saphenous
vein graft failure after coronary artery bypass surgery: insights
from PREVENT IV,'' Circulation, 2014 Oct 21, vol. 130(17), pp. 1445-
51.
\144\ Motwani, J.G., Topol, E.J., ``Aortocoronary saphenous vein
graft disease: pathogenesis, predisposition and prevention,''
Circulation, 1998, vol. 97(9), pp. 916-31.
\145\ Mills, N.L., Everson, C.T., ``Vein graft failure,'' Curr
Opin Cardiol, 1995, vol. 10, pp. 562-8.
\146\ Harskamp, R.E., Alexander, J.H., Schulte, P.J., Brophy,
C.M., Mack, M.J., Peterson, E.D., Williams, J.B., Gibson, C.M.,
Califf, R.M., Kouchoukos, N.T., Harrington, R.A., Ferguson, Jr.,
T.B., Lopes, R.D., ``Vein Graft Preservation Solutions, Patency, and
Outcomes After Coronary Artery Bypass Graft Surgery Follow-up From
PREVENT IV Randomized Clinical Trial,'' JAMA Surg., 2014, vol.
149(8), pp. 798-805.
\147\ Ibid.
\148\ Weiss, D.R., et al., ``Extensive deendothelialization and
thrombogenicity in routinely prepared vein grafts for coronary
bypass operations: facts and remedy,'' Int J Clin Exp Med, 2009;
vol. 2, pp. 95-113.
\149\ Wilbring, M., Tugtekin, S.M., Zatschler, B., Ebner, A.,
Reichenspurner, H., Matschke, K., Deussen, A., ``Even short-time
storage in physiological saline solution impairs endothelial
vascular function of saphenous vein grafts,'' Eur J Cardiothorac
Surg., 2011 Oct, vol. 40(4), pp. 811-815.
\150\ Thatte, H.S., Biswas, K.S., Najjar, S.F., Birjiniuk, V.,
Crittenden, M.D., Michel, T., and Khuri, S.F., ``Multi-Photon
Microscopic valuation of Saphenous Vein Endothelium and Its
Preservation With a New Solution, GALA.'' Annals Thoracic Surgery,
2003, vol. 75, pp. 1145-52.
---------------------------------------------------------------------------
In order to assess clinical outcomes associated with the use of
DuraGraft[supreg], the applicant opted to use readily available
databases associated with two hospitals that had noncommercial access
to the product through hospital pharmacies and, therefore, had real
world use of DuraGraft[supreg] treatment. The two retrospective cohort
studies, the European Retrospective Pilot Study and the USDVA Hospital
Retrospective Study, used these data bases to evaluate the
effectiveness and safety of the use of DuraGraft[supreg] during CABG
surgical procedures for post-CABG clinical complications associated
with VGF, including MI, repeat revascularization and MACE.
The European Retrospective Pilot Study (which was a feasibility
study) was a retrospective study conducted to assess the safety and
efficacy of DuraGraft[supreg] treatment on both short (less than 30
days) and long-term (greater than or equal to 30 days and up to 5
years) clinical outcomes. This study became the basis for the design of
a larger retrospective study conducted at the USDVA Hospital, discussed
below. The feasibility study is unpublished.
The European Retrospective Pilot study is a single-center clinical
study of CABG patients to evaluate the potential benefits of
DuraGraft[supreg] treatment as compared to a no-treatment control group
(saline). The investigator, who prepared the analysis, remained blinded
to individual patient data. A total of 630 patients who underwent
elective and isolated CABG surgery with at least one saphenous vein
graft between January 2002 and December 2008 were included. Eligibility
criteria were: (1) Patients with first-time CABG surgery in which at
least one vein graft was used; and (2) patients with in-situ internal
mammary artery (IMA) graft(s) only (no saphenous vein or free arterial
grafts). The single patient exclusion criteria were concomitant valve
surgery and/or aortic aneurysm repair. The institutional review board
of the University Health Alliance (UHA) approved the protocol, and
patients gave written informed consent for their follow-up. The no-
treatment control group (saline) included 375 patients who underwent
CABG surgery from January 2002 to May 2005, and the DuraGraft[supreg]
treatment group included 255 patients who underwent CABG surgery from
June 2005 to December 2008. During long-term follow-up, 5 patients were
lost to follow-up, and 10 patients died before the 30-day follow-up.
Therefore, a total of 247 patients from the DuraGraft[supreg] treatment
group (97 percent) and 368 patients from the no-treatment control group
(saline) (98 percent) were available for the long-term analysis.
Patients undergoing CABG surgery whose vascular grafts were treated
intra-operatively with DuraGraft[supreg] demonstrated no statistically
significant differences in MACE within the first 30 days following CABG
surgery. According to the applicant, these data suggest that
DuraGraft[supreg] treatment is at least as safe as the standard-of-care
used in CABG surgeries. Long-term outcomes between the two groups were
not statistically different. However, also according to the applicant,
a consistent numerical trend toward improved clinical outcomes for the
DuraGraft[supreg] treatment group compared to the no-treatment control
(saline) group was clearly identified. Although statistically
insignificant, there was a consistent reduction observed in the rates
for multiple endpoints such as all-cause death, MI, MACE, and
revascularization. This study found reductions in DuraGraft[supreg]-
treated grafts relative to saline for revascularization (57 percent),
MI (70 percent), MACE (37 percent), and all-cause death (23 percent)
compared to standard-of-care (heparinized saline/blood) through 5 years
follow-up. According to the applicant, based on the small sample size
for this evaluation of less than 630 patients and the known frequencies
of these events following CABG surgeries, statistical differences were
not expected. A subsequent post-hoc analysis also was performed by the
researchers at CHU Angers to evaluate whether any long-term clinical
variables (such as dual antiplatelet therapy, beta-blockers,
angiotensin receptor-blockers, statins, diabetes, lifestyle and other
factors) had any impact on the clinical outcomes of the study. The
conclusions of the post-hoc analyses were that the assessed long-term
clinical variables did not impact the clinical study outcomes.
The second study, the USDVA Hospital Retrospective Study, was an
unpublished, independent PI initiated, single-center, multi-surgeon,
retrospective, comparative (DuraGraft[supreg] vs. Saline) clinical
trial, which was conducted to assess the safety and impact of
DuraGraft[supreg] treatment on both short and long-term clinical
outcomes in patients who underwent isolated CABG surgery with saphenous
vein grafts (SVGs) at the Boston (West Roxbury) VA
[[Page 19310]]
Medical Center between 1996 and 2004. From 1996 through 1999,
DuraGraft[supreg] treatment was not available and heparinized saline
was routinely used to wet and store grafts. From 2001 through 2004, the
Boston VA Medical Center began exclusively using DuraGraft[supreg],
which was prepared by the hospital's pharmacy. The applicant
highlighted that 2000 data was omitted from this analysis by the PI due
to the transition into the use of DuraGraft[supreg] and the uncertainty
of whether DuraGraft[supreg] or heparinized saline was used in CABG
patients during the transition period. Short-term clinical outcomes
were defined as perioperative and early post-operative events occurring
within the first 30 days after CABG including perioperative MI,
prolonged ventilation time (greater than 48 hours), prolonged time in a
coma (greater than 24 hours), renal failure, and death. Long-term
clinical outcomes were defined as events occurring greater than 30 days
after CABG including the need for repeat revascularization (that is,
repeat CABG or percutaneous coronary intervention [PCI]), non-fatal
acute MI (NFMI), all-cause death, and a composite of these MACE. The
primary study outcome was repeat revascularization, and the secondary
outcomes included MACE, NFMI, and all cause death.
According to the applicant, although the study represents the non-
contemporaneous use of saline and DuraGraft[supreg], the potential
effect of ``time of CABG'' on outcomes was minimized in large part by
the fact that this was a single-center study in which the same surgeons
performed surgeries throughout the timeframe of this study.
Additionally, the applicant explained that published evidence
(including evidence collected from the same center) indicates that
outcomes from CABG surgery such as mortality, MI, and repeat
revascularization have not changed significantly between the time of
this study and the present day, suggesting that surgical and medical
improvements, differences in patient selection, and other factors which
may have occurred over the timeframe of the study likely had little
influence over the study results and, therefore, the statistically
significant differences that were observed are due to ``study article''
effect.151 152 153
---------------------------------------------------------------------------
\151\ Goldman, S., Zadina, K., Mortiz, T., et al., ``Long-term
patency of saphenous vein and left internal mammary grafts after
coronary artery bypass surgery: results from a Department of
Veterans Affairs Cooperative Study,'' J Am Coll Cardiol, 2004, vol.
44, pp. 2149-2156.
\152\ Granger, D.N. and Kvietys, P.R., ``Reperfusion Injury and
Reactive Oxygen Species: The Evolution of a Concept.'' Redox Biol.
2015 Dec; 6: 524-551. Published online 2015 Oct 8. doi: 10.1016/
j.redox.2015.08.020.
\153\ Guibert, E.E., Petrenko, A.Y., Balaban, C.L., Somov, A.Y.,
Rodriguez, J.V., and Fuller, B.J., ``Organ Preservation: Current
Concepts and New Strategies for the Next Decade,'' Transfus Med
Hemother, 2011, vol. 38, pp. 125-142.
---------------------------------------------------------------------------
Data were extracted from a total of 2,436 patients who underwent a
CABG procedure with at least 1 SVG from 1996 through 1999 (saline
control n=1,400 patients) and 2001 through 2004 (DuraGraft[supreg]
treatment n=1,036 patients). Patients were excluded from the study if
they had a prior history of CABG, had no use of SVG, or underwent
additional procedures during the CABG surgery.
Review of patient characteristics between the two treatment arms
found the median age for the control group was 66 years old and 67
years old for the DuraGraft[supreg] treatment group. Mean follow-up in
the control treatment group was 9.95.6 years and 8.54.2 years for the DuraGraft[supreg] treatment group.
Short-term clinical outcomes showed frequencies for individual
outcomes were low, at less than 5 percent for both treatment groups.
However, according to the applicant, there was a statistically
significant 77 percent reduction of perioperative MI in the
DuraGraft[supreg] group compared to the saline group, which may have
indicated a potential short-term benefit related to preserving the
endothelium.
Long-term clinical outcomes for patients treated with
DuraGraft[supreg] compared to saline showed DuraGraft[supreg] patients
with significantly lower risk of repeat revascularization (primary
endpoint), non-fatal MI, and MACE outcomes. According to the applicant,
the frequency of repeat revascularization was significantly lower after
DuraGraft[supreg] treatment starting at 1,000 days onwards with a
statistically significant adjusted 35 percent risk reduction.
Additionally, the applicant noted that the use of DuraGraft[supreg] was
associated with significantly lower risk for non-fatal MI beginning at
30 days post CABG with an adjusted risk reduction of 36 percent
(HR:0.687; 95 percent CI: 0.499, 0.815; p=0.0003). This effect was even
more profound at 1,000 days onward, with a statistically significant
risk reduction of up to 45 percent. Finally, the applicant noted that
the occurrence of MACE was significantly reduced after
DuraGraft[supreg] treatment, with an adjusted risk reduction of 19
percent starting at 1,000 days after CABG. Both crude and inverse
probability weighting (IPW) adjusted models for these long-term
outcomes were summarized. Long-term mortality was comparable between
treatment groups: neither the crude nor IPW-adjusted model showed a
significant association between DuraGraft[supreg] exposure and time to
death, either beginning 30 days or 1,000 days after initial CABG
surgery. According to the applicant, this study supports not only
safety, but also improved long-term clinical outcomes in
DuraGraft[supreg]-treated CABG patients.
According to the applicant, the data collected from this
statistically-powered USDVA Hospital Retrospective Study are consistent
with data collected in the European Retrospective Pilot Study in which
trend toward reductions of MI, repeat revascularization, and MACE were
observed in the DuraGraft[supreg] treatment group, lending confidence
that the observed trends in this study, as well as the European
Retrospective Pilot Study, represent real differences associated with
DuraGraft[supreg] use.
The applicant also referenced data from the SWEDEHEART 2016 Annual
Report, a report on data extracted from the Swedish Cardiac Surgery
Registry, to assess whether changes in the surgical procedure and post-
op medications over the timeline of the USDVA Hospital Retrospective
Study could have impacted the clinical outcomes. The applicant believed
that these mortality data, which overlapped with the timeframe of the
USDVA Hospital Retrospective Study, would provide an indication of
whether such changes in the CABG procedure occurred over the relevant
time period.
The applicant stated that the SWEDEHEART 2016 Annual Report was
published in 2017 and documented a fairly constant mortality rate
between 1995 and 2005 (we refer readers to the table below), which
overlapped the timeframe of the USDVA Hospital Retrospective Study
(1996 through 2004). The applicant noted that the data from the
SWEDEHEART 2016 Annual Report was extracted from the Swedish Cardiac
Surgery Registry, which collects data from all centers that are
performing, or have been performing, cardiac surgery in Sweden since
1992 and maintains 100 percent of the data covering the number of adult
cardiac surgery procedures. The applicant indicated that mortality data
are derived from the Swedish national population registry and,
therefore, are considered 100 percent complete and accurate. The
applicant noted that the 30-day mortality rate between 1996 and 2004
(the timeframe of the USDVA Hospital Retrospective Study) remained
fairly constant, even with CABG procedures performed by several
different hospitals and surgeons. According to the applicant, these
data indicate that
[[Page 19311]]
changes in the CABG procedure itself over the USDVA Hospital
Retrospective Study time period were not significant enough to impact
post-op mortality.
30-Day Mortality Rate (%) Between 1995 and 2005 Based on SWEDEHEART 2016
Annual Report
------------------------------------------------------------------------
30-day
Year Isolated CABD mortality rate
volume (%)
------------------------------------------------------------------------
1995.................................... 6,001 1.9
1996.................................... 6,283 2.2
1997.................................... 5,076 1.7
1998.................................... 5,797 2
1999.................................... 5,504 1.9
2000.................................... 5,478 2.2
2001.................................... 5,696 1.8
2002.................................... 5,645 1.9
2003.................................... 5,245 1.9
2004.................................... 4,868 2
2005.................................... 4,264 1.7
------------------------------------------------------------------------
According to the applicant, the European Retrospective Pilot Study
and the USDVA Hospital Study demonstrated an association of reduced
risk of non-fatal MI, repeat revascularization, and MACE with
DuraGraft[supreg] treatment. However, we have a number of concerns
relating to whether these results support a finding of substantial
clinical improvement. We note that these studies are unpublished and
consist of a retrospective design, which may contribute to potential
sources of error such as confounding and bias. Moreover, the studies do
not account for other variables that may affect vein integrity such as
method of vein harvest, vein distention pressure, and controlling for
the use of glycoprotein (GP) IIb/IIIa inhibitors.154 155
---------------------------------------------------------------------------
\154\ King, S., Short, M., Harmon, C., ``Glycoprotein IIb/IIIa
inhibitors: the resurgence of tirofiban,'' Vascul Pharmacol, 2016
March; vol. 78, pp. 10-16.
\155\ Harskamp, R.E., Hoedemaker, N., Newby, L.K., Woudstra, P.,
Grundeken, M.J., Beijk, M.A., Piek, J.J., Tijssen, J.G., Mehta,
R.H., de Winter, R.J., ``Procedural and clinical outcomes after use
of the glycoprotein IIb/IIIa inhibitor abciximab for saphenous vein
graft interventions,'' Cardiovasc Revasc Med, 2016 Jan-Feb, vol.
17(1), pp. 19-23. Epub 2015 Oct 31. PMID: 26626961.
---------------------------------------------------------------------------
With regard to the European Retrospective Pilot study,
specifically, we are concerned that there are no defined primary and
secondary long-term outcomes, no statistical plans to incorporate
adjustments for multiple comparisons, and no power calculations for the
expected differences in endpoints that would be biologically important.
Furthermore, we are concerned that saline was used as the control, as
opposed to buffered saline, which at the time was considered to be more
effective than saline and, therefore, may have been a more optimal
comparator.\156\ We also are concerned that certain information was not
available, including mean follow-up, patient-years follow-up and loss-
to-follow-up. Finally, the study did not appear to convey any
statistical differences for any of the short-term or long-term
endpoints.
---------------------------------------------------------------------------
\156\ Williams, J.B., Harskamp, R.E., Bose, S., Lawson, J.H.,
Alexander, J.H., Smith, P.K., Lopes, R.D., ``The Preservation and
Handling of Vein Grafts in Current Surgical Practice: Findings of a
Survey Among Cardiovascular Surgeons of Top-Ranked US Hospitals,''
JAMA Surg, 2015 Jul, vol. 150(7), pp. 681-3. PMID: 25970819.
---------------------------------------------------------------------------
With regard to the USDVA Hospital Retrospective Study, we note that
this study used heparinized saline as the comparator rather than
buffered saline. According to a survey published in 2015 of 90 major
U.S. medical centers, 40 percent were using buffered saline.\157\ Also,
we are concerned that the study population was limited to USDVA
hospital patients and was overwhelmingly white (95 percent) males (99
percent), due to the demographics available through the USDVA hospital
data source. We are concerned that this may affect the completeness of
the study and raise questions as to whether the data and results are
generalizable to other patient groups, to include, as acknowledged by
the applicant, nonveterans, women, and other racial/ethnic groups. We
also note that patients in the heparinized saline arm appeared to have
more comorbidities, more vein grafts, fewer arterial grafts and more
time on cardiopulmonary bypass as compared to the DuraGraft[supreg]
treatment arm suggesting there may have been differences in the health
of the patients in the two treatment arms prior to participation in the
study. Without more context explaining the cause of each of these
characteristics it may be difficult to substantiate the validity of the
study results. We also believe that it would have been helpful to
include coronary imaging studies with the results of the USDVA Hospital
Retrospective Study to correlate MI and revascularizations with vein
grafts. Without data from such studies, it is more difficult to
associate the solutions with the repeat revascularization outcomes.
---------------------------------------------------------------------------
\157\ Ibid.
---------------------------------------------------------------------------
Furthermore, in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR
20308) we noted our concern regarding the timeframe differences in the
saline and DuraGraft[supreg] arms in the USDVA Hospital Retrospective
Study. As discussed earlier in this section, the applicant expressed
that, although the USDVA Hospital Retrospective Study represents the
non-contemporaneous use of saline and DuraGraft[supreg], the potential
effect of ``time of CABG'' on outcomes was minimized in large part by
the fact that this was a single-center study in which the same surgeons
performed surgeries throughout the timeframe of this study. The
applicant also expressed that outcomes from CABG surgery such as
mortality, MI, and repeat revascularization have not changed
significantly between the time of the USDVA Hospital Retrospective
Study and the present day, suggesting that surgical and medical
improvements that may have occurred over the timeframe of the study
likely had little influence over the study results and, therefore, the
statistically significant differences that were observed are due to
``study article'' effect.158 159 160 We appreciate the
[[Page 19312]]
applicant identifying and speaking to this concern, as it was raised by
CMS in the FY 2019 IPPS/LTCH PPS proposed rule. However, we remain
concerned that the timeframe differences between the saline and
DuraGraft[supreg] arms in the USDVA Hospital Retrospective Study were
not accounted for in the analysis of the retrospective data taken from
the study.
---------------------------------------------------------------------------
\158\ Goldman, S., Zadina, K., Mortiz, T., et al., ``Long-term
patency of saphenous vein and left internal mammary grafts after
coronary artery bypass surgery: results from a Department of
Veterans Affairs Cooperative Study,'' J Am Coll Cardiol, 2004, vol.
44, pp. 2149-2156.
\159\ Granger, D.N. and Kvietys, P.R., ``Reperfusion Injury and
Reactive Oxygen Species: The Evolution of a Concept,'' Redox Biol,
2015 Dec, vol. 6, pp. 524-551. Published online 2015 Oct 8. doi:
10.1016/j.redox.2015.08.020.
\160\ Guibert, E.E., Petrenko, A.Y., Balaban, C.L., Somov, A.Y.,
Rodriguez, J.V., and Fuller, B.J., ``Organ Preservation: Current
Concepts and New Strategies for the Next Decade,'' Transfus Med
Hemother, 2011, vol. 38, pp. 125-142.
---------------------------------------------------------------------------
Additionally, although the applicant provided an explanation about
how to match patients via propensity scores, we are concerned that the
statistical plan did not include adjustments for multiple comparisons
nor did it include power calculations for the expected differences in
endpoints that would be biologically important.
The applicant also provided information from the USDVA Hospital
Retrospective Study that suggested there are a significant number of
MACE-type events in the first 3 years after CABG. However, much of the
long-term data for the control group was missing, in particular, data
related to the first 30 to 999 days post-CABG. Finally, regarding the
secondary long-term-outcome of MACE, we are concerned the study did not
appear to include coronary cardiac mortality, non-coronary cardiac
mortality, and other cardiac morbidity within the definition of MACE.
Also, as discussed above, the applicant referenced data from the
SWEDEHEART 2016 Annual Report, which noted a decline in the number of
CABG procedures (by approximately \1/3\) between 1996 and 2005. It is
unclear what contributed to the decline in CABG procedures during this
time period, particularly because, as the applicant indicated,
mortality rates remained fairly constant throughout this timeframe. We
believe the decline in the number of CABG procedures may also reflect
time-related differences in surgical management.
We are inviting public comments on whether DuraGraft[supreg] meets
the substantial clinical improvement criterion. We did not receive any
written comments in response to the New Technology Town Hall meeting
notice published in the Federal Register regarding the substantial
clinical improvement criterion for DuraGraft[supreg] or at the New
Technology Town Hall meeting.
f. EluviaTM Drug-Eluting Vascular Stent System
Boston Scientific Corporation submitted an application for new
technology add-on payments for the EluviaTM Drug-Eluting
Vascular Stent System for FY 2020. EluviaTM, a drug-eluting
stent for the treatment of lesions in the femoropopliteal arteries,
received FDA premarket approval (PMA) on September 18, 2018.
According to the applicant, the EluviaTM system is a
sustained-release drug-eluting stent indicated for improving luminal
diameter in the treatment of peripheral artery disease (PAD) with
symptomatic de novo or restenotic lesions in the native superficial
femoral artery (SFA) and or proximal popliteal artery (PPA) with
reference vessel diameters (RVD) ranging from 4.0 to 6.0 mm and total
lesion lengths up to 190 mm.
The applicant stated that PAD is a circulatory condition in which
narrowed arteries reduce blood flow to the limbs, usually in the legs.
Symptoms of PAD may include lower extremity pain due to varying degrees
of ischemia, claudication which is characterized by pain induced by
exercise and relieved with rest. According to the applicant, risk
factors for PAD include individuals who are age 70 years old and older;
individuals who are between the ages of 50 years old and 69 years old
with a history of smoking or diabetes; individuals who are between the
ages of 40 years old and 49 years old with diabetes and at least one
other risk factor for atherosclerosis; leg symptoms suggestive of
claudication with exertion, or ischemic pain at rest; abnormal lower
extremity pulse examination; known atherosclerosis at other sites (for
example, coronary, carotid, renal artery disease); smoking;
hypertension, hyperlipidemia, and homocysteinemia.\161\ PAD is
primarily caused by atherosclerosis--the buildup of fatty plaque in the
arteries. PAD can occur in any blood vessel, but it is more common in
the legs than the arms. Approximately 8.5 million people in the United
States have PAD, including 12 to 20 percent of individuals who are age
60 years old and older.\162\
---------------------------------------------------------------------------
\161\ Neschis, David G. & MD, Golden, M., ``Clinical features
and diagnosis of lower extremity peripheral artery disease.''
Available at: https://www.uptodate.com/contents/clinical-features-and-diagnosis-of-lower-extremity-peripheral-artery-disease.
\162\ Centers for Disease Control and Prevention, ``Peripheral
Arterial Disease (PAD) Fact Sheet,'' 2018, Retrieved from https://www.cdc.gov/DHDSP/data_statistics/fact_sheets/fs_PAD.htm.
---------------------------------------------------------------------------
A diagnosis of PAD is established with the measurement of an ankle-
brachial index (ABI) less than or equal to 0.9. The ABI is a comparison
of the resting systolic blood pressure at the ankle to the higher
systolic brachial pressure. Duplex ultrasonography is commonly used, in
conjunction with the ABI, to identify the location and severity of
arterial obstruction.\163\
---------------------------------------------------------------------------
\163\ Berger, J. & Davies, M., ``Overview of lower extremity
peripheral artery disease,'' Retrieved October 29, 2018, from
https://www.uptodate.com/contents/overview-of-lower-extremity-peripheral-artery-disease.
---------------------------------------------------------------------------
Management of the disease is aimed at improving symptoms, improving
functional capacity, and preventing amputations and death. Management
of patients who have been diagnosed with lower extremity PAD may
include medical therapies to reduce the risk for future cardiovascular
events related to atherosclerosis, such as myocardial infarction,
stroke, and peripheral arterial thrombosis. Such therapies may include
antiplatelet therapy, smoking cessation, lipid-lowering therapy, and
treatment of diabetes and hypertension. For patients with significant
or disabling symptoms unresponsive to lifestyle adjustment and
pharmacologic therapy, intervention (percutaneous, surgical) may be
needed. Surgical intervention includes angioplasty, a procedure in
which a balloon-tip catheter is inserted into the artery and inflated
to dilate the narrowed artery lumen. The balloon is then deflated and
removed with the catheter. For patients with limb-threatening ischemia
(for example, pain while at rest and or ulceration), revascularization
is a priority to reestablish arterial blood flow. According to the
applicant, treatment of the SFA is problematic due to multiple issues
including high rate of restenosis and significant forces of
compression.
The applicant describes EluviaTM Drug-Eluting Vascular
Stent System as a sustained-release drug-eluting self-expanding, nickel
titanium alloy (nitinol) mesh stent used to reestablish blood flow to
stenotic arteries. According to the applicant, the EluviaTM
stent is coated with the drug paclitaxel, which helps prevent the
artery from restenosis. The applicant stated that EluviaTM's
polymer-based drug delivery system is uniquely designed to sustain the
release of paclitaxel beyond 1 year to match the restenotic process in
the SFA. According to the applicant, the EluviaTM Stent
System is comprised of: (1) The implantable endoprosthesis; and (2) the
stent delivery system (SDS). On both the proximal and distal ends of
the stent, radiopaque markers made of tantalum increase visibility of
the stent to aid in placement. The tri-axial designed delivery system
consists of an outer shaft to stabilize the stent delivery system, a
middle shaft to protect and constrain the stent, and an inner shaft to
provide a guide wire lumen. The delivery system is compatible with
[[Page 19313]]
0.035 in (0.89 mm) guide wires. The EluviaTM stent is
available in a variety of diameters and lengths. The delivery system is
offered in 2 working lengths (75 cm and 130 cm).
As discussed previously, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would, therefore, not be
considered ``new'' for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, EluviaTM uses a unique mechanism
of action which has not been utilized by previously available medical
devices for treating stenotic lesions in the SFA. The applicant
asserted that the EluviaTM Drug-Eluting Vascular Stent
System is a device/drug combination product composed of an implantable
stent, combined with a polybutyl methacrylate (PBMA) primer layer, a
paclitaxel/polyvinylidene difluoride (PVDF) polymer, and a stent
delivery system. According to the applicant, the polymer carries and
protects the drug before and during the procedure and ensures that the
drug is released into the tissue in a controlled, sustained manner to
prevent restenosis of the vessel. According to the applicant, the
EluviaTM system continues to deliver paclitaxel to combat
restenosis for 12 to 15 months, which involves a novel and distinct
mechanism of action different than other drug-coated balloons or drug-
coated stents that only deliver the drug to the artery for about 2
months. According to the applicant, the PBMA polymer is clinically
proven to permit the sustained release of paclitaxel to achieve a
therapeutic outcome. We note that, the applicant submitted a request
for consideration for approval at the March 2019 ICD-10 Coordination
and Maintenance Committee Meeting for a unique ICD-10-PCS procedure
code to describe procedures which use the EluviaTM stent
system.
With regard to the second criterion, whether a technology is
assigned to the same or a different MS-DRG, the applicant asserted that
patients who may be eligible for treatment using the
EluviaTM system include hospitalized patients who have been
diagnosed with PAD. According to the applicant, these potential cases
may map to multiple MS-DRGs, the most likely being MS-DRGs 252 (Other
Vascular Procedures With MCC), 253 (Other Vascular Procedures With CC)
and 254 (Other Vascular Procedures Without CC/MCC). Potential cases
representing patients who may be eligible for treatment using the
EluviaTM system would be assigned to the same MS-DRGs as
cases representing hospitalized patients who have been diagnosed with
PAD and treated with currently available technologies.
With regard to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population when compared to an
existing technology, according to the applicant, clinical conditions
that may require use of the EluviaTM stent system include
treatment of the same patient population as cases identified with a
variety of diagnosis codes from the ICD-10-CM category I70
(Atherosclerosis) as listed in the table below:
------------------------------------------------------------------------
ICD-10-CM diagnosis code Code description
------------------------------------------------------------------------
I70.201............................. Unspecified atherosclerosis of
native arteries of extremities,
right leg.
I70.202............................. Unspecified atherosclerosis of
native arteries of extremities,
left leg.
I70.203............................. Unspecified atherosclerosis of
native arteries of extremities,
bilateral legs.
I70.208............................. Unspecified atherosclerosis of
native arteries of extremities,
other extremity.
I70.209............................. Unspecified atherosclerosis of
native arteries of extremities,
unspecified extremity.
I70.211............................. Atherosclerosis of native arteries
of extremities with intermittent
claudication, right leg.
I70.212............................. Atherosclerosis of native arteries
of extremities with intermittent
claudication, left leg.
I70.213............................. Atherosclerosis of native arteries
of extremities with intermittent
claudication, bilateral legs.
I70.218............................. Atherosclerosis of native arteries
of extremities with intermittent
claudication, other extremity.
I70.219............................. Atherosclerosis of native arteries
of extremities with intermittent
claudication, unspecified
extremity.
I70.221............................. Atherosclerosis of native arteries
of extremities with rest pain,
right leg.
I70.222............................. Atherosclerosis of native arteries
of extremities with rest pain,
left leg.
I70.223............................. Atherosclerosis of native arteries
of extremities with rest pain,
bilateral legs.
I70.228............................. Atherosclerosis of native arteries
of extremities with rest pain,
other extremity.
I70.229............................. Atherosclerosis of native arteries
of extremities with rest pain,
unspecified extremity.
I70.231............................. Atherosclerosis of native arteries
of right leg with ulceration of
thigh.
I70.232............................. Atherosclerosis of native arteries
of right leg with ulceration of
calf.
I70.233............................. Atherosclerosis of native arteries
of right leg with ulceration of
ankle.
I70.234............................. Atherosclerosis of native arteries
of right leg with ulceration of
heel and midfoot.
I70.235............................. Atherosclerosis of native arteries
of right leg with ulceration of
other part of foot.
I70.238............................. Atherosclerosis of native arteries
of right leg with ulceration of
other part of lower right leg.
I70.239............................. Atherosclerosis of native arteries
of right leg with ulceration of
unspecified site.
I70.241............................. Atherosclerosis of native arteries
of left leg with ulceration of
thigh.
I70.242............................. Atherosclerosis of native arteries
of left leg with ulceration of
calf.
I70.243............................. Atherosclerosis of native arteries
of left leg with ulceration of
ankle.
I70.244............................. Atherosclerosis of native arteries
of left leg with ulceration of
heel and midfoot.
I70.245............................. Atherosclerosis of native arteries
of left leg with ulceration of
other part of foot.
I70.248............................. Atherosclerosis of native arteries
of left leg with ulceration of
other part of lower left leg.
I70.249............................. Atherosclerosis of native arteries
of left leg with ulceration of
unspecified site.
I70.25.............................. Atherosclerosis of native arteries
of other extremities with
ulceration.
I70.261............................. Atherosclerosis of native arteries
of extremities with gangrene,
right leg.
I70.262............................. Atherosclerosis of native arteries
of extremities with gangrene,
left leg.
I70.263............................. Atherosclerosis of native arteries
of extremities with gangrene,
bilateral legs.
I70.268............................. Atherosclerosis of native arteries
of extremities with gangrene,
other extremity.
I70.269............................. Atherosclerosis of native arteries
of extremities with gangrene,
unspecified extremity.
I70.291............................. Other atherosclerosis of native
arteries of extremities, right
leg.
I70.292............................. Other atherosclerosis of native
arteries of extremities, left
leg.
I70.293............................. Other atherosclerosis of native
arteries of extremities,
bilateral legs.
[[Page 19314]]
I70.298............................. Other atherosclerosis of native
arteries of extremities, other
extremity.
I70.299............................. Other atherosclerosis of native
arteries of extremities.
------------------------------------------------------------------------
The applicant asserted that the EluviaTM stent is not
substantially similar to any existing technology because it uses a
unique mechanism of action, when compared to existing technologies, to
achieve a therapeutic outcome and, therefore, meets the newness
criterion.
We are concerned as to whether the polymer drug carrier system that
the EluviaTM system uses is, in fact, a new mechanism of
action as compared to stents that contain paclitaxel without the
carrier polymer. We are concerned that the EluviaTM device
may have a mechanism of action similar to the paclitaxel-coated
Zilver[supreg] Drug-Eluting Peripheral Stent, which is indicated for
improving luminal diameter for the treatment of de novo or restenotic
symptomatic lesions in native vascular disease of the above-the-knee
femoropopliteal arteries having reference vessel diameter from 4 mm to
7 mm and total lesion lengths up to 300 mm per patient. We are inviting
public comments on whether the EluviaTM system is
substantially similar to existing technology and whether it meets the
newness criterion, including with respect to the concerns we have
raised. With regard to the cost criterion, the applicant conducted the
following analysis to demonstrate that the technology meets the cost
criterion.
As noted earlier, the applicant asserted that cases involving the
treatment of PAD, involving treatment of lesions in the femoropopliteal
arteries typically, map to MS-DRGs 252, 253, and 254. The applicant
searched the FY 2017 MedPAR data file in MS-DRGs 252, 253 and 254 for
cases reporting an ICD-10-PCS procedure code for the treatment of
Peripheral BMS or DES, which the applicant believed would represent
cases potentially eligible for the use of the EluviaTM stent
system. The applicant identified 109,747 claims for cases representing
patients who may be eligible for treatment involving the
EluviaTM stent system. The applicant applied the following
trims: Claims paid under GHO (that is, Medicare beneficiaries enrolled
in a Medicare Advantage managed care plan), claims for CAHs, IPFs,
IRFs, LTCHs, Children's, Cancer, and RHNCI hospitals excluding Maryland
acute-care hospitals, claims with total charges or lengths-of-stay of
less than or equal to zero, claims with total charge differing from sum
of charges of the 19 cost groups by greater than $30, providers that do
not have charges greater than $0 for at least 14 of the 19 cost groups,
claims with total charges for the MS-DRG +/-3 standard deviations from
the log mean total charges or charges per day, ``IME only'' claims
submitted by a teaching hospital on behalf of a beneficiary enrolled in
a Medicare Advantage plan, claims with claim types ``61 to 64'' (that
is, claim types that refer to encounter claims, Medicare Advantage IME,
and HMO no-pay claims), and claims for which the applicant was unable
to calculate standardized charges (because the Provider Number
associated with the claim does not appear in the FY 2017 impact file).
This resulted in 73,861 claims across MS-DRGs 252, 253, and 254.
Using the 73,861 claims, the applicant determined an average case-
weighted unstandardized charge per case of $96,232. The applicant
removed all device-related charges and then standardized the charges
for each case and inflated each case's charges by applying the FY 2019
IPPS/LTCH PPS final rule outlier charge inflation factor of 1.08864 (83
FR 41722). (We note that the 2-year charge inflation factor was revised
in the FY 2019 IPPS/LTCH PPS final rule correction notice to 1.08986
(83 FR 49844). We further note that even when using the corrected final
rule values to inflate the charges, the average case-weighted
standardized charge per case for each scenario exceeded the average
case-weighted threshold amount.) The applicant then added charges for
EluviaTM by taking the cost of the device and converting it
to a charge by dividing the costs by the national average CCR of 0.309
for devices from the FY 2019 IPPS/LTCH PPS final rule (83 FR 41273).
The applicant calculated an average case-weighted standardized charge
per case of $86,950 using the percent distribution of MS-DRGs as case-
weights. Based on this analysis, the applicant determined that the
final inflated average case-weighted standardized charge per case for
EluviaTM exceeded the average case-weighted threshold of
$81,518 by $5,432.
The applicant conducted additional analyses to demonstrate it meets
the cost criterion. In these analyses, the applicant repeated the cost
analysis above with one analysis of cases reporting the ICD-10-PCS
procedures codes for Peripheral DES procedures and the other analysis
with cases reporting the ICD-10-PCS procedures codes for Peripheral BMS
procedures. In each of these additional sensitivity analyses, the final
inflated average case-weighted standardized charge per case exceeded
the average case-weighted cost threshold amount. We are inviting public
comments on whether EluviaTM meets the cost criterion.
With regard to the substantial clinical improvement criterion, the
applicant asserted that the EluviaTM Drug-Eluting Vascular
Stent System represents a substantial clinical improvement over
existing technologies because it achieves superior primary patency;
reduces the rate of subsequent therapeutic interventions; decreases the
number of future hospitalizations or physician visits; reduces hospital
readmission rates; reduces the rate of device-related complications;
and achieves similar functional outcomes and EQ-5D index values while
associated with half the rate of target lesion revascularizations
(TLRs).
The applicant submitted the results of the MAJESTIC study, a
single-arm, first-in-human study of EluviaTM. The MAJESTIC
\164\ study is a prospective, multi-center, single-arm, open-label
study. According to the applicant, the MAJESTIC study demonstrated
long-term treatment durability among patients whose femoropopliteal
arteries were treated with the EluviaTM stent. The applicant
asserts that the MAJESTIC study demonstrates the sustained impact of
the EluviaTM stent on primary patency. The MAJESTIC study
enrolled 57 patients who had been diagnosed with symptomatic lower limb
ischemia and lesions in the superficial femoral artery or proximal
popliteal artery. Efficacy measures at 2 years included primary
patency, defined as duplex ultrasound peak systolic velocity ratio of
less than 2.5 and the absence of target lesion revascularization (TLR)
or bypass. Safety monitoring through 3 years included adverse events
and TLR. The
[[Page 19315]]
24-month clinic visit was completed by 53 patients; 52 had Doppler
ultrasound evaluable by the core laboratory, and 48 patients had
radiographs taken for stent fracture analysis. The 3-year follow-up was
completed by 54 patients. At 2 years, 90.6 percent (48/53) of the
patients had improved by 1 or more Rutherford categories as compared
with the pre-procedure level without the need for TLR (when those with
TLR were included, 96.2 percent sustained improvement); only 1 patient
exhibited a worsening in level, 66.0 percent (35/53) of the patients
exhibited no symptoms (category 0) and 24.5 percent (13/53) had mild
claudication (category 1) at the 24-month visit. Mean ABI improved from
0.73 0.22 at baseline to 1.02 0.20 at 12
months and 0.93 0.26 at 24 months. At 24 months, 79.2
percent (38/48) of the patients had an ABI increase of at least 0.1
compared with baseline or had reached an ABI of at least 0.9. The
applicant also noted that at 12 months the Kaplan-Meier estimate of
primary patency was 96.4 percent.
---------------------------------------------------------------------------
\164\ M[uuml]ller-H[uuml]lsbeck, S., et al., ``Long-Term Results
from the MAJESTIC Trial of the Eluvia Paclitaxel-Eluting Stent for
Femoropopliteal Treatment: 3-Year Follow-up,'' Cardiovasc Intervent
Radiol, December 2017, vol. 40(12), pp. 1832-1838.
---------------------------------------------------------------------------
With regard to the EluviaTM stent achieving superior
primary patency, the applicant submitted the results of the IMPERIAL
\165\ study in which the EluviaTM stent is compared, head-
to-head, to the Zilver[supreg] PTX Drug-Eluting stent. The IMPERIAL
study is a global, multi-center, randomized controlled trial consisting
of 465 subjects. Eligible patients were aged 18 years old or older and
had a diagnosis of symptomatic lower-limb ischaemia, defined as
Rutherford Category 2, 3, or 4 and stenotic, restenotic (treated with a
drug-coated balloon greater than 12 months before the study or standard
percutaneous transluminal angioplasty only), or occlusive lesions in
the native superficial femoral artery or proximal popliteal artery,
with at least 1 infrapopliteal vessel patent to the ankle or foot.
Patients had to have stenosis of 70 percent or more (via angiographic
assessment), vessel diameter between 4 mm and 6 mm, and total lesion
length between 30 mm and 140 mm.
---------------------------------------------------------------------------
\165\ Gray, W.A., et al., ``A polymer-coated, paclitaxel-eluting
stent (Eluvia) versus a polymer-free, paclitaxel-coated stent
(Zilver PTX) for endovascular femoropopliteal intervention
(IMPERIAL): A randomised, non-inferiority trial,'' Lancet, September
24, 2018.
---------------------------------------------------------------------------
Patients who had previously stented target lesion/vessels treated
with drug-coated balloon less than 12 months prior to randomization/
enrollment and patients who had undergone prior surgery of the SFA/PPA
in the target limb to treat atherosclerotic disease were excluded from
the study. Two concurrent single-group (EluviaTM only) sub-
studies were done: A non-blinded, non-randomized pharmacokinetic sub-
study and a non-blinded, non-randomized study of patients who had been
diagnosed with long lesions (greater than 140 mm in diameter). The
IMPERIAL study is a prospective, multi-center, single-blinded
randomized, controlled (RCT) non-inferiority trial. Patients were
randomized (2:1) to implantation of either a paclitaxel-eluting polymer
stent (EluviaTM) or a paclitaxel-coated stent
(Zilver[supreg] PTX) after the treating physician had successfully
crossed the target lesion with a guide wire. The primary endpoints of
the study are Major Adverse Events defined as all causes of death
through 1 month, Target Limb Major Amputation through 12 months and/or
Target Lesion Revascularization (TLR) through 12 months and primary
vessel patency at 12 months post-procedure. Secondary endpoints
included the Rutherford categorization, Walking Impairment
Questionnaire, and EQ-5D assessments at 1 month and 6 months post-
procedure. Patient demographic and characteristics were balanced
between EluviaTM stent and Zilver[supreg] PTX stent groups.
The applicant noted that lesion characteristics for the patients in
the EluviaTM stent versus the Zilver[supreg] PTX stent arms
were comparable. Clinical follow-up visits related to the study were
scheduled for 1 month, 6 months, and 12 months after the procedure,
with follow-up planned to continue through 5 years, including clinical
visits at 24 months and 5 years and clinical or telephone follow-up at
3 and 4 years.
The applicant asserted that in the IMPERIAL study the
EluviaTM stent demonstrated superior primary patency over
the Zilver[supreg] PTX stent, 86.8 percent versus 77.5 percent,
respectively (p=0.0144). The non-inferiority primary efficacy endpoint
was also met. The applicant asserts that the SFA presents unique
challenges with respect to maintaining long-term patency. There are
distinct pathological differences between the SFA and coronary
arteries. The SFA tends to have higher levels of calcification and
chronic total occlusions when compared to coronary arteries. Following
an intervention within the SFA, the SFA produces a healing response
which often results in restenosis or re-narrowing of the arterial
lumen. This cascade of events leading to restenosis starts with
inflammation, followed by smooth muscle cell proliferation and matrix
formation.\166\ Because of the unique mechanical forces in the SFA,
this restenotic process of the SFA can continue well beyond 300 days
from the initial intervention. Results from the IMPERIAL study showed
that primary patency at 12 months, by Kaplan-Meier estimate, was
significantly greater for EluviaTM than for Zilver[supreg]
PTX, 88.5 percent and 79.5 percent, respectively (p=0.0119). According
to the applicant, these results are consistent with the 96.4 percent
primary patency rate at 12 months in the MAJESTIC study.
---------------------------------------------------------------------------
\166\ Forrester, J.S., Fishbein, M., Helfant, R., Fagin, J., ``A
paradigm for restenosis based on cell biology: clues for the
development of new preventive therapies,'' J Am Coll Cardiol, March
1, 1991, vol. 17(3), pp. 758-69.
---------------------------------------------------------------------------
The IMPERIAL study included two concurrent single-group
(EluviaTM only) sub-studies: A non-blinded, non-randomized
pharmacokinetic sub-study and a non-blinded, non-randomized study of
patients with long lesions (greater than 140 mm in diameter). For the
pharmacokinetic sub-study, patients had venous blood drawn before stent
implantation and at intervals ranging from 10 minutes to 24 hours post
implantation, and again at either 48 hours or 72 hours post
implantation. The pharmacokinetics sub-study confirmed that plasma
paclitaxel concentrations after EluviaTM stent implantation
were well below thresholds associated with toxic effects in studies in
patients who had been diagnosed with cancer (0.05 [mu]M or ~43 ng/mL).
The IMPERIAL sub-study long lesion subgroup consisted of 50
patients with average lesion length of 162.8 mm that were each treated
with two EluviaTM stents. According to the applicant, 12-
month outcomes for the long lesion subgroup are 87 percent primary
patency and 6.5 percent Target Lesion Revascularization (TLR).
According to the applicant, in a separate subgroup analysis of patients
65 years old and older (Medicare population), the primary patency rate
in the EluviaTM stent group is 92.6 percent, compared to
75.0 percent for the Zilver[supreg] PTX stent group (p=0.0386).
With regard to reducing the rate of subsequent therapeutic
interventions, secondary outcomes in the IMPERIAL study included repeat
re-intervention on the same lesion, target lesion revascularization
(TLR). The rate of subsequent interventions, or TLRs, in the
EluviaTM stent group was 4.5 percent compared to 9.0 percent
in the Zilver[supreg] PTX stent group. The applicant asserted that the
TLR rate in the EluviaTM group represents a substantial
reduction in re-intervention on the target lesion compared to that of
the Zilver[supreg] PTX stent group.
[[Page 19316]]
With regard to decreasing the number of future hospitalizations or
physician visits, the applicant asserted that the substantial reduction
in the lesion revascularization rate led to a reduced need to provide
additional intensive care, distinguishing the EluviaTM group
from the Zilver[supreg] PTX stent group. In the IMPERIAL study,
EluviaTM-treated patients required fewer days of re-
hospitalization. Patients in the EluviaTM group averaged
13.9 days of re-hospitalization for all adverse events compared to 17.7
days of re-hospitalization for patients in the Zilver[supreg] PTX stent
group. Patients in the EluviaTM group were re-hospitalized
for 2.8 days for TLR/Total Vessel Revascularization (TVR) compared to
7.1 days in the Zilver[supreg] PTX stent group. And lastly, patients in
the EluviaTM group were re-hospitalized for 2.7 days for
procedure/device-related adverse events compared to 4.5 days from the
Zilver[supreg] PTX stent group.
With regard to reducing hospital readmission rates, the applicant
asserted that patients treated in the EluviaTM group
experienced reduced rates of hospital readmission following the index
procedure compared to those in the Zilver[supreg] PTX stent group.
Hospital readmission rates at 12 months were 3.9 percent for the
EluviaTM group compared to 7.1 percent for the
Zilver[supreg] PTX stent group. Similar results were noted at 1 and 6
months; 1.0 percent versus 2.6 percent and 2.4 percent versus 3.8
percent, respectively.
With regard to reducing the rate of device-related complications,
the applicant asserted that while the rates of adverse events were
similar in total between treatment arms in the IMPERIAL study, there
were measurable differences in device-related complications. Device-
related adverse-events were reported in 8 percent of the patients in
the EluviaTM group compared to 14 percent of the patients in
the Zilver[supreg] PTX stent group.
Lastly, with regard to achieving similar functional outcomes and
EQ-5D index values, while associated with half the rate of TLRs, the
applicant asserted that narrowed or blocked arteries within the SFA can
limit the supply of oxygen-rich blood throughout the lower extremities,
causing pain or discomfort when walking (claudication). The applicant
further asserted that performing physical activities is often
challenging because of decreased blood supply to the legs, typically
causing symptoms to become more challenging over time unless treated.
While functional outcomes appear similar between the
EluviaTM and Zilver[supreg] PTX stent groups at 12 months,
these improvements for the Zilver[supreg] PTX stent group are
associated with twice as many TLRs to achieve similar EQ-5D index
values.\167\ Secondary endpoints improved after stent implantation and
were generally similar between the groups. At 12 months, of the
patients with complete Rutherford assessment data, 241 (86 percent) of
281 patients in the EluviaTM group and 120 (85 percent) of
142 patients in the Zilver[supreg] PTX group had symptoms reported as
Rutherford Category 0 or 1 (none to mild claudication). The mean ankle-
brachial index was 1.0 (SD 0.2) in both groups at 12 months (baseline
mean ankle-brachial index 0.7 [SD 0.2] for EluviaTM; 0.8
[0.2] for Zilver[supreg] PTX), with sustained hemodynamic improvement
for approximately 80 percent of the patients in both groups. Walking
function improved significantly from baseline to 12 months in both
groups, as measured with the Walking Impairment Questionnaire and the
6-minute walk test. In both groups, the majority of patients had
sustained improvement in the mobility dimension of the EQ-5D and
roughly half had sustained improvement in the pain or discomfort
dimension. No significant between-group differences were observed in
the Walking Impairment Questionnaire, 6-minute walk test, or EQ-5D.
Secondary endpoint results for the EluviaTM stent and
Zilver[supreg] PTX stent groups are as follows:
---------------------------------------------------------------------------
\167\ Gray, W.A., Keirse, K., Soga, Y., et al., ``A polymer-
coated, paclitaxel-eluting stent (Eluvia) versus a polymer-free,
paclitaxel-coated stent (Zilver PTX) for endovascular
femoropopliteal intervention (IMPERIAL): a randomized, non-
inferiority trial,'' Lancet, 2018, published online Sept 22, http://dx.doi.org/10.1016/S0140-6736(18)32262-1.
---------------------------------------------------------------------------
Hemodynamic improvement in walking--80.8 percent versus
78.7 percent;
Walking impairment questionnaire scores (change from
baseline)--40.8 (36.5) versus 35.8 (39.5);
Distance (change from baseline)--33.2 (38.3) versus 29.5
(38.2);
Speed (change from baseline)--18.3 (29.5) versus 18.1
(28.7);
Stair climbing (change from baseline)--19.4 (36.7) versus
21.1 (34.6); and
6-Minute walk test distance (m) (change from baseline)--
44.5 (119.5) versus 51.8 (130.5).
We are concerned that the IMPERIAL study, which showed significant
differences in primary patency at 12 months, was designed for non-
inferiority and not superiority. We also note the results of a recently
published meta-analysis of randomized controlled trials of the risk of
death associated with the use of paclitaxel-coated balloons and stents
in the femoropopliteal artery of the leg, which found that there is
increased risk of death following application of paclitaxel-coated
balloons and stents in the femoropopliteal artery of the lower limbs
and that further investigations are urgently warranted,\168\ although
the EluviaTM system was not included in the meta-analysis.
We are inviting public comments on whether the EluviaTM
system meets the substantial clinical improvement criterion, including
the implications of the conclusion of the meta-analysis results with
respect to a finding of substantial clinical improvement for
EluviaTM.
---------------------------------------------------------------------------
\168\ Katsanos, K., et al., ``Risk of Death Following
Application of Paclitaxel-Coated Balloons and Stents in the
Femoropopliteal Artery of the Leg: A Systematic Review and Meta-
Analysis of Randomized Controlled Trials,'' JAHA, vol. 7(24).
---------------------------------------------------------------------------
Below we summarize and respond to a written public comment we
received in response to the New Technology Town Hall meeting notice
published in the Federal Register regarding the substantial clinical
improvement criterion for EluviaTM.
Comment: With regard to the applicant's assertion that the
EluviaTM stent achieves statistically superior primary
patency over the Zilver[supreg] PTX stent, the commenter noted that the
non-inferior primary patency of EluviaTM as compared to the
Zilver[supreg] PTX stent was the primary efficacy endpoint of the
IMPERIAL study. The commenter stated that the authors of the IMPERIAL
study published a paper in The Lancet that noted a post-hoc analysis
that suggested that EluviaTM's primary patency was superior
to Zilver[supreg] PTX stent. The commenter further noted that in the FY
2020 New Technology Add-On Payment Town Hall presentation, the
EluviaTM Drug-Eluting Vascular Stent System's presenter used
this analysis as a predicator to substantiate the substantial clinical
improvement provided by the use of the EluviaTM stent. The
commenter questioned the basis of the applicant's assertion of
substantial clinical improvement contingent upon this rationale
because, according to the commenter, primary patency in this study was
measured by duplex ultrasound obtained on each enrollee at 12 months.
The commenter indicated that this is an endpoint based on imaging, and
in and of itself, may not have any direct clinical significance. The
commenter suggested that a loss of patency alone, without an associated
recurrence or increase of clinical signs or symptoms (pain, walking
impairment, ulcer development, etc.,) is
[[Page 19317]]
not a clinically-relevant measure. As such, the commenter believed that
the rationale used in that post-hoc analysis to determine superiority
in primary patency does not offer support for an assertion of clinical
improvement. The commenter noted that it is an interesting finding, but
as discussed further below, the commenter does not believe this
translates into a representation of substantial clinical improvement.
The commenter further stated that ``the pre-specified primary endpoint
of the study indicated non-inferiority of primary patency of
EluviaTM when compared to the Zilver[supreg] PTX stent, with
a non-significant difference of 5.3 percent (95 percent confidence
interval: -2.5 percent, 13.1 percent); and this information was not
included in the New Technology Town Hall presentation''.
With regard to the applicant's assertion that the
EluviaTM stent reduces the rate of subsequent therapeutic
interventions by 50 percent, the commenter noted that ``Subsequent
Therapeutic Interventions'' was not further defined in the New
Technology Town Hall presentation nor in the IMPERIAL study. The
commenter stated that it would appear from the presentation materials,
however, that it is referring specifically to ``target lesion
revascularizations (TLR)''.
The commenter referred to the EluviaTM New Technology
Town Hall presentation slide deck, and stated that the presenter
displayed graphs showing ``Clinically-driven TLR Rates'' for both the
EluviaTM stent and the Zilver[supreg] PTX stent. The
commenter stated that the graph showed a TLR rate for
EluviaTM of 4.5 percent, and a corresponding TLR rate of 9.0
percent for the Zilver[supreg] PTX stent, with that slide also
displaying a p-value of 0.0672. The commenter explained that because a
p-value of less than 0.05 is widely accepted in the scientific and
clinical communities as a threshold to establish a statistically
significant difference, a p-value of 0.0672 suggests that the
difference between the devices' TLR rates is not statistically
significant. The commenter believed that, given that the difference in
TLR rates is not statistically significant, no conclusions can or
should be drawn regarding substantial clinical improvement based on
these TLR rates. The commenter stated that the Lancet study paper
itself reported a TLR rate of 4.5 percent for EluviaTM and
8.7 percent for the Zilver[supreg] PTX stent, with an even higher p-
value of 0.0746,\169\ and the commenter believes that the difference in
TLR rates is more questionably meaningful. With regard to the
applicant's assertion that EluviaTM achieves similar
functional outcomes with half as many TLRs (repeat procedures) at 1
year, the commenter stated that based on the data presented during the
New Technology Town Hall presentation and discussed at length in the
Lancet study paper, ``functional'' clinical outcomes between the
EluviaTM and the Zilver[supreg] PTX patients were similar.
These clinical outcome measures included walking function (assessed
with the Walking Impairment Questionnaire and 6-minute walk test),
Rutherford scores, EQ-5D quality of life scores, and ankle-brachial
index measures. The commenter believed that these similar results
dispute the conclusion that EluviaTM represents a
substantial clinical improvement compared to the Zilver[supreg] PTX
stent. Further, the commenter stated that this section of the
presentation once again references and is based on the difference in
TLR rates. As noted above, the commenter believed that this difference
in rates was not demonstrated to be significant and, therefore, should
not be the basis for a conclusion of clinical improvement.
Additionally, the commenter also noted that, although not described in
the New Technology Town Hall presentation, the Lancet publication
indicates that the calculations of clinical improvement and hemodynamic
improvement already account for TLR as a failure. Therefore, the
commenter believed that stating that the outcomes are similar with half
as many TLRs is misleading. The commenter further stated that similar
clinical outcomes and TLR rates do support the study's conclusions of
non-inferiority, but should not form the basis for an assertion of
superiority.
---------------------------------------------------------------------------
\169\ Gray, W.A., et al., ``A polymer-coated, paclitaxel-eluting
stent (Eluvia) versus a polymer-free, paclitaxel-coated stent
(Zilver PTX) for endovascular femoropopliteal intervention
(IMPERIAL): a randomised, non-inferiority trial,'' Lancet, September
24, 2018.
---------------------------------------------------------------------------
With regard to the applicant's assertion that the use of the
EluviaTM stent reduces hospital readmission rates, the
commenter noted that during the New Technology Town Hall presentation,
the presenter noted that the EluviaTM group had a hospital
readmission rate at 12 months of 3.9 percent compared to the
Zilver[supreg] PTX group's rate of 7.1 percent, and that no p-value was
included on the slide used for the presentation to offer an assessment
of the statistical significance of this difference. The commenter noted
that this particular data comparison was not discussed in the main body
of the Lancet paper, but could be found in the online appendix. The
commenter further noted that as with the presentation slide, no p-value
was offered in the appendix. The commenter indicated that its
statistics team did, however, calculate a p-value of 0.17 for this
comparison. The commenter noted that a p-value of 0.17 is well above
the standard p-value threshold of 0.05 needed to draw a conclusion of
statistical significance. Given that this difference is not
statistically significant, the commenter believed that based on this
submitted data, this assertion should also not be used to substantiate
a representation of substantial clinical improvement for the
EluviaTM stent.
With regards to longer-term data on the Zilver[supreg] PTX stent
and the EluviaTM stent, the commenter noted that in the
commentary in The Lancet paper accompanying the IMPERIAL study, Drs.
Salvatore Cassese and Robert Byrne write that a follow-up duration of
12 months is insufficient to assess late failure, which is not
infrequently observed. According to Drs. Cassese and Byrne, the
preclinical models of restenosis after stenting of peripheral arteries
have shown that stents permanently overstretch the arterial wall, thus
stimulating persistent neointimal growth, which might cause a catch-up
phenomenon and late failure. The paper noted that in this regard, data
on outcomes beyond 1 year will be important to confirm the durability
of the efficacy of the EluviaTM stent.\170\ The commenter
stated that at this point in time, very limited longer-term data is
available on the use of the EluviaTM stent and that the
IMPERIAL study offers only 12-month data, although data out to 3 years
has been published from the relatively small 57-patient single-arm
MAJESTIC study. The commenter noted that the MAJESTIC study
demonstrates a decrease in primary patency from 96.4 percent at 1 year
to 83.5 percent at 2 years; and a doubling in TLR rates from 1 year to
2 years (3.6 percent to 7.2 percent) and again from 2 years to 3 years
(7.2 percent to 14.7 percent). The commenter stated that this is not
inconsistent with Drs. Cassese and Byrne's commentary regarding late
failure, and that the relatively small, single-arm design of the study
does not lend itself well to direct comparison to other SFA treatment
options such as the Zilver[supreg] PTX stent.
---------------------------------------------------------------------------
\170\ Cassese, S., & Byrne, R.E., ``Endovascular stenting in
femoropopliteal arteries,'' The Lancet, 2018, vol. 392(10157), pp.
1491-1493.
---------------------------------------------------------------------------
The commenter stated that EluviaTM's lack of long-term
data contrasts with 5-year data that is available from the
Zilver[supreg] PTX stent's pivotal 479-patient
[[Page 19318]]
RCT comparing the use of the Zilver[supreg] PTX stent to angioplasty
(with a sub-randomization comparing provisional use of Zilver[supreg]
PTX stenting to bare metal Zilver stenting in patients experiencing an
acute failure of percutaneous transluminal angioplasty (PTA)). The
commenter believed that these 5-year data demonstrate that the
superiority of the use of the Zilver[supreg] PTX stent demonstrated at
12 and 24 months is maintained through 5 years compared to PTA and
provisional bare metal stenting, and actually increases rather than
decreases over time. The commenter also believed that, given that these
stent devices are permanent implants and they are used to treat a
chronic disease, long-term data is important to fully understand an SFA
stent's clinical benefits. The commenter stated that with 5-year data
available to support the ongoing safety and effectiveness of the use of
the Zilver[supreg] PTX stent, but no such corresponding data available
for the use of the EluviaTM stent, it seems incongruous to
suggest that the use of the EluviaTM stent results in a
substantial clinical improvement compared to the Zilver[supreg] PTX
stent.
The commenter further stated that, in addition to the very limited
long-term data available for the EluviaTM stent, there is
also a lack of clinical data for the use of the EluviaTM
stent to confirm the benefit of the device outside of a strictly
controlled clinical study population. The commenter stated that in
contrast, the Zilver[supreg] PTX stent has demonstrated comparable
outcomes across a broad patient population, including a 787-patient
study conducted in Europe with 2-year follow-up and a 904-patient study
of all-comers (no exclusion criteria) in Japan with 5-year follow-up
completed. The commenter believed that with no corresponding data for
the use of the EluviaTM stent in a broad patient population,
it seems unreasonable to suggest that the use of the
EluviaTM stent results in a substantial clinical improvement
compared to the Zilver[supreg] PTX stent.
Response: We appreciate the information provided by the commenter.
We will take these comments into consideration when deciding whether to
approve new technology add-on payments for the EluviaTM
Drug-Eluting Vascular Stent System for FY 2020.
g. ELZONRISTM (tagraxofusp, SL-401)
Stemline Therapeutics submitted an application for new technology
add-on payments for ELZONRISTM for FY 2020.
ELZONRISTM (tagraxofusp, SL-401) is a targeted therapy for
the treatment of blastic plasmacytoid dendritic cell neoplasm (BPDCN)
administered via infusion. The applicant stated that BPDCN, previously
known as blastic natural killer (NK) cell leukemia/lymphoma, is a rare,
highly aggressive hematologic malignancy with a median overall survival
of 8 to 14 months from diagnosis that occurs predominantly in the
elderly (median age at diagnosis is 67 years old) and in male patients
(75 percent). The applicant cited data from the Surveillance,
Epidemiology, and End Results Program (SEER) registry that the
estimated incidence of BPDCN is less than 100 new cases per year in the
U.S. However, the applicant believes that registries likely
underestimate the true incidence of BPDCN due to changing nomenclature
and lack of a standardized disease characterization prior to 2008, and
that additional patients may be eligible for treatment.
According to the applicant, ELZONRISTM is a targeted
therapy directed to the interleukin-3 receptor (IL-3 receptor). The IL-
3 receptor is composed of two chains: An alpha chain, also known as
CD123, and a [beta] chain. Together, the two chains form a high-
affinity cell surface receptor for interleukin-3 (IL-3). The binding of
IL-3 to the IL-3 receptor initiates signaling that stimulates the
proliferation and differentiation of certain hematopoietic cells. The
alpha unit of the IL-3 receptor (also known as CD123) has also been
found to be expressed in a variety of cancers, including BPDCN, a
malignancy derived from plasmacytoid dendrite cells (pDCs).
The applicant explained that ELZONRISTM is a recombinant
protein composed of human IL-3 genetically fused to a truncated
diphtheria toxin (DT) payload. The applicant stated that
ELZONRISTM binds with high affinity to the IL-3 receptor and
is engineered such that IL-3 replaces the native receptor-binding
domain of DT and thereby acts like a homing device, targeting the DT
cytotoxic payload specifically to CD123-expressing cells. Upon binding
to the IL-3 receptor, ELZONRISTM is internalized into
endosomes, where the low pH environment enables proteolytic cleavage
and release of the catalytic domain of DT into the cytoplasm. The
target of DT's catalytic domain is elongation factor 2 (EF-2), a key
protein involved in protein translation. Inactivation of EF-2 leads to
termination of protein synthesis, which ultimately results in cell
death. The applicant asserted that ELZONRISTM is engineered
such that IL-3 targets the cytotoxic payload specifically to CD123-
expressing cells.
The applicant indicated that the regimens historically employed for
the treatment of patients who have been diagnosed with BPDCN have
generally consisted of those regimens, or modified versions of those
regimens, used for aggressive hematologic malignancies, including
regimens normally used in the treatment of acute lymphoblastic
leukemia, acute myeloid leukemia, and lymphoma. The applicant
summarized the mechanisms of various drugs and regimens currently used
to treat BPDCN, including:
Etoposide, which the applicant explained works by
inhibiting topoisomerase II, which in turn disrupts the ligation step
of the cell cycle, leading to apoptosis and cell death.
Hyper CVAD, which the applicant explained is a regimen
consisting of cyclophosphamide, vincristine and doxorubicin,
dexamethasone, methotrexate, and cytarabine. Cyclophosphamide damages
DNA by binding to it and causing the formation of cross-links.
Vincristine prevents cell duplication by binding to the protein
tubulin. Dexamethasone is a steroid to counteract side effects.
Methotrexate is an antimetabolite that competitively inhibits an enzyme
that is used in in folate synthesis, arresting cell reproduction.
CHOP, which the applicant explained is a regimen of
cyclophosphamide, doxorubicin, vincristine, and prednisone.
AspaMetDex L-asparaginase, Methotrexate, Dexamethasone.
The applicant explained that L-asparaginase catalyzes the conversion of
L-asparagine to aspartic acid and ammonia, depriving leukemic cells of
L-asparagine, leading to cell death.
Ara-C regimen (cytarabine), which the applicant explained
interferes with synthesis of DNA by altering the sugar component of
nucleosides.
The applicant stated that there are no approved therapies or
established standards of care for the treatment of patients who have
been diagnosed with BPDCN, either for treatment-naive or previously-
treated patients. The applicant asserted that current treatments for
patients who have been diagnosed with BPDCN might temporarily help to
slow disease progression, but they fail to eradicate cancer stem cells
(CSCs), and no specific treatment regimen has been shown to be
effective or is recommended. According to the applicant, only half of
reported patients show initial response to the regimens historically
employed for treatment of a diagnosis of BPDCN, and these reported
responses do not generally appear to be
[[Page 19319]]
durable, with many patients experiencing a quick relapse. Overall
survival is typically low, ranging from 8 to 14 months across various
treatment regimens.
With respect to the newness criterion, according to the applicant,
the FDA accepted the applicant's Biologics License Application (BLA)
filing for ELZONRISTM in August 2018 for the treatment of
patients who have been diagnosed with blastic plasmacytoid dendritic
cell neoplasm. The FDA granted this application Breakthrough Therapy,
Priority Review, and Orphan Drug designations, and on December 21,
2018, approved ELZONRISTM for the treatment of blastic
plasmacytoid dendritic cell neoplasm in adults and in pediatric
patients 2 years old and older. Currently, there are no ICD-10-PCS
procedure codes to uniquely identify procedures involving
ELZONRISTM. We note that the applicant has submitted a
request for approval for a unique ICD-10-PCS code for the
administration of ELZONRISTM beginning in FY 2020.
As discussed above, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome,
according to the applicant, ELZONRISTM treats BPDCN via
target antigen specificity, attacking cells with the IL-3 receptor
(CD123) overexpressed in cancer stem cells (CSCs) and tumor bulk, but
minimally expressed or absent on normal hematopoietic stem cells. The
applicant indicated that ELZONRISTM's mechanism of action
involves a receptor-mediated endocytosis, inhibition of protein
synthesis, and interference with IL-3 signal transduction pathways,
leading to growth arrest and apoptosis in leukemia blasts and CSCs. The
applicant asserted that current BPDCN treatments are not targeted, and
their mechanisms of action aim to arrest quickly-dividing cells through
DNA alkylation and intercalation, as well as through protein binding to
prevent cell duplication. The applicant also asserted that current
treatments for patients who have been diagnosed with BPDCN might
temporarily help to slow disease progression, but they fail to
eradicate CSCs. The applicant stated that in contrast,
ELZONRISTM utilizes a payload that is not cell cycle-
dependent and, therefore, it is able to kill not just highly
proliferative tumor bulk, but also the relatively quiescent CSCs. The
applicant noted that there are similar targeted therapies currently
under investigation, although the applicant asserted that these other
therapies are all in much earlier stages of development. Therefore, the
applicant asserted that ELZONRISTM utilizes a different
mechanism of action than currently available treatment options.
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant stated that because
BPDCN is a distinct and rare hematologic malignancy and there are no
other approved therapies or established standard-of-care, cases
representing patients receiving treatment involving
ELZONRISTM would not be assigned to the same MS-DRG(s) when
compared to cases representing patients receiving treatment involving
existing technologies. We note that, as explained below in the
discussion of the cost criterion, the applicant stated that potential
cases representing patients who may be eligible for treatment involving
ELZONRISTM would be assigned to MS-DRGs that contain cases
representing patients who are receiving chemotherapy without acute
leukemia as a secondary diagnosis.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, according to the
applicant, the use of ELZONRISTM would involve treatment of
a dissimilar patient population as compared to other therapies. The
applicant stated that the World Health Organization standardized the
current name and specific category of disease for BPDCN in 2016,
designating it as a distinct entity within the acute myeloid neoplasms
and acute leukemias. The applicant indicated that no BPDCN standard-of-
care has been established and currently patients who have been
diagnosed with BPDCN are being treated with therapies used for other
diseases. Therefore, the applicant asserted that ELZONRISTM
would be used in the treatment of a new patient population because the
patient population in question is distinguishable from others by the
ICD-10-CM diagnosis code specific to BPDCN: C86.4 (Blastic NK-cell
lymphoma), for which there is no specific treatment regimen that has
been shown to be effective or is recommended, as stated above.
As summarized above, the applicant maintains that
ELZONRISTM meets the newness criterion and is not
substantially similar to existing technologies because it has a unique
mechanism of action; potential cases representing patients who may be
eligible for treatment involving the use of ELZONRISTM would
be assigned to a different MS-DRG when compared to existing
technologies; and the use of the technology would treat a new patient
population. We are inviting public comments on whether
ELZONRISTM is substantially similar to any existing
technologies and whether ELZONRISTM meets the newness
criterion.
With regard to the cost criterion, the applicant used the FY 2017
MedPAR Hospital Limited Data Set (LDS) to assess the MS-DRGs to which
cases representing potential patient hospitalizations that may be
eligible for treatment involving ELZONRISTM would most
likely be assigned. The applicant identified these potential cases
using the ICD-10-CM diagnosis code C86.4 (Blastic NK-cell lymphoma),
which the applicant stated is another name for BPDCN. The applicant
identified 65 cases reporting ICD-10-CM diagnosis code C86.4 spanning
28 different MS-DRGs. The applicant asserted that cases representing
patients hospitalized who may be eligible to receive treatment
involving ELZONRISTM would most likely appear in MS-DRGs 847
(Chemotherapy without Acute Leukemia as Secondary Diagnosis with CC)
and 846 (Chemotherapy without Acute Leukemia as Secondary Diagnosis
with MCC). Therefore, the applicant limited the analysis to the cases
in MS-DRG 847 and MS-DRG 846 that also reported the ICD-10-CM diagnosis
code C86.4. The cases identified in these two MS-DRGs accounted for 24
(37 percent) of the 65 cases reporting ICD-10-CM diagnosis code C86.4.
The applicant indicated that because the number of cases reporting
ICD-10-CM diagnosis code C86.4 is so low and it was difficult to
discern the costs of the predecessor therapies that would be replaced
by the use of ELZONRISTM, the applicant performed the cost
criterion analysis under two different scenarios. Both scenarios use
the 24 cases identified in the FY 2017 MedPAR data and increase the
sample size by using an additional 18 cases identified in the FY 2016
MedPAR data mapping to the same MS-DRGs and reporting the same ICD-10-
CM diagnosis code, for a combined total of 42 cases with an average
case-weighted unstandardized charge per case of $67,947. For the first
scenario, because the applicant was unable to determine the appropriate
costs for the predecessor therapies, the applicant did not remove any
predecessor charges from the cases analyzed, although the applicant
noted that it might be extreme
[[Page 19320]]
to assume that no products or services would be replaced if
ELZONRISTM were used. For the second scenario, the applicant
removed all charges from the cases so that only ELZONRISTM
was used as the cost of the case. The applicant characterized this as a
conservative assumption, as it assumes that the only charges related to
these cases would be the cost of ELZONRISTM.
The applicant then standardized the FY 2017 charges using the FY
2017 impact file and then inflated the charges to FY 2019 using the 2-
year inflation factor of 8.59 percent (1.085868) that the applicant
indicated was published in the FY 2019 IPPS/LTCH PPS final rule. The
applicant standardized FY 2016 charges using the FY 2016 impact file
and then inflated the charges to FY 2019 using a 3-year inflation
factor of 13.15 percent (1.131529), which was calculated based on the
1-year inflation factor (1.04205) that the applicant indicated was
listed in the FY 2019 IPPS/LTCH PPS final rule. We note that the
inflation factors used by the applicant were the proposed 1-year and 2-
year inflation factors, which were published in the FY 2019 IPPS/LTCH
PPS final rule in the summary of FY 2019 IPPS proposals (83 FR 41718).
The final 1-year and 2-year inflation factors published in the FY 2019
IPPS/LTCH PPS final rule are 1.04338 and 1.08864, respectively (83 FR
41722), and a 3-year inflation factor calculated based on these numbers
is 1.13587. We note that these figures were revised in the FY 2019
IPPS/LTCH PPS final rule correction notice. The corrected final 1-year
and 2-year inflation factors are 1.04396 and 1.08986, respectively (83
FR 49844), and a 3-year inflation factor calculated based on the
corrected final numbers is 1.13776.
The applicant then added charges for ELZONRISTM in both
scenarios. To determine the charges for ELZONRISTM, the
applicant calculated the average per discharge cost of
ELZONRISTM inflated by the inverse of the national average
CCR for pharmacy costs of 0.191. The applicant then calculated an
average case-weighted standardized charge per case for each scenario
and compared it with the average case-weighted threshold amount. The
applicant stated that ELZONRISTM exceeded the average-case-
weighted threshold amount under each scenario and, therefore, meets the
cost criterion. Results of the analyses of both scenarios are
summarized in the table below:
----------------------------------------------------------------------------------------------------------------
Average case-
weighted new Final inflated
Number of technology average Amount
Medicare cases add-on case[dash]weighted exceeded
payment standardized threshold
threshold charge per case
----------------------------------------------------------------------------------------------------------------
FY 2016 and FY 2017 MedPAR Data; No 42 $52,049 $1,066,195 $1,014,146
Predecessor Charges Removed................
FY 2016 and FY 2017 MedPAR Data; All 42 52,049 1,010,455 958,406
Predecessor Charges Removed................
----------------------------------------------------------------------------------------------------------------
We note that the applicant used the proposed rule values to inflate
the standardized charges. However, we further note that even when using
either the final rule values or corrected final rule values to inflate
the charges, the average case-weighted standardized charge per case for
each scenario exceeded the average case-weighted threshold amount. We
are inviting public comments on whether ELZONRISTM meets the
cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant stated that it believes ELZONRISTM represents a
substantial clinical improvement because: (1) ELZONRISTM is
the only treatment indicated specifically for the treatment of patients
who have been diagnosed with BPDCN, a disease without a defined
standard-of-care; (2) ELZONRISTM offers a treatment option
for a patient population ineligible for aggressive chemotherapy
regimens used to treat BPDCN; (3) ELZONRISTM exhibits high
complete remission rates, potentially superior to other regimens used
to treat a diagnosis of BPDCN; (4) ELZONRISTM significantly
improves overall survival (OS) in the treatment of patients diagnosed
with BPDCN as compared to currently available treatment regimens; (5)
ELZONRISTM significantly improves clinical outcomes in the
BPDCN patient population because it may allow more patients to bridge
to stem cell transplantation, an effective treatment not currently
administered to most patients due to their inability to tolerate the
requisite conditioning therapies; (6) ELZONRISTM exhibits a
manageable profile that is consistent over increasing patient exposure
and experience, demonstrating a well-tolerated targeted therapy
suitable for the majority of patients who are unable to receive
intensive chemotherapy; and (7) ELZONRISTM is more efficient
than other chemotherapeutic drugs at killing BPDCN in preclinical
studies, suggesting clinical benefit would also be exhibited if head-
to-head comparison was pursued.
In support of the claim that ELZONRISTM is the only
treatment indicated specifically for the treatment of patients who have
been diagnosed with BPDCN, the applicant submitted a 2016 review
article which indicated that no standardized therapeutic approach has
been established yet for the treatment of BPDCN, and the optimal
therapy remains to be defined.\171\
---------------------------------------------------------------------------
\171\ Pagano, L., Valentini, C.G., Grammatico, S., Pulsoni, A.,
``Blastic plasmacytoid dendritic cell neoplasm: diagnostic criteria
and therapeutical approaches,'' British Journal of Haematology,
2016, vol. 174(2), pp. 188-202.
---------------------------------------------------------------------------
Second, in support of the claim that ELZONRISTM offers a
treatment option for a patient population ineligible for aggressive
chemotherapy regimens used to treat BPDCN, the applicant submitted a
2016 review of treatment modalities for patients who have been
diagnosed with BPDCN to establish that there is a clear unmet need for
targeted treatment. The study reported that seven BPDCN patients
treated with Hyper-CVAD, an aggressive chemotherapy regimen, achieved
an overall response of 86 percent and complete remission of 67 percent;
\172\ however, the applicant noted that the evidence is limited to a
small number of patients. Another 2016 review article indicated that
supportive care or palliative chemotherapy is used in the treatment of
many patients who have been diagnosed with BPDCN because of their age
or comorbidities, and may be the only option for elderly patients with
a low performance status or characterized by the presence of relevant
co-morbidities, suggesting that targeted therapy has the potential for
improving patient outcomes.\173\
---------------------------------------------------------------------------
\172\ Falcone, U., Sibai, H., Deotare, U., ``A critical review
of treatment modalities for blastic plasmacytoid dendritic cell
neoplasm,'' Critical Reviews in Oncology/Hematology, 2016, vol. 107,
pp. 156-162.
\173\ Pagano, L., Valentini, C.G., Grammatico, S., Pulsoni, A.,
``Blastic plasmacytoid dendritic cell neoplasm: diagnostic criteria
and therapeutical approaches,'' British Journal of Haematology,
2016, vol. 174(2), pp. 188-202.
---------------------------------------------------------------------------
[[Page 19321]]
Third, the applicant maintained that ELZONRISTM exhibits
high complete remission rates, potentially superior to other regimens
used to treat patients who have been diagnosed with BPDCN. The
applicant submitted a 2013 retrospective case study of patients who had
been diagnosed with BPDCN, in which 15/41 (37 percent) of evaluable
patients achieved CR with induction therapies; 2 partial responders
subsequently became complete responders with consolidation therapy (17/
41: 41 percent). This study noted a high death rate of 17 percent
following induction treatment.\174\ The applicant reported prospective
clinical trial data from ELZONRISTM's pivotal trial
(ELZONRISTM 12 [micro]g/kg/day), which observed a complete
response plus a complete clinical response of 72 percent in treatment-
naive patients (21/29 patients).\175\
---------------------------------------------------------------------------
\174\ Pagano, L., Valentini, C.G., Pulsoni, A., et al., for
GIMEMA-ALWP (Gruppo Italiano Malattie EMatologiche dell'Adulto,
Acute Leukemia Working Party), ``Blastic plasmacytoid dendritic cell
neoplasm with leukemic presentation: an Italian multicenter study,''
Haematologica, 2013, vol. 98(2), pp. 239-246.
\175\ Pemmaraju, N., et al., ``Results of Pivotal Phase 2 Trial
of SL-401 in Patients with Blastic Plasmacytoid Dendritic Cell
Neoplasm (BPDCN),'' Proceedings from the 2018 European Hematology
Association Congress, 2018, Abstract 214438.
---------------------------------------------------------------------------
Fourth, the applicant maintained that ELZONRISTM
significantly improves overall survival (OS) in patients who have been
diagnosed with BPDCN as compared to currently available treatment
regimens. The applicant submitted a 2013 retrospective case study of
patients who have been diagnosed with BPDCN, which found that the
median overall survival was just 8.7 months in 43 patients.\176\ The
applicant reported prospective clinical trial data from
ELZONRISTM's pivotal trial (ELZONRISTM 12
[micro]g/kg/day), which found that median overall survival has not yet
been reached, with a median follow-up of 23 months [0.2-41 +
months].\177\
---------------------------------------------------------------------------
\176\ Pagano, L., Valentini, C.G., Pulsoni, A., et al., for
GIMEMA-ALWP (Gruppo Italiano Malattie EMatologiche dell'Adulto,
Acute Leukemia Working Party), ``Blastic plasmacytoid dendritic cell
neoplasm with leukemic presentation: an Italian multicenter study,''
Haematologica, 2013, vol. 98(2), pp. 239-246.
\177\ Pemmaraju, N., et al., ``Results of Pivotal Phase 2
Clinical Trial of Tagraxofusp (SL-401) in Patients with Blastic
Plasmacytoid Dendritic Cell Neoplasm (BPDCN),'' Proceedings from the
2018 American Society of Hematology (ASH), 2018, Abstract S765.
---------------------------------------------------------------------------
Fifth, the applicant maintained that ELZONRISTM
significantly improves clinical outcomes in the treatment of the BPDCN
patient population because it may allow more patients to bridge to stem
cell transplantation, an effective treatment not currently administered
to most patients due to their inability to tolerate the requisite
conditioning therapies. The applicant submitted a 2011 retrospective
study that included 6 cases of elderly patients who had been diagnosed
with BPDCN in which 4 patients underwent allogenic stem cell
transplantation (SCT) following moderately reduced intensity of
conditioning chemotherapy regimens; 2 patients who received stem cell
transplant while in remission lived disease free 57 months and 16
months post-SCT, and 2 patients transplanted with active disease
achieved complete remission but relapsed 6 and 18 months after
transplantation. Conditioning chemotherapy regimens were reduced in
intensity due to the patients' elderly age.\178\ The applicant also
submitted a 2015 retrospective study of 25 BPDCN cases in which
patients were treated with SCT. Of 11 BPDCN patients treated with
autologous SCT and 14 patients treated with allogenic SCT, overall
survival (OS) at 4 years was 82 percent and 69 percent, respectively,
and no relapses were observed.\179\ The applicant also submitted a 2013
retrospective study of 43 BPDCN cases in which only 6 out of 43
patients (14 percent) received allogenic SCT.\180\ The applicant
submitted a 2010 retrospective study of BPDCN cases in which only 10
out of 47 patients (21 percent) received SCT.\181\ The applicant
submitted a 2016 review article which concluded that early results from
clinical trials for ELZONRISTM indicate that it could be
used to consolidate the effects of first-line chemotherapy and/or
reduce minimal residual disease before allogenic SCT.\182\ The
applicant reported prospective clinical trial data from
ELZONRISTM's pivotal trial (ELZONRISTM 12 [mu]g/
kg/day), for which the median age among the patients with BPDCN who
received treatment involving ELZONRISTM was 70 years old, in
which 45 percent (13/29) of treatment-na[iuml]ve patients treated with
ELZONRISTM (12 [micro]g/kg/day) were bridged to SCT in
remission.\183\
---------------------------------------------------------------------------
\178\ Dietrich, S., et al., ``Blastic plasmacytoid dendritic
cell neoplasia (BPDC) in elderly patients: results of a treatment
algorithm employing allogeneic stem cell transplantation with
moderately reduced conditioning intensity,'' Biology of Blood and
Marrow Transplantation, 2011, vol. 17, pp. 1250-1254.
\179\ Aoki, T., et al., ``Long-term survival following
autologous and allogenic stem cell transplantation for Blastic
plasmacytoid dendritic cell neoplasm,'' Blood, 2015, vol. 125(23),
pp. 3559-3562.
\180\ Pagano, L., Valentini, C.G., Pulsoni, A., et al., for
GIMEMA-ALWP (Gruppo Italiano Malattie EMatologiche dell'Adulto,
Acute Leukemia Working Party), ``Blastic plasmacytoid dendritic cell
neoplasm with leukemic presentation: an Italian multicenter study,''
Haematologica, 2013, vol. 98(2), pp. 239-246.
\181\ Dalle, S., et al., ``Blastic plasmacytoid dendritic cell
neoplasm: is transplantation the treatment of choice?,'' The British
Journal of Dermatology, 2010, vol. 162, pp. 74-79.
\182\ Pagano, L., Valentini, C.G., Grammatico, S., Pulsoni, A.,
``Blastic plasmacytoid dendritic cell neoplasm: diagnostic criteria
and therapeutical approaches,'' British Journal of Haematology,
2016, vol. 174(2), pp. 188-202.
\183\ Pemmaraju, N., et al., ``Results of Pivotal Phase 2 Trial
of SL-401 in Patients with Blastic Plasmacytoid Dendritic Cell
Neoplasm (BPDCN),'' Proceedings from the 2018 European Hematology
Association Congress, 2018, Abstract 214438.
---------------------------------------------------------------------------
Sixth, the applicant maintained that ELZONRISTM exhibits
a manageable profile that demonstrates a well-tolerated targeted
therapy suitable for the majority of patients who are unable to receive
intensive chemotherapy. The prospective clinical trial data from
ELZONRISTM's pivotal trial (ELZONRISTM 12
[micro]g/kg/day) found that ELZONRISTM's side effect profile
remained consistent over increasing patient exposure and experience. No
evidence of cumulative toxicity was seen over multiple cycles of
ELZONRISTM.
Myelosuppression (thrombocytopenia, anemia, neutropenia) was
modest, reversible, and was not dose-limiting for any patient. The most
common treatment-related adverse events included increased alanine
aminotransferase levels, increased aspartate aminotransferase levels
and hypoalbuminemia, mostly restricted to the first cycle of therapy.
The most serious side effect was capillary leak syndrome; most reports
were Grade II in severity.\184\
---------------------------------------------------------------------------
\184\ Ibid.
---------------------------------------------------------------------------
Lastly, the applicant asserts that ELZONRISTM is more
efficient than other chemotherapeutic drugs at killing BPDCN in
preclinical studies, suggesting clinical benefit would also be
exhibited if head-to-head comparison to cytotoxic agents commonly used
for the treatment of hematologic malignancies was pursued. The
applicant submitted a 2015 preclinical study that found malignant cells
from patients who had been diagnosed with BPDCN were more sensitive to
ELZONRISTM than to a wide variety of cytotoxic agents
commonly used for treatment of hematologic malignancies, including
drugs such as cytosine arabinoside, cyclophosphamide, vincristine,
dexamethasone, methotrexate, Erwinia L-asparaginase, and
asparaginase.\185\
---------------------------------------------------------------------------
\185\ Angelot-Delettre, F., Roggy, A., Frankel, A.E., Lamarthee,
B., Seilles, E., Biichle, S., et al., ``In vivo and in vitro
sensitivity of blastic plasmacytoid dendritic cell neoplasm to SL-
401, an interleukin-3 receptor targeted biologic agent,''
Haematologica, 2015, vol. 100(2), pp. 223-30.
---------------------------------------------------------------------------
[[Page 19322]]
After reviewing the information submitted by the applicant as part
of its FY 2020 new technology add-on payment application for
ELZONRISTM, we are concerned that some of the evidence
submitted by the applicant to demonstrate substantial clinical
improvement over existing technologies is based on preclinical studies.
We also are unsure if the study populations in the 2013 retrospective
study that the applicant used to compare remission rates are composed
of treatment-na[iuml]ve, previously-treated, or a mix of patients.
In addition, the applicant reported that the interim results of the
Phase II trial of treatment of BPDCN with ELZONRIS TM
demonstrated high response rates in BPDCN, including: 90 percent
overall response in treatment na[iuml]ve patients (26/29) and 69
percent overall response in relapse/refractory patients (9/13); 72
percent complete response plus complete clinical response in treatment
na[iuml]ve patients (21/29) and 38 percent complete response plus
complete clinical response in relapse/refractory patients (5/13); and
45 percent of patients treated in first-line setting were bridged to
stem cell transplant in remission (13/29).\186\ However, we are
concerned that the small number of patients in the study and the lack
of baseline data against which to compare this technology may make it
more difficult to determine whether these interim results support a
finding of substantial clinical improvement. We also note that because
the clinical trial is ongoing and the final outcomes are not available,
we are concerned that there may not be enough information on the
efficacy to determine substantial clinical improvement at this time. We
also note that the applicant's December 2018 New Technology Town Hall
meeting presentation includes information that differs slightly from
the application materials, and we are not clear whether the study
results submitted with the application reflect the most current
information available. We are inviting public comments on whether
ELZONRIS TM meets the substantial clinical improvement
criterion, including with respect to the concerns we have raised.
---------------------------------------------------------------------------
\186\ Pemmaraju, N., et al., ``Results of Pivotal Phase 2 Trial
of SL-401 in Patients with Blastic Plasmacytoid Dendritic Cell
Neoplasm (BPDCN),'' Proceedings from the 2018 European Hematology
Association Congress, 2018, Abstract 214438.
---------------------------------------------------------------------------
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for ELZONRIS
TM or at the New Technology Town Hall meeting.
h. Erdafitinib
Johnson & Johnson Health Care Systems, Inc. (on behalf of Janssen
Oncology, Inc.) submitted an application for new technology add-on
payments for Erdafitinib for FY 2020. The proposed indication for the
use of Erdafitinib is the second-line treatment of adult patients who
have been diagnosed with locally advanced or metastatic urothelial
carcinoma whose tumors exhibit certain fibroblast growth factor
receptor (FGFR) genetic alterations as detected by an FDA-approved
test, and who have disease progression during or following at least one
line of prior chemotherapy including within 12 months of neoadjuvant or
adjuvant chemotherapy.
According to the applicant, Erdafitinib is an oral pan-fibroblast
growth factor receptor (FGFR) tyrosine kinase inhibitor being evaluated
in Phase II and III clinical trials in patients who have been diagnosed
with advanced urothelial cancer. FGFRs are a family of receptor
tyrosine kinases, which may be upregulated in various tumor cell types
and may be involved in tumor cell differentiation and proliferation,
tumor angiogenesis, and tumor cell survival. Erdafitinib is a pan-
fibroblast FGFR inhibitor with potential antineoplastic activity. Upon
oral administration, Erdafitinib binds to and inhibits FGFR, which may
result in the inhibition of FGFR-related signal transduction pathways
and, therefore, the inhibition of tumor cell proliferation and tumor
cell death in FGFR-overexpressing tumor cells.
The applicant indicated that urothelial cancer (also known as
transitional cell cancer or bladder cancer) is the sixth most common
type of cancer diagnosed in the U.S. In 2018, an estimated 81,190 new
cases of bladder cancer were expected to be diagnosed (approximately
62,380 in men and 18,810 in women), and result in 17,240 deaths
(approximately 1 out of 5 diagnosed men and 1 out of 4 diagnosed
women).\187\ According to the applicant, for patients with metastatic
disease, outcomes can be dire due to the often rapid progression of the
tumor and the lack of efficacious treatments, especially in cases of
relapsed or refractory disease. The applicant further stated that the
relative 5-year survival rate for patients with metastatic disease is 5
percent.
---------------------------------------------------------------------------
\187\ American Cancer Society, ``Key Statistics for Bladder
Cancer,'' www.cancer.org/cancer/bladder-cancer/about/key-statistics.html.
---------------------------------------------------------------------------
According to the applicant, in regard to current second-line
treatment, patients who have been diagnosed with locally advanced or
metastatic urothelial cancer have limited options and favor anti-
programmed death ligand 1/anti-programmed death 1 (anti-PD-L1/anti-PD-
1) therapies (also known as checkpoint inhibitors) as opposed to
conventional cytotoxic chemotherapy. With objective response rates
ranging from approximately 20 to 25 percent with currently approved
therapies and treatments, the applicant stated that new effective
treatment options are needed for this patient population. Although
there are five FDA-approved immune checkpoint inhibitors, the applicant
stated that studies have shown that not all patients benefit from PD-1
blockade. The applicant explained that patients harboring FGFR
alternates, which occurs at a frequency of approximately 20 percent,
are thought to have immunologically ``cold tumors'' that are less
likely to benefit from PD-1 blockade therapy.
The applicant noted that Erdafitinib was granted Breakthrough
Therapy designation by the FDA on March 15, 2018, for the treatment of
patients who have been diagnosed and treated for urothelial cancer
whose tumors have certain FGFR genetic alterations. Erdafitinib has not
received FDA premarket approval as of the time of the development of
this proposed rule. Although there are no currently approved ICD-10-PCS
procedure codes to uniquely identify the use of Erdafitnib, facilities
can report the oral administration of Erdafitinib with the use of the
following ICD-10-PCS code: 3E0DX05 (Introduction of Other
Antineoplastic into Mouth and Pharynx, External Approach). We note that
the applicant has submitted a request for approval at the March 2019
ICD-10 Coordination and Maintenance Committee Meeting for a unique ICD-
10-PCS procedure code to specifically identify cases involving the
administration of Erdafitinib. According to the applicant, this request
was discussed at the September 11, 2018 ICD-10 Coordination and
Maintenance Committee meeting, and at that meeting CMS recommended the
establishment of a New Technology Section ``X'' code to distinctly
identify cases involving the administration of Erdafitinib.
As discussed above, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be
[[Page 19323]]
considered ``new'' for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome, the
applicant asserted that Erdafitinib is not substantially similar to any
existing treatment options because its inhibitory mechanism of action
is novel. Specifically, the applicant stated that Erdafitinib is a pan-
fibroblast FGFR inhibitor with potential antineoplastic activity. Upon
oral administration, Erdafitinib binds to and inhibits FGFR, which may
result in the inhibition of FGFR-related signal transduction pathways
and, therefore, the inhibition of tumor cell proliferation and tumor
cell death in FGFR-overexpressing tumor cells. The applicant stated
that Erdafitinib is a potent pan-FGFR (1-4) tyrosine kinase inhibitor
with IC50 (drug concentration at which 50 percent of target enzyme
activity is inhibited) in the single-digit nanomolar range. According
to the applicant, Erdafitinib will, therefore, represent a first-in-
class FGFR inhibitor because of its novel mechanism of action.
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant stated that potential
cases representing patients who may be eligible for treatment involving
Erdafitinib are likely to be assigned to a wide variety of MS-DRGs
because patients who may receive treatment involving Erdafitinib in the
inpatient setting would likely be hospitalized due to other conditions
than urothelial cancer. The applicant stated that potential cases
representing patients who may be eligible for treatment involving the
use of Erdafitinib may be assigned to the same MS-DRGs as cases
representing patients treated with currently available treatment
options for urothelial cancer.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
asserted that the treatment involving Erdafitnib is specific to a
select subset of patients who have been diagnosed with locally advanced
or metastatic urothelial carcinoma and previously treated, but
subsequently present with FGFR alterations. According to the applicant,
while patients who have been diagnosed with metastatic or unresectable
urothelial cancer may be offered second-line therapy options of a
checkpoint inhibitor or systemic chemotherapy, treatment involving
Erdafitinib is specific to a subset of patients with certain FGFR-
genetic alterations. Therefore, the applicant believes that Erdafitinib
treats a different patient population than currently available
treatments.
We are inviting public comments on whether Erdafitinib is
substantially similar to any existing technology and whether it meets
the newness criterion.
With regard to the cost criterion, the applicant conducted the
following analysis. The applicant searched the FY 2017 MedPAR Hospital
Limited Data Set (LDS) for inpatient hospital claims for potential
cases representing patients who may be eligible for treatment using
Erdafitinib. The applicant noted that because the inpatient admission
for the potential cases identified would likely be unrelated to the
proposed indication for the use of Erdafitinib, it is unlikely that the
administration of Erdafitinib would be initiated during an inpatient
hospitalization. In addition, the applicant assumed that most hospitals
would not utilize Erdafitinib for short-stay inpatient hospitalization,
and the applicant therefore eliminated all identified potential cases
representing inpatient hospitalizations of 3 days or fewer from its
analysis. The applicant also assumed that any inpatient hospitalization
of 4 days or longer would involve the daily administration of
Erdafitinib and calculated the drug's costs on a case-by-case basis,
multiplying the length-of-stay times the cost of the drug.
The applicant used a combination of ICD-10-CM diagnosis codes to
identify these potential cases. The applicant first identified claims
with one of the following ICD-10-CM diagnosis codes listed in the table
below.
------------------------------------------------------------------------
ICD-10-CM diagnosis code Code description
------------------------------------------------------------------------
C67.8..................... Malignant neoplasm of overlapping sites of
bladder.
C67.9..................... Malignant neoplasm of bladder, unspecified.
C68.8..................... Malignant neoplasm of overlapping sites of
urinary organs.
C68.9..................... Malignant neoplasm of urinary organ,
unspecified.
------------------------------------------------------------------------
The applicant then searched the MedPAR data file for inpatient
hospital claims that also had one of the following ICD-10-CM diagnosis
codes listed in the table below to identify a combination of applicable
codes.
------------------------------------------------------------------------
ICD-10-CM diagnosis code Code description
------------------------------------------------------------------------
C77.2..................... Secondary and unspecified malignant neoplasm
of intra-abdominal lymphnodes.
C77.4..................... Secondary and unspecified malignant neoplasm
of inguinal and lower limb lymph nodes.
C77.5..................... Secondary and unspecified malignant neoplasm
of intrapelvic lymph nodes.
C77.8..................... Secondary and unspecified malignant neoplasm
of lymph nodes of multiple regions.
C77.9..................... Secondary and unspecified malignant neoplasm
of lymph node, unspecified.
C78.00.................... Secondary malignant neoplasm of unspecified
lung.
C78.7..................... Secondary malignant neoplasm of unspecified
lung.
C79.00.................... Secondary malignant neoplasm of unspecified
kidney and renal pelvis.
C79.19.................... Secondary malignant neoplasm of other
urinary organs.
C79.51.................... Secondary malignant neoplasm of bone.
C79.82.................... Secondary malignant neoplasm of genital
organs.
------------------------------------------------------------------------
Based on this search, the applicant identified 2,844 cases mapping
to a wide range of MS-DRGs. The applicant identified and used in its
analysis those MS-DRGs to which more than 1 percent of the total
identified cases were assigned, as listed in the table below.
[[Page 19324]]
------------------------------------------------------------------------
MS-DRG MS-DRG title
------------------------------------------------------------------------
871....................... Septicemia or Severe Sepsis without MV >96
Hours with MCC.
654....................... Major Bladder Procedures with CC.
687....................... Kidney & Urinary Tract Neoplasms with CC.
686....................... Kidney & Urinary Tract Neoplasms with MCC.
872....................... Septicemia or Severe Sepsis without MV >96
Hours without MCC.
683....................... Renal Failure with CC.
698....................... Other Kidney & Urinary Tract Diagnoses with
MCC.
669....................... Transurethral Procedures with CC.
690....................... Kidney & Urinary Tract Infections without
MCC.
682....................... Renal Failure with MCC.
699....................... Other Kidney & Urinary Tract Diagnoses with
CC.
653....................... Major Bladder Procedures with MCC.
853....................... Infectious & Parasitic Diseases with O.R.
Procedure with MCC.
543....................... Pathological Fractures & Musculoskeletory &
Connective Tissue Malignancy with CC.
948....................... Signs & Symptoms without MCC.
668....................... Transurethral Procedures with MCC.
542....................... Pathological Fractures & Musculoskeletory &
Connective Tissue Malignacy with MCC.
657....................... Kidney & Ureter Procedures For Neoplasm with
CC.
641....................... Miscellaneous Disorders of Nutrition,
Metabolism, Fluids/Electrolytes without
MCC.
180....................... Respiratory Neoplasms with MCC.
291....................... Heart Failure & Shock with MCC or Peripheral
Extracorporeal Membrane Oxygenation (ECMO).
------------------------------------------------------------------------
Using 100 percent of the cases assigned to these MS-DRGs, the
applicant determined an average case-weighted unstandardized charge per
case of $86,302. The applicant did not remove any charges for prior
therapies because the applicant indicated that the use of Erdafitinib
would not replace any other therapies. The applicant standardized the
charges for each case and inflated each case's charges by applying the
FY 2019 IPPS/LTCH PPS final rule outlier charge inflation factor of
1.08864 (83 FR 41722). (We note that the 2-year charge inflation factor
was revised in the FY 2019 IPPS/LTCH PPS final rule correction notice.
The revised factor is 1.08986 (83 FR 49844). However, we note that even
when using either the revised final rule values or the corrected final
rule values published in the correction notice to inflate the charges,
the final inflated average case-weighted standardized charge per case
for Erdafitinib would exceed the average case-weighted threshold
amount.) The applicant then added the charges for the cost of
Erdafitinib. To determine the charges for the cost of Erdafitinib, the
applicant used the inverse of the FY 2019 IPPS/LTCH PPS final rule
pharmacy national average CCR of 0.191. The applicant's reported
average case-weighted threshold amount was $62,435 and its reported
final inflated average case-weighted standardized charge per case was
$111,713. Based on this analysis, the applicant believes Erdafitinib
meets the cost criterion because the final inflated average case-
weighted standardized charge per case exceeds the average case-weighted
threshold amount. We are inviting public comments on whether
Erdafitinib meets the cost criterion.
The applicant asserts that Erdafitinib represents a substantial
clinical improvement over existing technologies because it offers a
treatment option for a patient population unresponsive to or ineligible
for currently available treatments. The applicant stated that
Erdafitinib provides a substantial clinical improvement for a select
group of patients who have been diagnosed with locally advanced or
metastatic urothelial carcinoma who have failed first-line treatment
and have limited second-line treatment options, despite the recent
introduction of checkpoint inhibitors. The applicant further stated
that the use of Erdafitinib will be the first available treatment
option specific for the subset of patients who have certain fibroblast
growth factor receptor (FGFR) genetic alterations that are detected by
an FDA-approved test. The applicant also believes that Erdafitinib
represents a significant clinical improvement because the technology
reduces mortality, decreases pain, and reduces recovery time.
To support its assertions of substantial clinical improvement, the
applicant submitted the results of a Phase I dose-escalation study for
the use of Erdafitinib in the target patient population for which the
applicant asserts Erdafitinib would be the first available treatment
option and represents a substantial clinical improvement, which is
patients who had been diagnosed with advanced solid tumors for which
standard curative treatment appeared no longer effective. With a sample
size of 65 patients, patients received escalating oral doses of
Erdafitinib ranging from 0.5 mg to 12 mg, administered continuously
daily, or oral doses of Erdafitinib of 10 mg or 12 mg administered on a
7-days-on/7-days-off intermittent schedule. The study intended to
identify the Recommended Phase II Dose (RP2D) and investigate the
safety and pharmacodynamics of the drug. The applicant stated that the
initial RP2D was considered 9 mg continuous daily dosing and 10 mg for
intermitted dosing on the basis of improved tolerability.
The applicant also provided data from a multi-center, open-label
Phase II study of 99 patients, ages 36 years old to 87 years old, with
the median age being 68 years old, who had been diagnosed with
metastatic or unresectable urothelial carcinoma that had specific FGFR
alterations and were treated with a starting daily dose of Erdafitinib
of 8 mg. The applicant noted the study included 87 patients who
progressed after at least or more than 1 line of prior chemotherapy or
within 12 months of (neo) adjuvant chemotherapy. According to the
applicant, the objective response rate (ORR) measured by Response
Evaluation Criteria in Solid Tumors (RECIST) version 1.1 criteria was
40.4 percent (95 percent confidence interval [CI], 30.7 percent to 50.1
percent; 3.0 percent complete responses and 37.4 percent partial
responses). The disease control rate (complete responses, partial
responses, and stable disease) was 79.8 percent. The ORRs were similar
in chemotherapy-na[iuml]ve patients versus patients who progressed/
relapsed after chemotherapy (41.7 percent versus 40.2 percent) and in
patients who had visceral metastases versus those who did not (38.5
percent versus 47.6 percent). The median time to response was 1.4
months, and the median duration of response was 5.6
[[Page 19325]]
months (95 percent CI, 4.2 months to 7.2 months). The applicant noted
that the results demonstrated a median progression-free survival of 5.5
months (95 percent CI, 4.2 months to 6.0 months) and a median overall
survival of 13.8 months (95 percent CI, 9.8 months-not estimable). In
an exploratory analysis of 22 patients previously treated with
immunotherapy, the ORR was 59 percent; response to prior immunotherapy
(per investigator) in these patients was 5 percent.188 189
---------------------------------------------------------------------------
\188\ Nishina, T., Takahashi, S., Iwasawa, R., et al., ``Safety,
pharmacokinetic, and pharmacodynamics of erdafitinib, a pan-
fibroblast growth factor receptor (FGFR) tyrosine kinase inhibitor,
in patients with advanced or refractory solid tumors,'' Invest New
Drugs, 2018, vol. 36, pp. 424-434.
\189\ Tabernero, J., Bahleda, R., Dienstmann, R., et al.,
``Phase I Dose-Escalation Study of JNJ-42756493, an Oral Pan-
Fibroblast Growth Factor Receptor Inhibitor, in Patients With
Advanced Solid Tumors,'' J Clin Onc, Vol. 33(30), October 20, 2015,
pp. 3001-3008.
---------------------------------------------------------------------------
The applicant also referenced an ongoing Phase III study, but
indicated that the data was not available at the time of the
application's submission.
We have the following concerns with regard to whether the
technology meets the substantial clinical improvement criterion. First,
the applicant did not provide substantial data comparing Erdafitinib to
existing therapies. Additionally, the studies that were provided were
based on small sample sizes, open-labeled, and presented without a
complete comparison to existing therapies. Due to the limited nature of
available data, we have concerns that we may not have enough
information to determine if Erdafitinib represents a substantial
clinical improvement over existing technologies.
We are inviting public comments on whether Erdafitinib meets the
substantial clinical improvement criterion.
We did not receive any written public comments in response to the
New Technology Town Hall meeting notice published in the Federal
Register regarding the substantial clinical improvement criterion for
Erdafitinib or at the New Technology Town Hall meeting.
i. ERLEADATM (Apalutamide)
Johnson & Johnson Health Care Systems Inc., on behalf of Janssen
Products, LP, Inc., submitted an application for new technology add-on
payments for ERLEADATM (apalutamide) for FY 2020.
ERLEADATM received FDA approval on February 14, 2018. This
oral drug is an androgen receptor inhibitor indicated for the treatment
of patients who have been diagnosed with non-metastatic castration-
resistant prostate cancer (nmCRPC).
Prostate cancer is the second leading cause of cancer death in
men.\190\ Androgens, a type of hormone that includes testosterone, can
promote tumor growth. Androgen-deprivation therapy (ADT) is initially
an effective way to treat prostate cancer. However, almost all men with
prostate cancer eventually develop castration-resistant disease, or
cancer that continues to grow despite treatment with hormone therapy or
surgical castration.\191\ Non-metastatic castration-resistant prostate
cancer (nmCRPC) is a clinical state in which cancer has not spread to
other parts of the body, but continues to grow despite treatment with
ADT, either medical or surgical, that lowers testosterone levels.
Delaying metastases, or extending metastasis-free survival (MFS), may
delay symptomatic progression, morbidity, mortality, and healthcare
resource utilization. According to the applicant, nearly all men who
die from prostate cancer have antecedent metastases to bone or other
sites. ERLEADATM blocks the effect of androgens on the tumor
in order to delay metastases, a major cause of complications and death
among men with prostate cancer. Prior to ERLEADATM, there
were no FDA-approved treatments for nmCRPC to delay the onset of
metastatic castration-resistant prostate cancer (mCRPC).\192\ The U.S.
incidence of nmCRPC is estimated to be 50,000 to 60,000 cases per
year.\193\
---------------------------------------------------------------------------
\190\ American Cancer Society. https://www.cancer.org/research/cancer-facts-statistics/all-cancer-facts-figures/cancer-facts-figures-2019.html.
\191\ Dai, C., Heemers, H., Sharifi, N., ``Androgen signaling in
prostate cancer,'' Cold Spring Harb Perspect Med, 2017, vol. 7(9),
pp. a030452.
\192\ Center for Drug Evaluation and Research. NDA/BLA Multi-
Disciplinary Review and Evaluation (Summary Review, Office Director,
Cross Discipline Team Leader Review, Clinical Review, Non-Clinical
Review, Statistical Review and Clinical Pharmacology Review) NDA
210951--ERLEADA (apalutamide)--Reference ID: 4221387. Available at:
https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/210951Orig1s000MultidisciplineR.pdf. Published March 19, 2018.
\193\ Beaver, Julia A., Kluetz, Paul, Pazdur, Richard,
``Metastasis-free Survival--A New End Point in Prostate Cancer
Trials,'' 2018, N Eng J of Med, vol. 378, pp. 2458-2460, 10.1056/
NEJMp1805966.
---------------------------------------------------------------------------
With respect to the newness criterion, ERLEADATM
(apalutamide) was granted Fast Track and Priority Review designations
under FDA's expedited programs, and received FDA approval on February
14, 2018 for the treatment of patients who have been diagnosed with
non-metastatic castration-resistant prostate cancer. Currently, there
are no ICD-10-PCS procedure codes to uniquely identify the
administration of ERLEADATM. We note that the applicant
submitted a request for approval for a unique ICD-10-PCS code for the
administration of ERLEADATM beginning in FY 2020.
As discussed above, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome, the
applicant maintained that ERLEADATM is new because it was
the first drug approved by the FDA with its mechanism of action.
Specifically, ERLEADATM is an androgen receptor (AR)
inhibitor that binds directly to the ligand-binding domain of the AR.
It has a trifold mechanism of action. Apalutamide inhibits AR nuclear
translocation, inhibits DNA binding, and impedes AR-mediated
transcription, which together inhibit tumor cell growth.\194\ According
to the applicant, in non-clinical studies, apalutamide administration
caused decreased tumor cell proliferation and increased apoptosis
leading to decreased tumor volume in mouse xenograft models of prostate
cancer. Furthermore, the applicant asserted that in additional non-
clinical studies, apalutamide was shown to have a higher binding
affinity to the androgen receptor than bicalutamide (CASODEX), a first-
generation anti-androgen that has been used in clinical practice for
the treatment of nmCRPC. However, the applicant noted that bicalutamide
is not FDA-approved for this indication nor is there Phase III data
available on its use in this population. In addition, according to the
applicant, apalutamide has a different mechanism of action than
bicalutamide because it does not show antagonist-to-antagonist switch
like bicalutamide.
---------------------------------------------------------------------------
\194\ Clegg, N.J., Wongvipat, J., Joseph, J.D., et al., ``ARN-
509: a novel antiandrogen for prostate cancer treatment,'' Cancer
Res, 2012, vol. 72(6), pp. 1494-503.
---------------------------------------------------------------------------
With regard to the second criterion, whether a product is assigned
to the same or different MS-DRG, the applicant noted that patients who
may be eligible to receive treatment involving ERLEADATM in
the inpatient setting will likely be hospitalized due to other
conditions. Therefore, the applicant explained that potential cases
eligible to receive treatment involving ERLEADATM are likely
to be assigned to a wide variety of MS-DRGs, and
[[Page 19326]]
ERLEADATM is similar to existing technologies in this
respect.
With regard to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
maintained that ERLEADATM was the first FDA-approved
treatment option for patients who have been diagnosed with nmCRPC.
According to the applicant, there are a number of therapies currently
available for patients who have been diagnosed with mCRPC, including
chemotherapy, continuous ADT, immunotherapy, radiation therapy,
radiopharmaceutical therapy, and androgen pathway treatments, including
secondary hormonal therapies and supportive care. However, prior to
ERLEADATM, there were no FDA-approved treatment options for
patients who have been diagnosed with nmCRPC to delay the onset of
mCRPC. Therefore, according to the applicant, ERLEADATM
provides a treatment option to patients who have been diagnosed with a
stage of prostate cancer that previously had no other approved
treatment options available, and the standard approach was ``watch and
wait/observation.'' The applicant stated that both the National
Comprehensive Cancer Network[supreg] (NCCN[supreg]) guidelines for
prostate cancer and American Urological Association (AUA) guidelines
for castration-resistant prostate cancer note the limited treatment
options for nmCRPC as compared to mCRPC. The applicant pointed out that
apalutamide is highly recommended, as one of the two treatments with a
Category 1 recommendation included in the NCCN[supreg] guidelines and
standard treatment options for asymptomatic nmCRPC based on evidence
level Grade A in the AUA guidelines.195 196 Therefore, the
applicant posited that ERLEADATM involves the treatment of a
new patient population because it is a new treatment option for
patients who have been diagnosed with nmCRPC and have limited available
treatment options.
---------------------------------------------------------------------------
\195\ NCCN Clinical Practice Guidelines in Oncology (NCCN
Guidelines[supreg]): Prostate Cancer (Version 4.2018). National
Comprehensive Cancer Network. Available at: www.nccn.org. Published
August 15, 2018.
\196\ Lowrance, W.T., Murad, M.H., Oh, W.K., et al.,
``Castration-Resistant Prostate Cancer: AUA Guideline Amendment
2018,'' J Urol, 2018, pii: S0022-5347(18)43671-3.
---------------------------------------------------------------------------
As summarized above, the applicant maintained that
ERLEADATM meets the newness criterion and is not
substantially similar to existing technologies because it has a unique
mechanism of action and offers an effective treatment option to a new
patient population with limited available treatment options. We are
inviting public comments on whether ERLEADATM meets the
newness criterion.
With regard to the cost criterion, the applicant conducted the
following analysis to demonstrate that the technology meets the cost
criterion. In order to identify the range of MS-DRGs to which cases
representing potential patients who may be eligible for treatment using
ERLEADATM may map, the applicant identified cases that would
be eligible for use of ERLEADATM by the presence of two ICD-
10-CM diagnosis code combinations: C61 (Malignant neoplasm of prostate)
in combination with R97.21 (Rising PSA following treatment for
malignant neoplasm of prostate); or C61 in combination with Z19.2
(Hormone resistant malignancy status). The applicant searched the FY
2017 MedPAR final rule file (claims from FY 2015) for claims with the
presence of the two code combinations above. Cases identified mapped to
a wide variety of MS-DRGs. The applicant eliminated all hospital stays
of fewer than 4 days from its analysis because of its assumption that
most hospitals would not provide ERLEADATM for short-stay
inpatients. The applicant also assumed that any hospital stay 4 days or
longer would involve the daily provision of ERLEADATM. This
resulted in 493 cases across 152 MS-DRGs, with approximately 33 percent
of all cases mapping to the following 9 MS-DRGs: MS-DRG 871 (Septicemia
or Severe Sepsis without MV >96 Hours with MCC); MS-DRG 543
(Pathological Fractures and Musculoskeletal and Connective Tissue
Malignancy with CC); MS-DRG 683 (Renal Failure with CC); MS-DRG 723
(Malignancy, Male Reproductive System with CC); MS-DRG 722 (Malignancy,
Male Reproductive System with MCC); MS-DRG 698 (Other Kidney and
Urinary Tract Diagnoses with MCC); MS-DRG 699 (Other Kidney and Urinary
Tract Diagnoses with CC); MS-DRG 682 (Renal Failure with MCC); and MS-
DRG 948 (Signs and Symptoms without MCC).
For the 493 identified cases, the average case-weighted
unstandardized charge per case was $66,559. The applicant then
standardized the charges using the FY 2017 IPPS/LTCH PPS final rule
Impact file. Because ERLEADATM would not replace any other
therapies occurring during the inpatient stay, the applicant did not
remove any charges for the current treatment. The applicant then
applied the 2-year inflation factor of 8.59 percent (1.085868)
published in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41718) to
inflate the charges from FY 2017 to FY 2019. We note that the inflation
factors were revised in the FY 2019 IPPS/LTCH PPS final rule correction
notice. The corrected final 2-year inflation factor is 1.08986 (83 FR
49844). The applicant converted the costs of ERLEADATM to
charges using the inverse of the FY 2019 IPPS/LTCH PPS final rule
pharmacy national average CCR of 0.191 (83 FR 41273) to include the
charges in its estimate. Based on the FY 2019 IPPS/LTCH PPS final rule
correction notice data file thresholds, the average case-weighted
threshold amount was $52,362. The average case-weighted standardized
charge per case was $76,901. Because the average case-weighted
standardized charge per case exceeds the average case-weighted
threshold amount, the applicant maintained that the technology meets
the cost criterion.
The applicant submitted an additional cost analysis including
hospital stays shorter than 4 days to demonstrate that
ERLEADATM also meets the cost criterion using all discharges
in the analysis, regardless of length of stay. While the applicant
maintained that ERLEADATM is unlikely to be administered by
the hospital for inpatient stays fewer than 4 days, the applicant
demonstrated that the average case-weighted standardized charge per
case ($57,150) continues to exceed the average case-weighted threshold
amount ($50,225) using all discharges (932 cases).
We note that the applicant used the proposed rule values to inflate
the standardized charges above. However, we further note that even when
using either the final rule values or the corrected final rule values
to inflate the charges, the average case-weighted standardized charge
per case exceeded the average case-weighted threshold amount in each
analysis. We are inviting public comments on whether
ERLEADATM meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that ERLEADATM represents a substantial
clinical improvement because: (1) The technology offers a treatment
option for a patient population previously ineligible for treatments,
because ERLEADATM is the first FDA-approved treatment for
patients who have been diagnosed with nmCRPC; and (2) use of the
technology significantly improves clinical outcomes for a patient
population because ERLEADATM was shown to significantly
improve a number of clinical outcomes in the
[[Page 19327]]
randomized Phase III SPARTAN trial,\197\ including significant
improvement in metastasis-free survival (MFS).
---------------------------------------------------------------------------
\197\ Smith, M.R., et al., ``Apalutamide Treatment and
Metastasis-free Survival in Prostate Cancer,'' N Engl J Med, 2018,
vol. 12;378(15), pp. 1408-1418.
---------------------------------------------------------------------------
First, the applicant stated that there were no FDA-approved
treatments to delay metastasis for patients who have been diagnosed
with nmCRPC, a small but important clinical state within the spectrum
of prostate cancer, prior to the FDA approval of ERLEADATM.
The applicant emphasized that until the FDA approved the use of
ERLEADATM, Medicare patients who have been diagnosed with
nmCRPC had extremely limited treatment options, and the standard
approach was ``watch and wait/observation.'' The applicant asserted
that ERLEADATM offers a promising new treatment option and
has been shown to improve MFS in a Phase III trial \198\ with a
demonstrated safety and tolerability profile and no negative impact to
health-related quality of life based on patient-reported outcomes.
Therefore, the applicant stated that the ``robust results'' of the
clinical trial demonstrate that ERLEADATM is a substantial
clinical improvement over existing technologies because it provides an
effective treatment option for a patient population previously
ineligible for treatments.
---------------------------------------------------------------------------
\198\ Ibid.
---------------------------------------------------------------------------
Second, the applicant maintained that ERLEADATM is a
substantial clinical improvement because ERLEADATM was shown
to significantly improve a number of clinical outcomes, most notably
MFS. Metastases are a major cause of complications and death among men
with prostate cancer. Therefore, according to the applicant, delaying
metastases may delay symptomatic progression, morbidity, mortality, and
healthcare resource utilization. ERLEADATM was approved by
the FDA based on a prostate cancer trial using the primary endpoint of
MFS, with overall survival used as a secondary endpoint.
The SPARTAN trial was a randomized, double-blind, placebo-
controlled, Phase III trial which included men who had been diagnosed
with nmCRPC and a prostate-specific antigen doubling time of 10 months
or less. Patients were randomly assigned, in a 2:1 ratio, to receive
apalutamide (240 mg per day) or placebo. A total of 1,207 men underwent
randomization (806 to the apalutamide group and 401 to the placebo
group). All of the patients continued to receive androgen-deprivation
therapy. The primary end point of MFS was defined as the time from
randomization to the first detection of distant metastasis on imaging
or death. The study team calculated that a sample of 1,200 patients
with 372 primary end-point events would provide the trial with 90
percent power to detect a hazard ratio for metastasis or death in the
apalutamide group versus the placebo group of 0.70, at a two-sided
significance level of 0.05. The Kaplan-Meier method was used to
estimate medians for each trial group. The primary statistical method
of comparison for time-to-event end points was a log-rank test with
stratification according to the pre-specified factors. Cox
proportional-hazards models were used to estimate the hazard ratios and
95 percent confidence intervals.
According to the applicant, results of the primary endpoint
analysis for MFS were both statistically significant and clinically
meaningful. Median MFS was 40.5 months in the apalutamide group as
compared with 16.2 months in the placebo group (hazard ratio [HR]=0.28;
95 percent confidence interval [CI]: 0.23, 0.35; P<0.0001). In other
words, ERLEADATM significantly prolonged MFS by 2 years in
men who had been diagnosed with nmCRPC. In a multi-variate analysis,
treatment with ERLEADATM was an independent predictor for
longer MFS (HR: 0.26; 95 percent CI: 0.21-0.32; P<0.0001). The
treatment effect of ERLEADATM on MFS was consistently
favorable across pre-specified subgroups, including patients with
Prostate Specific Antigen doubling time (PSADT) of less than 6 months
versus more than 6 months (short PSA doubling time is a predictor of
metastasis), use of bone-sparing agents, and local-regional disease.
Additionally, the applicant stated that the validity of the primary
endpoint results is supported by improvements in all secondary
endpoints, with significant improvement observed in time to metastasis,
progression-free survival (PFS), and time to symptomatic progression
(all P<0.001) for ERLEADATM compared to placebo.
According to the applicant, treatment with ERLEADATM
significantly extended time to metastasis by almost 2 years (40.5
months versus 16.6 months, P<0.001). In addition, time to bone
metastasis and nodal metastasis in particular were both significantly
longer (P<0.0001) in the ERLEADATM group compared to the
placebo group.
According to the applicant, ERLEADATM was also
associated with a significant improvement in the secondary endpoint of
PFS, at 40.5 months for the ERLEADATM group versus 14.7
months for the placebo group (P<0.001). In a multi-variate analysis of
patients treated in the SPARTAN study, treatment with
ERLEADATM was an independent predictor for longer time to
symptomatic progression (reached versus not reached; P<0.001).
The applicant also included the results of additional secondary
endpoints for CMS consideration as evidence of substantial clinical
improvement, including a suggested overall survival (OS) benefit;
demonstrated safety profile; maintained quality of life; and decreased
prostate specific antigen (PSA) levels.
While OS data were not mature at the time of final MFS analysis
(only 24 percent of the required number of OS events were available for
analysis), the applicant asserted that OS results suggested a benefit
of treatment using ERLEADATM as compared to placebo. The
applicant explained that, according to a statistical analysis model
correlating the proportion of variability of OS attributable to the
variability of MFS, patients who developed metastases at 6, 9, and 12
months had significantly shorter median OS compared with those patients
without metastasis.
The applicant also stated that treatment using ERLEADATM
provides an effective option with a demonstrated safety profile and
tolerability for patients who have been diagnosed with nmCRPC. The
safety of the use of ERLEADATM was assessed in the SPARTAN
trial, and adverse events (AEs) that occurred at >=15 percent in either
group included: Fatigue, hypertension, rash, diarrhea, nausea, weight
loss, arthralgia, and falls. The applicant asserted that in considering
the risks and benefits of treatment involving the use of
ERLEADATM for patients who have been diagnosed with nmCRPC,
the FDA noted that there were no FDA-approved treatments for the
indication and that ERLEADATM had a favorable risk-benefit
profile.
Next, the applicant stated that the use of ERLEADATM
also has a substantial clinical improvement benefit of maintaining
quality of life. According to the applicant, patients who have been
diagnosed with nmCRPC are generally asymptomatic, so it is a positive
outcome if the addition of a therapy does not cause degradation of
health-related quality of life. The applicant maintained that in
asymptomatic men who have been diagnosed with high-risk nmCRPC, health-
related quality of life (HRQOL) was maintained after
[[Page 19328]]
initiation of the use of ERLEADATM.\199\ According to the
applicant, patient-reported outcomes using the Functional Assessment of
Cancer Therapy-Prostate [FACT-P] questionnaire and European Quality of
Life-5 Dimensions-3 Levels [EQ-5D-3L] questionnaire results indicated
that patients who received treatment involving ERLEADATM
maintained stable overall HRQOL outcomes over time from both treatment
groups.
---------------------------------------------------------------------------
\199\ Saad, F., et al., ``Effect of apalutamide on health-
related quality of life in patients with non-metastatic castration-
resistant prostate cancer: an analysis of the SPARTAN randomized,
placebo- controlled, phase 3 trial,'' Lancet Oncology, 2018 Oct;
Epub 2018 Sep 10.
---------------------------------------------------------------------------
Additionally, the applicant discussed prostate specific antigen
(PSA) outcomes as another secondary result demonstrating substantial
clinical improvement. PSA, a protein produced by the prostate gland, is
often present at elevated levels in men who have been diagnosed with
prostate cancer and PSA tests are used to monitor the progression of
the disease. According to the applicant, at 12 weeks after
randomization, the median PSA level had decreased by 89.7 percent in
the ERLEADATM group versus an increase of 40.2 percent in
the placebo group. In an exploratory analysis performed by the
applicant of patients treated in the SPARTAN study, the use of
ERLEADATM decreased the risk of PSA progression by 94
percent compared with the patients in the placebo group (not reached vs
3.71 months; HR: 0.064; 95 percent CI: 0.052-0.080; P<0.0001). Overall,
a >=90 percent maximum decline in PSA from baseline at any time during
the study was reported in 66 percent of the patients in the
ERLEADATM group and 1 percent of the patients in the placebo
group, according to the applicant. The applicant noted that increase in
time to PSA progression is relevant from a clinical standpoint for
clinicians and patients alike because PSA monitoring, rather than the
use of regularly scheduled surveillance imaging, as was the case with
SPARTAN, is often the most practical method of screening for
progression of nmCRPC.
We have the following concerns regarding the applicant's assertions
of substantial clinical improvement:
Regarding the SPARTAN trial design, we are concerned that
the study enrollment may not be representative of the U.S. population
considering that North American enrollment was only 35 percent of
patients overall, and only approximately 6 percent of enrolled patients
were black. Underrepresentation of black patients is of particular
concern considering that, in the United States, African-American
patients are disproportionately affected by prostate cancer. According
to the CDC,\200\ the rate of new prostate cancers by race is 158.3 per
100,000 men for African-Americans, compared to 90.2 for whites, 78.8
for Hispanics, 51.0 for Asian/Pacific Islanders, and 49.6 for American
Indians/Alaska Natives. We are concerned that, based on an exploratory
subgroup analysis performed by the applicant, black patients may not
have performed better in the treatment group; while the hazard ratio of
0.63 (95 percent confidence interval: 0.23, 1.72) suggests a benefit to
the group treated with ERLEADATM, the median MFS for this
subgroup was reported as shorter for the ERLEADATM group at
25.8 months than for the placebo group, at 36.8 months.\201\
Additionally, we note that 23 percent of the patients in the SPARTAN
trial did not have definitive local therapy at baseline for their
diagnosis of prostate cancer, which is accepted standard-of-care in the
United States.
---------------------------------------------------------------------------
\200\ U.S. Department of Health and Human Services, Centers for
Disease Control and Prevention and National Cancer Institute, U.S.
Cancer Statistics Working Group, U.S. Cancer Statistics Data
Visualizations Tool, based on November 2017 submission data (1999-
2015), Availavle at: www.cdc.gov/cancer/dataviz, June 2018.
\201\ Smith, M.R., et al., ``Apalutamide Treatment and
Metastasis-free Survival in Prostate Cancer,'' N Engl J Med, 2018,
vol. 12;378(15), pp. 1408-1418.
---------------------------------------------------------------------------
In response to this concern about low North American enrollment and
subgroup underrepresentation, the applicant submitted additional
information claiming a consistent treatment effect across all
subpopulations and regions. The applicant also pointed to the low
hazard ratio for the subgroup of black patients as support for the
benefit of the use of ERLEADATM. We welcome additional
information and public comments on whether the SPARTAN trial results
are generalizable to the U.S. population, and in particular, African-
American patients.
We also note regarding the SPARTAN trial that a total of
7.0 percent of the patients in the ERLEADATM group and 10.6
percent of the patients in the placebo group withdrew consent from the
trial. Additional explanation from the applicant of how those that
withdrew were considered in the analysis, and whether there was any
analysis of potential impact of withdrawals on the study results would
be helpful.
We also have concerns about the primary endpoint used for
the SPARTAN trial, MFS. The applicant explained that MFS was determined
to be a reasonable end point for patients who have been diagnosed with
nmCRPC because of the difficulty in using OS as a primary endpoint;
multiple drugs can be used sequentially for advanced disease,
necessitating larger and longer trials and potentially confounding
interpretation of results if attempting to prove that a prostate cancer
drug lengthens OS. Nevertheless, because MFS is not identical to OS and
data on OS was not mature at the time of the study's results, we note
that it may be difficult to conclude based on the current data whether
the use of ERLEADATM improves OS.
To address this concern, the applicant submitted additional
information on MFS as a surrogate clinical endpoint for OS, including a
recent study by the International Clinical Endpoints for Cancer of the
Prostate (ICECaP) Working Group showing a correlation between MFS and
OS in several prostate cancer studies.\202\ The applicant explained
that based on review of 19 randomized, controlled trials evaluating 21
study units in 12,712 men with localized prostate cancer, the
correlation between OS and MFS was 0.91 (95 percent CI: 0.91-0.91) at
the patient level, as measured by Kendall's [tau]. To demonstrate that
MFS is closely linked with OS, the applicant cited a retrospective
analysis of electronic health record database for patients who have
been diagnosed with nmCRPC in which MFS independently predicted
mortality risk; patients developing metastasis within 1 year had 4.4-
fold greater risk for mortality (95 percent CI: 2.2-8.8) than those who
remained metastasis-free at year 3.\203\ The applicant also reiterated
that a significant positive correlation between MFS and OS was observed
in the SPARTAN trial (Pearson's correlation coefficient=0.66;
Spearman's correlation coefficient=0.62, P<0.0001; and Kendall [tau]
statistic=0.52, parametric Fleischer's statistical model correlation
coefficient of 0.69 (standard error, 0.002; 95 percent CI: 0.69-0.70)).
---------------------------------------------------------------------------
\202\ ICECaP Working Group, Sweeney, C., Nakabayashi, M., et
al., ``The development of intermediate clinical endpoints in cancer
of the prostate (ICECaP)'', J Natl Cancer Inst, 2015, vol. 107(12),
pp. djv261.
\203\ Li S, Ding Z, Lin J.H., et al., ``Association of prostate-
specific antigen (PSA) trajectories with risk for metastasis and
mortality in nonmetastatic castration-resistant prostate cancer
(nmCRPC),'' Abstract presented at: 2018 Genitorurinary Cancers
Symposium, February 8-10, 2018, San Francisco, CA.
---------------------------------------------------------------------------
We are inviting public comments on whether ERLEADATM
meets the substantial clinical improvement criterion for patients who
have been
[[Page 19329]]
diagnosed with nmCRPC. We did not receive any written comments in
response to the New Technology Town Hall meeting notice published in
the Federal Register regarding the substantial clinical improvement
criterion for ERLEADATM or at the New Technology Town Hall
meeting.
j. SPRAVATO (Esketamine)
Johnson & Johnson Health Care Systems, Inc., on behalf of Janssen
Pharmaceuticals, Inc., submitted an application for new technology add-
on payments for SPRAVATO (Esketamine) nasal spray for FY 2020. The FDA
indication for SPRAVATO is treatment-resistant depression (TRD).
According to the applicant, major depressive disorder affects
nearly 300 million people of all ages globally and is the leading cause
of disability worldwide. People with major depressive disorder (MDD)
suffer from a serious, biologically-based disease which has a
significant negative impact on all aspects of life, including quality
of life and function.\204\ Although currently available anti-
depressants are effective for many of these patients, approximately
one-third do not respond to treatment.\205\ Patients who have not
responded to at least two different anti-depressant treatments of
adequate dose and duration for their current depressive episode are
considered to have been diagnosed with TRD. MDD in older age is marked
by lower response and remission rates, greater disability and
functional decline, decreased quality of life, and greater mortality
from suicide.206 207 208
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\204\ World Health Organization. (2018, March). Depression.
Available at: http://www.who.int/mediacentre/factsheets/fs369/en/.
\205\ National Institute of Mental Health. (2006, January).
Questions and Answers about the NIMH Sequenced Treatment
Alternatives to Relieve Depression (STAR*D)--Background. Available
at: https://www.nimh.nih.gov/funding/clinical-research/practical/stard/backgroundstudy.shtml.
\206\ Manthorpe, J., & Iliffe, S., ``Suicide in later life:
Public health and practitioner perspectives,'' International Journal
of Geriatric Psychiatry, 2010, vol. 25(12), pp. 1230-1238.
\207\ Lenze, E., Sheffrin, M., Driscoll, H., Mulsant, B.,
Pollock, B., Dew, M., Reynolds, C., ``Incomplete response in late-
life depression: Getting to remission,'' Dialogues in Clinical
Neuroscience, 2008, vol. 10(4), pp. 419-430.
\208\ Alexopoulos, G., & Kelly, R., ``Research advances in
geriatric depression,'' World Psychiatry, 2009, vol. 8(3), pp. 140-
149.
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According to the applicant, currently available pharmacologic
treatments for depression include Selective Serotonin Reuptake
Inhibitors (SSRIs), Serotonin-norepinephrine reuptake inhibitors
(SNRIs), monoamine oxidase inhibitors (MAOIs), tricyclic anti-
depressants (TCAs), other atypical anti-depressants, and adjunctive
atypical antipsychotics. In addition to SPRAVATO, the only
pharmacologic treatment currently approved for treatment-resistant
depression is a combination of two drugs: An antipsychotic and an SSRI
(fluoxetine/olanzapine combination). Currently available non-
pharmacological medical treatments include electroconvulsive therapy,
vagal nerve stimulation, deep brain stimulation (DBS), transcranial
direct current stimulation (tDCS), and repetitive transcranial magnetic
stimulation (rTMS).
According to the applicant, SPRAVATO is a non-competitive, subtype
non-selective, activity-dependent glutamate receptor modulator. The
applicant indicates that SPRAVATO works through increased glutamate
release resulting in downstream neurotrophic signaling facilitating
synaptic plasticity, thereby bringing about rapid and sustained
improvement in people who have been diagnosed with TRD. The applicant
explained that, through glutamate receptor modulation, SPRAVATO helps
to restore connections between brain cells in people who have been
diagnosed with TRD.\209\
---------------------------------------------------------------------------
\209\ Sanacora, G., et. al., ``Targeting the Glutamatergic
System to Develop Novel, Improved Therapeutics for Mood Disorders,''
Nat Rev Drug Discov., 2008, pp. 426-437.
---------------------------------------------------------------------------
According to the applicant, the nasal spray device is a single-use
device that delivers a total of 28 mg of SPRAVATO in two sprays (one
spray per nostril). The applicant has approved dosages of 56 mg (two
devices) or 84 mg (three devices), with a 28 mg (one device) available
for patients 65 years old and older. The treatment session consists of
healthcare supervision of the patient's self-administration of SPRAVATO
HCL to ensure proper usage and post-administration observation to
ensure patient stability. Specifically, clinicians will need to monitor
blood pressure and mental status changes. The applicant states that
monitoring will be required at every administration session.
With respect to the newness criterion, the applicant submitted a
New Drug Application (NDA) for SPRAVATO HCL Nasal Spray based on a
recently completed Phase III clinical development program for
treatment-resistant depression. According to the applicant, SPRAVATO
was granted a Breakthrough Therapy designation in 2013. SPRAVATO HCL
Nasal Spray was approved by the FDA with an effective date of March 5,
2019. Currently there are no ICD-10-PCS procedure codes to uniquely
identify the administration of SPRAVATO HCL Nasal Spray. The applicant
has submitted a request for approval for a unique ICD-10-PCS procedure
code to specifically identify cases involving the administration of
SPRAVATO HCL, beginning in FY 2020.
As discussed above, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or similar mechanism of action, the applicant asserts that SPRAVATO has
a unique mechanism of action. The applicant stated that SPRAVATO's
unique mechanism of action is the first new approach in 30 years for
the treatment of major depressive disorder, including treatment-
resistant depression.210 211 According to the applicant,
unlike existing approved anti-depressant pharmacotherapies, SPRAVATO's
anti-depressant activity does not primarily modulate monoamine systems
(norepinephrine, serotonin, or dopamine). The applicant asserts that
SPRAVATO restores connections between brain cells in people with
treatment-resistant depression through glutamate receptor modulation,
which results in downstream neurotropic signaling.\212\
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\210\ Duman, R. (2018). Ketamine and rapid-acting anti-
depressants: a new era in the battle against depression and suicide.
F1000Research, 7, 659. doi:10.12688/f1000research.14344.1.
\211\ Dubovsky, S., ``What Is New about New Anti-depressants?,''
Psychotherapy and Psychosomatics, 2018, vol. 87(3), pp. 129-139,
doi:10.1159/000488945.
\212\ Sanacora, G., et al., ``Targeting the Glutamatergic System
to Develop Novel, Improved Therapeutics for Mood Disorders,'' Nat
Rev Drug Discov., 2008, pp. 426-437.
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With regard to the second criterion, whether the technology is
assigned to the same or different MS-DRG, the applicant asserts that it
is likely that potential cases representing patients who may be
eligible for treatment involving the use of SPRAVATO HCL Nasal Spray
would be assigned to the same MS-DRGs as patients who receive treatment
involving currently available anti-depressants (AD).
With regard to the third criterion, whether the technology treats
the same or a similar disease or the same or similar patient
population, the applicant asserts that potential patients who may be
eligible to receive treatment involving SPRAVATO will be comprised of a
subset of patients who are receiving treatment involving currently
available anti-depressants. The applicant did not specifically
[[Page 19330]]
address the application of this criterion to SPRAVATO.
We are inviting public comments on whether SPRAVATO is
substantially similar to any existing technologies and whether it meets
the newness criterion.
With regard to the cost criterion, the applicant conducted the
following analysis to demonstrate that the technology meets the cost
criterion. To identify cases eligible for SPRAVATO, the applicant
searched the FY 2017 MedPAR data file for claims with the presence of
one of the following ICD-10-CM diagnosis codes: F33 (Major depressive
disorder, recurrent), F33.2 (Major depressive disorder, recurrent
severe without psychotic features), F33.3 (Major depressive disorder,
recurrent, severe with psychotic symptoms), and F33.9 (Major depressive
disorder, recurrent, unspecified). Claims from the FY 2017 MedPAR data
file with the presence of one of these ICD-10-CM diagnosis codes mapped
to a wide variety of MS-DRGs. The applicant excluded claims if they had
one or more diagnoses from the following list: (1) Aneurysmal vascular
disease; (2) intracerebral hemorrhage; (3) dementia; (4)
hyperthyroidism; (5) pulmonary insufficiency; (6) uncontrolled brady-
or tachyarrhythmias; (7) history of brain injury; (8) hypertensive; (9)
encephalopathy; (10) other conditions associated with increased
intracranial pressure; and (10) pregnancy. The applicant believed that
these conditions would preclude the use of SPRAVATO HCL. The applicant
also assumed that hospitals would not allow administration of SPRAVATO
HCL for short-stay inpatient hospitalizations and, therefore, excluded
all hospitalizations of fewer than 5 days. The applicant assumed that
patients would be allowed to administer their first dose on the 5th day
and every 7 days thereafter. Lastly, the applicant assumed that, based
on clinical data, patients would use 2.5 spray devices per treatment,
once a week.
After applying the inclusion and exclusion criteria described
above, the applicant identified a total of 3,437 potential cases
mapping to 439 MS-DRGs, with approximately 54.7 percent of cases
mapping to MS-DRGs 885 (Psychoses), 871 (Septicemia or Severe Sepsis
without MV >96 Hours with MCC), 917 (Poisoning & Toxic Effects of Drugs
with MCC), 897 (Alcohol/Drug Abuse or Dependence without Rehabilitation
Therapy without MCC), 291 (Heart Failure & Shock with MCC or Peripheral
Extracorporeal Membrane Oxygenation (ECMO)), 918 (Poisoning & Toxic
Effects of Drugs without MCC), 190 (Chronic Obstructive Pulmonary
Disease with MCC), 853 (Infectious & Parasitic Diseases with O.R.
Procedure with MCC), 683 (Renal Failure with CC), and 682 (Renal
Failure with MCC). The applicant further defined the potential cases
representing patients who may be eligible for treatment involving the
use of SPRAVATO HCL in the cost criterion analysis by reducing the
number of cases in each MS-DRG by one-third due to clinical data
indicating that approximately one-third of patients who have been
diagnosed with MDD also have been diagnosed with TRD.213 214
---------------------------------------------------------------------------
\213\ National Institute of Mental Health. (2006, January).
Questions and Answers about the NIMH Sequenced Treatment
Alternatives to Relieve Depression (STAR*D)--Background. Available
at: https://www.nimh.nih.gov/funding/clinical-research/practical/stard/backgroundstudy.shtml.
\214\ Rush, A.J., Trivedi, M., Wisniewski, S., Nierenberg, A.,
Steward, J., Warden, D., Fava, M., ``Acute and Longer-term Outcomes
in Depressed Outpatients Requiring One or Several Treatment Steps: A
STAR*D report,'' American Journal of Psychiatry, 2006, vol, 163(11),
pp. 1905-1917.
---------------------------------------------------------------------------
The applicant calculated the average case-weighted unstandardized
charge per case to be $73,119. Because the use of SPRAVATO HCL is not
expected to replace prior treatments, the applicant did not remove any
charges for the prior technology. The applicant then standardized the
charges and applied a 2-year inflation factor of 1.08986 obtained from
the FY 2019 IPPS/LTCH PPS final rule correction notice (83 FR 49844).
The applicant then added charges for the new technology to the inflated
average case-weighted standardized charges per case. No other related
charges were added to the cases. The applicant calculated a final
inflated average case-weighted standardized charge per case of $74,738
and an average case-weighted threshold amount of $48,864. Because the
final inflated average case-weighted standardized charge per case
exceeded the average case-weighted threshold amount, the applicant
maintained that the technology met the cost criterion.
With regard to the analysis above, we are concerned whether it is
appropriate to reduce the number of cases to one-third of the total
potential cases identified. While the supporting statistical data
provided by the applicant suggest that one-third of patients who have
been diagnosed with MDD often also receive diagnoses of TRD, it is
unclear which cases representing patients should be removed. It is
possible that patients who have been diagnosed with MDD are covered by
all 439 MS-DRGs, but patients who have been diagnosed with TRD only
exist in a certain subset of these same MS-DRGs. Further, those
patients who have been diagnosed with TRD could account for the most
costly of patients who have been diagnosed with MDD. Ultimately,
without further evidence, we may not be able to verify that the
assumption that patients who have been diagnosed with TRD comprise one-
third of the identified cases representing patients who have been
diagnosed with MDD and are evenly distributed across all of the MS-DRG
identified cases is appropriate. We are inviting public comments on
this issue and whether the SPRAVATO HCL Nasal Spray meets the cost
criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that SPRAVATO HCL Nasal Spray represents a
substantial clinical improvement over existing treatments because it
provides a treatment option for a patient population that failed
available treatments and who have shown inadequate response to at least
two anti-depressants in their current episode of MDD.\215\ According to
the applicant, in addition to SPRAVATO HCL, there is currently only one
other pharmacotherapy used for the treatment for diagnoses of TRD that
is approved by the FDA (Symbyax[supreg], a fluoxetine-olanzapine
combination), but its use is limited by tolerability concerns.\216\ In
support of its assertions of substantial clinical improvement, the
applicant provided several studies regarding SPRAVATO HCL.
---------------------------------------------------------------------------
\215\ Rush, A.J., Trivedi, M., Wisniewski, S., Nierenberg, A.,
Steward, J., Warden, D., Fava, M., ``Acute and Longer-term Outcomes
in Depressed Outpatients Requiring One or Several Treatment Steps: A
STAR*D report,'' American Journal of Psychiatry, 2006, vol. 163(11),
pp. 1905-1917.
\216\ Cristancho, M., & Thase, M, ``Drug safety evaluation of
olanzapine/fluoxetine combination,'' Expert Opinion on Drug Safety,
2014, vol. 13(8), pp. 1133-1141.
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The first study is a Phase II, double-blind, doubly-randomized,
placebo-controlled, multi-center study in adults aged 20 years old to
64 years old.\217\ This study consisted of the following four phases:
The screening, double-blind treatment, the optional open-label
treatment, and post-treatment follow-up. During the treatment phase,
two periods of treatment occurred between the 1st and the 8th day and
the 8th and the 15th day. At the beginning of first treatment period,
participants were randomized 3:1:1:1 to an intranasal placebo, SPRAVATO
HCL 28 mg, 56 mg, or 84 mg twice weekly, respectively. During the
second treatment period,
[[Page 19331]]
patients who were initially randomized to treatment groups remained on
the treatment regimen until the 15th day. Patients initially assigned
to the placebo group and who had moderate to severe symptoms (as
measured by the 16-item quick inventory of depressive symptomatology-
self report total score) were re-randomized 1:1:1:1 to placebo,
SPRAVATO HCL 28 mg, 56 mg, or 84 mg twice weekly groups, respectively.
---------------------------------------------------------------------------
\217\ Daly, E., Singh, J., Fedgchin, M., Cooper, K., Lim, P.,
Shelton, R., Drevets, W., ``Efficacy and Safety of Intranasal
Esketamine Adjunctive to Oral Anti-depressant Therapy in Treatment-
Resistant Depression,'' JAMA Psychiatry, 2018, vol. 75(2), pp. 139-
148.
---------------------------------------------------------------------------
Of the 126 patients screened, 67 were randomized at the beginning
of the first treatment period, with 33 patients receiving placebo, 11
patients receiving 28 mg of SPRAVATO HCL, 11 patients receiving 56 mg
of SPRAVATO HCL, and 12 patients receiving 84 mg of SPRAVATO HCL in
dosages. At the beginning of the second treatment period, those in the
treated group remained on the same treatment regimen, while the 33
placebo patients were re-randomized. Of the placebo group in the first
treatment period, 6 patients were added to the 4 who remained on
placebo, 8 patients received 28 mg of SPRAVATO HCL, 9 patients received
56 mg of SPRAVATO HCL, and 5 patients received 84 mg SPRAVATO HCL in
dosages. Of the 67 respondents randomized, 63 (94 percent) completed
the first treatment phase and 60 (90 percent) completed the first and
second treatment phases. During both treatment phases patients were
assessed at baseline, 2 hours, 24 hours, and at the study period
endpoints for the Montgomery-Asberg Depression Rating Scale (MADRS)
score, Clinical Global Impression of Severity scale score, adverse
events and other safety assessments including the Clinician
Administered Dissociative States Scale (CADSS). The primary efficacy
endpoint, change from baseline to endpoint in MADRS total score, was
analyzed using the analysis of covariance model including treatment and
country as factors and period baseline MADRS total score as a
covariate.\218\
---------------------------------------------------------------------------
\218\ Daly, E., Singh, J., Fedgchin, M., Cooper, K., Lim, P.,
Shelton, R., Drevets, W., ``Efficacy and Safety of Intranasal
Esketamine Adjunctive to Oral Anti-depressant Therapy in Treatment-
Resistant Depression,'' JAMA Psychiatry, 2018, vol. 75(2), pp. 139-
148.
---------------------------------------------------------------------------
At the end of the first treatment period, the least square mean
change (standard error) for the placebo group was -4.9 (1.74). As
compared to the placebo, the least square mean difference from placebo
(standard error) for the SPRAVATO HCL treatment groups was -5.0 (2.99)
for 28 mg of SPRAVATO HCL in dosage, -7.6 (2.91) for 56 mg of SPRAVATO
HCL in dosage, and -10.5 (2.79) for 84 mg of SPRAVATO HCL in dosage;
these differences were statistically significant at or beyond p<0.05.
Similar differences were seen at 2 hours and 24 hours for these groups
with the only non-significant difference occurring for 56 mg of
SPRAVATO HCL in dosage at 2 hours as compared to baseline. At the end
of the second treatment period, the least square mean change (standard
error) for the placebo group was -4.5 (2.92), for the SPRAVATO HCL-
treated groups was -3.1 (2.99) from the placebo for 28 mg of SPRAVATO
HCL in dosage, -4.4 (3.06) from the placebo for 56 mg of SPRAVATO HCL
in dosage, and -6.9 (3.41) from the placebo for 84 mg of SPRAVATO HCL
in dosage. Only the 84 mg of SPRAVATO HCL dosage difference from the
mean was statistically significant (p<.05). When the results from the
first and second treatment periods were pooled, all three groups had
statistically significant differences from the placebo. Based on these
results, the applicant asserts that all three SPRAVATO HCL treatment
groups were superior to the placebo.
When considering the safety profile of the use of SPRAVATO HCL, the
study reports that 3 (5 percent) of the treated patients and 1 (2
percent) open-label patient experienced adverse events leading to
discontinuation (syncope, headache, dissociative syndrome, ectopic
pregnancy). There was a noted dose response for the adverse events of
dizziness and nausea only. Most of the treated patients experienced
transient elevations in blood pressure and heart rate on dosing days,
as well as perceptual changes and/or dissociate symptoms (as measured
by CADSS) that began shortly after dosing and typically resolved by 2
hours.\219\
---------------------------------------------------------------------------
\219\ Daly, E., Singh, J., Fedgchin, M., Cooper, K., Lim, P.,
Shelton, R., Drevets, W., ``Efficacy and Safety of Intranasal
Esketamine Adjunctive to Oral Anti-depressant Therapy in Treatment-
Resistant Depression,'' JAMA Psychiatry, 2018, vol. 75(2), pp. 139-
148.
---------------------------------------------------------------------------
The study titled Transform One submitted by the applicant is a
Phase III, randomized, double-blind, active controlled, multi-center
study which enrolled patients 18 years old to 64 years old who had been
diagnosed with treatment-resistant depression for 28 days.\220\
Patients were randomized (1:1:1) to receive SPRAVATO HCL 56 mg, 84 mg,
or a placebo nasal spray administered twice weekly combined with a
newly initiated, open-label oral anti-depressant (AD) administered
daily (duloxetine, escitalopram, sertraline, or venlafaxine extended
release), which was dosed according to a fixed titration schedule.
Patients were assessed on the MADRS, CADSS, and discharge readiness as
measured by overall clinical status and the Global Assessment of
Discharge Readiness (CGADR). Discharge status was assessed at 1 and 1.5
hours. MADRS was assessed at 24 hours post initial dose and weekly
thereafter. CADSS was assessed at baseline and all dosing visits.
---------------------------------------------------------------------------
\220\ Fedgchin, M., Trivedi, M., Daly, E., Melkote, R., Lane,
R., Lim, P., Singh, J., ``Randominzed, Double-blind Study of Fixed-
dosed Intranasal Esketamine Plus Oral Anti-depressant vs. Active
Control in Treatment-resistant Depression,'' 9th Biennial Conference
of the International Society for Affective Disorders (ISAD) and the
Houston Mood Disorders Conference, September 2018.
---------------------------------------------------------------------------
Three hundred and fifteen patients of the 346 were randomized and
completed the treatment phase; 115 patients were randomized to the 56
mg of SPRAVATO HCL dosage group along with 114 to the 84 mg of SPRAVATO
HCL dosage group and 113 to the placebo group. The withdrawal rate was
3-fold higher in the 84 mg of SPRAVATO HCL dosage group (16.4 percent)
than the 56 mg of SPRAVATO HCL dosage group (5.1 percent) and the
placebo group (5.3 percent). Eleven of the 19 84 mg of SPRAVATO HCL
dosage withdrawals withdrew after only receiving the first 56 mg
SPRAVATO HCL dose; the withdrawal rate was not a dose-related safety
finding. Baseline statistics show few differences between groups: The
56 mg of SPRAVATO HCL dosage group has a higher proportion of patients
who have 1 or 2 previous AD medications (69 percent) as compared to the
patients in the 84 mg of SPRAVATO HCL dosage group (51.8 percent) and
placebo group (59.3 percent), and the placebo group (193.1) has a
notably shorter duration of the current episode of depression in weeks
as compared to the 56 mg of SPRAVATO HCL dosage group (202.8) and 84 mg
of SPRAVATO HCL dosage group (212.7). The MADRS score was assessed by a
mixed model for repeated measures with change from baseline as the
response variable and the fixed effect model terms for treatment
dosage, day, region, class of oral AD, a treatment-by-day moderating
effect, and baseline value as a covariate.
The primary efficacy measure was assessed by change in MADRS score
from baseline at 28 days. At the end of the study the 56 mg and 84 mg
of SPRAVATO HCL dosage groups had a difference of least square means of
-4.1 and -3.2, respectively. Neither of these were statistically
significant differences as compared to the placebo. The least square
mean treatment difference of MADRS score as compared to the placebo
were also assessed longitudinally at baseline and the 2nd day (-3.0 for
the 56 mg of SPRAVATO
[[Page 19332]]
HCL dosage group and -2.2 for the 84 mg of SPRAVATO HCL dosage group),
the 8th day (-3.0 for the 56 mg of SPRAVATO HCL dosage group and -2.7
for the 84 mg of SPRAVATO HCL dosage group), the 15th day (-3.8 for the
56 mg of SPRAVATO HCL dosage group and -3.6 for the 84 mg of SPRAVATO
HCL dosage group), the 22nd day (-5.0 for the 56 mg of SPRAVATO HCL
dosage group and -3.7 for the 84 mg of SPRAVATO HCL dosage group), and
the 28th day (-4.0 for the 56 mg of SPRAVATO HCL dosage group and -3.6
for the 84 mg of SPRAVATO HCL dosage group). In a graph provided by the
applicant, the lines plus standard errors plotted for the 56 mg and 84
mg of SPRAVATO HCL dosage groups overlap with each other at each time
point, but do not appear to overlap with the placebo group (calculated
confidence intervals would necessarily be wider and would possibly
overlap).
A secondary efficacy measure was the rate of patients who are
responders and remitters. Response is defined as greater than or equal
to 50 percent improvement on MADRS from baseline. Remission is defined
as a MADRS total score less than or equal to 12. The 56 mg and 84 mg of
SPRAVATO HCL dosage treatment groups, 54.1 percent and 53.1 percent,
respectively, had higher response rates than the placebo treatment
group at 38.9 percent. The 56 mg and 84 mg of SPRAVATO HCL dosage
treatment groups, 36.0 percent and 38.8 percent, had higher remission
rates than the placebo treatment group at 30.6 percent.
Lastly, safety was assessed by adverse events and CADSS. Both the
56 mg and 84 mg of SPRAVATO HCL dosage treatment groups had spikes of
CADSS scores, which spiked approximately 40 minutes post dose and
resolved at 90 minutes. These post dose spikes gradually decreased from
day 1 to day 25, but remained higher than the placebo group. The 84 mg
of SPRAVATO HCL dosage treatment group had higher CADSS score spikes
than the 56 mg of SPRAVATO HCL dosage treatment group at all periods
except day 1. The top 5 of 12 pooled treatment group adverse events and
percentages experienced are as follows: Nausea (29.4 percent),
dissociation (26.8 percent), dizziness (25.1 percent), vertigo (20.8
percent), and headache (20.3 percent).
The study titled Transform Two is a Phase III, randomized (1:1),
control trial, multi-center study enrolling patients 18 years old to 64
years old who had been diagnosed with treatment-resistant
depression.\221\ One hundred and fourteen patients were randomized to
the treatment group and 109 to the control group; 101 and 100 of the
treated and control groups respectively finished the study. For the
treatment group, doses of SPRAVATO HCL began at 56 mg on the 1st day,
with potential increases up to 84 mg until the 15th day at which point
the dose remained stable. Two-thirds of the SPRAVATO HCL-treated
patients were receiving the 84 mg dosage at the end of the study. For
both the placebo and treatment groups, a newly-initiated AD was
assigned by the investigator (duloxetine, escitalopram, sertraline, and
venlafaxine extended release) following a fixed titration dosing.
---------------------------------------------------------------------------
\221\ Popova, V., Daly, E., Trivedi, M., Cooper, K., Lane, R.,
Lim, P., Singh, J., ``Randomized, Double-blind Study of Flexibly-
dosed Intranasal Esketamine Pus Oral Anti-depressant vs. Active
Control in Treatment-resistant Depression,'' Canadian College of
Neuropsychopharmacology (CCNP) 41st Annual Meeting, 2018.
---------------------------------------------------------------------------
The primary efficacy endpoint was the change from baseline at day
28 in MADRS total score, which was analyzed using a mixed-effects model
using repeated measures (MMRM). The model included baseline MADRS total
score as a covariate, and treatment, country, class of AD (SNRI or
SSRI), day, and day-by-treatment moderator as fixed effects, and a
random patient effect. The key secondary efficacy endpoints were as
follows: The proportion of patients showing onset of clinical response
by the 2nd day that was maintained for the duration of the treatment
phase, the change from baseline in socio-occupational disability using
the Sheehan Disability Scale (SDS) using the MMRM model, and the change
from baseline in depressive symptoms using the patient health
questionnaire 9-item (PHQ-9) using the MMRM model.
There were no apparent differences between the SPRAVATO HCL
treatment and placebo groups at baseline. At day 28, the difference of
least square means (standard error) for the SPRAVATO HCL-treated group
was -4.0 (1.69) as compared to the placebo-treated group (p<0.05).
Similar to Transform One, the difference of least square means for the
SPRAVATO HCL-treated group as compared to the placebo-treated group
were plotted for baseline and the 2nd, 8th, 15th, 22nd, and 28th day.
At all treatment periods, except baseline and the 15th day, the
SPRAVATO HCL treatment group had statistically significant lower scores
than the placebo-treated group as indicated by 95 percent confidence
intervals. The difference between the SPRAVATO HCL-treated and placebo-
treated groups for the early onset of sustained clinical response was
substantively similar and not statistically different. The difference
of least square means (standard error) in socio-occupational disability
as measured by SDS was -4.0 (1.17) for those in the SPRAVATO HCL-
treated group as compared to the placebo-treated group (p<0.05). The
difference of least square means (standard error) for the PHQ-9 total
score for the SPRAVATO HCL-treated group compared to the placebo-
treated group was -2.4 (0.88) (p<0.05). Lastly, 69.3 percent of the
SPRAVATO HCL-treated patients as compared to 52.0 percent of the
placebo-treated patients were considered responders and 52.5 percent of
the SPRAVATO HCL-treated patients as compared to 31.0 percent of the
placebo patients were considered remitters. The adverse events list,
post dosing blood pressure increase, and post dosing CADSS spike were
similar to those seen in the previous Transform One study.\222\
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\222\ Fedgchin, M., Trivedi, M., Daly, E., Melkote, R., Lane,
R., Lim, P., Singh, J., ``Randominzed, Double-blind Study of Fixed-
dosed Intranasal Esketamine Plus Oral Anti-depressant vs. Active
Control in Treatment-resistant Depression,'' 9th Biennial Conference
of the International Society for Affective Disorders (ISAD) and the
Houston Mood Disorders Conference, September 2018.
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A post-hoc analysis based on Transform Two, which included 46
SPRAVATO HCL-treated and 44 placebo-treated patients was conducted to
assess for differences in efficacy and safety between the U.S.
population and the overall study population.\223\ Efficacy was again
assessed by MADRS, SDS, and PHQ-9 scores using the MMRM and with safety
assessments for treatment-emergent adverse events (TEAEs), serious
adverse events (SAEs), CADSS and other measures. At baseline the
treated group of SPRAVATO HCL plus an AD was similar to the placebo-
treated group who took only an AD on most measures to include average
age, sex, race, class of oral ADs, MADRS, CGI-S, SDS, and PHQ-9 scores.
The placebo-treated group had a longer average duration of current
episode at 177.6 days as compared to 132.2 days for the SPRAVATO HCL-
treated group; the placebo-treated group had a higher proportion of
patients having 3 or more previous AD medications (50.1 percent) as
compared to the SPRAVATO HCL treatment group (32.7 percent).
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\223\ Alphs, L., Cooper, K., Starr, L., DiBernardo, A., Shawi,
M., Jamieson, C., Singh, J., ``Clinical Efficacy and Safety of
Flexibly Dosed Esketamine Nasal Spray in a US Population of Patients
With Treatment-Resistant Depression,'' American Psychiatry
Association, 2018, Chicago.
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Both the SPRAVATO HCL-treated and placebo-treated groups showed
[[Page 19333]]
improvement on the efficacy measures after 28 days. At the endpoint of
28 days, the SPRAVATO HCL treatment group had a statistically
significant MADRS total score least square mean difference of -5.5
(p<0.05) from the placebo treatment group. At the endpoint the median
scores on the clinician-rated severity of depressive illness as
measured by CGI-S were -1.5 and -1.0 for the SPRAVATO HCL-treated and
placebo-treated groups respectively (one-sided p value >0.07). For the
measure of patient-rated severity of depressive illness, the SPRAVATO
HCL treatment group had a least square mean difference in PHQ-9 of -3.1
(p<0.05) as compared to the placebo treatment group. On the measure of
functional impairment, the SPRAVATO HCL treatment group had a least
square mean difference in SDS of -5.2 (p<0.01) as compared to the
placebo treatment group. Overall treatment-emergent adverse events were
observed in 91.3 percent of SPRAVATO HCL-treated patients and 77.3
percent of placebo-treated patients. One SPRAVATO HCL-treated patient
experienced a serious adverse event of cerebral hemorrhage. Lastly, the
top five most common adverse events were dizziness, nausea, headache,
dysgeusia, and throat irritation.
The study titled Transform Three is a randomized (1:1), double-
blind, active-controlled, multi-center study in elderly patients 65
years old and older who had been diagnosed with TRD.\224\ Randomization
was stratified by country and class of oral AD (SNRI and SSRI). All
treatment patients started on a 28 mg dosage of SPRAVATO HCL and
flexibly increased dosages of 56 mg or 84 mg based on investigator's
determination of efficacy and tolerability. Both SPRAVATO HCL-treated
(n=72) and placebo-treated (n=66) patients were started on a newly
initiated AD (duloxetine, escitalopram, sertraline, and venlafaxine
extended release). One hundred and twenty-two patients completed the
double-blind phase, with 63 patients in the SPRAVATO HCL-treated group
and 60 patients in the placebo-treated group.
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\224\ Ochs-Ross, R., Daly, E., Lane, R., Zhang, Y., Lim, P.,
Foster, K., Sign, J., ``Efficacy and Safety of Esketamine Nasal
Spray Plus an Oral Anti-depressant in Elderly Patients with
Treatment-resistant Depression,'' 2018 Annual Meeting of the
American Psychiatric Association (APA), 2018, New York.
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The primary endpoint was the change in MADRS total score from the
1st day to the 28th day. Secondary endpoints included the evaluation of
response and remission rates by group and the Clinical Global
Impression--Severity (CGI-S) scores. The safety endpoints were
evaluated by adverse event occurrence, laboratory tests, vital sign
measurements, physical exams, and other exams.
At baseline, there were substantive differences between the
placebo-treated and SPRAVATO HCL treatment groups in three measures.
Patients from the SPRAVATO HCL treatment group (48.6 percent) were more
likely to be from the European Union as compared to the placebo-treated
group (36.9 percent). Patients from the SPRAVATO HCL treatment group
were more likely to have 1 (20.8 percent versus 9.2 percent) to 4 (16.7
percent versus 6.2 percent) previous ADs as compared to the placebo-
treated group. On the measure of duration of current episode of
depression in weeks, the SPRAVATO HCL-treated group had an average
(standard deviation) of 163.1 (277.04) as compared to the placebo-
treated group with 274.1 (395.47). The primary endpoint, the change
from baseline to Day 28 of MADRS score difference of least square means
(95 percent CI) for the SPRAVATO HCL treatment group was -3.6 (-
7.20,0.07) as compared to the placebo group. As with previous studies,
the longitudinal change in MADRS total score is presented for baseline
and at the 8th, 15th, 22nd, and 28th day. The results for the SPRAVATO
HCL-treated group overlap with the placebo-treated group at each time
point. At Day 28, 27.0 percent of the SPRAVATO HCL-treated patients as
compared to 13.3 percent of the placebo-treated patients were
considered responders and 17.5 percent of the SPRAVATO HCL-treated
patients as compared to 6.7 percent of the placebo-treated patients
were considered remitters. At baseline and the end of the study, 83.4
percent and 38.1 percent, respectively, of the SPRAVATO HCL-treated
patients were rated as experiencing severe or marked symptoms on the
CGI-S scale as compared to 66.1 percent and 54.4 percent, respectively,
for those on the placebo.
Of the 72 patients who were treated with SPRAVATO HCL, 51 (70.8
percent) experienced a treatment-emergent adverse event (TEAE) as
compared to 39 of the 65 (60.0 percent) placebo-treated patients. Five
patients reported serious adverse events during the double-blind phase,
three of whom were SPRAVATO HCL-treated patients and two of whom were
placebo-treated patients. The top 5 of the 16 adverse events among the
treated patients are dizziness (20.8 percent), nausea (18.1 percent),
blood pressure increase (12.5 percent), fatigue (12.5 percent), and
headache (12.5 percent).
A post-hoc analysis, which included 34 SPRAVATO HCL-treated
patients and 36 placebo-treated patients from the Transform Three
study, was performed to examine the response and remission associated
with treatments in a subset of respondents 65 years old and older in
the United States.\225\ The MADRS, CGI-S, PHQ-9, and adverse event data
were utilized to assess clinical outcomes. Remission was defined as a
50 percent or greater decrease in MADRS baseline score and remission
was defined as a MADRS score of 12 or lower or a PHQ-9 score of less
than 5. At baseline the SPRAVATO HCL-treated and placebo-treated groups
were similar on the measures of age, sex, race, class of oral AD, age
at major depressive disorder diagnosis, MADRS score, and CGI-S score.
The SPRAVATO HCL treatment group differed from the placebo treatment
group on the measures of mean duration of current depressive episode in
weeks (187.6 versus 420.9) and mean PHQ-9 score (15.2 versus 18.2).
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\225\ Starr, L., Ochs-Ross, R., Zhang, Y., Singh, J., Lim, P.,
Lane, R., Alphs, L., ``Clinical Response, Remission, and Safety of
Esketamine Nasal Spray in a US Population of Geriatric Patients With
Treatment-Resistant Depression,'' American Psychiatric Association,
2018, New York.
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At the 28-day endpoint, response rates based on MADRS scores were
26.7 percent (n=30) for the SPRAVATO HCL-treated group and 14.7 percent
(n=34) for the placebo-treated group. At the endpoint, remission rates
based on MADRS scores were 16.7 percent (n=30) for the SPRAVATO HCL-
treated group and 2.9 percent (n=34) for the placebo-treated group.
Patient remission rates based on the PHQ-9 scores for SPRAVATO HCL-
treated and placebo-treated patients were 9.4 percent (n=32) and 22.6
percent (n=31), respectively. Clinically meaningful response as
measured by a one point or greater decrease in the CGI-S score was 63.3
percent (n=30) for the SPRAVATO HCL-treated group and 29.4 percent
(n=34) for those on the placebo. Clinically significant response as
measured by a decrease of two or greater on the CGI-S scale was 43.3
percent (n=30) for the SPRAVATO HCL-treated group and 11.8 percent
(n=34) for those on the placebo. Lastly, 67.7 percent of the SPRAVATO
HCL-treated patients and 58.3 percent of placebo-treated patients
experienced a treatment-emergent adverse event. There was one serious
adverse event in the SPRAVATO HCL-treated group (hip fracture) and
placebo-treated group (dizziness) each. The top 5 most common adverse
events in the 34
[[Page 19334]]
SPRAVATO HCL-treated patients were dysphoria (11.8 percent), fatigue
(11.8 percent), headache (11.8 percent), insomnia (11.8 percent), and
nausea (11.8 percent).
The study titled Sustain One concerns a double-blind, randomized
withdrawal, multi-center study entering either directly or after
completing the double-blind phase of an acute, short-term study.\226\ A
total of 705 patients were enrolled in this study of which 437 entered
directly into the study and the remainder transferred from one of two
short-term SPRAVATO HCL studies (fixed dose, n=150; flexible dose,
n=118). During the maintenance phase of this study, analyses were
performed on two mutually exclusive groups: (1) On the stable remitters
who were those randomized patients who were in stable remission at the
end of the optimization phase and who received at least one dose of the
study drug with one dose of an AD; and (2) on the stable responders who
were those randomized patients who were stable responders at the end of
optimization and who received at least one dose of the study drug with
one dose of an AD. A relapse was defined as a MADRS total score of 22
or greater for 2 consecutive assessments separated by 5 to 15 days or
hospitalization for worsening depression or any other clinically
relevant event suggestive of relapse.
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\226\ Daly, E., Trivedi, M., Janik, A., Li, H., Zhang, Y., Li,
X., Singh, J., ``A Randomized Withdrawal, Double-blind, Multicenter
Study of Esketamine Nasal Spray Plus an Oral Anti-depressant for
Relapse Prevent in Treatment-resistant Depression,'' 2018 Annual
Meeting of the American Society of Clinical Psychopharmacology
(ASCP), 2018, Miami.
---------------------------------------------------------------------------
Of those classified in stable remission, 90 patients were receiving
treatment with SPRAVATO HCL in combination with an AD and 86 patients
were receiving treatment with the placebo in combination with an AD. Of
those classified in stable response, 62 patients were receiving
treatment with SPRAVATO HCL in combination with an AD and 59 patients
were receiving treatment with the placebo in combination with an AD. At
baseline, between group and within group randomization seems
substantively successful, except for a lower proportion of placebo-
treated stable responders being male (28.8 percent) as compared to
SPRAVATO HCL-treated stable responders (38.7 percent), placebo-treated
stable remitters (31.4 percent), and SPRAVATO HCL-treated stable
remitters (35.6 percent).
Kaplan-Meier estimates of patients who remained relapse free were
performed for both study groups. For both remitters and responders, the
SPRAVATO HCL-treated had a higher percent of patients without relapse
for longer than the control group. Overall, among the stable remitters,
24 (26.7 percent) of the patients in the SPRAVATO HCL-treated group and
39 (45.3 percent) of the patients in the placebo-treated group
experienced a relapse event during the maintenance phase; among stable
responders, 16 (25.8 percent) of the patients and 34 (57.6 percent) of
the patients in the respective groups relapsed. Treatment with SPRAVATO
HCL in combination with an AD decreased the risk of relapse by 51
percent (estimated hazard ratio = 0.49; 95 percent CI: 0.29, 0.84)
among stable remitters and by 70 percent (hazard ratio = 0.30; 95
percent CI: 0.16, 0.55) among stable responders, as compared to the
placebo.
Safety and adverse events were presented similarly to the
previously discussed study data. The top 5 of the 22 adverse events
were dysgeusia (27.0 percent), vertigo (25.0 percent), dissociation
(22.4 percent), somnolence (21.1 percent), and dizziness (20.4
percent). The applicant stated that most adverse events were mild to
moderate, observed post dose on dosing days, and generally resolved in
the same day. Serious adverse events considered related to the study
drug were reported for six patients in the SPRAVATO HCL treatment group
(disorientation, hypothermia, lacunar stroke, sedation, and suicidal
ideation for one patient each, and autonomic nervous system imbalance
and simple partial seizure for one patient). The investigator
considered the lacunar infarct as probably related to the treatment,
while the sponsor considered the events of lacunar infarct and
hypothermia as doubtfully related to the treatment. As with the
previous studies, present-state dissociative symptoms and transient
perceptual effects measured by the CADSS total score began shortly
after the start of SPRAVATO HCL dosing, peaked at 40 minutes, and
resolved by 1.5 hours.
The next study presented by the applicant titled Sustain Two
concerns an open-label, long-term (up to 1 year of exposure), multi-
center, single-arm, Phase III study for patients who had been diagnosed
with TRD who entered into the study as either direct-entry or
transferred-entry (patients who completed the double-blind, randomized,
4-week, Phase III, efficacy and safety study in elderly patients).\227\
A total of 802 patients were enrolled; 779 entered in the induction
phase (691 as direct-entry and 88 as transferred-entry non-responders).
A total of 603 patients entered the optimization/maintenance phase (580
from the induction phase and 23 were transferred-entry responders). A
total of 150 (24.9 percent) of the patients completed the optimization/
maintenance phase. At that time, the predefined total patient exposure
was met and the study was stopped by the sponsor; 331 (54.9 percent) of
the patients were still receiving treatment and, therefore,
discontinued the study. Patients treated had a starting dose of 56 mg
of SPRAVATO HCL, or 28 mg for patients who were 65 years old or older,
followed by flexible dosing increases (28 mg to 84 mg per clinical
judgment) twice a week for 4 weeks. Dosages became stable at 15 days
for those under 65 years old, and at 18 days for those 65 years old and
older.
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\227\ Wajs, E., Aluisio, L., Morrison, R., Daly, E., Lane, R.,
Lim, P., Singh, J., ``Long-term Safety of Esketamine Nasal Spray
Plus Oral Anti-depressant in Patients with Treatment-resistant
Depression: Phase III, Open-label, Safety and Efficacy Study
(SUSTAIN-2),'' 2018 Annual Meeting of the American Society of
Clinical Psychopharmacology (ASCP), 2018, Miami.
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At baseline, 802 respondents had an average age of 52.2 years old,
62.6 percent were women, 85.5 percent were white, an average BMI of
27.9 percent, and 43.1 percent with a family history of depression. The
anti-depressants prescribed to these respondents were duloxetine (31.1
percent), escitalopram (29.6 percent), sertraline (19.6 percent), and
venlafaxine extended release (19.5 percent). Of the respondents at
baseline, 39.9 percent had used 3 or more ADs prior to the study with
no response. Safety measures were reported at 4 weeks, 48 weeks, and
pooled. For TEAEs, 83.8 percent of patients experienced at least one at
4 weeks and 85.6 percent at 48 weeks. TEAEs occurred in 90.1 percent
(n=723) of all patients and led to discontinuation in 9.5 percent of
both the pooled 4 and 48 week patient samples. TEAEs caused 2 deaths
(acute respiratory and cardiac failure, and completed suicide; neither
death considered as related by investigator) at 48 weeks. The top 5
most common TEAEs for the 4-week and 48-week time points were dizziness
(29.3 percent and 22.4 percent), dissociation (23.1 percent and 18.6
percent), nausea (20.2 percent and 13.9 percent), headache (17.6
percent and 18.9 percent), and somnolence (12.1 percent and 14.1
percent). At 4 weeks, 2.2 percent of the patients experienced at least
1 serious adverse event and 6.3 percent at 48 weeks. Of the 68 serious
adverse events, 63 were assessed as not related or doubtfully related
to
[[Page 19335]]
treatment involving SPRAVATO HCL by the investigator. Five of the
serious adverse events (anxiety, delusion, delirium, suicidal ideation
and suicide attempt) were considered as treatment related. Overall,
performance on multiple cognitive domains including visual learning and
memory, as well as spatial memory/executive function either improved or
remained stable post baseline in both elderly and younger patients.
Based on all of the above, the applicant concluded that the use of
SPRAVATO HCL represents a substantial clinical improvement over
existing technologies. CMS has the following concerns regarding whether
SPRAVATO HCL meets the substantial clinical improvement criterion.
First, we are concerned that the use of the placebo in combination
with a newly prescribed anti-depressant may not be the most appropriate
comparator when assessing the clinical improvement of the use of
SPRAVATO HCL as compared to existing therapies. In its application, the
applicant listed multiple treatment options aside from the use of anti-
depressants, which are currently available to treat diagnoses of TRD.
It is possible that other treatments approved for diagnoses of TRD may
obtain better treatment outcomes than changing to a new single anti-
depressant (as was the method used in the studies submitted in support
of this application). Comparisons with existing treatments for
treatment-resistant major depressive disorders would help us better
evaluate the clinical improvements offered by the use of SPRAVATO HCL.
Second, we are not certain that the results in the studies
submitted consistently show that the use of SPRAVATO HCL represents a
substantial clinical improvement when compared to existing therapies.
There does not appear to be a consistent statistically significant
positive primary efficacy outcome for SPRAVATO HCL-treated patients
compared to placebo-treated patients. Based on the data provided, we
also are uncertain of the extent to which the findings from the
submitted studies apply to the broader Medicare population. We are
particularly concerned that there are few substantive and statistically
significant improvements in depression outcomes with SPRAVATO HCL
treatment among the Medicare-aged participants of the study samples. In
addition, the studies which limit their analyses to Medicare-aged study
participants have limited racial diversity amongst small samples. In
addition, we note that the submitted studies excluded patients with
significant medical and psychiatric comorbidities through exclusion
criteria. However, the likelihood of having multiple chronic comorbid
conditions is increased amongst those with a mental health disorder
228 229 and for the elderly.230 231 The existence
of comorbidities increases the likelihood that the negative effects of
poly-pharmacy and drug-drug interactions could be experienced among the
Medicare population. Given that the provided studies utilized exclusion
criteria, which excluded those with serious comorbidities, we are
concerned that the limited results do not adequately represent the
average or even the majority of the Medicare population.
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\228\ Thorpe, K., Jain, S., & Joski, P., ``Prevalence and
Spending Associated with Patients Who have a Behavioral Health
Disorder and Other Conditions,'' Health Affairs, 2017, vol. 36(1),
pp. 124-132, doi:10.1377/hlthaff.2016.0875.
\229\ Druss, B., & Walker, E., 2011, ``Mental Disorders and
Medical Comorbidity,'' Robert Wood Johnson Foundation, 2011.
Available at: http://www.policysynthesis.org.
\230\ Kim, J., & Parish, A., ``Polypharmcy and Medication
Management in Older Adults,'' Nurs Clin N Am, 2017, vol. 52, pp.
457-468, doi:http://dx.doi.org/10.1016/j.cnur.2017.04.007.
\231\ Kim, L., Koncilja, K., & Nielsen, C., ``Medication
Management in Older Adults,'' Cleveland Clinic Journal of Medicine,
2018, vol. 85(2), pp. 129-135, doi:10.3949/ccjm.85a.16109.
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Third, we have concerns regarding the primary and secondary
endpoints for several of these studies. It is unclear whether the
primary endpoint of these studies (change in baseline MADRS) is the
most appropriate endpoint to assess substantial clinical improvement,
particularly as it unclear what threshold degree of change was defined
as meeting the definition of change from baseline in the analyses, and
whether this degree of change translates to clinical improvement (for
example, response and remissions rates). In addition, we have concerns
regarding the potential for physician behavior to have introduced bias,
which could impact the study results. The studies state that anti-
depressants are physician assigned and not randomized. Some of the
provided studies control for the type of anti-depressant prescribed
(SSRI and SNRI). We believe there is the potential for an interaction
effect between the prescribed anti-depressant and SPRAVATO HCL. It is
possible that one particular anti-depressant (of the anti-depressants
used in the studies)/SPRAVATO HCL combination accounts for the entirety
of the differences seen between the treated groups and the control
groups. Without consistently controlling for the specific anti-
depressants prescribed in multivariate analyses, we may not be able to
parse this potentially complex relation apart.
Fourth, given that SPRAVATO HCL is comprised of the drug ketamine,
we are concerned with the potential for abuse. Ketamine is accepted as
a medication for which there is a strong possibility for
abuse.232 233 234 As one publication finds, current abuse of
intravenous ketamine occurs intranasally.\235\ While clinical trials
assess the short-term benefits of ketamine treatment, there exists a
paucity of long-term studies to assess whether chronic usage of this
product may increase the likelihood of abuse.\236\ In light of the
potential for addictive behavior, we are concerned that despite any
demonstrated short-term clinical benefits, there may be potential
negatives for the use of this drug in the longer term.
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\232\ Schak, K., Vande Voort, J., Johnson, E., Kung, S., Leung,
J., Rasmussen, K., Frye, M., ``Potential Risks of Poorly Monitored
Ketamine Use in Depression Treatment,'' American Journal of
Psychiatry, 2016, vol. 173(3), pp. 215-218. Available at: http://www.ajp.psychiatryonline.org.
\233\ Freedman, R., Brown, A., Cannon, T., Druss, B., Earls, F.,
Escobar, J., Xin, Y., ``Can a Framework be Established for the Safe
Use of Ketamine?,'' American Journal of Psychiatry, 2018, vol. 7,
pp. 587-589. Available at: http://www.ajp.psychiatryonline.org.
\234\ Sanacora, G., Frye, M., McDonald, W., Mathew, S., Turner,
M., Schatzberg, A., Nemeroff, C., ``A Consensus Statement on the Use
of Ketamine in the Treatment of Mood Disorders,'' JAMA Psychiatry,
2017, Special Communication, E1-E6. doi:10.1001/
jamapsychiatry.2017.0080.
\235\ Schak, K., Vande Voort, J., Johnson, E., Kung, S., Leung,
J., Rasmussen, K., Frye, M., ``Potential Risks of Poorly Monitored
Ketamine Use in Depression Treatment,'' American Journal of
Psychiatry, 2016, vol. 173(3), pp. 215-218. Available at: http://www.ajp.psychiatryonline.org.
\236\ Sanacora, G., Frye, M., McDonald, W., Mathew, S., Turner,
M., Schatzberg, A., Nemeroff, C., ``A Consensus Statement on the Use
of Ketamine in the Treatment of Mood Disorders,'' JAMA Psychiatry,
2017, Special Communication, E1-E6. doi:10.1001/
jamapsychiatry.2017.0080.
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We are inviting public comments on whether SPRAVATO HCL meets the
substantial clinical improvement criterion. We did not receive any
written comments in response to the New Technology Town Hall meeting
notice published in the Federal Register regarding the substantial
clinical improvement criterion for SPRAVATO HCL or at the New
Technology Town Hall meeting.
k. XOSPATA
Astellas Pharma U.S., Inc. submitted an application for new
technology add-on payments for XOSPATA[supreg] (gilteritinib) for FY
2020. XOSPATA[supreg] received FDA approval November 28, 2018, and is
indicated for the treatment of adult patients who have been diagnosed
with relapsed or refractory acute myeloid leukemia (AML) with a
[[Page 19336]]
FMS-like tyrosine kinase 3 (FLT3) mutation as detected by an FDA-
approved test.
According to the applicant, XOSPATA[supreg] is an oral, small
molecule FMS-like tyrosine kinase 3 (FLT3). The applicant states that
XOSPATA[supreg] inhibits FLT3 receptor signaling and proliferation in
cells exogenously expressing FLT3, including FLT3 internal tandem
duplication (ITD), tyrosine kinase domain mutations (TKD) FLT3D835Y and
FLT3-ITD-D835Y and that it induces apoptosis in leukemic cells
expressing FLT3-ITD. FLT3 is a member of the class III receptor
tyrosine kinase family that is normally expressed on the surface of
hematopoietic progenitor cells, but it is over expressed in the
majority of AML cases.
The applicant states that AML is a type of cancer in which the bone
marrow makes abnormal myeloblasts (a type of white blood cell), red
blood cells, or platelets. According to the applicant, AML is a rare
and rapidly progressing form of cancer of the blood and bone marrow,
characterized by the proliferation of immature white blood cells known
as blast cells. The applicant states that while the specific cause of
AML is unknown, AML is generally characterized by aberrant
differentiation and increased proliferation of malignantly transformed
myeloid progenitor cells. It is considered a heterogeneous disease
state with various molecular and genetic abnormalities, which result in
variable clinical outcomes. When untreated or refractory to available
treatments, AML results in the accumulation of these transformed cells
within the bone marrow and suppression of the production of normal
blood cells (resulting in severe neutropenia and/or thrombocytopenia).
AML may be associated with infiltration of these cells into other
organs and tissues and can be rapidly fatal.
Almost 90 percent of leukemia cases are diagnosed in adults 20
years of age and older, among whom the most common types are chronic
lymphocytic leukemia and AML.\237\ AML accounts for approximately 80
percent of acute leukemias diagnosed in adults, with a median age at
diagnosis of 66 years old. It has been estimated that 19,520 people are
diagnosed annually with AML in the United States.\238\ In general, the
incidence of AML increases with advancing age; the prognosis is poorer
in older patients, and the tolerability of the currently available
standard-of-care treatment for patients who have been diagnosed with
AML is much poorer for older patients.\239\
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\237\ Atlanta: American Cancer Society; 2017 [cited October
2018]. Available from: https://www.cancer.org/content/dam/cancerorg/research/cancer-facts-and-statistics/cancer-treatment-and-survivorship-facts-and-figures/cancer-treatment-and-survivorshipfacts-and-figures-2016-2017.pdf.
\238\ Siegel, R.L., Miller, K.D., Jemal, A., ``Cancer
statistics, 2018,'' CA Cancer J Clin, 2018, vol. 68(1), pp. 7-30.
\239\ Tallman, M.S., ``New strategies for the treatment of acute
myeloid leukemia including antibodies and other novel agents,''
Hematology Am Soc Hematol Educ Program, 2005, pp. 143-50.
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According to the applicant, approximately 30 percent of adult
patients who have been diagnosed with AML are refractory, meaning
unresponsive, to induction therapy. Furthermore, of those who achieve
complete response (CR), approximately 75 percent will relapse. These
patients are then determined to have relapsed/refractory (R/R) AML.
According to the applicant, several chemotherapy regimens have been
used for the treatment of patients who have been diagnosed with
resistant or relapsed disease; however, the chemotherapy combinations
are universally dose-intensive and cannot always be easily administered
to older patients because of a high-risk of unacceptable toxicity. The
applicant indicated that, while these regimens may generate second
remission rates of up to 50 percent in patients with a first remission
of more than 1 year, toxicity is high in most patients who are frail or
over 60 years old.240 241 242 Additionally, the applicant
stated that if patients (including younger patients) relapse within 6
months of their initial CR, the chance of attaining a second remission
is less than 20 percent with chemotherapy alone.\243\ Furthermore, 5-
year survival after first relapse is approximately 10 percent,
demonstrating the lack of an effective cure for patients who have been
diagnosed with relapsed AML.\244\ Salvage therapy utilizing low-dose
chemotherapy provides a therapy that is more tolerable; however, the
low response rates (17 to 21 percent) makes the benefit of these agents
limited.245 246 Patients who are in second relapse or are
refractory to first salvage, meaning unresponsive to both the preferred
treatment, as well as the secondary choice of treatment, have an
extremely poor prognosis, with survival measured in weeks.\247\
Additionally, patients who have been diagnosed with R/R AML have poor
quality of life, higher hospitalization and total resource use burden,
and higher total healthcare costs.248 249 250 251
---------------------------------------------------------------------------
\240\ Rowe, J.M., Tallman, M.S., ``How I treat acute myeloid
leukemia,'' Blood, 2010, vol. 116(17), pp. 3147-56.
\241\ Breems, D.A., Van Putten, W.L., Huijgens, P.C.,
Ossenkoppele, G.J., Verhoef, G.E., Verdonck, L.F., et al.,
``Prognostic index for adult patients with acute myeloid leukemia in
first relapse,'' J Clin Oncol, 2005, vol. 23(9), pp. 1969-78.
\242\ Karanes, C., Kopecky, K.J., Head, D.R., Grever, M.R.,
Hynes, H.E., Kraut, E.H., et al., ``A Phase III comparison of high
dose ARA-C (HIDAC) versus HIDAC plus mitoxantrone in the treatment
of first relapsed of refractory acute myeloid leukemia Southwest
Oncology Group Study,'' Leuk Res, 1999, vol. 23(9), pp. 787-94.
\243\ Forman, S.J., Rowe, J.M., ``The myth of the second
remission of acute leukemia in the adult,'' Blood, 2013, vol.
121(7), pp. 1077-82.
\244\ Rowe, J.M., Tallman, M.S., ``How I treat acute myeloid
leukemia,'' Blood, 2010, vol. 116(17), pp. 3147-56.
\245\ Itzykson, R., Thepot, S., Berthon, C., et al.,
``Azacitidine for the treatment of relapsed and refractory AML in
older patients,'' Leuk Res, 2015, vol. 39, pp. 124-130.
\246\ Khan, N., Hantel, A., Knoebel, R., et al., ``Efficacy of
single-agent decitabine in relapsed and refractory acute myeloid
leukemia,'' Leuk Lymphoma, 2017, vol. 58, pp. 1-7.
\247\ Giles, F., O'Brien, S., Cortes, J., Verstovsek, S., Bueso-
Ramos, C., Shan, J., et al., ``Outcome of patients with acute
myelogenous leukemia after second salvage therapy,'' Cancer, 2005,
vol. 104(3), pp. 547-54.
\248\ Goldstone, A.H., et al., ``Attempts to improve treatment
outcomes in acute myeloid leukemia (AML) in older patients: the
results of the United Kingdom Medical Research Council AML11
trial,'' Blood, 2001, vol. 98(5), pp. 1302-1311.
\249\ Pandya, B.J., et al., ``Quality of life of Acute Myeloid
Leukemia Patients in a Real-World Setting,'' JCO, 2017, vol. 35(15)
suppl., e18525.
\250\ Medeiros, B.C., et al., ``Economic Burden of Treatment
Episodes in Acute Myeloid Leukemia (AML) Patients in the US: A
Retrospective Analysis of a Commercial Payer Database,'' ASH, 2017
Poster.
\251\ Aly, A., et al., ``Economic Burden of Relapsed/Refractory
AML in the U.S.,'' ASH, 2017 Poster.
---------------------------------------------------------------------------
The applicant indicated that patients who have been diagnosed with
AML with FLT3 positive mutations are a well-established subpopulation
of AML patients, but there are no approved therapies for patients who
have been diagnosed with R/R AML with FLT3 mutations. Approximately 30
percent of patients newly diagnosed with AML have mutations in the FLT3
gene.252 253 FLT3 is a member of the class III receptor
tyrosine kinase family that is normally expressed on the surface of
hematopoietic progenitor cells. FLT3 and its ligand play an important
role in proliferation, survival, and differentiation of multipotent
stem cells. The applicant explained that FLT3 is overexpressed in the
majority of patients diagnosed with AML. In addition, activated FLT3
with internal tandem duplication (ITD) or tyrosine kinase domain (TKD)
mutations at around D835 in the activation loop are present in 20
percent to 25 percent and
[[Page 19337]]
5 percent to 10 percent of AML cases, respectively.\254\ These
activated mutations in FLT3 are oncogenic and show transforming
activity in cells.\255\
---------------------------------------------------------------------------
\252\ The Cancer Genome Atlas Research Network, ``Genomic and
Epigenomic Landscapes of Adult De Novo Acute Myeloid Leukemia,'' N
Engl J Med, 2013, vol. 368(22), pp. 2059-2074.
\253\ Leukemia and Lymphoma Society Facts 2016-2017. Available
at: https://www.lls.org/facts-and-statistics/facts-and-statistics-overview, [Last accessed March 7, 2018].
\254\ Kindler, T., Lipka, D.B., Fischer, T., ``FLT3 as a
therapeutic target in AML: still challenging after all these
years,'' Blood, 2010, vol. 116(24), pp. 5089-102.
\255\ Yamamoto, Y., Kiyoi, H., Nakano, Y., Suzuki, R., Kodera,
Y., Miyawaki, S., et al., ``Activating mutation of D835 within the
activation loop of FLT3 in human hematologic malignancies,'' Blood,.
2001, vol. 97, pp. 2434-9.En
---------------------------------------------------------------------------
Compared to patients with wild-type FLT3, AML patients with FLT3
mutation experience shorter remission duration at 2 years, according to
the applicant. Approximately 30 percent of FLT3-ITD patients relapse
versus approximately 16 percent of other AML patients.\256\
Additionally, these patients experience poorer survival outcomes. The
estimated median OS for patients who have been newly diagnosed with
FLT3 mutations is 15.2 to 15.5 months compared to 19.3 to 28.6 months
for patients with wild-type FLT3.\257\ Patients who have been diagnosed
with R/R FLT3 mutation positive AML have lower remission rates with
salvage chemotherapy, shorter durations of remission to second relapse
and decreased overall survival relative to FLT3 mutation negative
patients.258 259 260 According to the applicant, patients
who have been diagnosed with FLT3 mutation positive R/R AML have a
substantial unmet medical need for treatment.
---------------------------------------------------------------------------
\256\ Brunet, S., et al., ``Impact of FLT3 Internal Tandem
Duplication on the Outcome of Related and Unrelated Hematopoietic
Transplantation for Adult Acute Myeloid Leukemia in First Remission:
A Retrospective Analysis,'' J Clin Oncol, March 1, 2012, vol. 30(7),
pp. 735-41.
\257\ Sotak, M.L., et al., ``Burden of Illness of FLT3 Mutated
Acute Myeloid Leukemia (AML),'' Blood, 2011, vol. 118(21), pp. 4765
4765.
\258\ Konig, H., Levis, M., ``Targeting FLT3 to treat leukemia.
Expert Opin Ther Targets,'' 2015, vol. 19(1), pp. 37-54.
\259\ Chevallier, P., Labopin, M., Turlure, P., Prebet, T.,
Pigneux, A., Hunault, M., et al., ``A new Leukemia Prognostic
Scoring System for refractory/relapsed adult acute myelogeneous
leukaemia patients: a GOELAMS study,'' Leukemia, 2011, vol. 25(6),
pp. 939-44.
\260\ Levis, M., Ravandi, F., Wang, E.S., Baer, M.R., Perl, A.,
Coutre, S., et al., ``Results from a randomized trial of salvage
chemotherapy followed by lestaurtinib for patients with FLT3 mutant
AML in first relapse,'' Blood, 2011, vol. 117(12), pp. 3294-301.
---------------------------------------------------------------------------
The applicant asserts that currently there are no unique ICD-10-PCS
codes to describe the administration of XOSPATA[supreg]. We note that
the applicant has submitted a request to the ICD-10 Coordination and
Maintenance Committee for approval for a unique ICD-10-PCS code to
identify procedures involving the use of XOSPATA[supreg], beginning in
FY 2020.
As discussed earlier, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and, therefore, would not be
considered ``new'' for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome, the
applicant asserted that XOSPATA[supreg] has a unique mechanism of
action and, therefore, should be considered new under this criterion.
The applicant stated that XOSPATA[supreg] is an oral, small molecule
FMS-like tyrosine kinase 3 (FLT3) inhibitor. According to the
applicant, XOSPATA[supreg] inhibits FLT3 receptor signaling and
proliferation in cells exogenously expressing FLT3, including FLT3
internal tandem duplication (ITD), tyrosine kinase domain mutations
(TKD) FLT3-D835Y and FLT3-ITD D835Y, and it induces apoptosis in
leukemic cells expressing FLT3-ITD. The applicant asserted that
XOSPATA[supreg] is the only FLT3-targeting agent approved by the FDA
for the treatment of relapsed or refractory FLT3mut+ AML.
With regard to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant asserted that cases
involving patients being medically treated for the type of AML
indicated for XOSPATA[supreg] would map to the following MS-DRGs: 834
(Acute Leukemia without Major O.R. Procedure with MCC), 835 (Acute
Leukemia without Major O.R. Procedure with CC), and 836 (Acute Leukemia
without Major O.R. Procedure without CC/MCC). Under current coding
conventions, it appears likely that cases involving treatment with the
use of XOSPATA[supreg] would map to the same MS-DRGs as existing
therapies.
With regard to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population when compared to an
existing technology, the applicant stated that XOSPATA[supreg] is FDA-
approved for the treatment of adult patients who have relapsed or
refractory AML with a FLT3 mutation. Cases representing potential
patients that may be eligible for treatment involving XOSPATA[supreg]
would be identified by ICD-10-CM diagnostic codes C92.02 (Acute
myeloblastic leukemia, in relapse) and C92.A2 (Acute myeloid leukemia
with multilineage dysplasia, in relapse). The applicant further
asserted that there are currently no other FLT3-targeting agents
approved for the treatment of patients who have been diagnosed with
relapsed or refractory FLT3mut+ AML. Therefore, the applicant asserted
that XOSPATA[supreg] is indicated to treat a new patient population for
which there are no other technologies currently available.
We are inviting public comments on whether XOSPATA[supreg] is
substantially similar to any existing technologies, and whether it
meets the newness criterion.
With regard to the cost criterion, the applicant conducted the
following analysis to demonstrate that the technology meets the cost
criterion.
The applicant searched the FY 2017 MedPAR data file for cases
reporting ICD-10-CM diagnosis codes C92.02 (Acute myeloblastic
leukemia, in relapse) and C92.A2 (Acute myeloid leukemia with
multilineage dysplasia, in relapse) listed as a primary or secondary
diagnosis that mapped to MS-DRGs 834, 835, and 836. The applicant
applied the following trims to the cases:
Excluded Health Maintenance Organization (HMO) and IME
Only claims;
Excluded cases for bone marrow transplant because
potential eligible patients who may receive treatment involving
XOSPATA[supreg] would not receive a bone marrow transplant during the
same admission as they received chemotherapy;
Excluded cases indicating an O.R. procedure;
Excluded cases treated at 8 providers that were not listed
in the FY 2019 IPPS/LTCH PPS final rule correction notice impact file
(these are predominately cancer hospitals).
After applying the trims above, 407 potential cases remained. The
applicant noted that it used only departmental charges that are used by
CMS for ratesetting.
Using the 407 cases, the applicant determined an average case-
weighted unstandardized charge per case of $166,389. The applicant then
removed all pharmacy charges because the applicant believed that
patients would typically receive other pharmaceuticals such as anti-
emetics during the hospital stay and patients receiving treatment
involving the use of XOSPATA[supreg] would continue to receive those
receive other pharmaceuticals. Additionally, according to the
applicant, blood charges were reduced because some patients receiving
treatment involving the use of XOSPATA[supreg] became infusion
independent in the clinical trial. The applicant standardized the
charges for each case and inflated each case's charges by applying the
proposed outlier charge inflation factor of 1.085868 (included in the
FY 2019
[[Page 19338]]
IPPS/LTCH PPS proposed rule (83 FR 20581)). The applicant calculated an
average case-weighted standardized charge per case of $157,034 using
the percent distribution of MS-DRGs as case-weights. Based on this
analysis, the applicant determined that the technology met the cost
criterion because the final inflated average case-weighted standardized
charge per case for XOSPATA[supreg] exceeded the average case-weighted
threshold amount of $88,479 by $68,555. As noted, the inflation factor
used by the applicant was the proposed 2-year inflation factor, which
was discussed in the FY 2019 IPPS/LTCH PPS final rule summation of the
calculation of the FY 2019 IPPS outlier charge inflation factor for the
proposed rule (83 FR 41718 through 41722). The final 2-year inflation
factor published in the FY 2019 IPPS/LTCH PPS final rule was 1.08864
(83 FR 41722), which was revised in the FY 2019 IPPS/LTCH PPS final
rule correction notice to 1.08986 (83 FR 49844).
We note that, although the applicant used the proposed rule value
to inflate the standardized charges, even when using the final rule
value or the corrected final rule value revised in the correction
notice to inflate the charges, the final inflated average case-weighted
standardized charge per case for XOSPATA[supreg] would exceed the
average case-weighted threshold amount. We are inviting public comments
on whether XOSPATA[supreg] meets the cost criterion.
With regard to substantial clinical improvement, the applicant
submitted one central study to support its assertion that
XOSPATA[supreg] represents a substantial clinical improvement over
existing technologies because it offers a treatment option for FLT3mut+
AML patients ineligible for currently available treatments. The
applicant also asserted that XOSPATA[supreg] represents a substantial
clinical improvement because the technology reduces mortality,
decreases the number of subsequent diagnostic or therapeutic
interventions, and reduces the number of future hospitalizations due to
adverse events as shown by its studies.\261\
---------------------------------------------------------------------------
\261\ Astellas, ``A Phase 3 Open-label, Multicenter, Randomized
Study of ASP2215 versus Salvage Chemotherapy in Patients with
Relapsed or Refractory Acute Myeloid Leukemia (AML) with FLT3
Mutation, Clinical Study Report,'' March 2018.
---------------------------------------------------------------------------
According to the applicant, the efficacy of XOSPATA[supreg] in the
treatment of patients who have been diagnosed with R/R AML has been
demonstrated in a U.S.-based, multi-national, active-controlled, Phase
III study (ADMIRAL, 2215-CL-0301). This study was designed to determine
the clinical benefit of the use of XOSPATA[supreg] in patients who have
been diagnosed with FMS-like tyrosine kinase (FLT3) mutated AML who are
refractory to, or have relapsed, after first-line AML therapy as shown
with overall survival (OS) compared to salvage chemotherapy, and to
determine the efficacy of the use of XOSPATA[supreg] as assessed by the
rate of complete remission and complete remission with partial
hematological recovery (CR/CRh) in these patients.\262\
---------------------------------------------------------------------------
\262\ Ibid.
---------------------------------------------------------------------------
In the ADMIRAL (2215-CL-0301) study, the applicant noted that
XOSPATA[supreg] demonstrated clinically meaningful CR and CRh rates, as
well as a clinically meaningful duration of CR/CRh in the patients
studied. The CR/CRh rate was 21.8 percent, with 31/142 patients
achieving a CR/CRh, 18/142 patients achieving CR (12.7 percent) and 13/
142 patients achieving a CRh (9.2 percent). Of the 31 patients (21.8
percent) who achieved CR/CRh, the median duration of remission was 4.5
months. For the 18 patients who achieved CR and the 13 patients who
achieved CRh, the median duration of response was 8.7 months and 2.9
months, respectively.\263\
---------------------------------------------------------------------------
\263\ Draft XOSPATA[supreg] (package insert) Northbrook, IL,
Astellas Pharma US, Inc., 2018.
---------------------------------------------------------------------------
The safety evaluation of XOSPATA[supreg] is based on 292 patients
who had been diagnosed with relapsed or refractory AML treated with 120
mg of XOSPATA[supreg] daily. The applicant noted that when looking at
the ADMIRAL study, the most common serious adverse events (SAEs) (Grade
III or above) were lab abnormalities of elevation of liver
transaminases in 43 (15 percent) of patients, fatigue in 14 (5 percent)
of patients, myalgia or arthralgia in 13 (5 percent) of patients, and
gastrointestinal disorders of diarrhea in 8 (3 percent) of patients and
nausea in 4 (1 percent) of patients. Due to the number and type of SAEs
reported, the applicant believed that XOSPATA[supreg] has the potential
to decrease the number of subsequent future hospitalizations or
physician visits as a result of management of adverse events, in
particular serious adverse events.
Transfusion dependence was also evaluated in the XOSPATA[supreg]-
treated patients. In some hematologic disorders, becoming transfusion
independent or receiving fewer transfusions over a specified interval
is defined as improvement or response depending on whether therapy is
given.\264\
---------------------------------------------------------------------------
\264\ Gale, R.P., Barosi, G., Barbui, T., Cervantes, F., Dohner,
K., Dupriez, B., et al., ``What are RBC-transfusion-dependence and -
independence?,'' Leuk. Res, 2011, vol. 35(1).
---------------------------------------------------------------------------
In the ADMIRAL study, at baseline prior to therapy initiation, 34
patients in the XOSPATA[supreg] arm were classified as transfusion
independent and 107 patients were classified as transfusion dependent.
Of these transfusion dependent patients, 34 (31.8 percent) patients
became transfusion independent during XOSPATA[supreg] treatment. Of the
34 patients who were transfusion independent at baseline, 18 (52.9
percent) patients maintained transfusion independence during
XOSPATA[supreg] treatment.
The applicant asserted that the use of XOSPATA[supreg] addresses a
medical need in a patient population that has been difficult to manage
in the past due to limited treatment options. In the ADMIRAL study, the
applicant provided data specific to reduced mortality rate compared to
historical data. Because of the small number of SAEs, the applicant
stated that it anticipates reduction of subsequent diagnostic and
therapeutic interventions, as well as decreased number of future
physician visits and hospitalization as noted previously. However, the
applicant did not provide direct numbers for the comparator arm of the
ADMIRAL study in its application. Because of this, we are concerned
that it may be difficult to determine XOSPATA[supreg]'s comparative
effectiveness. We note that, the ADMIRAL study was designed to evaluate
efficacy and head-to-head trials are lacking. Until the comparative
data for both randomized arms are available, we are concerned that
there may be insufficient evidence to determine that XOSPATA[supreg]
provides a substantial clinical improvement over existing technologies.
We are inviting public comments on whether XOSPATA[supreg] meets
the substantial clinical improvement criterion. We did not receive any
written public comments in response to the New Technology Town Hall
meeting notice published in the Federal Register regarding the
substantial clinical improvement criterion for XOSPATA[supreg] or at
the New Technology Town Hall meeting.
l. GammaTileTM
GT Medical Technologies, Inc. submitted an application for new
technology add-on payments for FY 2020 for the GammaTileTM.
We note that Isoray Medical, Inc. and GammaTile, LLC previously
submitted an application for new technology add-on payments for
GammaTileTM for FY
[[Page 19339]]
2018, which was withdrawn, and also for FY 2019, however the technology
did not receive FDA approval or clearance by July 1, 2018 and,
therefore, was not eligible for consideration for new technology add-on
payments. The GammaTileTM is a brachytherapy technology for
use in the treatment of patients who have been diagnosed with brain
tumors, which uses cesium-131 radioactive sources embedded in a
collagen matrix. GammaTileTM is designed to provide adjuvant
radiation therapy to eliminate remaining tumor cells in patients who
required surgical resection of brain tumors. According to the
applicant, the GammaTileTM technology is a new vehicle of
delivery for and inclusive of cesium-131 brachytherapy sources embedded
within the product. The applicant stated that the technology has been
manufactured for use in the setting of a craniotomy resection site
where there is a high chance of local recurrence of a CNS or dual-based
tumor. The applicant asserted that the use of the
GammaTileTM technology provides a new, unique modality for
treating patients who require radiation therapy to augment surgical
resection of malignancies of the brain. By offsetting the radiation
sources with a 3mm gap of a collagen matrix, the applicant asserted
that the use of the GammaTileTM technology resolves issues
with ``hot'' and ``cold'' spots associated with brachytherapy, improves
safety, and potentially offers a treatment option for patients with
limited, or no other, available options. The GammaTileTM is
biocompatible and bioabsorbable, and is left in the body permanently
without need for future surgical removal. The applicant asserted that
the commercial manufacturing of the product will significantly improve
on the process of constructing customized implants with greater speed,
efficiency, and accuracy than is currently available, and requires less
surgical expertise in placement of the radioactive sources, allowing a
greater number of surgeons to utilize brachytherapy techniques in a
wider variety of hospital settings.
The GammaTileTM technology received FDA clearance under
section 510(k) as a Class II medical device on July 6, 2018. The FDA
application included the indication for GammaTileTM to be
used to provide radiation therapy for patients who have been diagnosed
with recurrent intercranial neoplasms. The applicant submitted a
request for approval for a unique ICD-10-PCS code for the use of the
GammaTileTM technology, which was approved effective October
1, 2017 (FY 2018). The ICD-10-PCS procedure code used to identify
procedures involving the use of the GammaTileTM technology
is 00H004Z (Insertion of radioactive element, cesium-131 collagen
implant into brain, open approach).
As discussed earlier, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome, the
applicant stated that when compared to treatment using external beam
radiation therapy, GammaTileTM uses a new and unique
mechanism of action to achieve a therapeutic outcome. The applicant
explained that the GammaTileTM technology is fundamentally
different in structure, function, and safety from all external beam
radiation therapies, and delivers treatment through a different
mechanism of action. In contrast to external beam radiation modalities,
the applicant further explained that the GammaTileTM is a
form of internal radiation termed brachytherapy. According to the
applicant, brachytherapy treatments are performed using radiation
sources positioned very close to the area requiring radiation treatment
and deliver radiation to the tissues that are immediately adjacent to
the margin of the surgical resection. Conversely, external beam
radiation therapy travels inward and typically exposes radiation to a
large volume of normal brain tissue. As a result, the common clinical
practice to avoid radiation toxicity is to reduce dosage ranges,
limiting overall efficacy.
Due to the custom positioning of the radiological sources and the
use of the cesium-131 isotope, the applicant noted that the
GammaTileTM technology focuses therapeutic levels of
radiation on an extremely small area of the brain. Unlike all external
beam techniques, the applicant stated that this radiation does not pass
externally inward through the skull and healthy areas of the brain to
reach the targeted tissue and, therefore, may limit neurocognitive
deficits seen with the use of external beam techniques. Because of the
rapid reduction in radiation intensity that is characteristic of
cesium-131, the applicant asserted that the GammaTileTM
technology can target the margin of the excision with greater precision
than any alternative treatment option, while sparing healthy brain
tissue from unnecessary and potentially damaging radiation exposure.
The applicant also stated that, when compared to other types of
brain brachytherapy, GammaTileTM uses a new and unique
mechanism of action to achieve a therapeutic outcome. The applicant
explained that cancerous cells at the margins of a tumor resection
cavity can also be irradiated with the placement of brachytherapy
sources in the tumor cavity. However, the applicant asserted that the
GammaTileTM technology is a pioneering form of brachytherapy
for the treatment of brain tumors that uses the isotope cesium-131
embedded in a collagen implant that is customized to the geometry of
the brain cavity. According to the applicant, the use of cesium-131 and
the custom distribution of seeds offset in a three-dimensional collagen
matrix results in a unique and highly effective delivery of radiation
therapy to brain tissue. Specifically, the applicant asserted that the
offset radiation source permits only a prescribed radiation dose to
reach the target surface, reducing the potential for radiation induced
necrosis and the need for reoperation. Additionally, the applicant
stated that because the half-life of cesium-131 used in
GammaTileTM is shorter compared to other brachytherapy
isotopes, this results in a more rapid and effective energy deposition
than other isotopes with longer half-lives. Therefore, applicant
believes that GammaTileTM is unique due to the greater
relative biological effectiveness compared to other brachytherapy
options.
With regard to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the GammaTileTM
technology is a treatment option for patients who have been diagnosed
with brain tumors that progress locally after initial treatment with
external beam radiation therapy, and cases involving this technology
are assigned to the same MS-DRG (MS-DRG 023 (Craniotomy with Major
Device Implant/Acute Complex CNS PDX with MCC or Chemotherapy Implant))
as other current treatment forms of brachytherapy and external beam
radiation therapy.
With regard to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
stated that the GammaTileTM technology offers a treatment
option for a patient population with limited, or no other, available
treatment options. The applicant explained that treatment options for
patients who have been
[[Page 19340]]
diagnosed with brain tumors that progress locally after initial
treatment with external beam radiation therapy are limited, and there
is no current standard-of-care in this setting. According to the
applicant, surgery alone for recurrent tumors may provide symptom
relief, but does not remove all of the cancerous cells. The applicant
further stated that repeating external beam radiation therapy for
adjuvant treatment is hampered by an increasing risk of brain injury
because additional external beam radiation therapy will increase the
total dose of radiation to brain tissue, as well as increase the total
volume of irradiated brain tissue. Secondary treatment with external
beam radiation therapy is often performed with a reduced and, therefore
less effective, dose. The applicant stated that the technique of
implanting cesium-131 seeds in a collagen matrix is currently only
available to patients in one location and requires a high degree of
expertise to implant. The manufacturing process of the
GammaTileTM will greatly expand the availability of
treatment beyond research programs at highly specialized cancer
treatment centers.
Based on the above, the applicant concluded that the
GammaTileTM technology is not substantially similar to other
existing technologies and meets the newness criterion.
However, we are concerned that the mechanism of action of the
GammaTileTM may be the same or similar to current forms or
radiation therapy or brachytherapy. Specifically, while the placement
of the cesium-131 source (or any radioactive source) in a collagen
matrix offset may constitute a new delivery vehicle, we are concerned
that this sort of improvement in brachytherapy for the use in the
salvage treatment of radiosensitive malignancies of the brain may not
represent a new mechanism of action. We also question whether the
technology treats a new patient population, as maintained by the
applicant, because of the availability of other implantable treatment
devices that treat the same patient population as the patients treated
by the GammaTileTM.
We are inviting public comments on whether the
GammaTileTM technology is substantially similar to any
existing technologies and whether it meets the newness criterion.
With regard to the cost criterion, the applicant conducted the
following analysis. The applicant worked with the Barrow Neurological
Institute at St. Joseph's Hospital and Medical Center (St. Joseph's) to
obtain actual claims from mid-2015 through mid-2016 for craniotomies
that did not involve placement of the GammaTileTM
technology. The cases were assigned to MS-DRGs 025 through 027
(Craniotomy and Endovascular Intracranial Procedures with MCC, with CC,
and without CC/MCC, respectively). For the 460 claims, the average
case-weighted unstandardized charge per case was $143,831. The
applicant standardized the charges for each case and inflated each
case's charges by applying the outlier charge inflation factor of
1.04205 included in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41718)
by the age of each case (that is, the factor was applied to 2015 claims
3 times and 2016 claims 2 times). The applicant then calculated an
estimate for ancillary charges associated with placement of the
GammaTileTM device, as well as standardized charges for the
GammaTileTM device itself. The applicant determined it meets
the cost criterion because the final inflated average case-weighted
standardized charge per case (including the charges associated with the
GammaTileTM device) of $253,876 exceeds the average case-
weighted threshold amount of $143,749 for MS-DRG 023, the MS-DRG that
would be assigned for cases involving the GammaTileTM
device.
The applicant also noted, in response to a concern expressed by CMS
in the FY 2018 IPPS/LTCH PPS proposed rule, that its analysis does not
include a reduction in costs due to reduced operating room times. The
applicant stated that, while the use the device will reduce operating
times relative to the freehand placement of seeds in other brain
brachytherapy procedures, none of the claims in the cost analysis
involve such freehand placement. We are inviting public comments on
whether the GammaTileTM technology meets the cost criterion.
With regard to substantial clinical improvement, the applicant
stated that the GammaTileTM technology offers a treatment
option for a patient population unresponsive to, or ineligible for,
currently available treatments for recurrent CNS malignancies and
significantly improves clinical outcomes when compared to currently
available treatment options. The applicant explained that therapeutic
options for patients who have been diagnosed with large or recurrent
brain metastases are limited (for example, stereotactic radiotherapy,
additional EBRT, or systemic immunochemotherapy). However, according to
the applicant, the GammaTileTM technology provides a
treatment option for patients who have been diagnosed with
radiosensitive recurrent brain tumors that are not eligible for
treatment with any other currently available treatment option.
Specifically, the applicant stated that the GammaTileTM
device may provide the only radiation treatment option for patients who
have been diagnosed with tumors located close to sensitive vital brain
sites (for example, brain stem) and patients who have been diagnosed
with recurrent brain tumors who may not be eligible for additional
treatment involving the use of external beam radiation therapy. There
is a lifetime limit for the amount of radiation therapy a specific area
of the body can receive. Patients whose previous treatment includes
external beam radiation therapy may be precluded from receiving high
doses of radiation associated with subsequent external beam radiation
therapy, and the GammaTileTM technology can also be used to
treat tumors that are too large for treatment with external beam
radiation therapy. Patients who have been diagnosed with these large
tumors are not eligible for treatment with external beam radiation
therapy because the radiation dose to healthy brain tissue would be too
high.
The applicant summarized how the GammaTileTM technology
improves clinical outcomes compared to existing treatment options,
including external beam radiation therapy and other forms of brain
brachytherapy as: (1) Providing a treatment option for patients with no
other available treatment options; (2) reducing the rate of mortality
compared to alternative treatment options; (3) reducing the rate of
radiation necrosis; (4) reducing the need for re-operation; (5)
reducing the need for additional hospital visits and procedures; and
(6) providing more rapid beneficial resolution of the disease process
treatment.
The applicant cited several sources of data to support these
assertions. The applicant referenced a paper by Brachman, Dardis et
al., which was published in the Journal of Neurosurgery on December 21,
2018.\265\ This study, a follow-up on the progress of 20 patients with
recurrent previously irradiated meningiomasis, is a feasibility or
superior progression-free survival study comparing the patient's own
historical control rate against subsequent treatment with
GammaTileTM.
---------------------------------------------------------------------------
\265\ Brachman, D., et al., ``Resection and permanent
intracranial brachytherpay using modular, biocompatible cesium-131
implants: Results in 20 recurrent previously irradiated
meningiomas,'' J Neurosurgery, December 21, 2018.
---------------------------------------------------------------------------
An additional source of clinical data is from Gamma Tech's internal
review of data from two centers treating brain tumors with
GammaTileTM; the two
[[Page 19341]]
centers are the Barrow Neurological Institute (BNI) at St. Joseph's
Hospital and St. Joseph's Medical Center, Phoenix, AZ, and this
internal review is referred to herein as the ``BNI'' study.\266\ The
BNI study summarized Gamma Tech's experience with the
GammaTileTM technology. Another source of data that the
applicant cited to support its assertions regarding substantial
clinical improvement is an abstract by Pinnaduwage, D., et al. Also
submitted in the application were abstracts from 2014 through 2018 in
which updates from the progression-free survival study and the BNI
study were presented at specialty society clinical conferences. The
following summarizes the findings cited by the applicant to support its
assertions regarding substantial clinical improvement.
---------------------------------------------------------------------------
\266\ Brachman, D., et al., ``Surgery and Permanent
Intraoperative Brachytherapy Improves Time to Progress of Recurrent
Intracranial Neoplasms,'' Society for Neuro-Oncology Conference on
Meningioma, June 2016.
---------------------------------------------------------------------------
Regarding the assertion of local control, the 2018 article which
was published in the Journal of Neurosurgery found that, with a median
follow-up of 15.4 months (range 0.03-47.5 months), there were 2
reported cases of recurrence out of 20 meningiomas, with median
treatment site progression time after surgery and brachytherapy with
the GammaTileTM precursor and prototype devices not yet
being reached, compared to 18.3 months in prior instances. Median
overall survival after resection and brachytherapy was 26 months, with
9 patient deaths. In a presentation at the Society for Neuro-Oncology
in November 2014,\267\ the outcomes of 20 patients who were diagnosed
with 27 tumors covering a variety of histological types treated with
the GammaTileTM prototype were presented. The applicant
noted the following with regard to the patients: (1) All tumors were
intracranial, supratentorial masses and included low and high-grade
meningiomas, metastases from various primary cancers, high-grade
gliomas, and others; (2) all treated masses were recurrent following
treatment with surgery and/or radiation and the group averaged two
prior craniotomies and two prior courses of external beam radiation
treatment; and (3) following surgical excision, the prototype
GammaTileTM were placed in the resection cavity to deliver a
dose of 60 Gray to a depth of 5 mm of tissue; and (4) all patients had
previously experienced regrowth of their tumors at the site of
treatment and the local control rate of patients entering the study was
0 percent.
---------------------------------------------------------------------------
\267\ Dardis, C., ``Surgery and Permanent Intraoperative
Brachytherapy Improves Times to Progression of Recurrent
Intracranial Neoplasms,'' Society for Neuro-Oncology, November 2014.
---------------------------------------------------------------------------
With regard to outcomes, the applicant stated that, after their
initial treatment, patients had a median progression-free survival time
of 5.8 months; post treatment with the prototype
GammaTileTM, at the time of this analysis, only 1 patient
had progressed at the treatment site, for a local control rate of 96
percent; and median progression-free survival time, a measure of how
long a patient lives without recurrence of the treated tumor, had not
been reached (as this value can only be calculated when more than 50
percent of treated patients have failed the prescribed treatment).
The applicant also cited the findings from Brachman, et al. to
support local control of recurrent brain tumors. At the Society for
Neuro-Oncology Conference on Meningioma in June 2016,\268\ a second set
of outcomes on the prototype GammaTileTM was presented. This
study enrolled 16 patients with 20 recurrent Grade II or III
meningiomas, who had undergone prior surgical excision external beam
radiation therapy. These patients underwent surgical excision of the
tumor, followed by adjuvant radiation therapy with the prototype
GammaTileTM. The applicant noted the following outcomes: (1)
Of the 20 treated tumors, 19 showed no evidence of radiographic
progression at last follow-up, yielding a local control rate of 95
percent; 2 of the 20 patients exhibited radiation necrosis (1
symptomatic, 1 asymptomatic); and (2) the median time to failure from
the prior treatment with external beam radiation therapy was 10.3
months and after treatment with the prototype GammaTileTM
only 1 patient failed at 18.2 months. Therefore, the median treatment
site progression-free survival time after the prototype
GammaTileTM treatment had not yet been reached (average
follow-up of 16.7 months, range 1 to 37 months).
---------------------------------------------------------------------------
\268\ Brachman, D., et al, ``Surgery and Permanent
Intraoperative Brachytherapy Improves Time to Progress of Recurrent
Intracranial Neoplasms,'' Society for Neuro-Oncology Conference on
Meningioma, June 2016.
---------------------------------------------------------------------------
A third prospective study was accepted for presentation at the
November 2016 Society for Neuro-Oncology annual meeting.\269\ In this
study, 13 patients who were diagnosed with recurrent high-grade gliomas
(9 with glioblastoma and 4 with Grade III astrocytoma) were treated in
an identical manner to the cases described above. Previously, all
patients had failed the international standard treatment for high-grade
glioma, a combination of surgery, radiation therapy, and chemotherapy
referred to as the ``Stupp regimen.'' For the prior therapy, the median
time to failure was 9.2 months (range 1 to 40 months). After therapy
with a prototype GammaTileTM, the applicant noted the
following: (1) The median time to same site local failure had not been
reached and 1 failure was seen at 18 months (local control 92 percent);
and (2) with a median follow-up time of 8.1 months (range 1 to 23
months) 1 symptomatic patient (8 percent) and 2 asymptomatic patients
(15 percent) had radiation-related MRI changes. However, no patients
required re-operation for radiation necrosis or wound breakdown. Dr.
Youssef was accepted to present at the 2017 Society for Neuro-Oncology
annual meeting, where he provided an update of 58 tumors treated with
the GammaTileTM technology. At a median whole group follow-
up of 10.8 months, 12 patients (20 percent) had a local recurrence at
an average of 11.33 months after implant. Six and 18 month recurrence
free survival was 90 percent and 65 percent, respectively. Five
patients had complications, at a rate that was equal to or lower than
rates previously published for patients without access to the
GammaTileTM technology.
---------------------------------------------------------------------------
\269\ Youssef, E., ``C-131 Implants for Salvage Therapy of
Recurrent High Grade Gliomas,'' Society for Neuro-Oncology Annual
Meeting, November 2016.
---------------------------------------------------------------------------
In support of its assertion of a reduction in radiation necrosis,
the applicant also included discussion of a presentation by D.S.
Pinnaduwage, Ph.D., at the August 2017 annual meeting of the American
Association of Physicists in Medicine. Dr. Pinnaduwage compared the
brain radiation dose of the GammaTileTM technology with
other radioactive seed sources. Iodine-125 and palladium-103 were
substituted in place of the cesium-131 seeds. The study reported
findings that other radioactive sources reported higher rates of
radiation necrosis and that ``hot spots'' increased with larger tumor
size, further limiting the use of these isotopes. The study concluded
that the larger high-dose volume with palladium-103 and iodine-125
potentially increases the risk for radiation necrosis, and the
inhomogeneity becomes more pronounced with increasing target volume.
The applicant also cited a presentation by Dr. Pinnaduwage at the
August 2018 annual meeting of the American Association of Physicists in
Medicine, in which research findings demonstrated that seed migration
in
[[Page 19342]]
collagen tile implantations was relatively small for all tested
isotopes, with Cesium-13 showing the least amount of seed migration.
The applicant asserted that, when considered in total, the data
reported in these presentations and studies and the intermittent data
presented in their abstracts support the conclusion that a significant
therapeutic effect results from the addition of GammaTileTM
radiation therapy to the site of surgical removal. According to the
applicant, the fact that these patients had failed prior best available
treatments (aggressive surgical and adjuvant radiation management)
presents the unusual scenario of a salvage therapy outperforming the
current standard-of-care. The applicant noted that follow-up data
continues to accrue on these patients.
Regarding the assertion that GammaTileTM reduces
mortality, the applicant stated that the use of the
GammaTileTM technology reduces rates of mortality compared
to alternative treatment options. The applicant explained that studies
on the GammaTileTM technology have shown improved local
control of tumor recurrence. According to the applicant, the results of
these studies showed local control rates of 92 percent to 96 percent
for tumor sites that had local control rates of 0 percent from previous
treatment. The applicant noted that these studies also have not reached
median progression-free survival time with follow-up times ranging from
1 to 37 months. Previous treatment at these same sites resulted in
median progression-free survival times of 5.8 to 10.3 months.
The applicant further stated that the use of the
GammaTileTM technology reduces rates of radiation necrosis
compared to alternative treatment options. The applicant explained that
the rate of symptomatic radiation necrosis in the
GammaTileTM clinical studies of 5 to 8 percent is
substantially lower than the 26 percent to 57 percent rate of
symptomatic radiation necrosis requiring re-operation historically
associated with brain brachytherapy, and lower than the rates reported
for initial treatment of similar tumors with modern external beam and
stereotactic radiation techniques. The applicant indicated that this is
consistent with the customized and ideal distribution of radiation
therapy provided by the GammaTileTM technology.
The applicant also asserted that the use of the
GammaTileTM technology reduces the need for re-operation
compared to alternative treatment options. The applicant explained that
patients receiving a craniotomy, followed by external beam radiation
therapy or brachytherapy, could require re-operation in the following
three scenarios:
Tumor recurrence at the excision site could require
additional surgical removal;
Symptomatic radiation necrosis could require excision of
the affected tissue; and
Certain forms of brain brachytherapy require the removal
of brachytherapy sources after a given period of time.
However, according to the applicant, because of the high local
control rates, low rates of symptomatic radiation necrosis, and short
half-life of cesium-131, the GammaTileTM technology will
reduce the need for re-operation compared to external beam radiation
therapy and other forms of brain brachytherapy.
Additionally, the applicant stated that the use of the
GammaTileTM technology reduces the need for additional
hospital visits and procedures compared to alternative treatment
options. The applicant noted that the GammaTileTM technology
is placed during surgery, and does not require any additional visits or
procedures. The applicant contrasted this improvement with external
beam radiation therapy, which is often delivered in multiple fractions
that must be administered over multiple days. The applicant provided an
example where whole brain radiotherapy (WBRT) is delivered over 2 to 3
weeks, while the placement of the GammaTileTM technology
occurs during the craniotomy and does not add any time to a patient's
recovery.
Based on consideration of all of the data presented above, the
applicant believed that the use of the GammaTileTM
technology represents a substantial clinical improvement over existing
technologies.
We are concerned that the clinical efficacy and safety data
provided by the applicant may be limited. The findings presented appear
to be derived from relatively small case-studies and not data from FDA
approved clinical trials. While the applicant described increases in
median time to disease recurrence in support of clinical improvement,
we are concerned with the lack of analysis, meta-analysis, or
statistical tests that indicated that seeded brachytherapy procedures
represented a statistically significant improvement over alternative
treatments, such as external beam radiation or other forms of
brachytherapy. We also are concerned with the lack of studies involving
the actual manufactured device. Finally, while the FDA cleared
GammaTileTM under section 510(k), authorization to market
the device for the cleared indications, we note that the FDA's issuance
of a ``substantially equivalent determination'' did not indicate a
review of any specific superiority claims to a predicate device.
We are inviting public comments on whether the
GammaTileTM technology meets the substantial clinical
improvement criterion. We did not receive any written comments in
response to the New Technology Town Hall meeting notice published in
the Federal Register regarding the substantial clinical improvement
criterion for GammaTileTM or at the New Technology Town Hall
meeting.
m. Imipenem, Cilastatin, and Relebactam (IMI/REL) Injection
Merck & Co., Inc. submitted an application for new technology add-
on payments for IMI/REL for FY 2020. The applicant is seeking an
indication for IMI/REL for the treatment of patients 18 years of age
and older who have been diagnosed with: (a) Complicated intra-abdominal
infections (cIAI) caused by susceptible gram-negative microorganisms
where limited or no alternative therapies are available; and (b)
complicated urinary tract infections (cUTIs), including pyelonephritis,
caused by susceptible gram-negative microorganisms where limited or no
alternative therapies are available. The applicant stated that IMI/REL
does not currently have a trade name, although an NDA was accepted and
is being reviewed for IMI/REL.
The applicant reported that complicated intra-abdominal infections
are a subset of intra-abdominal infections, a term which includes a
diverse set of diseases. It is broadly defined as peritoneal
inflammation in response to micro-organisms, resulting in purulence in
the peritoneal cavity. Complicated intra-abdominal infections extend
beyond the source organ into the peritoneal space. These infections
cause peritoneal inflammation, and are associated with localized or
diffuse peritonitis. Localized peritonitis often manifests as an
abscess with tissue debris, bacteria, neutrophils, macrophages, and
exudative fluid contained in a fibrous capsule. Diffuse peritonitis is
categorized as primary, secondary, or tertiary peritonitis.\270\
---------------------------------------------------------------------------
\270\ Lopez, N., Kobayashi, L., Coimbra, R., ``A Comprehensive
review of abdominal infections,'' World J Emerg Surg, 2011, vol. 6,
pp. 7, Published February 23, 2011, doi:10.1186/1749-7922-6-7.
---------------------------------------------------------------------------
In addition, the applicant stated that complicated intra-abdominal
infections
[[Page 19343]]
are characterized by chills, rigors, or fever (temperature of greater
than or equal to 38.0 [deg]C); elevated white blood cell count (greater
than 10,000/mm\3\), or left shift (greater than 15 percent immature
PMNs); nausea or vomiting; dysuria, increased urinary frequency, or
urinary urgency; and lower abdominal pain or pelvic pain. Acute
pyelonephritis is characterized by chills, rigors, or fever
(temperature of greater than or equal to 38.0 [deg]C); elevated white
blood cell count (greater than 10,000/mm\3\), or left shift (greater
than 15 percent immature PMNs); nausea or vomiting; dysuria, increased
urinary frequency, or urinary urgency; flank pain; and costo-vertebral
angle tenderness on physical examination. Risk factors for infection
with drug-resistant organisms do not, on their own, indicate a
cUTI.\271\
---------------------------------------------------------------------------
\271\ Hooton, T. and Kalpana, G., ``Acute complicated urinary
tract infection (including pyelonephritis) in adults,'' In A. Bloom
(Ed.), UpToDate. Available at: https://www.uptodate.com/contents/acute-complicated-urinary-tract-infectionincluding-pyelonephritis-in-adults.
---------------------------------------------------------------------------
According to the applicant, IMI/REL is a fixed-dose combination of
imipenem/cilastatin (IMI), a [beta]-lactam (BL) antibacterial
(specifically, a carbapenem), and relebactam (REL), a novel [beta]-
lactamase inhibitor (BLI). The applicant stated that IMI was the first
marketed carbapenem when approved by the FDA in 1985. It is a sterile
formulation of imipenem (a thienamycin antibacterial) and cilastatin
sodium (inhibitor of the renal dipeptidase, dehydropeptidase-l). The
applicant asserted that IMI is stable against hydrolysis by many
extended spectrum [beta]-lactamases (ESBLs) and is frequently used for
the treatment of serious bacterial infections in which gram-negative
bacteria and/or anaerobes play a significant role. The applicant
additionally stated that REL is a non-[beta]-lactam, small molecule
diazabicyclooctane (DABCO) BLI with inhibitory activity against various
[beta]-lactamases: Class A carbapenemases (such as KPC), Class C
cephalosporinases (including AmpC), and ESBLs.
The applicant stated that procedures involving the administration
of IMI/REL could be, generally, identified with ICD-10-PCS codes
3E03329 (Introduction of other anti-infective into peripheral vein,
percutaneous approach) or 3E04329 (Introduction of other anti-infective
into central vein, percutaneous approach). However, neither code would
uniquely identify procedures involving the administration of IMI/REL.
The applicant has submitted a request to the ICD-10 Coordination and
Maintenance Committee for approval for an ICD-10-PCS procedure code to
distinctly identify procedures involving the administration of IMI/REL.
The applicant anticipates that the recommended dosage of IMI/REL
will be 500 mg imipenem/500 mg cilastatin/250 mg relebactam, via
intravenous infusion over 30 minutes every 6 hours. The applicant
anticipates that the dosage will be decreased proportionally with
decreases in the renal creatinine clearance category.
As discussed earlier, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether the product uses the
same or a similar mechanism of action as an existing technology to
achieve the same therapeutic outcome, the applicant stated that IMI/
REL's mechanism of action differentiates it from other approved
injectable antibiotics. The applicant noted that there are three other
BL/BLI antibiotics that have recently been FDA-approved, including
Zerbaxa[supreg], Avycaz[supreg], and VABOMERETM. However,
the applicant stated that the properties of REL, a non-[beta]-lactam,
small molecule diazabicyclooctane (DABCO) BLI with inhibitory activity
against various [beta]-lactamases including: Class A carbapenemases
(such as KPC), Class C cephalosporinases (including AmpC), and ESBLs,
when combined with imipenem and cilastatin, used as [beta]-lactams,
gives IMI/REL a different mechanism of action from that of the
aforementioned BL/BLI antibiotics. The applicant provided comparisons
of efficacy with other BL/BLI antibiotics as evidence of IMI/REL's
unique mechanism of action, and asserted that the combination of REL
and IMI would be efficacious in most imipenem-resistant strains at
clinically achievable doses and concentrations, and that both IMI and
REL are not subject to efflux pumps in P. aeruginosa. The applicant
additionally submitted several studies that noted that REL, as a non-
[beta]-lactam, small-molecule BLI with dual Class A/C activity, is
suited to inactivate [beta]-lactamase subtypes involved in carbapenem
resistance.272 273 By inhibiting these [beta]-lactamases,
the applicant claims that REL has the potential to restore IMI's
efficacy against MDR pathogens previously expressing resistance to IMI.
---------------------------------------------------------------------------
\272\ Sims, et al., ``Prospective, randomized, double-blind,
Phase 2 dose-ranging study comparing efficacy and safety of
imipenem/cilastatin plus relebactam with imipenem/cilastatin alone
in patients with complicated urinary tract infections.'' Journal of
Antimicrobial Chemotherapy. 2017.
\273\ Rhee, et al., ``Pharmacokinetics, Safety, and Tolerability
of Single and Multiple Doses of Relebactam, a b-LactamaseInhibitor,
in Combination with Imipenem and Cilastatin in Healthy
Participants.'' Antimicrobial Agents and Chemotherapy, 2018.
---------------------------------------------------------------------------
With respect to the second criterion, whether the product is
assigned to the same or a different MS-DRG as existing technologies,
the applicant asserted that patients who may be eligible to receive
treatment involving IMI/REL include hospitalized patients who have been
diagnosed with a cUTI or cIAI. We expect that cases involving IMI/REL
would most likely be assigned to the same MS-DRGs to which cases
involving comparator treatments are assigned.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
asserted that the use of IMI/REL would treat a different patient
population than existing and currently available treatment options. As
previously noted, the applicant submitted several studies that noted
REL, as a non-[beta]-lactam, small-molecule BLI with dual Class A/C
activity, is suited to inactivate [beta]-lactamase subtypes involved in
carbapenem resistance.274 275 By inhibiting these [beta]-
lactamases, the applicant asserts that REL has the potential to restore
IMI's efficacy against MDR pathogens previously expressing resistance
to IMI and, therefore, to extend treatment to patient populations that
might have previously been resistant to IMI. Additionally, the
applicant compared the administration of IMI/REL to other comparator
antibiotics to demonstrate its unique place in the armamentarium,
beginning with three older antibiotics. First, in comparison to
polymyxins, the applicant asserts that even in colistin-derived
preparations of polymyxins, nephrotoxicity is still evident and is the
potential adverse experience of most
[[Page 19344]]
concern to prescribing clinicians,\276\ and further asserted that
neither polymyxin B nor colistin have been subjected to contemporary
drug development procedures.\277\ Second, the applicant asserted that
clinical data for fosfomycin in the treatment of MDR bacterial
infections are very scarce. Third, the applicant stated that
tigecycline does not have activity against Pseudomonas spp.\278\
Furthermore, in a safety announcement released by the FDA in 2013, it
was noted that an increased risk of death was observed with tigecycline
compared to other antibacterials used to treat similar infections.\279\
---------------------------------------------------------------------------
\274\ Sims, et al., ``Prospective, randomized, double-blind,
Phase 2 dose-ranging study comparing efficacy and safety of
imipenem/cilastatin plus relebactam with imipenem/cilastatin alone
in patients with complicated urinary tract infections.'' Journal of
Antimicrobial Chemotherapy, 2017.
\275\ Rhee, et al., ``Pharmacokinetics, Safety, and Tolerability
of Single and Multiple Doses of Relebactam, a b-LactamaseInhibitor,
in Combination with Imipenem and Cilastatin in Healthy
Participants.'' Antimicrobial Agents and Chemotherapy, 2018.
\276\ Dalfino, L, et al., ``High-Dose, extended-interval
colistin administration in critically ill patients: is this the
right dosing strategy? A preliminary study,'' Clin Infect Dis, 2012,
vol. 54(12), pp. 1720-6.
\277\ American Thoracic Society, Infectious Diseases Society of
America, ``Guidelines for the management of adults with hospital
lacquired, ventilator-associated, and healthcare-associated
pneumonia,'' Am J Respir Crit Care Med, 2005, vol. 171, pp. 388-416.
\278\ Giamarellou, H., Poulakou, G., ``Multidrug-resistant gram-
negative infections; what are the treatment options? Drugs,'' Drugs,
2009, vol, 69(14), pp. 1879-1901.
\279\ FDA Drug Safety Communication: ``FDA warns of increased
risk of death with IV antibacterial Tygacil (tigecycline) and
approves new Boxed Warning'', Accessed at https://www.fda.gov/Drugs/DrugSafety/ucm369580.htm on 11/10/2018.
---------------------------------------------------------------------------
The applicant also compared the administration of IMI/REL to the
three other aforementioned BL/BLI antibiotics. First, the applicant
asserted that the use of tazobactam in Zerbaxa[supreg] is not effective
against KPC-producing bacteria \280\ and some highly drug-resistant
strains of P. aeruginosa, including some carbapenem-resistant (CR)
strains, which are able to escape the antipseudomonal activity of
Zerbaxa[supreg]. Second, the applicant asserted that there have been
recent reports of resistance to Avycaz[supreg],281 282
including in a recent report published by the European Centre for
Disease Prevention and Control (ECDC).\283\ The applicant reports that
additionally, avibactam has been shown to be subject to efflux in P.
aeruginosa, which the applicant asserts casts further concerns
regarding its utility.284 285 Third, the applicant asserted
that the use of vaborbactam in VABOMERETM has little impact
on the activity of meropenem in vitro against CR P. aeruginosa,
arguably due to vaborbactam being subject to efflux.286 287
In addition, the applicant stated that the U.S. Prescribing Information
(USPI) for VABOMERETM indicates that vaborbactam has no
effect on meropenem activity against meropenem-susceptible
isolates.\288\
---------------------------------------------------------------------------
\280\ Papp-Wallace, K.M., et al., ``Substrate selectivity and a
novel role in inhibitor discrimination by residue 237 in the KPC-2
betalactamase,'' Antimicrob Agents Chemother, Jul 2010, vol. 54(7).
pp. 2867-77, doi: 10.1128/AAC.00197-10, Epub 2010, Apr 26.
\281\ Shields, R.K., et al., ``Emergence of ceftazidime-
avibactam resistance due to plasmid-borne blaKPC-3 mutations during
treatment of carbapenem-resistant Klebsiella pneumoniae
infections,'' Antimicrob Agents Chemother, Feb 23, 2017, vol.
;61(3), pii: e02097-16, doi: 10.1128/AAC.02097-16, Print 2017 Mar.
\282\ Haidar, G,, et al., ``Identifying spectra of activity and
therapeutic niches for ceftazidime-avibactam and imipenem relebactam
against carbapenemresistant Enterobacteriaceae,'' Antimicrob Agents
Chemother, 2017, vol. 61, pp. e00642-17.
\283\ European Centre for Disease Prevention and Control,
``Emergence of resistance to ceftazidime-avibactam in carbapenem-
resistant Enterobacteriaceae, 12 June 2018,'' Stockholm; ECDC; 2018.
\284\ Poster presented at ECCMID 2017 (Apr 22-25), Vienna
(Austria). EP0469: Avibactam is a substrate for MexAB-OprM in
P.aeruginosa.
\285\ Chalhoub, H., et al., ``Loss of activity of ceftazidime-
avibactam due to Mex-AB-OprM efflux and overproduction of AmpC
cephalosporinase in Pseudomonas aeruginosa isolated from patients
suffering from cystic fibrosis,'' Int J Antimicrob Agents, August 3,
2018, pii: S0924-8579(18)30226-7, doi: 10.1016/
j.ijantimicag.2018.07.027. [Epub ahead of print].
\286\ Castanheira, M., et al., ``Meropenem-Vaborbactam Tested
against contemporary gram-negative isolates collected worldwide
during 2014, including carbapenem-resistant, KPC-producing,
multidrug-resistant, and extensively drug-resistant
Enterobacteriaceae,'' Antimicrob Agents Chemother. August, 24, 2017,
vol. 61(9), pii: e00567-17, doi: 10.1128/AAC.00567-17, Print
September 2017.
\287\ Zhanel, G.G., et al., ``Imipenem-relebactam and meropenem-
vaborbactam: two novel carbapenem-[beta]-lactamase inhibitor
combinations,'' Drugs, January 2018, vol. 78(1), pp. 65-98, doi:
10.1007/s40265-017-0851-9.
\288\ USPI for VABOMERETM.
---------------------------------------------------------------------------
Finally, the applicant compared the administration of IMI/REL to
two additional antibiotics. First, the applicant asserted that
XeravaTM has no activity against P. aeruginosa.\289\ Second,
the applicant asserted that aminoglycosides, including
ZemdriTM, usually have minimal lung penetration, limiting
potential efficacy in HABP/VABP. The applicant stated that currently
used aminoglycosides are associated with nephrotoxicity and
ototoxicity, and, outside of UTI, are rarely given as single agents in
the treatment of serious bacterial infections. The applicant stated
that the approved USPI for ZemdriTM includes black-box
warnings for nephrotoxicity, ototoxicity, neuromuscular blockade, and
fetal harm.\290\
---------------------------------------------------------------------------
\289\ USPI for XeravaTM.
\290\ USPI for ZemdriTM.
---------------------------------------------------------------------------
We are concerned that the mechanism of action of IMI/REL may be
similar to the mechanism of action of other BL/BLI antibiotics. While
we recognize that REL is used as a unique molecular structure with
respect to other BLIs in BL/BLI combination, the fundamental mechanism
of action of IMI/REL may be similar to that of other BL/BLIs.
Additionally, with respect to whether the use of IMI/REL would treat a
different patient population than existing treatment options, we note
that, while the variety of antibiotic resistance-patterns certainly
warrants a varied armamentarium for clinicians, there are existing
antimicrobials that are approved to, generally, treat diagnoses of
cUTIs, cIAIs, and MDR pathogens. We are concerned that non-uniform
resistance patterns among patients, necessitating a range of drugs to
treat the same diseases, may not constitute a new patient population.
We are inviting public comments on whether the IMI/REL technology is
substantially similar to any existing technologies and whether it meets
the newness criterion, including with respect to the concerns we have
raised.
The applicant conducted the following analysis to demonstrate that
the technology meets the cost criterion. To determine the MS-DRGs that
potential cases representing patients who may be eligible for treatment
involving the administration of IMI/REL would map to, the applicant
identified all MS-DRGs containing cases that reported ICD-10-CM
diagnosis codes for cUTI or cIAI, as a primary or secondary diagnosis,
as well as a diagnosis code(s) for CRE resistance. Based on the FY 2017
MedPAR data file and Hospital Limited Data Set (LDS), the applicant
identified a total of 21,111 cases representing patients who may be
eligible for treatment with the administration of IMI/REL, which mapped
to 441 unique MS-DRGs. There were 307 MS-DRGs with very minimal
frequencies (fewer than 11 cases), and a total of 1,138 cases
associated with these low-volume MS-DRGs. After trimming the cases that
were mapped to low-volume MS-DRGS, the applicant identified 19,973
cases that were mapped to 134 unique MS-DRGs, with the top 10 MS-DRGs
covering approximately 74.3 percent of all identified cases.
Using 100 percent of the 19,973 cases considered, the applicant
determined an average case-weighted unstandardized charge per case of
$60,506. The applicant standardized the charges for each case and
inflated each case's charges by applying the FY 2019 IPPS/LTCH PPS
final rule outlier charge inflation factor of 1.08864 (83 FR 41722).
(We note that this 2-year charge inflation factor was revised in the FY
2019 IPPS/LTCH PPS final rule correction notice. The corrected factor
is 1.08986 (83 FR 49844). However, we further note that even when using
the corrected final rule values to inflate the
[[Page 19345]]
charges, the average case-weighted standardized charge per case for
each scenario exceeded the average case-weighted threshold amount.) The
applicant then removed 100 percent of the drug charges from the
relevant cases to estimate the charges for drugs that potentially may
be replaced or avoided by the administration of IMI/REL. The applicant
then added charges for the administration of IMI/REL by taking the cost
of the drug and converting it to a charge by dividing the costs by the
national average CCR of 0.191 for drugs from the FY 2019 IPPS/LTCH PPS
final rule (83 FR 41273). The applicant calculated an average case-
weighted standardized charge per case of $74,778, using the percent
distribution of MS-DRGs as case-weights. Based on this analysis, the
applicant determined that the final inflated average case-weighted
standardized charge per case for cases involving the administration of
IMI/REL exceeded the average case-weighted threshold amount of $50,417
by $24,361.
The applicant conducted additional analysis to demonstrate that the
technology meets the cost criterion. In these analyses, the applicant
repeated the cost analysis above with one analysis of cases with a
diagnosis of cUTI and the other analysis of cases with a diagnosis of
cIAI. In each of these additional sensitivity analyses, the applicant
determined that the final inflated average case-weighted standardized
charge per case exceeded the final average case-weighed threshold
amount, by $21,677 and $44,119, respectively. We are inviting public
comments on whether the administration of IMI/REL meets the cost
criterion.
With regard to substantial clinical improvement, the applicant
believes that the administration of IMI/REL represents a substantial
clinical improvement over currently available therapies because of the
efficacy and safety results of the completed Phase III trial RESTORE-
IMI 1. RESTORE-IMI 1 included 47 subjects who were randomized in a
randomized, double-blind, active-controlled, parallel group, multi-
center Phase III trial of IMI/REL (provided together in a single vial
as a fixed-dose combination product) + placebo compared with colistin
(in the form of colistimethate sodium [CMS]) + IMI in patients with
imipenem non-susceptible bacterial infections, including HABP/VABP,
cIAI, and cUTI. The primary efficacy endpoint for RESTORE-IMI 1 was
overall response based on the following: (a) All-cause mortality
through Day 28 post-randomization in patients who had been diagnosed
with HABP/VABP, (b) clinical response at Day 28 post-randomization for
patients who had been diagnosed with cIAI, and (c) composite clinical
and microbiological response at early follow-up (EFU) (Day 5 to 9
following completion of therapy) for patients who had been diagnosed
with cUTI. Key secondary efficacy endpoints include estimation of
clinical response at Day 28 post-randomization and all-cause mortality
through Day 28. A favorable clinical response for all infection sites
refers to resolution of baseline clinical signs and symptoms associated
with the baseline infection. The primary efficacy analysis population
for this study is the microbiological modified intent-to treat (m-MITT)
population (31 patients), defined as all randomized patients who
received at least one dose of the study drug within a given stage/phase
IV study therapy regimen, and who had been diagnosed with a qualifying
baseline bacterial pathogen.
With respect to efficacy, the applicant stated that the
administration of IMI/REL demonstrates a substantial clinical
improvement due to the following three study results: (1) Numerically
comparable overall response of the use of IMI/REL compared to CMS +
IMI, (2) numerically favorable clinical response at Day 28 for the use
of IMI/REL compared to CMS + IMI, and (3), numerically lower all-cause
mortality at Day 28. First, the applicant indicated that a favorable
overall response (primary endpoint) was achieved in 71.4 percent of the
patients who received treatment involving IMI/REL + placebo and 70.0
percent of the patients who received treatment with CMS + IMI.\291\
Second, the applicant asserted that favorable clinical response
(secondary endpoint) was achieved by a higher percentage of the
patients who received treatment involving IMI/REL + placebo (71.4
percent) than patients who received treatment with CMS + IMI (40.0
percent) at Day 28, as well as at all other time points assessed.\292\
Third, the applicant states that all-cause mortality at Day 28 favored
IMI/REL + placebo (9.5 percent) over CMS + IMI (30 percent), although
the difference was not statistically significant at the 90 percent
level.
---------------------------------------------------------------------------
\291\ Motsch, J. et al., ``RESTORE-IMI 1: A Multicenter,
Randomized, Double-Blind, Comparator-Controlled Trial Comparing the
Efficacy and Safety of Imipenem/Relebactam vs Colistin Plus Imipenem
in Patients With Imipenem-Non-susceptible Bacterial Infections.''
\292\ Ibid.
---------------------------------------------------------------------------
With respect to safety, the applicant indicated that the primary
population used for all safety evaluations was the All-Subjects-as-
Treated (ASaT) population, which comprises all patients who received at
least one dose of the study medication. The applicant stated that the
incidence of AEs, including deaths, SAEs, drug-related AEs and SAEs,
and discontinuations due to AEs, was lower in patients who received
treatment involving the administration of IMI/REL + placebo than in
patients who received treatment involving the CMS + IMI. Overall, the
most commonly reported AEs (greater than or equal to 10 percent of the
patients overall) across both treatment groups were pyrexia (12.8
percent of the patients), increased AST (12.8 percent of the patients),
increased ALT (10.6 percent), and nausea (10.6 percent of subjects).
The incidences of increased AST, increased ALT, and nausea were lower
in patients who received treatment involving IMI/REL + placebo than in
patients who received treatment involving CMS + IMI. The applicant
further stated that in accounting for nephrotoxicity associated with
the use of CMS, a pre-specified key secondary objective of the study
was to estimate the proportion of patients who experienced treatment-
emergent nephrotoxicity following receipt of treatment involving IMI/
REL + placebo or CMS + IMI and to compare the treatment groups. From
this analysis, the applicant concluded that the incidence of treatment-
emergent nephrotoxicity was significantly lower in patients who
received treatment involving IMI/REL + placebo (10.3 percent) than in
patients who received treatment involving CMS + IMI (56.3 percent)
(two-sided p-value of 0.002).
We have the following concerns regarding whether IMI/REL meets the
substantial clinical improvement criterion. First, we are concerned
regarding the comparator chosen for the RESTORE-IMI 1 trial. We are not
certain why the combination of CMS + IMI was chosen, and if other
comparators would have been more appropriate. Second, 8 of the 21 cases
in the m-MITT population treated with IMI/REL were cases of HABP/
VABP,\293\ and further 7 out of the 15 cases of positive clinical
response in the m-MITT population to IMI/REL were cases of HABP/
VABP.\294\ Because HABP/VABP are not conditions for which the applicant
is seeking indications for IMI/REL, it is possible that conclusions
drawn from the RESTORE-IMI 1 study regarding safety and efficacy are
not specific to those indications described
[[Page 19346]]
in the application. Third, the favorable clinical response after Day 28
is measured at the 90 percent confidence level,\295\ rather than the
more common 95 percent level, without explanation. Fourth, we note that
the study is composed of an initial sample of only 47 patients.\296\
With such a small sample we are concerned about the external validity
of the conclusions, specifically the generalizability of the results to
the Medicare population, given the specific demographic makeup of that
population. Fifth, we have another methodological concern regarding the
different endpoints present in the study, along with the Day 28
assessment. We note that HABP/VABP, cUTI, and cIAI are measured
respectively by mortality, favorable clinical response (cure), and
favorable clinical response (cure OR sustained eradication).\297\ We
are uncertain why different endpoints were chosen for the different
conditions. Additionally, we are uncertain if the Day 28 assessment
cited in the application reflects microbiological or just clinical
response. Sixth, the applicant defined the m-MITT and ASaT populations
as those patients who received at least one dose of the study drug. We
are not certain whether these analyses should also include those
patients in the comparator arm who did not receive the study drug, as
this could violate the applicant's definition of m-MITT. Seventh, CMS
also notes that both the estimated difference in the favorable overall
response at the primary endpoint and the estimated difference in all-
cause mortality are not statistically significant \298\ and, therefore,
may not represent a substantial clinical improvement. Finally, in
addition, with respect to safety, the applicant asserted that the
administration of IMI/REL induces less nephrotoxicity compared to the
use of CMS + IMI. However, nephrotoxicity is a known adverse effect of
CMS, and other available antimicrobials approved to treat diagnoses of
cUTIs and cIAIs induce less nephrotoxicity (and were not studied in the
data provided to support this application). Therefore, it is not clear
that IMI/REL induces less nephrotoxicity compared to other available
treatments.
---------------------------------------------------------------------------
\293\ 18-1315-D MRPAB18303 IDWeek SmMITT_final.
\294\ Ibid.
\295\ 18-1315-C MRPAB18304 IDWeek Nephrotoxicity_final.
\296\ Ibid.
\297\ 18-1315-D MRPAB18303 IDWeek SmMITT_final.
\298\ Kaye, K.S., et al., ``Results for the Supplemental
Microbiological Modified Intent-to-Treat (SmMITT) Population of the
RESTORE-IMI 1 Trial of Imipenem/Cilastatin/Relebactam Versus
Colistin Plus Imipenem/Cilastatin in Patients With Imipenem-
Nonsusceptible.''
---------------------------------------------------------------------------
We are inviting public comments on whether IMI/REL meets the
substantial clinical improvement criterion, including with respect to
the concerns we have raised. We did not receive any written comments in
response to the New Technology Town Hall meeting notice published in
the Federal Register regarding the substantial clinical improvement
criterion for IMI/REL or at the New Technology Town Hall meeting.
n. JAKAFITM (Ruxolitinib)
Incyte Corporation submitted an application for new technology add-
on payments for JAKAFITM (ruxolitinib) for FY 2020.
JAKAFITM is an oral kinase inhibitor that inhibits Janus-
associated kinases 1 and 2 (JAK1/JAK2). The JAK pathway, which includes
JAK1 and JAK2, is involved in the regulation of immune cell maturation
and function. According to the applicant, JAK inhibition represents a
novel therapeutic approach for the treatment of acute graft-versus-host
disease (GVHD) in patients who have had an inadequate response to
corticosteroids.
Allogeneic hematopoietic stem cell transplantation (allo-HSCT) is a
treatment option for patients who have been diagnosed with hematologic
cancers, some solid tumors, and some non-malignant hematologic
disorders. According to the applicant, approximately 9,000 allo-HSCTs
were performed in the U.S. in 2017. The most common cause of death in
allo-HSCT recipients within the first 100 days is relapsed disease (29
percent), infection (16 percent), and GVHD (9 percent).\299\ GVHD is a
condition where donor immunocompetent cells attack the host tissue.
GVHD can be acute (aGVHD), which generally occurs prior to day 100, or
chronic (cGVHD). aGVHD results in systemic inflammation and tissue
destruction affecting multiple organs. Systemic corticosteroids are
used as first-line therapy for the treatment of a diagnosis of aGVHD,
with response rates between 40 percent and 60 percent. However, the
response is often not durable, and there is no consensus on optimal
second-line treatment.\300\ The applicant envisions the use of
JAKAFITM as second-line treatment (that is, first-line
steroid treatment failures) for the treatment of a diagnosis of
steroid-refractory aGVHD.
---------------------------------------------------------------------------
\299\ D'Souza, A., Lee, S., Zhu, X., Pasquini, M., ``Current use
and trends in hematopoietic cell transplantation in the United
States,'' Biol Blood Marrow Transplant, 2017, vol. 23(9), pp. 1417-
1421.
\300\ Martin, P.J., Rizzo, J.D., Wingard, J.R., et al., ``First
and second-line systemic treatment of acute graft-versus-host
disease: recommendations of the American Society of Blood and Marrow
Transplantation,'' Biol Blood Marrow Transplant, 2012, vol. 18(8),
pp. 1150-1163.
---------------------------------------------------------------------------
The applicant reports that there are no FDA-approved treatments for
patients who have been diagnosed with steroid-refractory aGVHD, and
despite available treatment options, according to the applicant,
patients do not always achieve a positive response, underscoring the
need for new and innovative treatments for these patients. The
applicant also states that patients who develop steroid-refractory
aGVHD can progress to severe disease, with 1-year mortality rates of 70
to 80 percent. A number of combination treatment approaches are being
investigated as second-line therapy in patients who have been diagnosed
with steroid-refractory aGVHD, including methotrexate, mycophenolate
mofetil, extracorporeal photopheresis, IL-2R targeting agents
(basiliximab, daclizumab, denileukin, and diftitox), alemtuzumab, horse
antithymocyte globulin, etancercept, infliximab, and sirolimus.
According to the applicant, the American Society for Blood and Marrow
Transplantation (ASBMT) does not provide any recommendations for
second-line therapy for patients who have been diagnosed with steroid-
refractory aGVHD, nor suggest avoidance of any specific agent.
JAKAFITM received FDA approval in 2011 for the treatment
of patients who have been diagnosed with intermediate or high-risk
myelofibrosis (MF). In addition, JAKAFITM received FDA
approval in December 2014 for the treatment of patients who have been
diagnosed with polycythemia vera (PV) who have had an inadequate
response to, or are intolerant of hydroxyurea. JAKAFITM is
primarily prescribed in the outpatient setting for these indications.
The applicant has submitted a supplemental new drug application (sNDA)
(with Orphan Drug and Breakthrough Therapy designations) seeking FDA's
approval for a new indication for JAKAFITM for the treatment
of patients who have been diagnosed with steroid-refractory aGVHD who
have had an inadequate response to treatment with corticosteroids. The
applicant asserts that for this new indication, JAKAFITM is
expected to be used in the inpatient setting, during either hospital
admission for allo-HSCT, or upon need for hospital re-admission for
treating patients who have been diagnosed with aGVHD who have had an
inadequate response to treatment with corticosteroids. Although as of
the time of the development of this FY 2020 IPPS/LTCH PPS proposed rule
it has not yet received FDA approval, the applicant
[[Page 19347]]
indicated that it expects FDA approval for this new indication for the
use of JAKAFITM prior to the July 1, 2019 deadline.
There are currently no ICD-10-PCS procedure codes that uniquely
identify the administration of JAKAFITM. We note that the
applicant submitted a request for approval for a unique ICD-10-PCS
procedure code to describe procedures involving the administration of
JAKAFITM beginning in FY 2020.
As stated above, if a technology meets all three of the substantial
similarity criteria described above, it would be considered
substantially similar to an existing technology and, therefore, would
not be considered ``new'' for purposes of new technology add-on
payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome, the
applicant asserts that there are no products that utilize the same or
similar mechanism of action (that is, JAK inhibition) to achieve the
same therapeutic outcome for the treatment of acute steroid-resistant
GVHD. The applicant further explained that JAKAFITM
functions to inhibit the JAK pathway, and has been shown in pre-
clinical and clinical trials to reduce GVHD. The applicant explained
that JAKs are intracellular, non-receptor tyrosine kinases that relay
the signaling of inflammatory cytokines. The applicant stated that,
based on their role in immune cell development and function, JAKs might
affect all phases of aGVHD pathogenesis, including cell activation,
expansion, and destruction. Specifically, JAKs regulate activities of
immune cells involved in aGVHD etiology, including antigen-presenting
cells, T-cells, and B-cells, and function downstream of many cytokines
relevant to GVHD-mediated tissue damage. Inhibition of JAK1/JAK2
signaling in aGVHD could be expected to block signal transduction from
proinflammatory cytokines that activate antigen-presenting cells,
expansion and differentiation of T-cells, suppression of regulatory T-
cells, and inflammation and tissue destruction mediated by infiltrating
cytotoxic T-cells.\301\ The applicant stated that other agents that are
being investigated as second-line treatments for patients who have been
diagnosed with steroid-resistant aGVHD, such as methotrexate,
mycophenolate mofetil, extracorporeal photopheresis, IL-2R targeting
agents (basiliximab, daclizumab, denileukin, and diftitox),
alemtuzumab, horse antithymocyte globulin, etancercept, infliximab, and
sirolimus, use a different mechanism of action than that of
JAKAFITM. The applicant believes that the mechanism of
action of JAKAFITM differs from that of existing
technologies used to achieve the same therapeutic outcome.
---------------------------------------------------------------------------
\301\ Martin, P.J., Rizzo, J.D., Wingard, J.R., et al., ``First
and second-line systemic treatment of acute graft-versus-host
disease: recommendations of the American Society of Blood and Marrow
Transplantation,'' Biol Blood Marrow Transplant, 2012, vol. 18(8),
pp. 1150-1163.
---------------------------------------------------------------------------
With regard to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant asserts that there are
currently no FDA-approved medicines for the treatment of patients who
have been diagnosed with steroid-refractory aGVHD who have had an
inadequate response to corticosteroids and, therefore,
JAKAFITM would not be assigned to the same MS-DRG as
existing technologies.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
stated that there are no existing treatment options for patients who
have been diagnosed with steroid-refractory aGVHD who have had an
inadequate response to corticosteroids and, therefore,
JAKAFITM represents a new treatment option for a patient
population without existing or alternative options. The applicant
stated that, based on its knowledge, there are no other prospective
studies evaluating the effects of treatment with JAK inhibitors for the
treatment of aGVHD in this patient population, and there are no FDA-
approved agents for the treatment of patients who have been diagnosed
with steroid-refractory aGVHD who have inadequately responded to
treatment with corticosteroids.
For the reasons summarized above, the applicant maintained that
JAKAFITM is not substantially similar to any existing
technology. We note, however, that there are a number of available
second-line treatment options for a diagnosis of aGVHD that treat the
same patient population. We also note that a number of these treatment
options use a method of immunomodulation and suppress the body's immune
response similar to the mechanics and goals of JAKAFITM and,
therefore, we believe that JAFAKITM may have a similar
mechanism of action as existing therapies. Finally, for patients
receiving treatment involving any current second-line therapies for a
diagnosis of steroid-refractory aGVHD, CMS would expect these patient
cases to be generally assigned to the same MS-DRGs as a diagnosis for
aGVHD, as would cases representing patients who may be eligible for
treatment involving JAKAFITM. We are inviting public
comments on whether JAKAFITM is substantially similar to any
existing technologies, including with respect to the concerns we have
raised, and whether the technology meets the newness criterion.
With regard to the cost criterion, the applicant conducted the
following analysis to demonstrate that the technology meets the cost
criterion. To identify cases representing patients who may be eligible
for treatment involving JAKAFITM, the applicant searched the
FY 2017 MedPAR Limited Data Set (LDS) for cases reporting ICD-10-CM
diagnosis codes for acute or unspecified GVHD in combination with
either ICD-10-CM diagnosis codes for associated complications of bone
marrow transplant or ICD-10-PCS procedure codes for transfusion of
allogeneic bone marrow, as identified in the table below. The applicant
used this methodology to capture patients who developed aGVHD during
their initial stay for allo-HSCT treatment, as well as those patients
who were discharged and needed to be readmitted for a diagnosis of
aGVHD.
The applicant submitted the following table displaying a complete
list of the ICD-10-CM diagnosis codes and ICD-10-PCS procedure codes it
used to identify cases representing patients who may be eligible for
treatment with JAKAFITM.
BILLING CODE 4120-01-P
[[Page 19348]]
[GRAPHIC] [TIFF OMITTED] TP03MY19.017
[[Page 19349]]
[GRAPHIC] [TIFF OMITTED] TP03MY19.018
[[Page 19350]]
[GRAPHIC] [TIFF OMITTED] TP03MY19.019
BILLING CODE 4120-01-C
The applicant identified a total of 210 cases mapping to MS-DRGs
014 (Allogeneic Bone Marrow Transplant), 808 (Major Hematological and
Immunological Diagnoses except Sickle Cell Crisis and Coagulation
Disorders with MCC), 809 (Major Hematological and Immunological
Diagnoses except Sickle Cell Crisis and Coagulation Disorders with CC),
and 871 (Septicemia or Severe Sepsis without MV >96 hours with MCC).
The applicant indicated that, because it is difficult to determine the
realistic amount of drug charges to be replaced or avoided as a result
of the use of JAKAFI\TM\, it provided two scenarios to demonstrate that
JAKAFI\TM\ meets the cost criterion. In the first scenario, the
applicant removed 100 percent of pharmacy charges to conservatively
estimate the charges for drugs that potentially may be replaced or
avoided by the use of JAKAFI\TM\. The applicant then standardized the
charges and applied a 2-year inflation factor of 8.864 percent, which
is the same inflation factor used by CMS to update the outlier
threshold in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41722). (We
note that this figure was revised in the FY 2019 IPPS/LTCH PPS final
rule correction notice. The corrected final 2-year inflation factor is
1.08986 (83 FR 49844).) The applicant then added charges for JAKAFI\TM\
to the inflated average case-weighted standardized charges per case. No
other related charges were added to the cases.
Under the assumption of 100 percent of historical drug charges
removed, the applicant calculated the inflated average case-weighted
standardized charge per case to be $261,512 and the average case-
weighted threshold amount to be $172,493. Based on this analysis, the
applicant believed that JAKAFI\TM\ meets the cost criterion because the
inflated average case-weighted standardized charge per case exceeds the
average case-weighted threshold amount.
As noted above, the applicant also submitted a second scenario to
demonstrate that JAKAFI\TM\ meets the cost criterion. The applicant
indicated that removing all charges for previous technologies as
demonstrated in the first scenario is unlikely to reflect the actual
case because many drugs are used in treating a diagnosis of aGVHD,
especially during the initial bone marrow transplant. Therefore, the
applicant also provided a sensitivity analysis where it did not remove
any pharmacy charges or any other historical charges, which it
indicated could be a more realistic assumption. Under this scenario,
the final average case-weighted standardized charge per case is
$377,494, which exceeds the average case-weighted threshold amount of
$172,493. The applicant maintained that JAKAFI\TM\ also meets the cost
criterion under this scenario.
We are inviting public comments on whether JAKAFI\TM\ meets the
cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that JAKAFI\TM\ represents a substantial clinical
improvement because: (1) The technology offers a treatment option for a
patient population previously ineligible for treatments because
JAKAFI\TM\ (if approved) would be the first FDA-approved treatment
option for patients who have been diagnosed with GVHD who have had an
inadequate response to corticosteroids; and (2) use of the technology
significantly improves clinical outcomes in patients with steroid-
refractory aGVHD, which the applicant asserts is supported by the
results from REACH1, a prospective, open-label, single-cohort Phase II
study of the use of JAKAFI\TM\, in combination with corticosteroids,
for the treatment of Grade II to IV steroid-refractory aGVHD.
The applicant stated that there are very few prospective studies
evaluating second-line therapy for a diagnosis of steroid-refractory
aGVHD, and interpretation of these studies is hampered by the
heterogeneity of the patient population, small sample sizes, and lack
of standardization in the study design (including timing of the
response, different response criteria, and absence of validated
endpoints). Agents that have been investigated over the last 2 decades
in these studies include low-dose methotrexate, mycophenolate mofetil,
extracorporeal photopheresis, IL-2R targeting (that is, basiliximab,
daclizumab, denileukin, and diftitox), alemtuzumab, horse antithymocyte
globulin, etanercept, infliximab, and sirolimus. The applicant stated
that second-line treatments, especially those associated with
suppression of T-cells, are associated with increased infection and
viral reactivation (including cytomegalovirus (CMV), Epstein-Barr
virus, human herpes virus 6, adenovirus, and polyoma). Numerous
combination approaches (for example, antibodies directed against IL-2
receptor, mammalian target of rapamycin inhibitors, or other
immunosuppressive agents) also have been studied for the treatment of
steroid-refractory aGVHD, but the applicant indicated that data do not
support the recommendation or exclusion of any particular regimen. The
applicant also asserted that such treatment combination approaches have
been associated with significant toxicities, high failure rates, and an
average 6-month survival rate of 49 percent.\302\ Therefore, the
applicant maintains that therapeutic options are limited for patients
who are refractory to corticosteroid treatment for a diagnosis of
aGVHD.
---------------------------------------------------------------------------
\302\ Martin, P.J., Rizzo, J.D., Wingard, J.R., et al., ``First
and second-line systemic treatment of acute graft-versus-host
disease: recommendations of the American Society of Blood and Marrow
Transplantation,'' Biol Blood Marrow Transplant, 2012, vol. 18(8),
pp. 1150-1163.
---------------------------------------------------------------------------
The applicant asserted that the clinical benefit of the use of
JAKAFI\TM\ in patients who have been diagnosed with steroid-refractory
aGVHD is supported by the results from five clinical studies, including
a mixture of prospective and retrospective studies.
The first study is REACH1, a prospective, open-label, single-cohort
Phase II study of the use of JAKAFI\TM\, in combination with
corticosteroids, for the treatment of Grade II to IV steroid-refractory
aGVHD. REACH1 included 71 patients who had been diagnosed with steroid-
refractory aGVHD. Included eligible patients were those that were 12
[[Page 19351]]
years old or older, had undergone at least one allogeneic hematopoietic
stem cell transplantation from any donor source and donor type and were
diagnosed with Grade II to IV steroid-refractory aGVHD, and presented
evidence of myeloid engraftment. The patients' median age was 58 years
old (ages 18 years old to 73 years old); 66 patients were white and 36
patients were female. The majority of patients had peripheral blood
stem cells as the graft source (57 patients or 80.3 percent). The
starting dose of JAKAFI\TM\ was 5 mg twice daily (BID). The dose could
be increased to 10 mg BID after 3 days, if hematologic parameters were
stable and in the absence of any treatment-related toxicities.
Methylprednisolone (or prednisone equivalent) was administered at a
starting dose of 2 mg/kg/day on the first day of treatment and tapered
as appropriate. Patients receiving calcineurin inhibitors or other
medications for GVHD prophylaxis were permitted to continue at the
investigator's discretion. The primary endpoint was overall response
rate (ORR) at Day 28, which the applicant indicated has been shown to
be predictive of non-relapse mortality (NRM). No description of the
statistical methods used in the REACH1 study was provided by the
applicant.
The applicant stated that the ORR at Day 28 was achieved by 54.9
percent of patients; nearly half (48.7 percent) of the responding
patients achieved a complete response (CR). The best ORR was 73.2
percent. Median time to first response for all responders was 7 days.
Median duration of response was 345 days for both Day 28 responders
(lower limit, 159 days) and for other responders (lower limit, 106
days). Event-free probability estimates for Day 28 responders at 3 and
6 months were 81.6 percent and 65.2 percent, respectively. Among all
patients, median (95 percent CI) overall survival was 232.0 (93.0-not
evaluable) days. Mean survival rates for the 39 responders at Day 28
were 73.2 percent at 6 months, 69.9 percent at 9 months, and 66.2
percent at 12 months with non-relapsed mortality of 21.2 percent at 6
months, 24.5 percent at 9 months, and 28.2 percent at 12 months. Mean
survival rates for the 13 other responders were 35.9 percent at 6 and 9
months and were not evaluable at 12 months with non-relapsed mortality
at 64.1 percent at 6 and 9 months and not evaluable at 12 months. Mean
survival rates for non-responders were 15.8 percent at 6 months and
10.5 percent at 9 months and 12 months with non-relapsed mortality at
78.9 percent at 6 months and 84.2 percent at 9 and 12 months. Most
patients (55.8 percent) had a greater than or equal to 50 percent
reduction from baseline in corticosteroid dose.
The applicant stated that the additional use of JAKAFITM
to corticosteroid-based treatment did not result in unexpected
toxicities or exacerbation of known toxicities related to high-dose
corticosteroids or aGVHD. Cytopenias were among the most common
treatment-emergent adverse events. The applicant indicated that
JAKAFITM was well tolerated, and the adverse event profile
was consistent with the observed safety profiles of the use of
JAKAFITM and that of patients who had been diagnosed with
steroid-refractory aGVHD. The most common treatment emergent adverse
events in the REACH1 study were anemia (64.8 percent), hypokalemia
(49.3 percent), peripheral edema (45.1 percent), decreased platelet
count (45.1 percent), decreased neutrophil count (39.4 percent),
muscular weakness (33.8 percent), dyspnea (32.4 percent),
hypomagnesaemia (32.4 percent), hypocalcemia (31 percent), and nausea
(31 percent). The most common treatment emergent infections were sepsis
(12.7 percent) and bacteremia (9.9 percent).
All patients who had a CMV event (n=14) had a positive CMV donor or
recipient serostatus or both at baseline. No deaths were attributed to
CMV events. The applicant asserted that the results of the prospective
REACH1 study demonstrate the potential of the use of
JAKAFITM to meaningfully improve the outcomes of allo-HSCT
patients who develop steroid-refractory aGVHD, and further underscore
the promise of JAK inhibition to advance the treatment of this
potentially-devastating condition. Longer term follow-up analyses from
REACH1 are expected to yield additional insights into the long-term
efficacy and safety profile of the use of JAKAFITM in this
patient population.
In a second prospective, open-label study, 14 patients who had been
diagnosed with acute or chronic GVHD that were refractory to
corticosteroids and at least 2 other lines of treatment were treated
with JAKAFITM at a dose of 5 mg twice a day and increased to
10 mg twice a day. Of the 14 patients, 13 responded with respect to
clinical GVHD symptoms and serum levels of pro-inflammatory cytokines.
Three patients with histologically-proven acute skin or intestinal GVHD
Grade I, achieved a CR. One non-responder discontinued use of
JAKAFITM after 1 week because of lack of efficacy. In all
other patients, corticosteroids could be reduced after a median
treatment period of 1.5 weeks. CMV reactivation was observed in 4 out
of the 14 patients, and they responded well to antiviral therapy. Until
last follow-up, no patient experienced a relapse of GVHD.
The applicant asserted that the efficacy and safety of the use of
JAKAFITM for the treatment of steroid-refractory aGVHD is
further supported by the results from a third study, a retrospective,
multi-center study of 95 patients who received JAKAFITM as
salvage therapy for corticosteroid-refractory GVHD. In the 54 patients
who had been diagnosed with aGVHD, the median number of GVHD therapies
received was 3. The (best) ORR was 81.5 percent. A CR and partial
response (PR) was achieved in 46.3 percent and 35.2 percent of
patients, respectively. Median time to response was 1.5 weeks (range 1
to 11 weeks). Cytopenias and cytomegalovirus reactivation were seen in
55.5 percent (Grade III or IV) and 33.3 percent of patients who had
been diagnosed with aGVHD, respectively. Of those patients responding
to treatment with JAKAFITM, with either CR or PR (n=44), the
rate of GVHD-relapse was 6.8 percent (3/44). The 6-month-survival was
79 percent (67.3 percent to 90.7 percent, 95 percent CI). The median
follow-up time was 26.5 weeks (range 3 to 106 weeks). Underlying
malignancy relapse occurred in 9.2 percent of patients who had been
diagnosed with aGVHD.
A fourth retrospective study evaluated data from the same 95
patients in 19 stem cell transplant centers in Europe and the United
States. For long-term results, CR was defined as the absence of any
symptoms related to GVHD; PR was defined as the improvement of greater
than or equal to 1 in stage severity in one organ, without
deterioration in any other organ. A response had to last for at least
or more than 3 weeks. Of the 54 patients who had been diagnosed with
aGVHD, the 1-year overall survival (OS) rate was 62.4 percent (CI: 49.4
percent to 75.4 percent). The estimated median OS (50 percent death)
was 18 months for aGVHD patients. The median duration of
JAKAFITM treatment was 5 months. At follow-up, 22/54 (41
percent) of the patients had an ongoing response and were free of any
immunosuppression. Cytopenias (any grade) and CMV-reactivation were
observed during JAKAFITM-treatment (30/54, 55.6 percent and
18/54, 33.3 percent, respectively).
A fifth retrospective study evaluated 79 patients who received
treatment
[[Page 19352]]
using JAKAFITM for refractory GVHD at 13 centers in Spain.
Twenty-two patients had a diagnosis of aGVHD (Grades II to IV) and
received a median of 2 previous GVHD therapies (range, 1 to 5
therapies). The median daily dose of JAKAFITM was 20 mg. The
overall response rate was 68.2 percent, which was obtained after a
median of 2 weeks of treatment, and 18.2 percent (4/22) of the patients
reached CR. Overall, steroid doses were tapered in 72 percent of the
patients who had been diagnosed with aGVHD. Cytomegalovirus
reactivation was reported in 54.5 percent of the patients who had been
diagnosed with aGVHD. Overall, 26 patients (32.9 percent) discontinued
treatment using JAKAFITM due to: Lack of response (14),
cytopenias (3 patients had thrombocytopenia, 3 had anemia, and 3 had
both); infections (1 patient); other causes (2 patients). Ten deaths
occurred in patients who had been diagnosed with aGVHD.
We note the following concerns with respect to whether
JAKAFITM represents a substantial clinical improvement.
First, while the applicant has submitted data from several clinical
studies to support the efficacy of the use of JAKAFITM in
treatment of patients who have been diagnosed with steroid-resistant
aGVHD, including an overall response rate at Day 28 for 54.9 percent of
the patients enrolled in one study, with nearly half of the responding
patients achieving CR, the applicant has not provided any data directly
comparing the use of JAKAFITM to any second-line treatments.
As noted previously, a number of different agents can be used for
second-line treatment as described by recommendations from the American
Society of Blood and Marrow Transplantation (ASBMT).\303\ Numerous
combination approaches have been investigated for second-line therapy
for diagnoses of steroid-refractory aGVHD in allo-HSCT patients. These
studied agents include methotrexate, mycophenolate mofetil,
extracorporeal photopheresis, IL-2R targeting agents (basiliximab,
daclizumab, denileukin, and diftitox), alemtuzumab, horse antithymocyte
globulin, etancercept, infliximab, and sirolimus. Recommendations from
professional societies for the treatment of diagnoses of aGVHD describe
the lack of data demonstrating superior efficacy of any single agent as
second-line therapy for patients who have been diagnosed with steroid-
resistant aGVHD and, therefore, suggest that choice of second-line
treatment be guided by clinical considerations.\304\ Because the
applicant has not provided any data directly comparing the use of
JAKAFITM to any other second-line treatments (for example,
current standard-of-care), it may make it difficult to directly assess
whether the use of JAKAFITM provides a substantial clinical
improvement compared to these existing therapies.
---------------------------------------------------------------------------
\303\ Martin, P.J., Rizzo, J.D., Wingard, J.R., et al., ``First
and second-line systemic treatment of acute graft-versus-host
disease: recommendations of the American Society of Blood and Marrow
Transplantation,'' Biol Blood Marrow Transplant, 2012, vol. 18(8),
pp. 1150-1163.
\304\ Martin, P.J., Rizzo, J.D., Wingard, J.R., et al., ``First
and second-line systemic treatment of acute graft-versus-host
disease: recommendations of the American Society of Blood and Marrow
Transplantation,'' Biol Blood Marrow Transplant, 2012, vol. 18(8),
pp. 1150-1163.
---------------------------------------------------------------------------
Second, we have concerns regarding the methodologic approach of the
studies submitted by the applicant in support of its assertions
regarding substantial clinical improvement. While two of the clinical
studies provided by the applicant are prospective in nature, the other
three clinical studies provided in support of the application are
retrospective studies and, therefore, provide a weaker basis of
evidence for making conclusions of the causative effects of the drug
compared to prospective studies. Additionally, no blinding or
randomization occurred to minimize potential biases from the lack of a
control group, and no Phase III study data were submitted by the
applicant, to assist in our evaluation of substantial clinical
improvement. Although we acknowledge that the patient population that
would be eligible for treatment involving JAKAFITM under its
proposed indication is likely relatively small because it is a subset
of the patient population receiving allo-HSCTs, it may be difficult to
evaluate the impact of the technology on longer term outcomes, such as
overall survival and durability of response based on the studies
submitted because the clinical studies are based on relatively small
sample sizes.
Third, given the variable amount of detail provided on the studies
generally (for example, the number of patients from the United States,
how many are Medicare eligible and the results for these Medicare-
eligible patients, what specific first-line treatments enrolled
patients received and for what duration, how CRs and PRs were defined
and assessed, statistical methods and assumptions), it is more
difficult to fully assess the generalizability of the applicant's
assertions to the Medicare population.
Fourth, we note that several patients enrolled in each of the
studies provided by the applicant had safety-related complications,
including cytopenias and CMV reactivation. These complications are
concerning because the target population is already immunocompromised
and at risk of serious infections.
We are inviting public comments on whether JAKAFITM
meets the substantial clinical improvement criterion, including with
respect to the concerns we have raised.
We did not receive any written comments in response to the New
Technology Town Hall Meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for
JAKAFITM or at the New Technology Town Hall meeting.
o. Supersaturated Oxygen (SSO2) Therapy (DownStream[supreg]
System)
TherOx, Inc. submitted an application for new technology add-on
payments for Supersaturated Oxygen (SSO2) Therapy (the
DownStream[supreg] System) for FY 2020. We note that the applicant
previously submitted an application for new technology add-on payments
for FY 2019, which was withdrawn prior to the issuance of the FY 2019
IPPS/LTCH PPS final rule. The DownStream[supreg] System is an
adjunctive therapy that creates and delivers superoxygenated arterial
blood directly to reperfused areas of myocardial tissue which may be at
risk after an acute myocardial infarction (AMI), or heart attack.
SSO2 Therapy's proposed indication is for patients receiving
treatment for an ST-segment elevation myocardial infarction (STEMI), a
type of AMI where the anterior wall infarction impacts the left
ventricle (LV) and which carries a substantial risk of death and
disability. Elderly patients have an elevated risk of AMI, and the vast
majority of AMI occur in the Medicare population.\305\ The applicant
stated that the net effect of the SSO2 Therapy is to reduce
the size of the infarction and, therefore, lower the risk of heart
failure and mortality, as well as improve quality of life for STEMI
patients.
---------------------------------------------------------------------------
\305\ Wang, Y., Lichtman, J.H., Dharmarajan, K., Masoudi, F.A.,
Ross, J.S., Dodson, J.A., Chen, J., Spertus, J.A., Chaudhry, S.I.,
Nallamothu, B.K., Krumholz, H.M., 2014, ``National trends in stroke
after acute myocardial infarction among Medicare patients in the
United States: 1999 to 2010,'' American Heart Journal, vol. 169(1),
pp. 78-85.e4.
---------------------------------------------------------------------------
SSO2 Therapy consists of three main components: The
DownStream[supreg] System; the DownStream cartridge; and the
SSO2 delivery catheter. The DownStream[supreg] System and
cartridge function together to create an oxygen-enriched saline
solution called SSO2 solution from hospital-supplied oxygen
and physiologic saline. A small amount of
[[Page 19353]]
the patient's blood is then mixed with the SSO2 solution,
producing oxygen-enriched hyperoxemic blood, which is delivered to the
left main coronary artery (LMCA) via the delivery catheter at a flow
rate of 100 ml/min. The duration of the SSO2 Therapy is 60
minutes and the infusion is performed in the catheterization
laboratory. The oxygen partial pressure (pO2) of the
infusion is elevated to ~1,000 mmHg, therefore providing oxygen locally
to the myocardium at a hyperbaric level for 1 hour. After the 60-minute
SSO2 infusion is complete, the cartridge is unhooked from
the patient and discarded per standard practice. Coronary angiography
is performed as a final step before removing the delivery catheter and
transferring the patient to the intensive care unit (ICU).
The applicant for the SSO2 Therapy received premarket
approval from the FDA on April 4, 2019. The applicant stated that use
of the SSO2 Therapy can be identified by the ICD-10-PCS
procedure codes 5A0512C (Extracorporeal supersaturated oxygenation,
intermittent) and 5A0522C (Extracorporeal supersaturated oxygenation,
continuous).
As discussed earlier, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments. The applicant
identified three treatment options currently available to restore
coronary artery blood flow in AMI patients. These options are
fibronolytic therapy (plasminogen activators) with or without
glycoprotein IIb/IIIa inhibitors, percutaneous coronary intervention
(PCI) with or without stent placement, and coronary artery bypass graft
(CABG). The applicant noted that all of these therapies restore blood
flow at the macrovascular level by targeting the coronary artery
thrombosis that is the direct cause of the AMI. The applicant also
noted that PCI with stenting is the preferred treatment for STEMI
patients. The applicant asserted that SSO2 Therapy is not
substantially similar to these existing treatment options and,
therefore, meets the newness criterion. Below we summarize the
applicant's assertions with respect to whether the SSO2
Therapy meets each of the three substantial similarity criteria.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome, the
applicant asserted that SSO2 Therapy is a unique therapy
designed to deliver localized hyperbaric oxygen equivalent to the
coronary arteries immediately after administering the standard-of-care,
PCI with stenting. The applicant describes SSO2 Therapy's
mechanism of action as two-fold: (1) First, the increased oxygen levels
act to re-open the microcirculatory system within the infarct zone,
which has experienced ischemia during the occlusion period, and (2)
second, once the microcirculatory system is re-opened, the blood flow
containing the additional oxygen re-starts metabolic processes within
the stunned myocardium. According to the applicant, the net result is
to reduce the extent of necrosis as measured by infarct size in the
myocardium post-AMI and thereby improve left ventricular function,
leading to improved patient outcomes. The applicant maintained that
this mechanism of action is not comparable to that of any existing
treatment because no other therapy has demonstrated an infarct size
reduction over and above the routine delivery of PCI. As mentioned
above, the applicant asserted that currently available therapies
restore blood flow at the macrovascular level by targeting the coronary
artery thrombosis that is the direct cause of the AMI.
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant reiterated that the
standard procedure for treating patients with AMI is PCI with stent
placement, and that these cases are typically assigned to MS-DRG 246
(Percutaneous Cardiovascular Procedures with Drug-Eluting Stent with
MCC or 4+ Arteries/Stents), MS-DRG 247 (Percutaneous Cardiovascular
Procedures with Drug-Eluting Stent without MCC), MS-DRG 248
(Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent
with MCC or 4+ Arteries/Stents), MS-DRG 249 (Percutaneous
Cardiovascular Procedures with Non-Drug-Eluting Stent without MCC), MS-
DRG 250 (Percutaneous Cardiovascular Procedures without Coronary Artery
Stent with MCC), or MS-DRG 251 (Percutaneous Cardiovascular Procedures
without Coronary Artery Stent without MCC). The applicant maintained
that because no other technologies exist that can deliver localized
hyperbaric oxygen in the acute care setting, SSO2 Therapy
has no analogous MS-DRG assignment. However, we note that potential
cases that may be eligible for treatment involving SSO2
Therapy may be assigned to the same MS-DRG(s) as other cases involving
PCI with stent placement also used to treat patients who have been
diagnosed with AMI.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, according to the
applicant, the target patient population of SSO2 Therapy is
patients who are receiving treatment after a diagnosis of AMI and
specifically ST-segment elevation myocardial infarction (STEMI) where
the anterior wall infarction impacts the left ventricle (LV). The
applicant acknowledged that, because SSO2 Therapy is
administered following completion of successful PCI, its target patient
population includes a subset of patients with the same or similar type
of disease process as patients treated with PCI with stent placement.
However, the applicant also asserted that, while PCI with stenting
achieves the goal of re-opening a blocked artery, SSO2
Therapy delivers localized hyperbaric oxygen to reduce the extent of
the myocardial necrosis that occurs as a consequence of experiencing
AMI. Therefore, the applicant believed that SSO2 Therapy
offers a treatment option for a different type of disease than
currently available treatments.
We are inviting public comments on whether the SSO2
Therapy is substantially similar to existing technologies and whether
it meets the newness criterion.
With regard to the cost criterion, the applicant conducted the
following analysis to demonstrate that SSO2 Therapy meets
the cost criterion. The applicant searched the FY 2017 MedPAR file for
claims reporting diagnoses of anterior STEMI by ICD-10-CM diagnosis
codes I21.0 (ST elevation myocardial infarction of anterior wall),
I21.01 (ST elevation (STEMI) myocardial infarction involving left main
coronary artery), I21.02 (ST elevation (STEMI) myocardial infarction
involving left anterior descending coronary artery), or I21.09 (ST
elevation (STEMI) myocardial infarction involving other coronary artery
of anterior wall) as a primary diagnosis, which the applicant believed
would describe potential cases representing potential patients who may
be eligible for treatment involving the SSO2 Therapy. The
applicant identified 11,668 cases mapping to 4 MS-DRGs, with
approximately 91 percent of all potential cases mapping to MS-DRG 246
(Percutaneous Cardiovascular Procedures with Drug-Eluting Stent with
MCC or 4+ Arteries/Stents) and MS-DRG 247 (Percutaneous Cardiovascular
Procedures with Drug-Eluting Stent without MCC). The remaining 9
percent of potential cases
[[Page 19354]]
mapped to MS-DRG 248 (Percutaneous Cardiovascular Procedures with Non-
Drug-Eluting Stent with MCC or 4+ Arteries/Stents) and MS-DRG 249
(Percutaneous Cardiovascular Procedures with Non-Drug-Eluting Stent
without MCC).
The applicant determined that the average case-weighted
unstandardized charge per case was $98,846. The applicant then
standardized the charges. The applicant did not remove charges for the
current treatment because, as discussed above, SSO2 Therapy
would be used as an adjunctive treatment option following successful
PCI with stent placement. The applicant then added charges for the
technology, which accounts for the use of 1 cartridge per patient, to
the average charges per case. The applicant did not apply an inflation
factor to the charges for the technology. The applicant also added
charges related to the technology, to account for the additional
supplies used in the administration of SSO2 Therapy, as well
as 70 minutes of procedure room time, including technician labor and
additional blood tests. The applicant inflated the charges related to
the technology. Based on the FY 2019 IPPS/LTCH PPS final rule
correction notice data file thresholds, the average case-weighted
threshold amount was $96,267. In the applicant's analysis, the inflated
average case-weighted standardized charge per case was $144,364.
Because the inflated average case-weighted standardized charge per case
exceeds the average case-weighted threshold amount, the applicant
maintained that the technology meets the cost criterion.
We are inviting public comments on whether the SSO2
Therapy meets the cost criterion.
With regard to the substantial clinical improvement criterion, the
applicant asserted that SSO2 Therapy represents a
substantial clinical improvement over existing technologies because it
improves clinical outcomes for STEMI patients as compared to the
currently available standard-of-care treatment, PCI with stenting
alone. Specifically, the applicant asserted that: (1) Infarct size
reduction improves mortality outcomes; (2) infarct size reduction
improves heart failure outcomes; (3) SSO2 Therapy
significantly reduces infarct size; (4) SSO2 Therapy
prevents left ventricular dilation; and (5) SSO2 Therapy
reduces death and heart failure at 1 year. The applicant highlighted
the importance of the SSO2 Therapy's mechanism of action,
which treats hypoxemic damage at the microvascular or microcirculatory
level. Specifically, the applicant noted that microvascular impairment
in the myocardium is irreversible and leads to a greater extent of
infarction. According to the applicant, the totality of the data on
myocardial infarct size, ventricular remodeling, and clinical outcomes
strongly supports the substantial clinical benefit of SSO2
Therapy administration over the standard-of-care.
To support the claims that infarct size reduction improves
mortality and heart failure outcomes, the applicant cited an analysis
of the Collaborative Organization for RheothRx Evaluation (CORE) trial
and a pooled patient-level analysis.
The CORE trial was a prospective, randomized, double-
blinded, placebo-controlled trial of Poloxamer 188, a novel therapy
adjunctive to thrombolysis at the time the study was conducted.\306\
The applicant sought to relate left ventricular ejection fraction (EF),
end-systolic volume index (ESVI) and infarct size (IS), as measured in
a single, randomized trial, to 6-month mortality after myocardial
infarction treated with thrombolysis. According to the applicant,
subsets of clinical centers participating in CORE also participated in
one or two radionuclide sub-studies: (1) Angiography for measurement of
EF and absolute, count-based LV volumes; and (2) single-photon emission
computed tomographic sestamibi measurements of IS. These sub-studies
were performed in 1,194 and 1,181 patients, respectively, of the 2,948
patients enrolled in the trial. Furthermore, ejection fraction, ESVI,
and IS, as measured by central laboratories in these sub-studies, were
tested for their association with 6-month mortality. According to the
applicant, the results of the study showed that ejection fraction
(n=1,137; p=0.0001), ESVI (n=945; p=0.055) and IS (n=1,164; p=0.03)
were all associated with 6-month mortality, therefore, demonstrating
the relationship between these endpoints and mortality.\307\
---------------------------------------------------------------------------
\306\ Burns, R.J., Gibbons, R.J., Yi, Q., et al., ``The
relationships of left ventricular ejection fraction, end-systolic
volume index and infarct size to six-month mortality after hospital
discharge following myocardial infarction treated by thrombolysis,''
J Am Coll Cardiol, 2002, vol. 39, pp. 30-6.
\307\ Ibid.
---------------------------------------------------------------------------
The pooled patient-level analysis was performed from 10
randomized, controlled trials (with a total of 2,632 patients) that
used primary PCI with stenting.\308\ The analysis assessed infarct size
within 1 month after randomization by either cardiac magnetic resonance
(CMR) imaging or technetium-99m sestamibi single-photon emission
computed tomography (SPECT), with clinical follow-up for 6 months.
Infarct size was assessed by CMR in 1,889 patients (71.8 percent of
patients) and by SPECT in 743 patients (28.2 percent of patients)
including both inferior wall and more severe anterior wall STEMI
patients. According to the applicant, median infarct size (or percent
of left ventricular myocardial mass) was 17.9 percent and median
duration of clinical follow-up was 352 days. The Kaplan-Meier estimated
1-year rates of all-cause mortality, re-infarction, and HF
hospitalization were 2.2 percent, 2.5 percent, and 2.6 percent,
respectively. The applicant noted that a strong graded response was
present between infarct size (per 5 percent increase) and the 2 outcome
measures of subsequent mortality (Cox-adjusted hazard ratio: 1.19 [95
percent confidence interval: 1.18 to 1.20]; p<0.0001) and
hospitalization for heart failure (adjusted hazard ratio: 1.20 [95
percent confidence interval: 1.19 to 1.21]; p<0.0001), independent of
other baseline factors.\309\ The applicant concluded from this study
that infarct size, as measured by CMR or technetium-99m sestamibi SPECT
within 1 month after primary PCI, is strongly associated with all-cause
mortality and hospitalization for heart failure within 1 year.
---------------------------------------------------------------------------
\308\ Stone, G.W., Selker, H.P., Thiele, H., et al.,
``Relationship between infarct size and outcomes following primary
PCI,'' J Am Coll Cardiol, 2016, vol. 67(14), pp. 1674-83.
\309\ Ibid.
---------------------------------------------------------------------------
Next, to support the claim that SSO2 Therapy
significantly reduces infarct size, the applicant cited the AMIHOT I
and II studies.
The AMIHOT I clinical trial was designed as a prospective,
randomized evaluation of patients who had been diagnosed with AMI,
including both anterior and inferior patients, and received treatment
with either PCI with stenting alone or with SSO2 Therapy as
an adjunct to successful PCI within 24 hours of symptom onset.\310\ The
study included 269 randomized patients and 3 co-primary endpoints:
Infarction size reduction, regional wall motion score improvement at 3
months, and reduction in ST segment elevation. The study was designed
to demonstrate superiority of the SSO2 Therapy group as
compared to the control group for each of these endpoints, as well as
to demonstrate non-inferiority of the SSO2 Therapy group
with respect to 30-day Major Adverse Cardiac Event (MACE). The
applicant stated that results for the control versus SSO2
Therapy group
[[Page 19355]]
comparisons for the three co-primary effectiveness endpoints
demonstrated a nominal improvement in the test group, although this
nominal improvement did not achieve clinical and statistical
significance in the entire population. The applicant further stated
that a pre-specified analysis of the SSO2 Therapy patients
who were revascularized within 6 hours of AMI symptom onset and who had
anterior wall infarction showed a marked improvement in all 3 co-
primary endpoints as compared to the control group.\311\ Key safety
data revealed no statistically significant differences in the composite
primary endpoint of 1-month (30 days) MACE rates between the
SSO2 Therapy and control groups. MACE includes the combined
incidence of death, re-infarction, target vessel revascularization, and
stroke. In total, 9/134 (6.7 percent) of the patients in the
SSO2 Therapy group and 7/135 (5.2 percent) of the patients
in the control group experienced 30-day MACE (p=0.62).\312\
---------------------------------------------------------------------------
\310\ O'Neill, W.W., Martin, J.L., Dixon, S.R., et al., ``Acute
Myocardial Infarction with Hyperoxemic Therapy (AMIHOT), J Am Coll
Cardiol, 2007, vol. 50(5), pp. 397-405.
\311\ Ibid.
\312\ Ibid.
---------------------------------------------------------------------------
The AMIHOT II trial randomized 301 patients who had been
diagnosed with and receiving treatment for anterior AMI with either PCI
plus the SSO2 Therapy or PCI alone.\313\ The AMIHOT II trial
had a Bayesian statistical design that allows for the informed
borrowing of data from the previously completed AMIHOT I trial. The
primary efficacy endpoint of the study required proving superiority of
the infarct size reduction, as assessed by Tc-99m Sestamibi SPECT
imaging at 14 days post PCI/stenting, with the use of SSO2
Therapy as compared to patients who were receiving treatment involving
PCI with stenting alone. The primary safety endpoint for the AMIHOT II
trial required a determination of non-inferiority in the 30-day MACE
rate, comparing the SSO2 Therapy group with the control
group, within a safety delta of 6.0 percent.\314\ Endpoint evaluation
was performed using a Bayesian hierarchical model that evaluated the
AMIHOT II result conditionally in consideration of the AMIHOT I 30-day
MACE data. According to the applicant, the results of the AMIHOT II
trial showed that the use of SSO2 therapy, together with PCI
and stenting, demonstrated a relative reduction of 26 percent in the
left ventricular infarct size and absolute reduction of 6.5 percent
compared to PCI and stenting alone.\315\
---------------------------------------------------------------------------
\313\ Stone, G.W., Martin, J.L., de Boer, M.J., et al., ``Effect
of Supersaturated Oxygen Delivery on Infarct Size after Percutaneous
Coronary Intervention in Acute Myocardial Infarction,'' Circ
Cardiovasc Intervent, 2009, vol. 2, pp. 366-75.
\314\ Ibid.
\315\ Ibid.
---------------------------------------------------------------------------
Next, to support the claim that SSO2 Therapy prevents
left ventricular dilation, the applicant cited the Leiden study, which
represents a single-center, sub-study of AMIHOT I patients treated at
Leiden University in the Netherlands. The study describes outcomes of
randomized selective treatment with intracoronary aqueous oxygen (AO),
the therapy delivered by SSO2 Therapy, versus standard care
in patients who had acute anterior wall myocardial infarction within 6
hours of onset. Of the 50 patients in the sub-study, 24 received
treatment using adjunctive AO and 26 were treated according to standard
care after PCI, with no significant differences in baseline
characteristics between groups. LV volumes and function were assessed
by contrast echocardiography at baseline and 1 month. According to the
applicant, the results demonstrated that treatment with aqueous oxygen
prevents LV remodeling, showing a reduction in LV volumes (3 percent
decrease in LV end-diastolic volume and 11 percent decrease in LV end-
systolic volume) at 1 month as compared to baseline in AO-treated
patients, as compared to increasing LV volumes (14 percent increase in
LV end diastolic volume and 18 percent increase in LV end-systolic
volume) at 1 month in control patients.\316\ The results also show that
treatment using AO preserves LV ejection fraction at 1 month, with AO-
treated patients experiencing a 10 percent increase in LV ejection
fraction as compared to a 2 percent decrease in LV ejection fraction
among patients in the control group.\317\
---------------------------------------------------------------------------
\316\ Warda, H.M., Bax, J.J., Bosch, J.G., et al., ``Effect of
intracoronary aqueous oxygen on left ventricular remodeling after
anterior wall ST-elevation acute myocardial infarction,'' Am J
Cardiol, 2005, vol. 96(1), pp. 22-4.
\317\ Ibid.
---------------------------------------------------------------------------
Finally, to support the claim that SSO2 Therapy reduces
death and heart failure at 1 year, the applicant submitted the results
from the IC-HOT clinical trial, which was designed to confirm the
safety and efficacy of the use of the SSO2 Therapy in those
individuals presenting with a diagnosis of anterior AMI who have
undergone successful PCI with stenting of the proximal and/or mid left
anterior descending artery within 6 hours of experiencing AMI symptoms.
It is an IDE, nonrandomized, single arm study. The study primarily
focused on safety, utilizing a composite endpoint of 30-day Net Adverse
Clinical Events (NACE). A maximum observed event rate of 10.7 percent
was established based on a contemporary PCI trial of comparable
patients who had been diagnosed with anterior wall STEMI. The results
of the IC-HOT trial exhibited a 7.1 percent observed NACE rate, meeting
the study endpoint. Notably, no 30-day mortalities were observed, and
the type and frequency of 30-day adverse events occurred at similar or
lower rates than in contemporary STEMI studies of PCI-treated patients
who had been diagnosed with anterior AMI.\318\ Furthermore, according
to the applicant, the results of the IC-HOT study supported the
conclusions of effectiveness established in AMIHOT II with a measured
30-day median infarct size = 19.4 percent (as compared to the AMIHOT II
SSO2 Therapy group infarct size = 20.0 percent).\319\ The
applicant stated that notable measures include 4-day microvascular
obstruction (MVO), which has been shown to be an independent predictor
of outcomes, 4-day and 30-day left ventricular end diastolic and end
systolic volumes, and 30-day infarct size.\320\ The applicant also
stated that the IC-HOT study results exhibited a favorable MVO as
compared to contemporary trial data, and decreasing left ventricular
volumes at 30 days, compared to contemporary PCI populations that
exhibit increasing left ventricular size.\321\ The applicant asserted
that the IC-HOT clinical trial data continue to demonstrate the
substantial clinical benefit of the use of SSO2 Therapy as
compared to the standard-of-care, PCI with stenting alone.
---------------------------------------------------------------------------
\318\ David, SW, Khan, Z.A., Patel, N.C., et al., ``Evaluation
of intracoronary hyperoxemic oxygen therapy in acute anterior
myocardial infarction: The IC-HOT study,'' Catheter Cardiovasc
Interv, 2018, pp. 1-9.
\319\ Ibid.
\320\ Ibid.
\321\ Ibid.
---------------------------------------------------------------------------
The applicant also performed controlled studies in both porcine and
canine AMI models to determine the safety, effectiveness, and mechanism
of action of the SSO2 Therapy.322 323 According
to the applicant, the key summary points from these animal studies are:
---------------------------------------------------------------------------
\322\ Spears, J.R., Henney, C., Prcevski, P., et al., ``Aqueous
Oxygen Hyperbaric Reperfusion in a Porcine Model of Myocardial
Infarction,'' J Invasive Cardiol, 2002, vol. 14(4), pp. 160-6.
\323\ Spears, J.R., Prcevski, P., Xu, R., et al., ``Aqueous
Oxygen Attenuation of Reperfusion Microvascular Ischemia in a Canine
Model of Myocardial Infarction,'' ASAIO J, 2003, vol. 49(6), pp.
716-20.
---------------------------------------------------------------------------
SSO2 Therapy administration post-AMI acutely
improves heart function as measured by left ventricular ejection
fraction (LVEF) and regional wall
[[Page 19356]]
motion as compared with non-treated control subjects.
SSO2 Therapy administration post-AMI results in
tissue salvage, as determined by post-sacrifice histological
measurements of the infarct size. Control animals exhibit larger
infarcts than the SSO2-treated animals.
SSO2 Therapy has been shown to be non-toxic to
the coronary arteries, myocardium, and end organs in randomized,
controlled swine studies with or without induced acute myocardial
infarction.
SSO2 Therapy administration post-AMI has
exhibited regional myocardial blood flow improvement in treated animals
as compared to controls.
A significant reduction in myeloperoxidase (MPO) levels in
the SSO2-treated animals versus controls, which indicate
improvement in underlying myocardial hypoxia.
Transmission electron microscopy (TEM) photographs showing
amelioration of endothelial cell edema and restoration of capillary
patency in ischemic zone cross-sectional histological examination of
the SSO2-treated animals, while non-treated controls exhibit
significant edema and vessel constriction at the microvascular level.
We have the following concerns regarding whether the technology
meets the substantial clinical improvement criterion. We note that the
standard-of-care for STEMI has evolved since the AMIHOT I and AMIHOT II
studies were conducted, such that it is unclear whether use of
SSO2 Therapy would demonstrate the same clinical improvement
as compared to the current standard-of-care. We also note that the
AMIHOT II study used SPECT infarct size data 14 days post-MI for
efficacy and MACE events (including death, re-infarction,
revascularization, and stroke) by 30 days post-MI for safety. We are
concerned that there is no long-term data to demonstrate the validity
of these statistics, and that infarct size has not been completely
validated as a surrogate marker for the combination of PCI plus
SSO2. With respect to the IC-HOT study, we are concerned
that the lack of a control may limit the interpretation of the data. We
also are concerned that the safety data (death, re-infarction, re-
vascularization, stent thrombosis, severe heart failure, and bleeding)
for the IC-HOT study were limited to the 30 days post-MI, with no long-
term data being available.
We are inviting public comments on whether the SSO2
Therapy meets the substantial clinical improvement criterion, including
with respect to whether the results of the AMIHOT I and AMIHOT II
studies remain valid given the advancements in STEMI care since these
trials were conducted, and the availability of long-term data to
validate the efficacy and safety data of the AMIHOT II and IC-HOT
studies.
We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for the
SSO2 Therapy or at the New Technology Town Hall meeting.
p. T2Bacteria[supreg] Panel (T2 Bacteria Test Panel)
T2 Biosystems, Inc. submitted an application for new technology
add-on payments for the T2 Bacteria Test Panel (T2Bacteria[supreg]
Panel) for FY 2020. According to the applicant, the T2Bacteria[supreg]
Panel is indicated as an aid in the diagnosis of bacteremia, bacterial
presence in the blood which is a precursor for sepsis. It is a
multiplex diagnostic panel that detects five major bacterial pathogens
(Enterococcus faecium, Escherichia coli, Klebsiella pneumoniae,
Pseudomonas aeruginosa, and Staphylococcus aureus) associated with
sepsis. According to the applicant, the T2Bacteria[supreg] Panel is
capable of detecting bacterial pathogens directly in whole blood more
rapidly and with greater sensitivity as compared to the current
standard-of-care, blood culture. The applicant noted that the
T2Bacteria[supreg] Panel's major detected species are five of the most
common and virulent sepsis-causing organisms.324 325 The
applicant asserted that, by enabling the rapid administration of
species-specific antimicrobial therapies, the T2Bacteria[supreg] Panel
helps to reduce patients' hospital lengths-of-stay and substantially
improves clinical outcomes. Furthermore, the applicant asserted that
the T2Bacteria[supreg] Panel helps to reduce the overuse of ineffective
or unnecessary antimicrobial therapy, reducing patient side effects,
lowering hospital costs, and potentially counteracting the growing
resistance to antimicrobial therapy.
---------------------------------------------------------------------------
\324\ Boucher, H., Talbot, G., Bradley, J., Edwards, J.,
Gilbert, D., Rice, L., Bartlett, J., ``Bad Bugs, No Drugs: No
ESKAPE! An update from the infectious disease society of America,''
Clinical Infectious Diseases, 2009, vol. 48, pp. 1-12, doi:10.1086/
595011.
\325\ Rice, L., ``Federal Funding for the Study of Antimicrobial
Resistance in Nosocomial Pathogens: No ESKAPE,'' Journal of
Infectious Diseases, 2008, vol. 197, pp. 1079-1081, doi:10.1086/
533452.
---------------------------------------------------------------------------
The applicant stated that the T2Bacteria[supreg] Panel runs on the
T2Dx Instrument, which is a bench-top diagnostic instrument that
utilizes developments in magnetic resonance and nanotechnology to
detect pathogens directly in whole blood, plasma, serum, saliva, sputum
and urine at limits of detection as low as one colony forming unit per
milliliter. The applicant explained that the T2Dx breaks down red blood
cells, concentrates microbial cells and cellular debris, amplifies DNA
using a thermostable polymerase and target-specific primers, and
detects amplified product by amplicon-induced agglomeration of
supermagnetic particles and T2MR measurement.\326\ To perform a
diagnostic test, the patient's sample tube is snapped onto the
disposable test cartridge, which is pre-loaded with all necessary
reagents. The cartridge is then inserted into the T2Dx, which
automatically processes the sample and then delivers a diagnostic test
result. The applicant asserted that each test panel is comprised of a
test cartridge and a reagent tray and that each are required to run the
T2Bacteria[supreg] Test Panel.
---------------------------------------------------------------------------
\326\ Clancy, C., & Nguyen, H., ``T2 magnetic resonance for the
diagnosis of bloodstream infections: charting a path forward,''
Journal of Antimicrobial Chemotherapy, 2018, vol. 73(4), pp. iv2-
iv5, doi:10.1093/jac/dky050.
---------------------------------------------------------------------------
As stated above, the current standard-of-care for identifying
bacterial bloodstream infections that cause sepsis is a blood culture.
The applicant explained that blood culture diagnostics have many
limitations, beginning with a series of time and labor intensive
analyses. According to the applicant, completing a blood culture
requires typically 20 mLs or more of a patient's blood, which is
obtained in two 10 mL draws and placed into two blood culture bottles
containing nutrients formulated to grow bacteria. The applicant
explained that before the blood culture indicates if a patient is
infected, pathogens typically must reach a concentration of 1,000,000
to 100,000,000 CFU/mL in the blood specimen. This growth process
typically takes 1 to 6 or more days because the pathogen's initial
concentration in the blood specimen is often less than 10 CFU/mL. The
applicant stated that a typical blood culture provides a result in a 2
to 4 day timeframe for species ID and yields 50 to 65 percent clinical
sensitivity.327 328 According to the applicant, a recent
retrospective analysis of 13 U.S. hospitals and over
[[Page 19357]]
150,000 cultures found a median blood culture time for species ID of 43
hours.\329\
---------------------------------------------------------------------------
\327\ Clancy, C., & Nguyen, M. H., ``Finding the ``Missing 50%''
of Invasive Candidiasis: How nonculture Diagnostics will improve
understanding of disease spectrum and transform patient care,''
Clinical Infectious Diseases, 2013, vol. 56(9), pp. 1284-1292,
doi:10.1093/cid/cit006.
\328\ Cockerill, F., Wilson, J., Vetter, E., Goodman, K.,
Torgerson, C., Harmsen, W., Wilson, W., ``Optimal Testing Parameters
for Blood Cultures,'' Clinical Infectious Diseases, 2004, vol. 38,
pp. 1724-1730.
\329\ Tabak, Y., Vankeepuram, L., Ye, G., Jeffers, K., Gupta,
V., & Murray, P., ``Blood Culture Turanaround Time in US Acute Care
Hospitals and Implications for Laboratory Process Optimization,''
Journal of Clinical Microbiology, August 2018, pp. 1-15.
---------------------------------------------------------------------------
According to the applicant, blood cultures provide results at
multiple stages. A negative test result requires a minimum of 5 days
for blood cultures. A positive blood culture typically means that some
pathogen is present, but additional steps must be performed to identify
the specific pathogen and provide targeted therapy. The applicant
submitted data stating that during the T2Bacteria[supreg] Panel's
pivotal study, blood cultures took an average of 63.2 hours (off
T2Bacteria[supreg] Panel) and 38.5 hours (on T2Bacteria[supreg] Panel)
to obtain positive results and 96.0 hours (off T2Bacteria[supreg]
Panel) and 71.7 hours (on T2Bacteria[supreg] Panel) to achieve species
identification.\330\ The applicant stated that, given this length of
time to species identification, the first therapy for a patient at risk
of sepsis is often broad-spectrum antibiotics, which treats some, but
not all bacteria types. In addition, the applicant indicated that the
time to species identification in blood culture diagnostics causes
delays in administration of species-specific targeted therapies,
increasing hospital lengths-of-stay and risk of death.
---------------------------------------------------------------------------
\330\ T2 Biosystems, Inc., ``T2Bacteria[supreg] Panel for use on
the T2Dx[supreg] Instrument, 510(k) summary,'' Lexington, 2018.
---------------------------------------------------------------------------
With respect to the newness criterion, the applicant filed a
section 510(k) premarket notification with the FDA on September 8, 2017
for the T2Bacteria[supreg] Panel. According to the applicant, the
T2Bacteria[supreg] Panel received FDA 510(k) clearance on May 24, 2018,
based on a determination of substantial equivalence to a legally
marketed predicate device. The applicant noted that the
T2Bacteria[supreg] Panel has a very broad application in the inpatient
hospital setting and, as a result, potential cases available for use of
the T2Bacteria[supreg] Panel may be identified by thousands of ICD-10-
CM diagnosis codes. We note that the applicant has submitted a request
to the ICD-10 Coordination and Maintenance Committee for approval for a
unique ICD-10-PCS procedure code, effective in FY 2020, to describe
procedures which use the T2Bacteria[supreg] Panel. Currently, there are
no ICD-10-PCS procedure codes to uniquely identify procedures involving
the use of the T2Bacteria[supreg] Panel.
As discussed above, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and would not be considered ``new''
for purposes of new technology add-on payments.
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome, the
applicant asserted that the T2Bacteria[supreg] Panel: (1) Has a
different mechanism of action when compared to the current standard-of-
care for the diagnosis of bacterial pathogens directly from whole
blood; and (2) is designed to achieve a different therapeutic outcome
when compared to the other diagnostic test panel that is based on the
same technological diagnostic platform. Specifically, the applicant
asserted that the standard-of-care blood culture is a laboratory test
in which blood, taken from the patient, is inoculated into bottles
containing culture media and incubated over a period of time to
determine whether infection-causing micro-organisms (bacteria or fungi)
are present in the patient's bloodstream. In contrast, the applicant
stated that the T2Bacteria[supreg] Panel relies on developments in
magnetic resonance and nanotechnology to determine the presence of
bacterial pathogens in a patient's blood by exploiting the physics of
magnetic resonance. Furthermore, the applicant indicated that the only
other product on the U.S. market that uses the same or similar
mechanism of action as the T2Bacteria[supreg] Panel is the T2Candida
Panel, which detects five clinically relevant species of Candida, a
fungal pathogen known to cause sepsis. However, the applicant noted
that the T2Candida Panel achieves a different therapeutic outcome than
the T2Bacteria[supreg] Panel, which is the diagnostic aid in the
treatment of sepsis caused by fungal infections in the blood.
With regard to the second criterion, whether the technology is
assigned to the same or different MS-DRG, the applicant did not
comment. However, we believe that cases involving the use of the
technology would be assigned to the same MS-DRGs as cases involving the
current standard-of-care laboratory blood cultures.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, according to the
applicant, the T2Bacteria[supreg] Panel would be used as a diagnostic
aid in the treatment of similar diseases and patient populations as the
current standard-of-care laboratory blood cultures.
We are concerned that the mechanism of action of the
T2Bacteria[supreg] Test Panel may be similar to the mechanism of action
used by the current standard-of-care laboratory blood cultures or other
available diagnostic tests. While the applicant states that the
technology has a different mechanism of action because its differs from
the standard-of-care, blood cultures, we note that like other available
diagnostic tests, the T2Bacteria[supreg] Test Panel uses DNA to
identify bacterial species. Similarly, in order to obtain species
identification from the current standard-of-care, blood cultures, a DNA
test is also required. Therefore, we are concerned with the similarity
of this mechanism of action. We are inviting public comments on whether
the T2Bacteria[supreg] Test Panel is substantially similar to the
standard-of-care laboratory blood cultures or other diagnostic tests
and whether this technology meets the newness criterion.
With regard to the cost criterion, the applicant provided the
following analysis. To identify the MS-DRGs to which potential cases
available for use of the T2Bacteria[supreg] Panel would most likely
map, a selection of ICD-10-CM diagnosis codes associated with the
clinical presence of the on-panel sepsis-causing bacteria for which the
T2Bacteria[supreg] Test Panel tests was
identified.331 332 333 334 335 The applicant asserted that
the T2Bacteria[supreg] Test Panel can identify three Gram-negative
blood
[[Page 19358]]
stream infections (Escherichia coli, Klebsiella pneumoniae, Pseudomonas
aeruginosa) and two Gram-positive bloodstream infection species
(Staphylococcus aureus, and Enterococcus faecium). A total of 67 ICD-
10-CM diagnosis codes were identified and segmented by two categories,
infections (39 codes) and sepsis (28 codes). The applicant asserted
that the former category represents potential cases available to be
diagnosed by the T2Bacteria[supreg] Panel for patients who are at risk
for sepsis and the latter represents potential cases available for use
of the T2Bacteria[supreg] Panel for patients who have been diagnosed
with a confirmed sepsis. The applicant stated that distinguishing
between the two was necessary due to the varying costs associated with
the treatment of patients at risk for sepsis versus confirmed cases of
sepsis.
---------------------------------------------------------------------------
\331\ Calderwood, S., ``Clinical manifestations, diagnosis and
treatment of enterohemorrhagic Escherichia coli (EHEC) infection,''
September 2017. Available at: https://www.uptodate.com/contents/clinical-manifestations-diagnosis-and-treatment-of-enterohemorrhagic-escherichia-coli-ehec-infection.
\332\ Yu, W.L., & Chuang, Y.C., ``Clinical features, diagnosis,
and treatment of Klebsiella pneumoniae infection,'' May 18, 2017.
Available at: https://www.uptodate.com/contents/clinical-features-
diagnosis-and-treatment-of-klebsiella-pneumoniae-
infection?search=Klebsiella%20pneumoniae&source=search_result&selecte
dTitle=1~150&usage_type=default&display_rank=1.
\333\ Kanj, S., & Sexton, D., ``Epidemiology, microbiology, and
pathogenesis of Pseudomonas aeruginosa infection,'' October 9, 2018.
Available at: https://www.uptodate.com/contents/epidemiology-
microbiology-and-pathogenesis-of-pseudomonas-aeruginosa-
infection?search=Pseudomonas%20aeruginosa&source=search_result&select
edTitle=2~150&usage_type=default&display_rank=2.
\334\ Holland, T., & Fowler, V., ``Clinical manifestations of
Staphylococcus aureus infection in adults,'' September 22, 2017.
Available at: https://www.uptodate.com/contents/clinical-
manifestations-of-staphylococcus-aureus-infection-in-
adults?search=Staphylococcus%20aureus&source=search_result&selectedTi
tle=3~150&usage_type=default&display_rank=3.
\335\ Murray, B., ``Microbiology of enterococci,'' August 31,
2017. Available at: https://www.uptodate.com/contents/microbiology-
of-
enterococci?search=Enterococcus%20faecium&source=search_result&select
edTitle=2~21&usage_type=default&display_rank=2.
---------------------------------------------------------------------------
After the identification of the 39 infection and 28 sepsis
diagnosis codes, both selections were refined by the applicant with the
removal of cases identified by a total of 15 codes that represent
pathogens not within the spectrum of blood infections that the
T2Bacteria[supreg] Panel has been tested with and/or has been confirmed
to detect. From the infection diagnosis codes, cases identified by two
ICD-10-CM diagnosis codes: A021 (Salmonella sepsis); and A227 (Anthrax
sepsis) were removed. From the sepsis diagnosis codes, cases identified
by 13 diagnosis codes were removed: A021 (Salmonella sepsis); A227
(Anthrax sepsis); A400 (Sepsis due to streptococcus, group A); A401
(Sepsis due to streptococcus, group B); A403 (Sepsis due to
streptococcus pneumonia); A408 (Other streptococcal sepsis); A409
(Streptococcal sepsis, unspecified); A413 (Sepsis due to hemophilus
influenza); A414 (Sepsis due to anaerobes); A4153 (Sepsis due to
serratia); A427 (Actinomycotic sepsis); A5486 (Gonococcal sepsis); and
B377 (Candidal sepsis). The remaining infection and sepsis diagnosis
codes were then used to query the FY 2017 MedPAR database to identify
inpatient discharges reporting these diagnosis codes under the primary
and secondary position.
According to the applicant, the resulting sets of MS-DRGs from both
diagnosis code selection queries had visible commonalities when looking
at only the MS-DRGs that contained potential cases which represented at
least 1 percent of the discharge volume for the specific diagnoses.
According to the applicant, due to the high volume of cases pulled and
visible trends, provider-specific discharges at the MS-DRG level with
fewer than 11 discharges were omitted from the analysis. In reconciling
the list of MS-DRGs containing potential cases identified for the
specific infection and sepsis codes, the applicant stated that MS-DRGs
853 (Infectious & Parasitic Diseases with O.R. Procedure with MCC), 870
(Septicemia or Severe Sepsis with Mechanical Ventilation >96 Hours),
871 (Septicemia or Severe Sepsis without Mechanical Ventilation >96
Hours with MCC) and 872 (Septicemia or Severe Sepsis without Mechanical
Ventilation >96 Hours without MCC) contain at least 1 percent of the
potential case volume under both scenarios and are the MS-DRGs to which
these potential cases available for use of the T2Bacteria[supreg] Test
Panel would most closely map.
The applicant provided multiple cost analysis scenarios to
demonstrate that the T2Bacteria[supreg] Test Panel meets the cost
criterion. Eight scenarios were provided for the Sepsis and Infection
diagnosis codes, separately, using the ICD-10-CM selections and based
on the following methodologies: (1) Applicable discharges for the
potential cases contained in 4 MS-DRGs (853, 870, 871 and 872); (2)
applicable discharges for cases inclusive of all identified MS-DRGs;
(3) applicable discharges with ICU usage for potential cases contained
in 4 MS-DRGs (853, 870, 871 and 872); (4) applicable discharges with
ICU usage for potential cases inclusive of all identified MS-DRGs; (5)
applicable discharges for cases contained in 4 MS-DRGs (853, 870, 871
and 872) with removal of 50 percent of pharmacy charges for prior
technology; (6) applicable discharges for potential cases inclusive of
all identified MS-DRGs with removal of 50 percent of pharmacy charges
for prior technology; (7) applicable discharges with ICU usage for
potential cases contained in 4 MS-DRGs (853, 870, 871 and 872) with
removal of 75 percent of pharmacy charges for prior technology; and (8)
applicable discharges with ICU usage for potential cases contained
inclusive of all identified MS-DRGs with removal of 75 percent of
pharmacy charges for prior technology.
The applicant's order of operations used for each analysis is as
follows: (1) Using the 15 sepsis or 37 infection diagnosis codes; (2)
using the complete set of cases or those who had an ICU stay; (3)
removing pharmacy charges at 0 percent, 50 percent, or 75 percent (for
ICU patients only); and (4) standardizing the charges per cases using
the Impact File published with the FY 2019 IPPS/LTCH PPS final rule
correction notice data file. After removing the charges for the prior
technology and standardizing charges, the applicant applied an
inflation factor of 1.08986, which is the 2-year inflation factor from
the FY 2019 IPPS/LTCH PPS final rule correction notice (83 FR 49844) to
update the charges from FY 2017 to FY 2019. The applicant then added
charges for the T2Bacteria[supreg] Panel. Under each scenario, the
applicant stated that the inflated average case-weighted standardized
charge per case exceeded the average case-weighted threshold amount.
Below we provide a table depicting the applicant's results for all 16
scenarios that the applicant indicated demonstrates that the technology
meets the cost criterion.
------------------------------------------------------------------------
Final inflated
average case- Average
weighted case[dash]
Scenario standardized weighted
charge per threshold
case amount
------------------------------------------------------------------------
Sepsis Discharges for Cases Contained in $69,088 $62,699
4 MS-DRGs (872, 871, 870 and 853)......
Sepsis Discharges for Cases Inclusive of 74,630 64,991
All Identified MS-DRGs.................
Sepsis Discharges for Cases with ICU 94,385 69,194
Usage Contained in 4 MS-DRGs (872, 871,
870 and 853)...........................
Sepsis Discharges for Cases with ICU 103,285 73,349
Usage Inclusive of All Identified MS-
DRGs...................................
Sepsis Discharges for Cases Contained in 63,503 62,699
4 MS-DRGs (872, 871, 870 and 853) with
Removal of 50 Percent of Pharmacy
Charges for Prior Technology...........
Sepsis Discharges for Cases Inclusive of 68,555 64,991
All Identified MS-DRGs with Removal of
50 Percent of Pharmacy Charges for
Prior Technology.......................
[[Page 19359]]
Sepsis Discharges for Cases with ICU 82,415 69,194
Usage Contained in 4 MS-DRGs (872, 871,
870, and 853) with Removal of 75
Percent of Pharmacy Charges for Prior
Technology.............................
Sepsis Discharges for Cases with ICU 90,151 73,350
usage Inclusive of All Identified MS-
DRGs with Removal of 75 Percent of
Pharmacy Charges for Prior Technology..
Infection Discharges for Cases Contained 69,349 60,696
in 4 MS-DRGs (872, 871, 870 and 853)...
Infection Discharges for Cases Inclusive 61,299 52,595
of All Identified MS-DRGs..............
Infection Discharges for Cases with ICU 95,952 67,024
Usage Contained in 4 MS-DRGs (872, 871,
870 and 853)...........................
Infection Discharges for Cases with ICU 102,171 68,682
Usage Inclusive of All Identified MS-
DRGs...................................
Infection Discharges for Cases Contained 63,744 60,696
in 4 MS-DRGs (872, 871, 870 and 853)
with Removal of 50 Percent of Pharmacy
Charges for Prior Technology...........
Infection Discharges for Cases Inclusive 56,833 52,595
of All Identified MS-DRGs with Removal
of 50 Percent of Pharmacy Charges for
Prior Technology.......................
Infection Discharges for Cases with ICU 83,760 67,024
Usage Contained in 4 MS-DRGs (872, 871,
870, and 853) with Removal of 75
Percent of Pharmacy Charges for Prior
Technology.............................
Infection Discharges for Cases with ICU 90,091 68,683
Usage Inclusive of All Identified MS-
DRGs with Removal of 75 Percent of
Pharmacy Charges for Prior Technology..
------------------------------------------------------------------------
The applicant noted that, in all 16 scenarios, the average case-
weighted standardized charge per case for potential cases available for
aid by use of the T2Bacteria[supreg] Test Panel would exceed the
average case-weighted threshold amounts in the FY 2019 IPPS/LTCH PPS
final rule correction notice data file by between $803.87 and
$33,488.82. Supplementary analyses were provided by the applicant,
which included eight additional scenarios that combined the 15 sepsis
and 37 infection diagnosis codes into one set of 52 diagnosis codes.
The applicant again utilized an inflation factor of 1.08986 and
followed the same methodology as the previously discussed cost
analyses. The applicant again noted that the final inflated average
case-weighted standardized charge per case exceeded the average case-
weighted threshold amounts in all scenarios, ranging between $1,083.67
and $32,430.57.
We are inviting public comments on whether the T2Bacteria[supreg]
Panel meets the cost criterion.
With respect to the substantial clinical improvement criterion, the
applicant asserted that the T2Bacteria[supreg] Panel represents a
substantial clinical improvement over existing technologies. According
to the applicant, the T2Bacteria[supreg] Panel is the only FDA-cleared
diagnostic aid that has the ability to rapidly and accurately identify
sepsis-causing bacteria species directly from whole blood within 3 to 5
hours, instead of the 1 to 5 days required by current standard-of-care
laboratory blood cultures or other diagnostic technology. The applicant
also asserted that the use of the T2Bacteria[supreg] Panel provides
more rapid beneficial resolution of the disease process due to enabling
faster treatment. Several studies provided by the applicant suggest
that effective detection prior to therapy can lead to a reduction in
hospital lengths-of-stay and likelihood of death.336 337
According to the applicant, in these studies for every hour reduction
in time to effective therapy or species ID, the length-of-stay
decreased by 2.7 hours.
---------------------------------------------------------------------------
\336\ Huang, A., Newton, D., Kunapuli, A., Gandhi, T., Washer,
L., Isip, J., Nagel, J., ``Impact of Rapid Organism Identification
via Matrix-Assisted Laser Desorption/Ionization Time-of-Flight
Combined with Antimicrobial Stewardship Team Intervention in Adult
Patients with Bacteremia and Candidemia,'' Clinical Infectious
Diseases, 2013, vol. 57(9), pp. 1237-1245.
\337\ Perez, K., Olsen, R., Musick, W., Cernoch, P., Davis, J.,
Peterson, L., & Musser, J., ``Integrating Rapid Diagnostics and
Antimicrobial Stewardship Improves Outcomes in Patients with
Antibiotic-Resistant Gram-Negative Bacteremia,'' Journal of
Infection, 2014, vol. 69(3), pp. 216-225.
---------------------------------------------------------------------------
The applicant stated that the T2Bacteria[supreg] pivotal trial that
led to the FDA clearance enrolled 11 hospitals in the United States and
1,427 patients with a blood culture ordered as the standard-of-care,
with species ID determined by MALDI-TOF or Vitek2.\338\ Furthermore,
due to the low prevalence of panel specific organisms, an additional
250 contrived specimens were evaluated. The T2Bacteria[supreg] Panel
result was blinded to the managing staff and did not influence care.
Blood samples were drawn for culture and T2Bacteria[supreg] Panel from
the same line at the same time. The mean time to blood culture
positivity was 51.0 43.0 hours (mean SD) and
the mean time to species ID was 83.7 47.6 hours (mean
SD). In contrast, the mean time to T2Bacteria[supreg]
Panel result was 6.5 1.9 hours, where a full load of 7
samples completed in 7.70 1.4 hours and a single sample
completed in 3.6 0.02 hours. Therefore, the difference in
mean time to result between blood culture and the T2Bacteria[supreg]
Panel assay was 77.2 hours or 3.2 days (p<0.001). Compared to the
matched draw blood culture and contrived samples, the overall
sensitivity ranged from 81.3 percent to 100 percent and specificity
ranged from 95.0 percent to 100 percent, respectively. Of the 190
positive T2Bacteria[supreg] Panel results, 35 had matching blood
culture results and 155 were potentially false positive. Of these 155,
35 had a positive blood culture at another blood draw within 14 days;
30 had positive results by amplification and gene sequencing; and 23
had other positive non-blood specimens for the same organism. Sixty-
three of the 190 (33 percent) positive results were not associated with
evidence of infection. Later testing by the applicant confirmed that
reagent contamination caused the high false positive rates specifically
for E. coli of 1.7 percent and P. aeruginosa (1.7 percent) in stored
blood samples. Compared to blood culture results for species identified
with the T2Bacteria[supreg] Panel, the assay detected 3.2-times more
positives associated with infection.
---------------------------------------------------------------------------
\338\ T2 Biosystems, Inc., ``T2Bacteria[supreg] Panel for use on
the T2Dx[supreg] Instrument, 510(k) summary,'' Lexington, 2018.
---------------------------------------------------------------------------
Nguyen, et al., a submitted publication manuscript based on the
pivotal study data used by the FDA, found that the species
identification of the T2Bacteria[supreg] Panel took an average mean
time of 3.61 0.2 hours up to 7.70 1.38 hours
(mean time dependent on the number of samples loaded, 1 to 7), which
was shorter than that of the standard-of-care blood culture with a
[[Page 19360]]
mean time of 71.7 39.3 hours.\339\ In addition to faster
species identification, the applicant asserted that the
T2Bacteria[supreg] Panel identifies more infection-positive cases than
blood cultures when verified by non-concurrent test results \340\ or
when verified with proven, probably, or possible criteria (concurrent
blood culture positive results, non-concurrent blood culture results
with positive culture results from another site within 21 days, and no
culture match, but the T2Bacteria[supreg] Panel bacteria was a
plausible cause of disease, respectively). In this study, 66 percent of
patients with concomitant blood culture results and T2Bacteria[supreg]
Panel positive results were not on active antibiotics at the time of
the blood draw, while 24 percent of patients with probable or possible
blood stream infections that were positive by T2Bacteria[supreg] Panel
alone were not on effective therapy.
---------------------------------------------------------------------------
\339\ Nguyen, M.H., Clancy, C., Pasculle, A.W., Pappas, P.,
Alangaden, G., Pankey, G., Mylonakis, E. ``Clinical performance of
the T2Bacteria panel for diagnosis bloodstream infections due to
five common bacterial pathogens,'' Manuscript for submission.
\340\ T2 Biosystems, Inc., ``T2Bacteria[supreg] Panel for use on
the T2Dx[supreg] Instrument, 510(k) summary,'' Lexington, 2018.
---------------------------------------------------------------------------
In another study submitted by the applicant, 137 blood cultures and
T2Bacteria[supreg] Panel tests were obtained from participants in the
emergency department.\341\ T2Bacteria[supreg] Panel results were
verified with concordant blood culture results, or when discordant with
blood cultures from another location drawn within 14 days of the
matched draw, or with the whole blood Sanger sequencing method. No
samples generated an invalid result for the T2Bacteria[supreg] assay.
The T2Bacteria[supreg] Panel identified 15 positives for which blood
cultures had concordant matches for 12. The three unmatched positives
were verified via other means. As compared to blood cultures, the
T2Bacteria[supreg] Panel had an overall positive percent agreement of
100 percent (12/12) and a negative percent agreement of 98.4 percent
(662/673). The negative percent agreement is shown to be due to blood
culture results that are indeterminate, or false positive.
---------------------------------------------------------------------------
\341\ Voigt, C., Silbert, S., Widen, R., Marturano, J., Lowery,
T., Ashcraft, D., & Pankey, G., ``The T2Bacteria assay is a
sensitive and rapid detector of bacteremia that can be initiated in
the emergency department and has potential to favorably influence
subsequent therapy,'' Journal of Emergency Medical Review, pp. 1-30.
---------------------------------------------------------------------------
In the same study,\342\ the T2Bacteria[supreg] Panel results
relative to standard-of-care blood culture identification were
classified into four impact level categories: (1) Minimal impact
results have negative blood culture results with no evidence of
infection for which results would have little to no impact; (2) some
impact results occur for patients who have an effective therapy at the
time of results, but the number of antibiotics administered could have
been reduced; (3) moderate impact results are for those on effective
therapy at the time of results, but were switched to species-directed
therapy within 12 hours of a standard-of-care blood culture
identification; and (4) direct impact results relate to those who could
have been placed on effective therapy earlier based on the results of
the T2Bacteria[supreg] Panel.\343\ The study identified 7 ``minimal
impact'' incidents, 8 ``some impact'' incidents, 4 ``moderate impact''
incidents, and 4 ``direct impact'' incidents, indicating that 16/23
(69.6 percent) of positive test results could have potentially
influenced patient care.
---------------------------------------------------------------------------
\342\ Ibid.
\343\ Voigt, C., Silbert, S., Widen, R., Marturano, J., Lowery,
T., Ashcraft, D., & Pankey, G., ``The T2Bacteria assay is a
sensitive and rapid detector of bacteremia that can be initiated in
the emergency department and has potential to favorably influence
subsequent therapy,'' Journal of Emergency Medical Review, pp. 1-30.
---------------------------------------------------------------------------
In articles provided by the applicant which concerned separate
studies, the T2Bacteria[supreg] Panel was found to have a shorter time
to species identification than blood cultures.344 345 The
study analysis by De Angelis, et al., 2018, an international,
prospective observational study involving 129 patients (144 enrolled)
18 years of age and older who had a blood culture and for whom a
T2Bacteria[supreg] Panel was also obtained, showed that the
T2Bacteria[supreg] Panel provided a mean time to species identification
and negative result of 5.5 1.4 hours and 6.1
1.5 hours, respectively as compared to 25.2 15.2 hours and
120 0.0 hours resulting from the standard-of-care blood
culture method, respectively.\346\ There were a total of 10
concordantly identified micro-organisms, 2 identified by standard-of-
care blood culture only, and 20 detected by the T2Bacteria[supreg]
Panel only. As compared to the results from the standard-of-care blood
culture method, the results from the T2Bacteria[supreg] Panel had a
sensitivity that ranged from 50 percent to 100 percent across the 5
detection channels, with an aggregate of 83.3 percent and a specificity
that ranged from 94.8 percent to 100 percent, with an aggregate of 97.6
percent. For patients who had a matched blood culture positive (n=8)
and who met the criterion of infection (n=6), a total of 36 percent (5/
14) of the patients were receiving inappropriate antimicrobial therapy
at the time of the T2Bacteria[supreg] Panel result. The results of this
study are again discussed in another article submitted by the
applicant, which states that these results may have the potential to
rapidly identify the five on-panel pathogens that may include cases
missed by results of the standard-of-care blood culture.\347\
---------------------------------------------------------------------------
\344\ De Angelis, G., Posteraro, B., Dr Carolis, E.,
Menchinelli, G., Franceschi, F., Tumbarello, M., Sanguinetti, M.,
``T2Bacteria magnetic resonance assay for the rapid detection of
ESKAPEc pathogens directly in whole blood,'' Journal of
Antimicrobial Chemotherapy, 2018, vol. 73, pp. iv20-iv26,
doi:10.1093/jac/dky049.
\345\ Nguyen, M. H., Clancy, C., Pasculle, A. W., Pappas, P.,
Alangaden, G., Pankey, G., Mylonakis, E., ``Clinical performance of
the T2Bacteria panel for diagnosis bloodstream infections due to
five common bacterial pathogens,'' Manuscript for submission.
\346\ De Angelis, G., Posteraro, B., Dr Carolis, E.,
Menchinelli, G., Franceschi, F., Tumbarello, M., Sanguinetti, M.,
``T2Bacteria magnetic resonance assay for the rapid detection of
ESKAPEc pathogens directly in whole blood,'' Journal of
Antimicrobial Chemotherapy, 2018, vol. 73, pp. iv20-iv26,
doi:10.1093/jac/dky049.
\347\ Clancy, C., & Nguyen, H., ``T2 magnetic resonance for the
diagnosis of bloodstream infections: charting a path forward,''
Journal of Antimicrobial Chemotherapy, 2018, vol. 73(4), pp. iv2-
iv5, doi:10.1093/jac/dky050.
---------------------------------------------------------------------------
The applicant further asserted that the T2Bacteria[supreg] Panel
provides a decreased rate of subsequent diagnostic or therapeutic
interventions. The applicant discussed the results of a meta-analysis
of 70 studies, in which the proportion of patients on an inappropriate
empiric therapy was 46.5 percent.\348\ The applicant indicated that the
results show that amongst patients with a blood culture draw, typical
antibiotic administration rates range from 50 to 70
percent.349 350 351 The applicant asserted that based on the
results of the analysis by the Voigt, et al., manuscript, 35 percent
(8/23) of the patients, receiving 3.6 1.1 (mean SD) unique antibiotics per patient, could have potentially seen
[[Page 19361]]
a reduction in the number of administered antibiotics.\352\ The
applicant further stated via a supplementary presentation to CMS that
the use of the T2Bacteria[supreg] Panel allows for earlier species
directed therapy than that allowed for by standard-of-care blood
cultures. The applicant believed that the use of the T2Bacteria[supreg]
Panel may allow the provider to move from broad potentially unnecessary
empiric to species-targeted therapy. The applicant stated that using
hospital antibiograms and being informed of the species by the
T2Bacteria[supreg] Panel, the physician is able to use species-directed
therapy and place up to 90 percent of patients on an effective therapy
in a few hours instead of 2 to 3 days.
---------------------------------------------------------------------------
\348\ Paul, M., Shani, V., Muchtar, E., Kariv, G., Robenshtok,
E., & Leibovici, L., ``Systematic Review and Meta-Analysis of the
Efficacy of Appropriate Empiric Antibiotic Therapy for Sepsis,''
Antimicrobial Agents and Chemotherapy, 2010, vol. 54(11), pp. 4851-
4863.
\349\ Castellanos-Ortega, A., Suberviola, B., Garcia-Astudillo,
L., Holanda, M., Ortiz, F., Llorca, J., & Delgado-Rodriguez, M.,
``Impact of the Surviving Sepsis Campaign Protocols on Hospital
Length of Stay and Mortality in Septic Shock Patients: Results of a
three-year follow-up quasi-experimental study,'' Crit Care Med,
2010, vol. 38(4), pp. 1036-1043, doi:10.1097/CCM.0b0bl3e3181d455b6.
\350\ Karlsson, S., Varpula, M., Pettila, V., & Parvlainen, I.,
``Incidence, Treatment, and Outcome of Severe Sepsis in ICU-treated
Adults in Finland: The Finnsepsis study,'' Intensive Care Medicine,
2007, vol. 33, pp. 435-443, doi:10.1007/s00134-006-0504-z.
\351\ Suberviola, B., Marquez-Lopez, A., Castellanos-Ortega, A.,
Fernandez-Mazarrasa, C., Santibanez, M., & Martinez, L.,
``Microbiological Diagnosis of Speis: Polymerase chain reaction
system versus blood cultures,'' American Journal of Critical Care,
2016, vol. 25(1), pp. 68-75.
\352\ Voigt, C., Silbert, S., Widen, R., Marturano, J., Lowery,
T., Ashcraft, D., & Pankey, G., ``The T2Bacteria assay is a
sensitive and rapid detector of bacteremia that can be initiated in
the emergency department and has potential to favorably influence
subsequent therapy,'' Journal of Emergency Medical Review, pp. 1-30.
---------------------------------------------------------------------------
According to the applicant, the practice of antibiotic de-
escalation was recently evaluated across 23 studies and found to be
safe and effective.\353\ Given the toxicity associated with
antibiotics, where some antibiotics cause encephalopathies including
seizures \354\ and in extreme cases show up to a 4.5 percent mortality
rate due to the antibiotic itself,\355\ the applicant asserted that
judicious use of antibiotics is necessary. The applicant further stated
that rapid diagnostics such as that able to be accomplished by the use
of the T2Bacteria[supreg] Panel assay, due to its negative predictive
value (NPV) of 99.7 percent,\356\ will enable physicians to focus
therapy and reduce the use of unnecessary drugs, where a targeted
therapy is possible in 3.8 hours instead of 2 days, reducing toxicity
and development of resistance.\357\
---------------------------------------------------------------------------
\353\ Ohji, G., Doi, A., Yamamoto, S., & Iwata, K., ``Is De-
escalation of Antimicrobials Effective? A systematic review and
meta-analysis,'' International Journal of Infectious Diseases, 2016,
vol. 49, pp. 71-79, Retrieved from http://dx.doi.org/10.1016/j.ijid.2016.06.002.
\354\ Bhattacharyya, S., Darby, R.R., Raibagkar, P., Gonzalez
Castro, L.N., & Berkowitz, A., ``Antibiotic-associated
Encephalopathy,'' American Academy of Neurology, 2016, pp. 963-971.
\355\ Koch-Weser, J., Sidel, V., Federman, E., Kanarek, P.,
Finer, D., & Eaton, A., ``Adverse Effects of Sodium Colistimethate;
Manifestations and specific reaction rates during 317 courses of
therapy,'' Annals of Internal Medicine, 1970, vol. 72, pp. 857-868.
\356\ Nguyen, M. H., Clancy, C., Pasculle, A.W., Pappas, P.,
Alangaden, G., Pankey, G., Mylonakis, E., ``Clinical performance of
the T2Bacteria panel for diagnosis bloodstream infections due to
five common bacterial pathogens,'' Manuscript for submission.
\357\ Weisz, E., Newton, E., Estrada, S., & Saunders, M.,
``Early Experience with the T2Bacteria Research Use Only (RUO) Panel
at a Community Hospital,'' Lee Memorial Hospital, Fort Meyers.
---------------------------------------------------------------------------
The applicant stated that the use of the T2Bacteria[supreg] Panel
will result in reduced mortality. The applicant indicated that the
results of large retrospective analyses show that every hour delaying
time to appropriate antibiotic therapy increased odds of death by 4
percent or reduced survival by 7.6 percent.358 359 360 The
applicant stated that the results of the T2Bacteria[supreg] Panel
Pivotal trial show that out of 23 positive patients, 4 (17 percent)
could have seen a reduction in time to effective therapy, with mean
time of 28.0 hours. An additional 4 (17 percent) could have seen a
reduction in time to species-directed therapy, with mean time reduction
of 52.6 hours. The applicant stated that by using the
T2Bacteria[supreg] Panel assay relative to standard-of-care blood
cultures, they expect a potential reduction in the odds of death to be
52.8 percent. According to the applicant, this factor of 2 difference
is consistent with a two-time higher odds of death in patients given
inappropriate empiric antibiotics relative to appropriate empiric
antibiotics.\361\ The applicant indicated that this result suggests
that employing the use of the T2Bacteria[supreg] Panel assay should
reduce mortality in bacteremia patients who are not immediately on
appropriate therapy.
---------------------------------------------------------------------------
\358\ Paul, M., Shani, V., Muchtar, E., Kariv, G., Robenshtok,
E., & Leibovici, L., ``Systematic Review and Meta-Analysis of the
Efficacy of Appropriate Empiric Antibiotic Therapy for Sepsis,''
Antimicrobial Agents and Chemotherapy, 2010, vol. 54(11), pp. 4851-
4863.
\359\ Kumar, A., Roberts, D., Wood, K., Light, B., Parrillo, J.,
Sharma, S., Cheang, M., ``Duration of Hypotension before Initiation
of Effective Antimicrobial Therapy is the Critical Determinant of
Survival in Human Septic Shock,'' Crit Care Med, 2006, vol. 34(6),
pp. 1589-1596, doi:10.1097/01.CCM.0000217961.75225.E9.
\360\ Seymour, C., Gesten, F., Prescott, H., Friedrich, M.,
Iwashyna, T., Phillips, G., Levy, M., ``Time to Treatment and
Mortality during Mandated Emergency Care for Sepsis,'' The New
England Journal of Medicine, 2017, vol. 376(23), pp. 2235-2244,
doi:10.1056/NEJMoa1703058.
\361\ Paul, M., Shani, V., Muchtar, E., Kariv, G., Robenshtok,
E., & Leibovici, L., ``Systematic Review and Meta-Analysis of the
Efficacy of Appropriate Empiric Antibiotic Therapy for Sepsis,''
Antimicrobial Agents and Chemotherapy, 2010, vol. 54(11), pp. 4851-
4863.
---------------------------------------------------------------------------
In the form of supplementary information, the applicant stated that
the use of the T2Bacteria[supreg] Panel covers 5 species, which account
for 50 percent to 70 percent of all blood stream infections, depending
on local epidemiology. According to the applicant, the remaining 30
percent to 50 percent of patients would continue to need standard-of-
care blood cultures for species identification. Based on all of the
above, the applicant believed that the T2Bacteria[supreg] Test Panel
represents a substantial clinical improvement over existing
technologies.
We have the following concerns regarding whether the
T2Bacteria[supreg] Panel meets the substantial clinical improvement
criterion. First, we are not certain that the applicant has provided
sufficient evidence to demonstrate that the early identification
without antibiotic susceptibility provided by the use of the T2
Bacteria[supreg] Panel is enough to prevent unnecessary empiric therapy
because specific identification and antibiotic susceptibilities may
still be required by blood cultures to adequately treat sepsis. For
instance, if an on-panel bacteria were identified it remains possible
that this species could be resistant to the standard-of-care treatment
for such bacteria used in a hospital. In addition, we believe that not
only is it possible for an identified species to be resistant to
typical empiric therapy, therefore diminishing the utility of its early
identification, it also is possible for off-panel organisms to be
present and also not be affected by species-targeted empiric treatment.
The applicant provided supplemental information in which it stated that
consistent with its labeling, the use of the T2Bacteria[supreg] Test
Panel would not replace blood cultures for specific organisms. Given
this information, we are concerned that the use of the
T2Bacteria[supreg] Panel may not be a substantial clinical improvement
over standard-of-care blood cultures, the existing comparator.
Second, the applicant provided research and analyses, which is
suggestive that the use of the T2Bacteria[supreg] Test Panel may lead
to decreased hospital lengths-of-stay, and decreased mortality.
Specifically, these analyses and articles show that there is a
possibility for a correlated relationship between the
T2Bacteria[supreg] Panel's time to species ID and these identified
outcomes. The applicant addressed this issue in a qualitative
manuscript analysis involving identification of potential impacts of
the T2Bacteria[supreg] Test Panel.\362\ We recognize that this
qualitative analysis is informative, but we are concerned that the low
number of cases (under 10) may limit generalizability of these results.
Given this information, we are concerned that in lieu of direct
testing, these suggestive
[[Page 19362]]
findings may not show a causative relationship.
---------------------------------------------------------------------------
\362\ Voigt, C., Silbert, S., Widen, R., Marturano, J., Lowery,
T., Ashcraft, D., & Pankey, G., ``The T2Bacteria assay is a
sensitive and rapid detector of bacteremia that can be initiated in
the emergency department and has potential to favorably influence
subsequent therapy,'' Journal of Emergency Medical Review, pp. 1-30.
---------------------------------------------------------------------------
Third, we are concerned that in all of the studies provided, the
comparator for the T2Bacteria[supreg] Panel is a single blood culture
draw. It is well established that blood culture sensitivity and
specificity increase with repeat blood draws. According to research
provided by the applicant, a single set of blood cultures should not be
drawn, but rather surveillance blood cultures, involving multiple draws
over time, should be practiced.\363\ Therefore, we believe that initial
blood cultures followed by repeated blood draws would have been a
better comparator. Furthermore, we believe an even stronger comparator
for the T2Bacteria[supreg] Test Panel would be other DNA based tests,
such as polymerase chain reaction (PCR), which also utilize DNA to
identify bacterial infections.
---------------------------------------------------------------------------
\363\ Wilson, M., Mitchell, M., Morris, A., Murray, P., Reimer,
L., Reller, L. B., Welch, D., ``Prinicples and Procedures for Blood
Cultures; Approved Guildeline,'' Clinical and Laboratory Standards
Institute, 2007.
---------------------------------------------------------------------------
Ultimately, we are concerned that the use of the T2Bacteria[supreg]
Test Panel may not alter the clinical course of treatment. We believe
that the variable sensitivity and specificity for the
T2Bacteria[supreg] Panel may be of concern if these results do not
compare favorably to other available DNA tests. While some of the false
positives in the pivotal trial were explained by reagent contamination
(43 of the 63 false positives),\364\ the high false positive rate seen
in the applicant's literature, (for example, 13 of 32 positives (40.6
percent),\365\ 58 of 146 positives (39.7 percent),\366\ and a potential
20 of 63 (31.7 percent) from the pivotal trial) may result in
unnecessary treatment of patients. Furthermore, use of a contrived arm
in the pivotal trial and low overall incidence of these five specific
sepsis-causing organisms may make it difficult to determine a
substantial clinical improvement in the complex clinical setting.
Lastly, it seems that blood cultures may still be necessary to identify
species susceptibility because the T2Bacteria[supreg] Test Panel does
not identify susceptibility and subsequent treatment based upon its
results will still require empiric treatment. If these points are true,
then the inferred decreased hospital lengths-of-stay, decreased
mortality, and better clinical outcomes may not be achieved with the
use of the T2Bacteria[supreg] Test Panel.
---------------------------------------------------------------------------
\364\ T2 Biosystems, Inc., ``T2Bacteria[supreg] Panel for use on
the T2Dx[supreg] Instrument, 510(k) summary,'' Lexington, 2018.
\365\ De Angelis, G., Posteraro, B., Dr Carolis, E.,
Menchinelli, G., Franceschi, F., Tumbarello, M., Sanguinetti, M.,
``T2Bacteria magnetic resonance assay for the rapid detection of
ESKAPEc pathogens directly in whole blood,'' Journal of
Antimicrobial Chemotherapy, 2018, vol. 73, pp. iv20-iv26,
doi:10.1093/jac/dky049.
\366\ Nguyen, M. H., Clancy, C., Pasculle, A. W., Pappas, P.,
Alangaden, G., Pankey, G., Mylonakis, E., ``Clinical performance of
the T2Bacteria panel for diagnosis bloodstream infections due to
five common bacterial pathogens,'' Manuscript for submission.
---------------------------------------------------------------------------
We are inviting public comments on whether the T2Bacteria[supreg]
Test Panel technology meets the substantial clinical improvement
criterion, including with respect to the specific concerns we have
raised. We did not receive any written comments in response to the New
Technology Town Hall meeting notice published in the Federal Register
regarding the substantial clinical improvement criterion for the
T2Bacteria[supreg] Test Panel or at the New Technology Town Hall
meeting.
q. VENCLEXTA[supreg]
AbbVie Pharmaceuticals, Inc. submitted an application for new
technology add-on payments for VENCLEXTA[supreg] (venetoclax tablets)
for FY 2020. According to the applicant, VENCLEXTA[supreg] is an oral
anti-cancer drug previously FDA-approved for the treatment of patients
who have been diagnosed with chronic lymphocytic leukemia (CLL) with
17p deletion, as detected by an FDA-approved test, who have received at
least one prior therapy. VENCLEXTA[supreg] received additional FDA
approval on November 21, 2018, for the treatment of adult patients who
have been diagnosed with CLL or small lymphocytic lymphoma (SLL), with
or without 17p deletion, who have received at least one prior therapy,
and in combination with azacitidine or decitabine or low-dose
cytarabine for the treatment of newly-diagnosed acute myeloid leukemia
(AML) in adults who are age 75 years old or older, or who have
comorbidities that preclude use of intensive induction chemotherapy.
AML is a type of cancer in which the bone marrow makes abnormal
myeloblasts (a type of white blood cell), red blood cells, or
platelets.\367\ The applicant stated that more than half of the
patients who are diagnosed with AML annually (19,520) \368\ are of
Medicare age.\369\ The leukemic cells proliferate in the marrow and
interfere with production of normal blood cells, causing weakness,
infection, bleeding, and other symptoms and complications. In
approximately half of these patients, nonrandom chromosomal
abnormalities are found by cytogenetic analysis, and these are used for
classification, management, and prognostication. AML is generally
rapidly lethal unless treated with intensive chemotherapy and/or
targeted therapies together with supportive care.\370\
---------------------------------------------------------------------------
\367\ National Cancer Institute, ``Adult Acute Myeloid Leukemia
Treatment--Patient Version,'' https://www.cancer.gov/types/leukemia/patient/adult-aml-treatment-pdq, Accessed September 11, 2018.
\368\ Siegel, R.L., Miller, K.D., Jemal, A., ``Cancer
Statistics,'' CA: A Cancer Journal for Clinicians, 2018, vol, 68(1),
pp. 7-30, doi:10.3322/caac.21442.
\369\ National Cancer Institute. ``SEER Stat Fact Sheets: Acute
Myeloid Leukemia,'' Bethesda, MD, http://seer.cancer.gov/statfacts/html/amyl.html, Accessed September 11, 2018.
\370\ Wolters Kluwer Health, ``Overview of acute myeloid
leukemia in adults,'' https://www.uptodate.com/contents/induction-therapy-for-acute-myeloid-leukemia-in-younger-adults, Accessed
October 9, 2018.
---------------------------------------------------------------------------
According to the applicant, in younger patients who have been
diagnosed with AML, intensive combination chemotherapy is the primary
treatment modality.\371\ Options for induction chemotherapy include
standard or high-dose cytarabine in combination with an anthracycline.
The most commonly used induction regimens for diagnoses of AML are the
so-called ``7+3'' regimens, which combine a 7-day continuous
intravenous infusion of cytarabine with a short infusion or bolus of an
anthracycline given on days 1 through 3. The applicant indicated that
the most commonly used anthracycline in this regimen is daunorubicin,
but other anthracyclines or synthetic anthracycline analogs have been
used. Depending on age and patient selection, up to 70 to 80 percent of
younger adults achieve complete remission with the use of these
regimens.372 373
---------------------------------------------------------------------------
\371\ Wolters Kluwer Health, ``Induction therapy for acute
myeloid leukemia in younger adults,'' https://www.uptodate.com/contents/induction-therapy-for-acute-myeloid-leukemia-in-younger-adults, Accessed September 11, 2018.
\372\ Ohtake, S., Miyawaki, S., Fujita, H., et al., ``Randomized
study of induction therapy comparing standard-dose idarubicin with
high-dose daunorubicin in adult patients with previously untreated
acute myeloid leukemia: the JALSG AML201 Study,'' Blood, 2010, vol.
117(8), pp. 2358-65, doi:10.1182/blood-2010-03-273243.
\373\ Fernandez, H.F., Sun, Z., Yao, X., et al., ``Anthracycline
Dose Intensification in Acute Myeloid Leukemia,'' New England
Journal of Medicine, 2009, vol. 361(13), pp. 1249-59, doi:10.1056/
nejmoa0904544.
---------------------------------------------------------------------------
However, the applicant indicated that older adults over the age of
55 years old \374\ are more frequently refractory to such cytotoxic-
intensive induction chemotherapy when compared to younger patients
because of biological disease-related factors such as increased
[[Page 19363]]
frequency of adverse-risk cytogenetic and molecular features, secondary
AML, and increased expression of multi-drug resistance phenotypes.\375\
Elderly patients also present with more comorbidities and compromised
organ function than do younger patients, which means they have
decreased tolerance to intensive therapies which can lead to
unacceptably high treatment-related mortality.376 377 378
The applicant explained that prognostic algorithms that can predict the
probability of achieving a complete response (CR) and the risk for an
early death for elderly patients with untreated AML have been
developed, and can help a physician determine whether or not the
patient is eligible for intensive chemotherapy.\379\ For these reasons,
only 40 percent of Medicare-aged patients who have been diagnosed with
AML receive chemotherapy for the treatment of the disease.\380\ The
applicant stated that, in patients not considered fit for intensive
treatment and who, therefore, were treated with lower intensity
regimens of low-dose cytarabine and hydroxyurea, with or without, all-
trans retinoic acid for diagnoses of AML and high-risk myelodysplastic
syndrome, only 25 percent of the patients on low-dose cytarabine
survived for 12 months.\381\ According to the applicant, in an
international Phase III study comparing the use of azacitidine with
conventional care regimens in older patients who had been newly
diagnosed with AML, only 18.6 percent of the patients receiving best
supportive care survived for 12 months.\382\ Accordingly, the applicant
believed that more effective, better-tolerated therapies for elderly
patients who have been diagnosed with AML are needed.\383\
---------------------------------------------------------------------------
\374\ Wolters Kluwer Health, ``Induction therapy for acute
myeloid leukemia in younger adults,'' https://www.uptodate.com/contents/induction-therapy-for-acute-myeloid-leukemia-in-younger-adults, Accessed September 11, 2018.
\375\ Krug, U., B[uuml]chner, T., Berdel, W.E., M[uuml]ller-
Tidow, C., ``The treatment of elderly patients with acute myeloid
leukemia,'' Dtsch Arztebl Int, 2011, vol. 108, pp. 863-70.
\376\ Pettit, K., Odenike, O., ``Defining and treating older
adults with acute myeloid leukemia who are ineligible for intensive
therapies,'' Front Oncol, 2015, vol. 5, pp. 280.
\377\ Kantarjian, H., Ravandi, F., O'Brien, S., et al.,
``Intensive chemotherapy does not benefit most older patients (age
70 years or older) with acute myeloid leukemia,'' Blood, 2010, vol.
116, pp. 4422-9.
\378\ Kantarjian, H., O'Brien, S., Cortes, J., et al., ``Results
of intensive chemotherapy in 998 patients age 65 years or older with
acute myeloid leukemia or high-risk myelodysplastic syndrome:
predictive prognostic models for outcome,'' Cancer, 2006, vol. 106,
pp. 1090-98.
\379\ O'Donnell, Margaret R., et al. ``Acute Myeloid Leukemia,
Version 3.2017, NCCN Clinical Practice Guidelines in Oncology.''
Journal of the National Comprehensive Cancer Network, vol. 15, no.
7, 2017, pp. 926-957., doi:10.6004/jnccn.2017.0116.
\380\ Medeiros, B.C., Satram-Hoang, S., Hurst, D., Hoang, K.Q.,
Momin, F., Reyes, C., ``Big data analysis of treatment patterns and
outcomes among elderly acute myeloid leukemia patients in the United
States,'' Annals of Hematology, 2015, vol. 94(7), pp. 1127-38,
doi:10.1007/s00277-015-2351-x.
\381\ Burnett, Alan K., et al., ``A Comparison of Low-Dose
Cytarabine and Hydroxyurea with or without All-Trans Retinoic Acid
for Acute Myeloid Leukemia and High-Risk Myelodysplastic Syndrome in
Patients Not Considered Fit for Intensive Treatment,'' Cancer, vol.
109, no. 6, 2007, pp. 1114-1124, doi:10.1002/cncr.22496.
\382\ Dombret, H., et al., ``International Phase 3 Study of
Azacitidine vs Conventional Care Regimens in Older Patients with
Newly Diagnosed AML with >30% Blasts,'' Blood, vol. 126, no. 3,
2015, pp. 291-299, doi:10.1182/blood-2015-01-621664.
\383\ DiNardo, C.D., Pratz, K.W., Letai, A., et al., ``Safety
and preliminary efficacy of venetoclax with decitabine or
azacitidine in elderly patients with previously untreated acute
myeloid leukemia: a non-randomized, open-label, phase Ib study,''
The Lancet Oncology, 2018, vol. 19(2), pp. 216-28, doi:10.1016/
s1470-2045(18)30010-x.
---------------------------------------------------------------------------
We note that, the applicant has submitted a request for approval
for a unique ICD-10-PCS code to identify procedures involving the
administration of VENCLEXTA[supreg], effective for FY 2020.
As discussed earlier, if a technology meets all three of the
substantial similarity criteria, it would be considered substantially
similar to an existing technology and, therefore, would not be
considered ``new'' for purposes of new technology add-on payments.
Current treatments include decitabine, azacitidine, low-dose
cytarabine, MYLOTARGTM, and supportive care such as anti-
emetics, transfusions, and antibiotics/antifungals.384 385
---------------------------------------------------------------------------
\384\ Ibid.
\385\ Wolters Kluwer Health, ``Induction therapy for acute
myeloid leukemia in younger adults,'' https://www.uptodate.com/contents/induction-therapy-for-acute-myeloid-leukemia-in-younger-adults, Accessed September 11, 2018.
---------------------------------------------------------------------------
With regard to the first criterion, whether a product uses the same
or a similar mechanism of action to achieve a therapeutic outcome, the
applicant asserted that VENCLEXTA[supreg] does not use the same or
similar mechanism of action when compared with an existing technology
to achieve a therapeutic outcome for patients diagnosed with AML who
are ineligible for intensive chemotherapy The applicant stated that
VENCLEXTA[supreg] is the first and only FDA-approved, selective oral
anti-apoptotic B-cell lymphoma 2 (BCL-2) inhibitor, and works by
inhibiting the BCL-2 protein, which regulates cell death and is
associated with chemotherapy-resistance and poor outcomes in patients
who have been diagnosed with AML.\386\ The applicant further asserted
that VENCLEXTA[supreg] is known to synergize with hypomethylating
agents (azacitidine/decitabine) and low-dose cytarabine in the
treatment of AML.\387\ In AML, malignant cells are dependent on BCL-2
and other pro-survival proteins such as MCL-1 for their survival. A
hypomethylator like azacitidine increases BCL-2 dependence and
sensitivity to VENCLEXTA[supreg] through inhibition of MCL-1, therefore
sensitizing the cell to VENCLEXTA[supreg]-induced
apoptosis.388 389 The applicant indicated that because the
combination of drugs in the recently-approved indication for the
treatment of AML is new, and VENCLEXTA[supreg] works synergistically
when administered as part of this treatment combination, this creates a
unique mechanism of action for the treatment of AML.
---------------------------------------------------------------------------
\386\ Pan, R., Hogdal, L.J., Benito, J.M., et al., ``Selective
BCL-2 inhibition by ABT-199 causes on-target cell death in acute
myeloid leukemia,'' Cancer Discov, 2014, vol. 4(3), pp. 362-75.
\387\ Bogenberger, J.M., Delman, D., Hansen, N., et al., ``Ex
vivo activity of BCL-2 family inhibitors ABT-199 and ABT-737
combined with 5-azacitidine in myeloid malignancies,'' Leukemia &
Lymphoma, 2014, vol. 56(1), pp. 226-229, doi:10.3109/
10428194.2014.910657.
\388\ Konopleva, M., et al., ``Efficacy and Biological
Correlates of Response in a Phase II Study of Venetoclax Monotherapy
in Patients with Acute Myelogenous Leukemia,'' Cancer Discovery,
vol. 6, no. 10, Dec. 2016, pp. 1106-1117, doi:10.1158/2159-8290.cd-
16-0313.
\389\ Valentin, Rebecca, et al., ``The Rise of Apoptosis:
Targeting Apoptosis in Hematologic Malignancies,'' Blood, 2018, vol.
132, no. 12, pp. 1248-1264, doi:10.1182/blood-2018-02-791350.
---------------------------------------------------------------------------
With respect to the second criterion, whether a product is assigned
to the same or a different MS-DRG, the applicant asserted that
potential cases representing patients who have been diagnosed with CLL
who may be eligible for treatment using VENCLEXTA[supreg] would be
assigned to different MS-DRGs than cases representing patients who have
been diagnosed with AML. According to the applicant, potential cases
representing patients who have been diagnosed with CLL who may be
eligible for treatment using VENCLEXTA[supreg] would be assigned to the
following MS-DRGs: 808 (Major Hematological And Immunological Diagnoses
Except Sickle Cell Crisis And Coagulation Disorders With MCC), 809
(Major Hematological And Immunological Diagnoses Except Sickle Cell
Crisis And Coagulation Disorders With CC), 823 (Lymphoma And Non-Acute
Leukemia With Other Procedure With MCC), 824 (Lymphoma And Non-Acute
Leukemia With Other Procedure With CC), 825 (Lymphoma And Non-Acute
Leukemia With Other Procedure Without CC/MCC), 834 (Acute Leukemia
Without Major O.R. Procedure With MCC), 835 (Acute Leukemia Without
Major O.R. Procedure With CC), 836 (Acute Leukemia Without Major O.R.
Procedure Without CC/MCC), and 839
[[Page 19364]]
(Chemotherapy With Acute Leukemia As SDX Without CC/MCC). We believe
that potential cases representing patients who have been newly
diagnosed with AML, as well as potential cases representing patients
who have been diagnosed with CLL, could both be assigned to the
following 3 MS-DRGs: 820 (Lymphoma and Leukemia With Major O.R.
Procedure With MCC), 821 (Lymphoma and Leukemia With Major O.R.
Procedure With CC), and 822 (Lymphoma and Leukemia With Major O.R.
Procedure Without CC/MCC). We expect that cases involving treatment
with VENCLEXTA[supreg] would most likely be assigned to the same MS-
DRGs to which cases involving comparable treatments are assigned.
With respect to the third criterion, whether the new use of the
technology involves the treatment of the same or similar type of
disease and the same or similar patient population, the applicant
asserted that VENCLEXTA[supreg] does not involve the treatment of the
same or similar type of disease or same or similar patient population
because there are currently no curative treatment options available for
elderly patients who have been newly diagnosed with AML who are
ineligible for intensive chemotherapy.
The applicant further asserted that the disease and patient
population for which VENCLEXTA[supreg] provides treatment is unique.
There are no other FDA-approved therapies specific to this patient
population--newly diagnosed AML patients who are ineligible for
intensive chemotherapy--and currently these patients receive only
lower-intensity treatments without curative intent, but rather
treatment is focused on alleviating symptoms, prolonging life, and/or
improving quality of life.\390\ The applicant stated that where
patients on intensive chemotherapy have benefited from improvements in
overall survival over the past 50 years, ineligible patients have not;
and more effective, better-tolerated therapies for elderly patients who
have been diagnosed with AML are urgently needed.\391\ The applicant
further stated that this unmet medical need is one reason why
VENCLEXTA[supreg] received Breakthrough Therapy designation from the
FDA for this patient population.\392\
---------------------------------------------------------------------------
\390\ Wolters Kluwer Health, ``Acute myeloid leukemia: Treatment
and outcomes in older adults,'' https://www.uptodate.com/contents/acute-myeloid-leukemia-treatment-and-outcomes-in-older-adults,
Accessed September 11, 2018.
\391\ DiNardo, C.D., Pratz, K.W., Letai, A., et al., ``Safety
and preliminary efficacy of venetoclax with decitabine or
azacitidine in elderly patients with previously untreated acute
myeloid leukemia: a non-randomized, open-label, phase Ib study,''
The Lancet Oncology, 2018, vol. 19(2), pp. 216-28, doi:10.1016/
s1470-2045(18)30010-x.
\392\ Hoffjman-LaRoche, Ltd., F., ``FDA grants breakthrough
therapy designation for VENCLEXTA[supreg] in acute myeloid
Leukaemia,'' https://www.roche.com/dam/jcr:0cf1ad70-02c8-44b4-94ac-ccdf1dbca95a/en/inv-update-2017-07-28-e.pdf, Accessed October 9,
2018.
---------------------------------------------------------------------------
With respect to whether the technology involves the treatment of a
unique patient population, we note that as the applicant indicated,
there are lower-intensity chemotherapeutic regimens available as
standard-of-care therapies for patients who have been newly diagnosed
with AML who are ineligible for intensive chemotherapy. We are inviting
public comments on whether VENCLEXTA[supreg] is substantially similar
to any existing technology and whether it meets the newness criterion,
including with respect to the concerns we have raised.
With regard to the cost criterion, the applicant conducted the
following analysis. The applicant used the FY 2017 MedPAR Hospital
Limited Data Set (LDS) to assess the MS-DRGs to which cases
representing potential patient hospitalizations that may be eligible
for treatment involving VENCLEXTA[supreg] would most likely be
assigned. These potential cases representing patients who may be
VENCLEXTA[supreg] candidates were identified if these cases reported a
diagnosis of AML. The cohort was limited by excluding patients who were
discharged as not classified with one of the relevant ICD-10-CM codes.
From the resulting data, the applicant determined the most
applicable MS-DRGs to use in order to determine the average length-of-
stay by identifying the codes with at least 1 percent of total
discharge volume, which limited the selection to 16 codes. According to
the applicant, in an effort to limit impact from MS-DRGs with probable
low relevance and/or not usually representing solely AML inpatient
stays, a number of high-volume MS-DRGs were not included in the
calculation. These excluded codes included those representing high-dose
chemotherapy inpatient stays, sepsis cases, pneumonia inpatient stays,
and heart failure and circulation disorders. This left potential cases
represented in MS-DRGs 808, 809, 834, 835, 836, and 839 to determine
the average length-of-stay, which under this criterion resulted in 7.25
days.
The applicant noted that two limitations of this calculation method
are: (1) That the average length-of-stay may have changed since FY 2017
for the MS-DRGs selected; and (2) the approach of relevant case
identification may not adequately capture patients who are ineligible
for intensive chemotherapy.
The applicant provided additional analyses with the
VENCLEXTA[supreg] charges under six separate cost threshold scenarios.
According to the applicant, the cost criterion was satisfied in each of
these scenarios, with charges in excess of the average case-weighted
threshold amount. Scenario 1 captures discharges classified with one or
more of seven subtypes of patients who have been diagnosed with AML who
have not achieved remission or who have been diagnosed with AML in
relapse; a subgroup to capture patients who have not been responsive to
existing treatments. Scenario 2 captures discharges classified with one
or more of seven subtypes of patients who had been diagnosed with AML
who never have achieved remission; a population that will have a high
concentration of patients who have been newly diagnosed with AML.
Lastly, scenario 3 is a combination of all discharges that classified
patients who have been diagnosed with AML who have not relapsed.
While the VENCLEXTA[supreg] Breakthrough Therapy designation is for
use in elderly patients who have been newly diagnosed with AML, the
applicant determined it was necessary to produce separate cost
threshold calculations based on the three diagnosis code selections
pending the final VENCLEXTA[supreg] label. Scenarios 1 through 3 have
additional exclusions and inclusion codes that: (1) Add comorbidities
to patients between 65 years old and 74 years old; (2) remove affects
from related non-AML conditions; and (3) ensure that all discharges
were administered drugs. Scenarios 4, 5, and 6 use the same base ICD-
10-CM inclusion codes as scenarios 1, 2, and 3, respectively, however,
they do not use additional inclusion and exclusion codes, which makes
the cost threshold results representative of a broader patient
population. For each cost threshold scenario, the applicant also
applied a deduction of 50 percent of pharmacy charges to account for
the replacement of hospital expenditures when VENCLEXTA[supreg] is used
as first-line therapy.
The applicant produced cost threshold results for 6 scenarios, each
with 4 MS-DRGs, for a total of 24 cost threshold calculations. All four
MS-DRGs had identical volume percentages in each of the six scenarios.
The average dollar amount by which the average case-weighted
standardized charges per case exceeded the average case-weighted
threshold amount is
[[Page 19365]]
$17,612.75 for scenario 1, $15,730.27 for scenario 2, $15,566.70 for
scenario 3, $33,868.18 for scenario 4, $32,098.60 for scenario 5, and
$30,860.67 for scenario 6. The applicant asserted that considering only
the most applicable MS-DRGs, MS-DRG 834 and MS-DRG 835, the average
case-weighted threshold amounts were exceeded by a range of $16,169.02
at the lowest (scenario 2) and $50,185.99 at the highest (scenario 4)
and, therefore, the applicant believes VENCLEXTA[supreg] meets the cost
criterion.
Based on all of the analyses above, the applicant maintained that
VENCLEXTA[supreg] meets the cost criterion. We are inviting public
comments on whether VENCLEXTA[supreg] meets the cost criterion.
With regard to substantial clinical improvement, the applicant
asserted that VENCLEXTA[supreg], in combination with either azacitidine
or decitabine, and VENCLEXTA[supreg], in combination with low-dose
cytarabine, both constitute a substantial clinical improvement over
currently available treatments for patients who have been newly
diagnosed with AML who are ineligible for intensive chemotherapy. The
applicant submitted two main studies to support its assertion that the
technology represents a substantial clinical improvement over existing
technologies.
The first study submitted was M14-358, a Phase Ib, open-label,
multi-center, non-randomized study of the use of VENCLEXTA[supreg], in
combination with azacitidine or decitabine, in the treatment of
patients who have been newly diagnosed with AML who are not eligible
for standard induction therapy. Eligible patients were 60 years old and
older, had previously undiagnosed AML, had intermediate- or poor-risk
cytogenetics, and were not eligible for standard induction therapy.
Patients received VENCLEXTA[supreg] via a daily ramp-up to a final 400
mg once-daily dose. During the ramp-up, patients received tumor lysis
syndrome (TLS) prophylaxis and were hospitalized for monitoring.
Azacitidine at 75 mg/m2 was administered either intravenously or
subcutaneously on Days 1 through 7 of each 28-day cycle beginning on
Cycle 1 Day 1. Decitabine at 20 mg/m2 was administered intravenously on
Days 1 through 5 of each 28-day cycle beginning on Cycle 1 Day 1.
Patients continued to receive treatment cycles until disease
progression or unacceptable toxicity. Azacitidine dose reduction was
implemented in the clinical trial for management of hematologic
toxicity. Dose reductions for decitabine were not implemented in the
clinical trial.
The primary objective of the escalation stage of this trial was to
evaluate the safety and pharmacokinetics of orally-administered
VENCLEXTA[supreg], combined with decitabine or azacitidine, at standard
doses and schedules in patients who had been newly diagnosed with AML
who were 60 years old and older and who are not eligible for standard
induction therapy due to comorbidities. Secondary objectives for the
dose escalation included assessing the preliminary efficacy of the use
of VENCLEXTA[supreg] administered orally, in combination with either
decitabine or azacitidine, in this patient population. The primary
objectives of the expansion stage were to confirm the safety and to
assess efficacy including complete remission (CR) and complete
remission with incomplete blood count recovery (CRi) and determine
overall survival (OS) of the use of VENCLEXTA[supreg] combined with
decitabine or azacitidine in the treatment of patients who had been
newly diagnosed with AML. A secondary objective for the expansion was
to evaluate duration of response (DOR). Complete remission was defined
as absolute neutrophil count greater than 1,000/microliter, platelets
greater than 100,000/microliter, red blood cell transfusion
independence, and bone marrow with less than 5 percent blast, absence
of circulating blasts and blasts with Auer rods, and absence of
extramedullary disease. Complete remission with partial hematological
recovery (CRh) was defined as less than 5 percent of blasts in the bone
marrow, no evidence of disease, and partial recovery of peripheral
blood counts (platelets greater than 50,000/microliter and ANC greater
500/microliter).
The study arm with VENCLEXTA[supreg], in combination with
azacitadine, had 67 patients with a mean age of 76 years old (range 61
years old to 90 years old). Eighty-seven percent of this group was
white, 64 percent had an ECOG performance status of 0 to 1, and 34
percent had poor cytogenetic risk detected. The study arm with
VENCLEXTA[supreg], in combination with decitabine, had 13 patients with
a mean age of 75 years old (range 68 years old to 86 years old). Seven-
seven percent of this group was white, 92 percent had an ECOG
performance status of 0 to 1, and 62 percent had poor cytogenetic risk
detected.
For patients who received VENCLEXTA[supreg], in combination with
azacitadine, 37.5 percent (95 percent CI 26, 50) achieved CR and 24
percent (95 percent CI 14, 36) achieved CRh. Sixty-one percent of the
patients achieved CR or CRh. The median time to first CR or CRh was 1
month (range 0.7 months to 8.9 months), and median observed time in
remission for those patients who achieved CR was 5.5 months (range 0.4
months to 30 months) for this group. The median OS was 16.9 months, the
12-month OS estimate was 57 percent, and median duration of response
was 21.2 months. For patients who received VENCLEXTA[supreg], in
combination with decitabine, 54 percent (95 percent CI, 25 months to 81
months) achieved CR and 8 percent (95 percent CI, 0.2 months to 36
months) achieved CRh. Sixty-two percent of the patients achieved CR or
CRh. The median time to first CR or CRh was 1.9 months (range 0.8
months to 4.2 months), and median observed time in remission for those
who achieved CR was 4.7 months (range 1 month to 18 months) for this
group. The median OS was 16.2 months, the 12-month OS estimate was 61
percent, and median duration of response was 15 months. The study
enrolled 35 additional patients (age range 65 years old to 74 years
old) who did not have known comorbidities that precluded the use of
intensive induction chemotherapy and were treated with
VENCLEXTA[supreg], in combination with azacitidine (n=17) or decitabine
(n=18). For the additional patients treated with VENCLEXTA[supreg], in
combination with azacitidine, the CR rate was 35 percent (95 percent CI
14, 62). The CRh rate was 41 percent (95 percent CI 18, 67). For the
additional patients treated with VENCLEXTA[supreg], in combination with
decitabine, the CR rate was 56 percent (95 percent CI 31, 79). The CRh
rate was 22 percent (95 percent CI 6.4, 48).
In terms of safety, for patients receiving azacitadine, the most
common adverse reactions (greater than or equal to 30 percent) of any
grade were nausea, diarrhea, constipation, neutropenia,
thrombocytopenia, hemorrhage, peripheral edema, vomiting, fatigue,
febrile neutropenia, rash, and anemia. Serious adverse reactions were
reported in 75 percent of the patients. The most frequent serious
adverse reactions (greater than or equal to 5 percent) were febrile
neutropenia, pneumonia (excluding fungal), sepsis (excluding fungal),
respiratory failure, and multiple organ dysfunction syndrome. The
incidence of fatal adverse drug reactions was 1.5 percent within 30
days of starting treatment. No reaction had an incidence of greater
than or equal to 2 percent. Discontinuations due to adverse reactions
occurred in 21 percent of the patients. The most frequent adverse
reactions leading to drug
[[Page 19366]]
discontinuation (greater than or equal to 2 percent) were febrile
neutropenia and pneumonia (excluding fungal). Dosage interruptions due
to adverse reactions occurred in 61 percent of the patients. The most
frequent adverse reactions leading to dose interruption (greater than
or equal to 5 percent) were neutropenia, febrile neutropenia, and
pneumonia (excluding fungal). Dosage reductions due to adverse
reactions occurred in 12 percent of the patients. The most frequent
adverse reaction leading to dose reduction (greater than or equal to 5
percent) was neutropenia.
For patients receiving decitabine, the most common adverse
reactions (greater than or equal to 30 percent) of any grade were
febrile neutropenia, constipation, fatigue, thrombocytopenia, abdominal
pain, dizziness, hemorrhage, nausea, pneumonia (excluding fungal),
sepsis (excluding fungal), cough, diarrhea, neutropenia, back pain,
hypotension, myalgia, oropharyngeal pain, peripheral edema, pyrexia,
and rash. Serious adverse reactions were reported in 85 percent of the
patients. The most frequent serious adverse reactions (greater than or
equal to 5 percent) were febrile neutropenia, sepsis (excluding
fungal), pneumonia (excluding fungal), diarrhea, fatigue, cellulitis,
and localized infection. One (8 percent) fatal adverse drug reaction of
bacteremia occurred within 30 days of starting treatment.
Discontinuations due to adverse reactions occurred in 38 percent of the
patients. The most frequent adverse reaction leading to drug
discontinuation (greater than or equal to 5 percent) was pneumonia
(excluding fungal). Dosage interruptions due to adverse reactions
occurred in 62 percent of the patients. The most frequent adverse
reactions leading to dose interruption (greater than or equal to 5
percent) were febrile neutropenia, neutropenia, and pneumonia
(excluding fungal). Dosage reductions due to adverse reactions occurred
in 15 percent of the patients. The most frequent adverse reaction
leading to dose reduction (greater than or equal to 5 percent) was
neutropenia.
The second study submitted was M14-387, a non-randomized, open-
label Phase I/II study of the use of VENCLEXTA[supreg], in combination
with low-dose cytarabine, in patients who had been newly diagnosed with
AML who are ineligible for standard anthracycline-based induction
therapy. The study enrolled patients who were 60 years old and older
who had been diagnosed with AML and who were not eligible for standard
induction therapy.
Patients initiated use of VENCLEXTA[supreg] via daily ramp-up to a
final 600 mg once-daily dose. During the ramp-up, patients received TLS
prophylaxis and were hospitalized for monitoring. Cytarabine at a dose
of 20 mg/m2 was administered subcutaneously once-daily on Days 1
through 10 of each 28-day cycle beginning on Cycle 1 Day 1.
This study consisted of three distinct portions. The first portion
of the study was a Phase I, or dose-escalation portion, that evaluated
the safety and pharmacokinetics (PK) profile of VENCLEXTA[supreg]
administered with low-dose azacitidine with the objectives of defining
the maximum-tolerated dose (MTD) and generating data to support a
recommended Phase II dose (RPTD). A subsequent initial Phase II portion
evaluated whether the RPTD had sufficient efficacy and acceptable
toxicity to warrant further development of the combination therapy.
Subsequently, a Phase II, Cohort C was enrolled to evaluate the ORR for
patients who were allowed additional supportive medications (for
example, strong CYP3A inhibitors), if medically indicated, because new
PK data emerged from external studies demonstrating that these
previously excluded concomitant medications may be tolerable with an
appropriate VENCLEXTA[supreg] dose adjustment during co-administration.
The primary objectives of the Phase I portion were to assess the
safety profile, characterize the (PK), and determine the dose schedule,
the MTD, and the RPTD of the use of VENCLEXTA[supreg], in combination
with low-dose azacitidine or cytarabine in the treatment of patients
who had been newly diagnosed with AML who were 60 years old and older
and who were not eligible for standard induction therapy due to co-
morbidity or other factors. The primary objectives of the initial Phase
II portion of the study were to evaluate the preliminary estimates of
efficacy including the overall response rate (ORR) and to characterize
the toxicities of the combination at the RPTD. The primary objective of
Phase II, Cohort C was to evaluate the ORR for patients allowed
additional supportive medications (strong cytochrome P450 [CYP]3A
inhibitors), if medically indicated. The secondary objectives of the
initial Phase II portion and Phase II, Cohort C were to evaluate
leukemia response (rates of complete remission (CR)), complete
remission with incomplete blood count recovery (Cri), partial remission
(PR), and morphologically leukemia-free status (MLFS)), duration of
response (DOR), and OS. Patients continued to receive treatment cycles
until disease progression or unacceptable toxicity. Dose reduction for
low-dose cytarabine was not implemented in the clinical trial.
The study enrolled 61 patients with a median age of 76 years old
(range 63 years old to 90 years old), 92 percent of whom were white, 66
percent of whom had an ECOG performance status of 0 to 1, and 34
percent of whom had poor cytogenetic risk detected. Twenty-one percent
(95 percent CI 12, 34) achieved CR and 21 percent (95 percent CI 12,
34) achieved CRh. Overall 43 percent of the patients achieved CR or
CRh. The median OS was 10.1 months and median duration of response was
8.1 months. The study enrolled 21 additional patients (age ranged 67
years old to 74 years old) who did not have known comorbidities that
precluded the use of intensive induction chemotherapy and were treated
with VENCLEXTA[supreg], in combination with low-dose cytarabine. The CR
rate was 33 percent (95 percent CI: 15, 57). The CRh rate was 24
percent (95 percent CI: 8.2, 47).
In terms of safety, the most common adverse reactions (greater than
or equal to 30 percent) of any grade were nausea, thrombocytopenia,
hemorrhage, febrile neutropenia, neutropenia, diarrhea, fatigue,
constipation, and dyspnea. Serious adverse reactions were reported in
95 percent of the patients. The most frequent serious adverse reactions
(greater than or equal to 5 percent) were febrile neutropenia, sepsis
(excluding fungal), hemorrhage, pneumonia (excluding fungal), and
device-related infection. The incidence of fatal adverse drug reactions
was 4.9 percent within 30 days of starting treatment with no reaction
having an incidence of greater than or equal to 2 percent.
Discontinuations due to adverse reactions occurred in 33 percent of the
patients. The most frequent adverse reactions leading to drug
discontinuation (greater than or equal to 2 percent) were hemorrhage
and sepsis (excluding fungal). Dosage interruptions due to adverse
reactions occurred in 52 percent of the patients. The most frequent
adverse reactions leading to dose interruption (greater than or equal
to 5 percent) were thrombocytopenia, neutropenia, and febrile
neutropenia. Dosage reductions due to adverse reactions occurred in 8
percent of the patients. The most frequent adverse reaction leading to
dose reduction (greater than or equal to 2 percent) was
thrombocytopenia. On the basis of these studies, the applicant asserted
that median OS, 12-month OS, CR + CRi, and DOR for VENCLEXTA[supreg]
are all substantially higher than the outcomes
[[Page 19367]]
achieved by standard-of-care as reported by studies. The applicant
asserted that these improvements, especially the more than doubling of
the remission rates as compared to other available low-intensity
therapies (range reported as 0 to 28 percent), are substantial and
clinically meaningful.
In regard to the substantial clinical improvement criterion for
VENCLEXTA[supreg], we reviewed the data the applicant provided on
outcomes (for example, CR, CRh, CRi, DOR, and OS) using historical
controls of other chemotherapeutic regimens used for this target
patient population, and we note that the data is lacking information
with regard to a direct comparator. The studies did not detail the
demographics and outcomes for patients over the age of 75 versus
younger patients. We note that the applicant did not provide any
information on how many enrolled patients are from the United States.
We further note that fatal adverse drug reactions occurred in both
submitted studies in patients receiving treatment involving the use of
VENCLEXTA[supreg], and dosage interruptions due to adverse events
occurred in a significant proportion of the patients receiving the
drug. We also are concerned about the lack of conclusive data on the
efficacy of VENCLEXTA[supreg].
We are inviting public comments on whether VENCLEXTA[supreg] meets
the substantial clinical improvement criterion. We did not receive any
written public comments in response to the New Technology Town Hall
meeting notice published in the Federal Register regarding the
substantial clinical improvement criterion for VENCLEXTA[supreg] or at
the New Technology Town Hall meeting.
6. Request for Information on the New Technology Add-On Payment
Substantial Clinical Improvement Criterion
Under the Hospital Inpatient Prospective Payment System (IPPS), CMS
has established policies to provide additional payment for new medical
services and technologies. Similarly, under the Hospital Outpatient
Prospective Payment System (OPPS), CMS has established policies to
provide separate payment for innovative medical devices, drugs and
biologicals. Sections 1886(d)(5)(K) and (L) of the Act require the
Secretary to establish a mechanism to recognize the costs of new
medical services and technologies under the IPPS, and section
1833(t)(6) of the Act requires the Secretary to provide an additional
payment amount, known as a transitional pass-through payment, for the
additional costs of innovative medical devices, drugs, and biologicals
under the OPPS. The substantial clinical improvement criterion that is
used to evaluate a technology that is the subject of an application for
new technology add-on payments under the IPPS or an application for the
transitional pass-through payment for the additional costs of
innovative devices under the OPPS (both categories of technologies are
hereafter collectively referred to as ``new technology'') is the
subject of the potential revisions discussed in this section to the new
technology add-on payment policy's substantial clinical improvement
criteria.
Under the IPPS, the regulations at Sec. 412.87 implement these
provisions and specify three criteria for a new medical service or
technology to receive the additional payment: (1) The medical service
or technology must be new; (2) the medical service or technology must
be costly such that the DRG rate otherwise applicable to discharges
involving the medical service or technology is determined to be
inadequate; and (3) the service or technology must demonstrate a
substantial clinical improvement over existing services or
technologies. Under this third criterion, Sec. 412.87(b)(1) of our
existing regulations provides that a new technology is an appropriate
candidate for an additional payment when it represents an advance that
substantially improves, relative to technologies previously available,
the diagnosis or treatment of Medicare beneficiaries (we refer readers
to the September 7, 2001 final rule for a more detailed discussion of
this criterion (66 FR 46902)). For more background on add-on payments
for new medical services and technologies under the IPPS, we refer
readers to the FY 2009 IPPS/LTCH PPS final rule (73 FR 48552).
In the CY 2001 OPPS interim final rule with comment period (65 FR
67798), we implemented the transitional device pass-through payment
requirements in section 1833(t)(6) of the Act under our regulation at
42 CFR 419.66. Under Sec. 419.66(b), a medical device must meet the
following requirements to be eligible for transitional pass-through
payments: (1) If required by FDA, the device must have received FDA
premarket approval or clearance (except for a device that has received
an FDA investigational device exemption (IDE) and has been classified
as a Category B device by the FDA), or another appropriate FDA
exemption; and the pass-through payment application must be submitted
within 3 years from the date of the initial FDA approval or clearance,
if required, unless there is a documented, verifiable delay in U.S.
market availability after FDA approval or clearance is granted, in
which case CMS will consider the pass-through payment application if it
is submitted within 3 years from the date of market availability; (2)
the device is determined to be reasonable and necessary for the
diagnosis or treatment of an illness or injury or to improve the
functioning of a malformed body part, as required by section
1862(a)(1)(A) of the Act; and (3) the device is an integral part of the
service furnished, is used for one patient only, comes in contact with
human tissue, and is surgically implanted or inserted (either
permanently or temporarily), or applied in or on a wound or other skin
lesion. In addition, according to Sec. 419.66(b)(4), a device is not
eligible to be considered for device pass-through payment if it is any
of the following: (1) Equipment, an instrument, apparatus, implement,
or item of this type for which depreciation and financing expenses are
recovered as depreciation assets as defined in Chapter 1 of the
Medicare Provider Reimbursement Manual (CMS Pub. 15-1); or (2) a
material or supply furnished incident to a service (for example, a
suture, customized surgical kit, or clip, other than a radiological
site marker).
Finally, we use the following criteria, as set forth under Sec.
419.66(c), to determine whether a new category of pass-through payment
devices should be established. The devices to be included in the new
category must:
Not be appropriately described by an existing category or
by any category previously in effect established for transitional pass-
through payments, and were not being paid for as an outpatient service
as of December 31, 1996;
Have an average cost that is not ``insignificant''
relative to the payment amount for the procedure or service with which
the device is associated as determined under Sec. 419.66(d) by
demonstrating: (1) The estimated average reasonable costs of the
devices in the category exceeds 25 percent of the applicable APC
payment amount for the service related to the category of devices; (2)
the estimated average reasonable cost of the devices in the category
exceeds the cost of the device-related portion of the APC payment
amount for the related service by at least 25 percent; and (3) the
difference between the estimated average reasonable cost of the devices
in the category and the portion of the APC payment amount for the
device exceeds 10 percent of the APC payment amount for the related
service (with the exception of brachytherapy and temperature-monitored
cryoblation, which are exempt from the cost
[[Page 19368]]
requirements as specified at Sec. Sec. 419.66(c)(3) and (e)); and
Demonstrate a substantial clinical improvement, that is,
substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment.
For more background on transitional pass-through payments for
devices under the OPPS, we refer readers to the CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html.
CMS posts on its website the application forms (OMB control #:
0938-1347 for IPPS, and OMB control #: 0938-0857 for OPPS) that
applicants must use to apply for IPPS new technology add-on payments
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech.html and for OPPS transitional pass-through
payments for devices at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html). Each
application describes the information specifically requested from each
applicant, including what information is needed to support claims of
substantial clinical improvement. For example, CMS requests that the
applicant provide a summary of substantial clinical improvement
claim(s), along with the data supporting each claim. For IPPS new
technology add-on payments, in order to provide an opportunity for
public input prior to publication of each proposed rule, CMS publishes
a notice in the Federal Register to announce a town hall meeting at the
CMS Headquarters Office in Baltimore, MD, which provides an opportunity
for public discussion of the substantial clinical improvement criterion
for each IPPS application. This meeting can be attended in-person or
through a telephone line, and is also live-streamed on the CMS YouTube
web page. CMS considers each IPPS applicant's presentation made at the
town hall meeting, as well as written comments submitted on the
applications that were received by the applicable deadline, in our
evaluation of the new technology add-on payment applications in the
IPPS/LTCH PPS proposed rule. For both IPPS and OPPS applicants, CMS
summarizes each applicant's claim(s) of substantial clinical
improvement as part of its discussion of the entire application in the
relevant proposed rule, as well as any concerns regarding those claims.
In the relevant final rule for the IPPS, CMS summarizes and responds to
public comments received on the proposed rule and presents its decision
whether to approve or disapprove the application for additional payment
for the technology for the upcoming fiscal year. In the relevant final
rule for the OPPS, CMS similarly responds to public comments and
discusses its decision to approve or deny the application for separate
transitional pass-through payment for the device for the upcoming
calendar year.
A stakeholder comment received in response to the most recent New
Technology Town Hall meeting held in December 2018 expressed
appreciation for CMS' statements in the FY 2019 IPPS/LTCH PPS proposed
rule (83 FR 20278 through 20279) related to the relationship between
the data which satisfies FDA designations and the data which satisfies
the substantial clinical improvement criterion under the IPPS
regulations, and stated that the clarification would help future
applicants understand which types of data can serve as the foundation
for satisfying the substantial clinical improvement criterion.
Commenters also stated that CMS' statements presented in the FY 2019
IPPS/LTCH PPS proposed rule explaining that it accepts a wide range of
data, including peer-reviewed articles, study results, letters from
major associations, or other evidence that would support the conclusion
of substantial clinical improvement were appreciated. However, feedback
from applicants for new technology add-on payments and commenters in
prior years have indicated that it would be helpful for CMS to provide
greater guidance on what constitutes ``substantial clinical
improvement.'' We understand that greater clarity regarding what would
substantiate the requirements of this criterion would help the public,
including innovators, better understand how CMS evaluates new
technology applications for add-on payments and provide greater
predictability about which applications will meet the criterion for
substantial clinical improvement. We are considering potential
revisions to the substantial clinical improvement criteria under the
IPPS new technology add-on payment policy, and the OPPS transitional
pass-through payment policy for devices, and are seeking public
comments on the type of additional detail and guidance that the public
and applicants for new technology add-on payments would find useful.
This request for public comments is intended to be broad in scope and
provide a foundation for potential rulemaking in future years.
In addition to this broad request for public comments for potential
rulemaking in future years, as discussed in greater detail in section
II.H.7. of the preamble of this proposed rule, in order to respond to
stakeholder feedback requesting greater understanding of CMS' approach
to evaluating substantial clinical improvement, we are soliciting
comments from the public on specific changes or clarifications to the
IPPS and OPPS substantial clinical improvement criterion that CMS might
consider making in the FY 2020 IPPS/LTCH PPS final rule to provide
greater clarity and predictability.
In the applications for both the IPPS new technology add-on
payment, and for OPPS limited to the transitional pass-through payment
for devices, CMS lists the following criteria that it uses to determine
whether a new medical service or technology would represent a
substantial clinical improvement:
(1) The technology offers a treatment option for a patient
population unresponsive to, or ineligible for, currently available
treatments.
(2) The technology offers the ability to diagnose a medical
condition in a patient population where that medical condition is
currently undetectable or offers the ability to diagnose a medical
condition earlier in a patient population than allowed by currently
available methods. There must also be evidence that use of the device
to make a diagnosis affects the management of the patient.
(3) Use of the technology significantly improves clinical outcomes
for a patient population as compared to currently available treatments.
Some examples of outcomes that are frequently evaluated in studies of
technologies are the following:
Reduced mortality rate with use of the device;
Reduced rate of device-related complications;
Decreased rate of subsequent diagnostic or therapeutic
interventions (for example, due to reduced rate of recurrence of the
disease process);
Decreased number of future hospitalizations or physician
visits;
More rapid beneficial resolution of the disease process
treatment because of the use of the device;
Decreased pain, bleeding, or other quantifiable symptom;
and
Reduced recovery time.
CMS considers the totality of the substantial clinical improvement
claims and supporting data, as well as public
[[Page 19369]]
comments, when evaluating this aspect of each application.
We are requesting feedback on whether new or changed regulatory
provisions or new or changed guidance regarding additional aspects of
the substantial clinical improvement evaluation process in the
following areas would be helpful. Comments we receive in response to
the following general questions will inform future rulemaking after the
issuance of the final rule for FY 2020:
What role should substantial clinical improvement play in
our payment policies to ensure these policies do not discourage
appropriate utilization of new medical services and technologies?
How should CMS determine what existing technologies are
appropriate comparators to new technologies? How should CMS evaluate a
technology when its comparators have different measured clinical
outcomes?
Should CMS provide more specificity or greater clarity on
the types of evidence or study designs that may be considered by the
agency in evaluating substantial clinical improvement?
For example, what data should be used to demonstrate whether the
use of the technology substantially improves clinical outcomes for
patients relative to existing technologies? To what extent, if any,
should the data be focused on the Medicare population? What clinical
outcomes data and patient reported measures data should be assessed to
demonstrate substantial clinical improvement?
What particular types of study designs, types of inclusion and
exclusion criteria, or types of statistical methodologies, either
generally or in comparison to existing technologies, could a new
technology use to demonstrate that the technology meets the substantial
clinical improvement criterion?
Are there certain study designs that are technically or ethically
challenging for specific medical technologies and, if so, should that
be more explicitly reflected in the regulations?
Should potential limitations related to cross-trial comparisons
with any existing therapies be more explicitly reflected in the
regulations?
For non-inferiority studies, the goal of such studies is to show
that the difference between the new and active control treatment is
small--small enough to allow the known effectiveness of the active
control, based on its performance in past studies and the assumed
effectiveness of the active control in the current study, to support
the conclusion that the new technology is also effective. Are there
particular instances where non-inferiority studies should be considered
sufficient for an evaluation for substantial clinical improvement
because a non-inferiority study is the most appropriate study design
for a given technology?
Are there instances where it would be appropriate for CMS
to infer substantial clinical improvement (for example, technical or
financial challenges to study accrual)?
Should CMS consider evidence regarding the off-label use
of a new technology? If so, what is the appropriate use of that
evidence when evaluating a new technology for an FDA approved or
cleared indication? Are there other new technology add-on payment or
device pass-through payment changes that CMS should consider regarding
off-label use?
We note that, while additional specificity and guidance on
substantial clinical improvement may be helpful, this may also have the
unintended consequence of limiting future flexibility in the evaluation
of future applications, especially as new technologies are continually
emerging. How should CMS balance these considerations in the evaluation
of new technologies as it considers potential future steps? Towards
this end, would it be helpful to the goal of both predictability and
flexibility if the agency explained the types of information or
evidence that are not required for a finding of substantial clinical
improvement?
Currently, our regulations at Sec. 412.87 require that we
announce the results of the new technology add-on payment
determinations in the Federal Register as part of our annual updates
and changes to the IPPS. We also are seeking public comments on
revising this requirement to allow the new technology add-on payment
determinations, including but not limited to determinations of
substantial clinical improvement, to be announced annually in the
Federal Register separate from the annual updates and changes to the
IPPS.
7. Potential Revisions to the New Technology Add-On Payment and
Transitional Device Pass-Through Payment Substantial Clinical
Improvement Criterion for Applications Received Beginning in FY 2020
for IPPS and CY 2020 for OPPS
In addition to future possible rulemaking and further guidance
based on the responses to the general questions in the preceding
section, we also are considering adopting, in the FY 2020 IPPS/LTCH PPS
final rule, the following potential regulatory changes to the
substantial clinical improvement criteria for applications received
beginning in FY 2020 for IPPS (that is, for FY 2021 and subsequent new
technology add-on payment) and beginning in CY 2020 for OPPS, after
consideration of the public comments we receive in response to this
proposed rule. We also are seeking public comments on whether any or
all of these potential regulatory changes might be more appropriate as
changes in guidance rather than or in addition to changes to our
regulations.
Adopting a policy in regulation or sub-regulatory guidance
that explicitly specifies that the requirement for substantial clinical
improvement can be met if the applicant demonstrates that new
technology would be broadly adopted among applicable providers and
patients. A broad adoption criterion would reflect the choices of
patients and providers, and thus the marketplace, in determining
whether a technology represents a substantial clinical improvement.
This patient-centered approach would acknowledge that patients and
providers can together determine the potential for substantial clinical
improvement on an individual basis. As part of the policy being
considered, we would add a provision at Sec. 412.87(b)(1) and Sec.
419.66(c)(2) stating that ``substantially improves'' means, inter alia,
broad adoption by applicable providers and patients. We are seeking
public comments on whether, if such a provision is finalized, it should
specify that a ``majority'' is the appropriate way to further define
and specify ``broad adoption'', or if some other measure of ``broad''
(for example, more than the current standard-of-care, more than a
particular percentage) is more appropriate. Furthermore, we are seeking
public comments on whether to further specify that ``broad adoption''
is in the context of applicable providers and patients for the
technology, and does not mean broadly adopted across the entire IPPS or
OPPS. We are interested in whether commenters have particular
suggestions regarding how, in implementing such a provision, CMS could
provide other helpful regulatory clarification or sub-regulatory
guidance regarding how ``broad adoption'' could be measured and
demonstrated prospectively as a basis for substantial clinical
improvement. If adopted, such a policy would establish, by regulation,
predictability and clarity regarding the meaning and application of
substantial clinical improvement by providing a specific and clear path
to one way
[[Page 19370]]
substantial clinical improvement can be established.
Adopting in regulations or through sub-regulatory guidance
a definition that the term ``substantially improves'' means, inter
alia, that the new technology has demonstrated positive clinical
outcomes that are different from existing technologies. As part of the
policy being considered, we would specify that the term ``improves''
can always be met by comparison to existing technology. Then, we would
further specify that such improvement may always be demonstrated by
reference and comparison to diagnosis or treatment achieved by existing
technology. This would provide a standard for innovators that is
predictable and based on comparison to outcomes from existing
technologies, and would reflect that an evaluation of ``improvement''
involves a comparison relative to existing technology. If adopted, such
a policy, would establish, by regulation or through sub-regulatory
guidance, predictability and clarity regarding the meaning and
application of substantial clinical improvement by clarifying how
existing and new technologies are compared.
Adopting a policy in regulation or through sub-regulatory
guidance that specifies that ``substantially improves'' can be met
through real-world data and evidence, including a non-exhaustive list
of such data and evidence, but that such evidence is not a requirement.
Real-world evidence reflects usage in everyday settings outside of a
clinical trial, which is the majority of care delivered in the United
States. For example, between 3 percent and 5 percent of patients with
cancer are enrolled in a clinical trial.\393\
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\393\ https://ascopubs.org/doi/full/10.1200/jop.0922001.
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As part of the policy being considered, the regulation or sub-
regulatory guidance would list the kinds of data and evidence and
particular findings that CMS would consider in determining whether the
technology meets the substantial clinical improvement criterion and
that such kinds of data can be sufficient to meet that standard. Then,
we would provide a non-exhaustive list of such kinds of data and
findings, including: a decreased mortality rate; a reduction in length
of stay; a reduced recovery time; a reduced rate of at least one
significant complication; a decreased rate of at least one subsequent
diagnostic or therapeutic intervention; a reduction in at least one
clinically significant adverse event; a decreased number of future
hospitalizations or physician visits; a more rapid beneficial
resolution of the disease process treatment; an improvement in one or
more activities of daily living; or, an improved quality of life.
Outcomes relating to quality of life, length of stay, and activities of
daily living may reflect meaningful endpoints not often captured by
clinical trials or other pivotal trials designed primarily for
regulatory purposes. We are seeking public comments on whether we
should adopt such a policy and list, and if so, what the list should
contain. We also are seeking comments on whether, as a general matter,
data exists on patients' experience with new medical devices outside of
the clinician's office, on the effects of a treatment on patients'
activities of daily living, or on any of the other areas listed above.
These comments would at least inform our adoption of a policy in
regulations or sub-regulatory guidance. If adopted, such a policy,
would establish, by regulation or guidance, predictability and clarity
regarding the meaning and application of substantial clinical
improvement by providing a specific and clear path to one way
substantial clinical improvement can be established.
To address the impression that a peer-reviewed journal
article is required for the agency to find that a new technology meets
the requirement for substantial clinical improvement, explicitly
adopting a policy in regulations or sub-regulatory guidance that the
relevant information for purposes of a finding of substantial clinical
improvement may not require a peer-reviewed journal article. We
recognize the value of both academic and other traditional and non-
traditional emerging sources of information in determining substantial
clinical improvement. We are seeking public comments on whether, in
addition to making clear that a peer-reviewed journal article is not
required, types of relevant information that could be helpful should be
specified in such a regulation or guidance to include but not be
limited to other particular formats or sources of information, such as
consensus statements, white papers, patient surveys, editorials and
letters to the editor, systematic reviews, meta-analyses, inferences
from other literature or evidence, and case studies, reports or series,
in addition to randomized clinical trials, study results, or letters
from major associations, whether published or not. If adopted, such a
policy, would establish, by regulation or guidance, predictability and
clarity that the agency is open, in every case, to all types of
information in considering whether a new technology meets the
substantial clinical improvement criterion, consistent with our current
practice of not requiring any particular type of information.
Adopting a policy in regulations or sub-regulatory
guidance that, if there is a demonstrated substantial clinical
improvement based on the use of a new medical service or technology for
any subset of beneficiaries, the substantial clinical improvement
criterion may be met regardless of the size of that subset patient
population. Substantial clinical improvement may be confounded by
comorbidities, patient factors, or other concomitant therapies which
are not readily controlled in research studies. This potential change
recognizes that subset populations may have unique needs. As part of
the policy being considered, we would include a statement in regulation
or guidance that a technology may meet the ``substantial clinical
improvement'' criterion by demonstrating a substantial improvement for
any subset of beneficiaries regardless of size. This potential change
would reflect that many medical technologies are designed for limited
subset populations. Many personalized and precision medicine approaches
aspire for ``n=1 therapy.''
We are seeking public comments on whether, in adopting such a
policy, we should also specify that the add-on payment would be limited
to use in that subset of patient population. If not, why not? For
example, if a new technology that treats cancer only demonstrates
substantial clinical improvement for a select subset of patients with
that diagnosis, should the additional inpatient payments for use of the
new technology be limited to only when that new technology is used in
the treatment of that select subset of Medicare beneficiaries, and, if
so, how could that subset of patient population be defined in advance,
and in what circumstances should there be an exception to any such
limitation? If such a policy were adopted, how could it be constructed
or written to not create new limitations or obstacles to innovation
that are not present in our regulations today?
We also are seeking public comments as to whether there are special
approaches that CMS should adopt in regulations or through sub-
regulatory guidance for new technologies that treat low-prevalence
medical conditions in which substantial clinical improvement may be
more challenging to evaluate. Specifically, we are seeking comment on
how to categorize and specify these conditions, including how to define
``low-prevalence'', whether CMS should adopt any of the potential
changes
[[Page 19371]]
under consideration in this section which are not adopted more broadly,
or any special approaches suggested by commenters. The goal is to
establish, by regulation or guidance, predictability and clarity that
the substantial clinical improvement criterion can be met, either in
all cases or for cases involving low-prevalence medical conditions,
regardless of the size of the patient population which would benefit.
Adopting a policy in regulations or sub-regulatory
guidance that specifically addresses that the substantial clinical
improvement criterion can be met without regard to the FDA pathway for
the technology. As part of the policy being considered, we would
clarify in regulation that the notion of ``improvement'' includes
situations where there is an extant technology such as a predicate
device for 510(k) purposes, and explicitly state that the agency will
not require a device to be approved or cleared through a basis other
than a 510(k) clearance in order for the device to be considered a
substantial clinical improvement. If adopted, the policy described
here, would establish, by regulation or guidance, predictability and
clarity by clarifying that the substantial clinical improvement
criterion can be met without regard to the FDA pathway for the
technology, consistent with our current practice.
We are soliciting comments on the potential revisions and
regulatory or sub-regulatory changes described above, and also welcome
suggestions on other information that would help us clarify and/or
modify in the FY 2020 IPPS/LTCH PPS final rule or through sub-
regulatory guidance CMS' expectations regarding substantial clinical
improvement for payments for new technologies.
8. Proposed Alternative Inpatient New Technology Add-On Payment Pathway
for Transformative New Devices
Under section 1886(d)(5)(K)(vi) of the Act, a medical service or
technology will be considered a ``new medical service or technology''
if the service or technology meets criteria established by the
Secretary after notice and an opportunity for public comment. For a
more complete discussion of the establishment of the current criteria
for the new technology add-on payment, we refer readers to the
September 7, 2001 final rule (66 FR 46913), where we finalized the
``substantial improvement'' criterion to limit new technology add-on
payments under the IPPS to those technologies that afford clear
improvements over the use of previously available technologies.
Specifically, we stated that we would evaluate a request for new
technology add-on payments against the following criteria to determine
if the new medical service or technology would represent a substantial
clinical improvement over existing technologies:
The device offers a treatment option for a patient
population unresponsive to, or ineligible for, currently available
treatments.
The device offers the ability to diagnose a medical
condition in a patient population where that medical condition is
currently undetectable or offers the ability to diagnose a medical
condition earlier in a patient population than allowed by currently
available methods. There must also be evidence that use of the device
to make a diagnosis affects the management of the patient.
Use of the device significantly improves clinical outcomes
for a patient population as compared to currently available treatments.
We also noted examples of outcomes that are frequently evaluated in
studies of medical devices.
In the September 7, 2001 final rule (66 FR 46913), we stated that
we believed the special payments for new technology should be limited
to those new technologies that have been demonstrated to represent a
substantial improvement in caring for Medicare beneficiaries, such that
there is a clear advantage to creating a payment incentive for
physicians and hospitals to utilize the new technology. We also stated
that where such an improvement is not demonstrated, we continued to
believe the incentives of the DRG system would provide a useful balance
to the introduction of new technologies. In that regard, we also
pointed out that various new technologies introduced over the years
have been demonstrated to have been less effective than initially
thought, or in some cases even potentially harmful. We stated that we
believe that it is in the best interest of Medicare beneficiaries to
proceed very carefully with respect to the incentives created to
quickly adopt new technology.
Since 2001 when we first established the substantial clinical
improvement criterion, the FDA programs for helping to expedite the
development and review of transformative new technologies that are
intended to treat serious conditions and address unmet medical needs
(referred to as FDA's expedited programs) have continued to evolve in
tandem with advances in medical innovations and technology. We note
that at the time of the development of the September 7, 2001 final
rule, devices were the predominant new technology entering the market
and, therefore, the substantial clinical improvement criterion was
developed with innovative new devices as a focus. At the time, the FDA
had three expedited programs (Priority Review, Accelerated Approval,
and Fast Track) for drugs and biologicals and no expedited programs for
devices. Now, as described in FDA guidance (available on the website
at: https://www.fda.gov/downloads/Drugs/Guidances/UCM358301.pdf and
https://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/UCM581664.pdf), there are
four expedited FDA programs for drugs (the three expedited FDA programs
named above and a fourth, Breakthrough Therapy, which was established
in 2012) and one expedited FDA program for devices, the Breakthrough
Devices Program. The 21st Century Cures Act (Cures Act) (Pub. L. 144-
255) established the Breakthrough Devices Program to expedite the
development of, and provide for priority review of, medical devices and
device-led combination products that provide for more effective
treatment or diagnosis of life-threatening or irreversibly debilitating
diseases or conditions and which meet one of the following four
criteria: that represent breakthrough technologies; for which no
approved or cleared alternatives exist; that offer significant
advantages over existing approved or cleared alternatives, including
the potential, compared to existing approved alternatives, to reduce or
eliminate the need for hospitalization, improve patient quality of
life, facilitate patients' ability to manage their own care (such as
through self-directed personal assistance), or establish long-term
clinical efficiencies; or the availability of which is in the best
interest of patients.
Some stakeholders over the years have requested that new
technologies that receive marketing authorization and are part of an
FDA expedited program be deemed as representing a substantial clinical
improvement for purposes of the inpatient new technology add-on
payments, even in the initial rulemaking on this issue. We understand
this request would arguably create administrative efficiency because
they currently view the two sets of criteria as the same, overlapping,
similar, or otherwise duplicative or unnecessary. As discussed in the
September 7, 2001 final rule in which we initially adopted the
requirement that a new technology must represent a substantial clinical
improvement, we proposed to consult a
[[Page 19372]]
Federal panel of experts in evaluating new technology under the
``substantial improvement'' criterion. One commenter believed the panel
would be unnecessary and that CMS should automatically deem drugs and
biologicals approved by FDA that were included in its expedited
programs (which the commenter referred to as ``fast track'' processes)
as new technology (66 FR 46914). We stated in response that the panel
would consider all relevant information (including FDA expedited
program approval) in making its determinations. However, we stated that
we did not envision an automatic approval process.
Since 2001, we have continued to receive similar comments. More
recently, in response to the FY 2019 New Technology Town Hall meeting
notice (83 FR 50379) and the meeting, a commenter stated that the Food
and Drug Administration Modernization Act of 1997 authorized a category
of medical devices that are eligible for FDA Priority Review
designation (83 FR 20278). The commenter explained that, to qualify,
products must be designated by the FDA as offering the potential for
significant improvements in the diagnosis or treatment of the most
serious illnesses, including those that are life-threatening or
irreversibly debilitating. The commenter indicated that the processes
by which products meeting the statutory standard for priority review
are considered by the FDA are specified in greater detail in FDA's
Expedited Access Pathway Program, and in the 21st Century Cures Act.
The commenter believed that the criteria for FDA Priority Review
designation of devices are very similar to the substantial clinical
improvement criteria and, therefore, devices used in the inpatient
setting determined to be eligible for expedited review and approved by
the FDA should automatically be considered as meeting the substantial
clinical improvement criterion, without further consideration by CMS.
The Administration is committed to addressing barriers to
healthcare innovation and ensuring Medicare beneficiaries have access
to critical and life-saving new cures and technologies that improve
beneficiary health outcomes. As detailed in the President's FY 2020
Budget, HHS is pursuing several policies that will instill greater
transparency and consistency around how Medicare covers and pays for
innovative technology.
Therefore, given the FDA programs for helping to expedite the
development and review of transformative new drugs and devices that
meet expedited program criteria (that is, new drugs and devices that
treat serious or life-threatening diseases or conditions for which
there is an unmet medical need), we considered whether it would also be
appropriate to similarly facilitate access to these transformative new
technologies for Medicare beneficiaries taking into consideration that
marketing authorization (that is, Premarket Approval (PMA); 510(k)
clearance; the granting of a De Novo classification request; or
approval of a New Drug Application (NDA)) for a product that is the
subject of one of FDA's expedited programs could lead to situations
where the evidence base for demonstrating substantial clinical
improvement in accordance with CMS' current standard has not fully
developed at the time of FDA marketing authorization (that is, PMA;
510(k) clearance; the granting of a De Novo classification request; or
approval of a NDA) (as applicable). We also considered whether FDA
marketing authorization of a product that is part of an FDA expedited
program is evidence that the product is sufficiently different from
existing products for purposes of newness.
After consideration of these issues, and consistent with the
Administration's commitment to addressing barriers to healthcare
innovation and ensuring Medicare beneficiaries have access to critical
and life-saving new cures and technologies that improve beneficiary
health outcomes, we concluded that it would be appropriate to develop
an alternative pathway for transformative medical devices. In
situations where a new medical device is part of the Breakthrough
Devices Program and has received FDA marketing authorization (that is,
the device has received PMA; 510(k) clearance; or the granting of a De
Novo classification request), we are proposing an alternative inpatient
new technology add-on payment pathway to facilitate access to this
technology for Medicare beneficiaries.
Specifically, we are proposing that, for applications received for
new technology add-on payments for FY 2021 and subsequent fiscal years,
if a medical device is part of the FDA's Breakthrough Devices Program
and received FDA marketing authorization, it would be considered new
and not substantially similar to an existing technology for purposes of
the new technology add-on payment under the IPPS. In light of the
criteria applied under the FDA's Breakthrough Device Program, and
because the technology may not have a sufficient evidence base to
demonstrate substantial clinical improvement at the time of FDA
marketing authorization, we also are proposing that the medical device
would not need to meet the requirement under Sec. 412.87(b)(1) that it
represent an advance that substantially improves, relative to
technologies previously available, the diagnosis or treatment of
Medicare beneficiaries. We are proposing to add a new paragraph (c)
under Sec. 412.87 to codify this proposed policy; existing paragraph
(c) would be redesignated as paragraph (d) and amendments would be made
to proposed redesignated paragraph (d) to reflect this proposed
alternative pathway and to make clear that a new medical device may
only be approved under Sec. 412.87(b) or proposed new Sec. 412.87(c).
Under this proposed alternative pathway, a medical device that has
received FDA marketing authorization (that is, has been approved or
cleared by, or had a De Novo classification request granted by, the
FDA) and that is part of the FDA's Breakthrough Devices Program would
need to meet the cost criterion under Sec. 412.87(b)(3), as reflected
in proposed new Sec. 412.87(c)(3), and would be considered new as
reflected in proposed Sec. 412.87(c)(2).
Given the lack of an evidence base to demonstrate substantial
clinical improvement at the time of FDA marketing authorization, we are
soliciting public comment on how CMS should weigh the benefits of this
proposed alternative pathway to facilitate beneficiary access to
transformative new medical devices, including the benefits of
mitigating potential delayed access to innovation and adoption, against
any potential risks, such as the risk of adverse events or negative
outcomes that might come to light later.
We further note that section 1886(d)(5)(K)(ii)(II) of the Act
provides for the collection of data with respect to the costs of a new
medical service or technology described in subclause (I) for a period
of not less than 2 years and not more than 3 years beginning on the
date on which an inpatient hospital code is issued with respect to the
service or technology. We also are seeking public comments on whether
the newness period under the proposed alternative new technology add-on
payment pathway for transformative new medical devices should be
limited to a period of time sufficient for the evidence base for the
new transformative medical device to develop to the point where a
substantial clinical improvement determination can be made (for
example, 1 to 2 years after approval, depending on whether the
transformative new medical device would be eligible for a third year of
new
[[Page 19373]]
technology add-on payments). We note that, if we were to adopt such a
policy in the future, the proposed amended regulation text would be
revised accordingly. We further note that the newness period for a
transformative new medical device cannot exceed 3 years, regardless of
whether it is approved under the current eligibility criteria, the
proposed alternative pathway, or potentially first under the proposed
alternative pathway, and subsequently under the current eligibility
criteria later in its newness period.
As stated above, for the reasons discussed in section I.O. of
Appendix A to this proposed rule, we are not proposing an alternative
inpatient new technology add-on payment pathway for drugs at this time.
9. Proposed Change to the Calculation of the Inpatient New Technology
Add-On Payment
As noted earlier, section 1886(d)(5)(K)(ii)(I) of the Act specifies
that a new medical service or technology may be considered for a new
technology add-on payment if, based on the estimated costs incurred
with respect to discharges involving such service or technology, the
DRG prospective payment rate otherwise applicable to such discharges
under this subsection is inadequate. As discussed in the September 7,
2001 final rule, in deciding which treatment is most appropriate for
any particular patient, it is expected that physicians would balance
the clinical needs of patients with the efficacy and costliness of
particular treatments. In the May 4, 2001 proposed rule (66 FR 22695),
we stated that we believed it is appropriate to limit the additional
payment to 50 percent of the additional cost of the new technology to
appropriately balance the incentives. We stated that this proposed
limit would provide hospitals an incentive for continued cost-effective
behavior in relation to the overall costs of the case. In addition, we
stated that we believed hospitals would face an incentive to balance
the desirability of using the new technology versus the old; otherwise,
there would be a large and perhaps inappropriate incentive to use the
new technology.
As such, the current calculation of the new technology add-on
payment is based on the cost to hospitals for the new medical service
or technology. Specifically, under Sec. 412.88, if the costs of the
discharge (determined by applying CCRs as described in Sec. 412.84(h))
exceed the full DRG payment (including payments for IME and DSH, but
excluding outlier payments), Medicare will make an add-on payment equal
to the lesser of: (1) 50 percent of the costs of the new medical
service or technology; or (2) 50 percent of the amount by which the
costs of the case exceed the standard DRG payment. Unless the discharge
qualifies for an outlier payment, the additional Medicare payment is
limited to the full MS-DRG payment plus 50 percent of the estimated
costs of the new technology or medical service.
Since the 50-percent limit to the new technology add-on payment was
first established, we have received feedback from stakeholders that our
current policy does not adequately reflect the costs of new technology
and does not sufficiently support healthcare innovations. For example,
stakeholders have stated that a maximum add-on payment of 50 percent
does not allow for accurate payment of a new technology with an
unprecedented high cost, such as the CAR T-cell technologies
KYMRIAH[supreg] and YESCARTA[supreg] (83 FR 41173).
After consideration of the concerns raised by commenters and other
stakeholders, and consistent with the Administration's commitment to
addressing barriers to healthcare innovation and ensuring Medicare
beneficiaries have access to critical and life-saving new cures and
technologies that improve beneficiary health outcomes, we agree that
there may be merit to the recommendations to increase the maximum add-
on amount, and that capping the add-on payment amount at 50 percent
could in some cases no longer provide a sufficient incentive for the
use of a new technology. Costs of new medical technologies have
increased over the years to the point where 50 percent of the estimated
cost may not be adequate, and we have received feedback that hospitals
may potentially choose not to provide certain technologies for that
reason alone.
At the same time, we continue to believe that it is important to
preserve the incentives inherent under an average-based prospective
payment system through the use of a percentage of the estimated costs
of a new technology or service. We stated in the September 7, 2001
final rule (66 FR 46919) that we do not believe it is appropriate to
pay an add-on amount equal to 100 percent of the costs of new
technology because there is no similar methodology to reduce payments
for cost-saving technology. For example, as new technologies permit the
development of less-invasive surgical procedures, the total costs per
case may begin to decline as patients recover and leave the hospital
sooner. Finally, we stated our concern that, because these payments are
linked to charges submitted by hospitals, there is the potential that
hospitals may adapt their charge structure to maximize payments for
DRGs that include eligible new technologies. The higher the marginal
cost factor, the greater the incentive hospitals face in this regard.
It is challenging to determine empirically a precise payment
percentage between the current 50 percent and 100 percent payment that
would be the most appropriate. We believe that 65 percent is an
incremental increase that would reasonably balance the need to maintain
the incentives inherent to the prospective payment system while also
encouraging the development and use of new technologies.
Therefore, we are proposing that, beginning with discharges on or
after October 1, 2019, if the costs of a discharge involving a new
technology (determined by applying CCRs as described in Sec.
412.84(h)) exceed the full DRG payment (including payments for IME and
DSH, but excluding outlier payments), Medicare will make an add-on
payment equal to the lesser of: (1) 65 percent of the costs of the new
medical service or technology; or (2) 65 percent of the amount by which
the costs of the case exceed the standard DRG payment. Unless the
discharge qualifies for an outlier payment, the additional Medicare
payment would be limited to the full MS-DRG payment plus 65 percent of
the estimated costs of the new technology or medical service. We also
are proposing to revise paragraphs (a)(2) and (b) under Sec. 412.88 to
reflect these proposed changes to the calculation of the new technology
add-on payment amount beginning in FY 2020.
III. Proposed Changes to the Hospital Wage Index for Acute Care
Hospitals
A. Background
1. Legislative Authority
Section 1886(d)(3)(E) of the Act requires that, as part of the
methodology for determining prospective payments to hospitals, the
Secretary adjust the standardized amounts for area differences in
hospital wage levels by a factor (established by the Secretary)
reflecting the relative hospital wage level in the geographic area of
the hospital compared to the national average hospital wage level. We
currently define hospital labor market areas based on the delineations
of statistical areas established by the Office of Management and Budget
(OMB). A
[[Page 19374]]
discussion of the proposed FY 2020 hospital wage index based on the
statistical areas appears under section III.A.2. of the preamble of
this proposed rule.
Section 1886(d)(3)(E) of the Act requires the Secretary to update
the wage index annually and to base the update on a survey of wages and
wage-related costs of short-term, acute care hospitals. (CMS collects
these data on the Medicare cost report, CMS Form 2552-10, Worksheet S-
3, Parts II, III, and IV. The OMB control number for approved
collection of this information is 0938-0050.) This provision also
requires that any updates or adjustments to the wage index be made in a
manner that ensures that aggregate payments to hospitals are not
affected by the change in the wage index. The proposed adjustment for
FY 2020 is discussed in section II.B. of the Addendum to this proposed
rule.
As discussed in section III.I. of the preamble of this proposed
rule, we also take into account the geographic reclassification of
hospitals in accordance with sections 1886(d)(8)(B) and 1886(d)(10) of
the Act when calculating IPPS payment amounts. Under section
1886(d)(8)(D) of the Act, the Secretary is required to adjust the
standardized amounts so as to ensure that aggregate payments under the
IPPS after implementation of the provisions of sections 1886(d)(8)(B),
1886(d)(8)(C), and 1886(d)(10) of the Act are equal to the aggregate
prospective payments that would have been made absent these provisions.
The proposed budget neutrality adjustment for FY 2020 is discussed in
section II.A.4.b. of the Addendum to this proposed rule.
Section 1886(d)(3)(E) of the Act also provides for the collection
of data every 3 years on the occupational mix of employees for short-
term, acute care hospitals participating in the Medicare program, in
order to construct an occupational mix adjustment to the wage index. A
discussion of the occupational mix adjustment that we are proposing to
apply to the FY 2020 wage index appears under sections III.E.3. and F.
of the preamble of this proposed rule.
2. Core-Based Statistical Areas (CBSAs) for the Proposed FY 2020
Hospital Wage Index
The wage index is calculated and assigned to hospitals on the basis
of the labor market area in which the hospital is located. Under
section 1886(d)(3)(E) of the Act, beginning with FY 2005, we delineate
hospital labor market areas based on OMB-established Core-Based
Statistical Areas (CBSAs). The current statistical areas (which were
implemented beginning with FY 2015) are based on revised OMB
delineations issued on February 28, 2013, in OMB Bulletin No. 13-01.
OMB Bulletin No. 13-01 established revised delineations for
Metropolitan Statistical Areas, Micropolitan Statistical Areas, and
Combined Statistical Areas in the United States and Puerto Rico based
on the 2010 Census, and provided guidance on the use of the
delineations of these statistical areas using standards published on
June 28, 2010 in the Federal Register (75 FR 37246 through 37252). We
refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951
through 49963) for a full discussion of our implementation of the OMB
labor market area delineations beginning with the FY 2015 wage index.
Generally, OMB issues major revisions to statistical areas every 10
years, based on the results of the decennial census. However, OMB
occasionally issues minor updates and revisions to statistical areas in
the years between the decennial censuses through OMB Bulletins. On July
15, 2015, OMB issued OMB Bulletin No. 15-01, which provided updates to
and superseded OMB Bulletin No. 13-01 that was issued on February 28,
2013. The attachment to OMB Bulletin No. 15-01 provided detailed
information on the update to statistical areas since February 28, 2013.
The updates provided in OMB Bulletin No. 15-01 were based on the
application of the 2010 Standards for Delineating Metropolitan and
Micropolitan Statistical Areas to Census Bureau population estimates
for July 1, 2012 and July 1, 2013. In the FY 2017 IPPS/LTCH PPS final
rule (81 FR 56913), we adopted the updates set forth in OMB Bulletin
No. 15-01 effective October 1, 2016, beginning with the FY 2017 wage
index. For a complete discussion of the adoption of the updates set
forth in OMB Bulletin No. 15-01, we refer readers to the FY 2017 IPPS/
LTCH PPS final rule. In the FY 2018 IPPS/LTCH PPS final rule (82 FR
38130), we continued to use the OMB delineations that were adopted
beginning with FY 2015 to calculate the area wage indexes, with updates
as reflected in OMB Bulletin No. 15-01 specified in the FY 2017 IPPS/
LTCH PPS final rule.
On August 15, 2017, OMB issued OMB Bulletin No. 17-01, which
provided updates to and superseded OMB Bulletin No. 15-01 that was
issued on July 15, 2015. The attachments to OMB Bulletin No. 17-01
provide detailed information on the update to statistical areas since
July 15, 2015, and are based on the application of the 2010 Standards
for Delineating Metropolitan and Micropolitan Statistical Areas to
Census Bureau population estimates for July 1, 2014 and July 1, 2015.
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41362 through 41363), we
adopted the updates set forth in OMB Bulletin No. 17-01 effective
October 1, 2018, beginning with the FY 2019 wage index. For a complete
discussion of the adoption of the updates set forth in OMB Bulletin No.
17-01, we refer readers to the FY 2019 IPPS/LTCH PPS final rule.
For FY 2020, we are continuing to use the OMB delineations that
were adopted beginning with FY 2015 (based on the revised delineations
issued in OMB Bulletin No. 13-01) to calculate the area wage indexes,
with updates as reflected in OMB Bulletin Nos. 15-01 and 17-01.
3. Codes for Constituent Counties in CBSAs
CBSAs are made up of one or more constituent counties. Each CBSA
and constituent county has its own unique identifying codes. There are
two different lists of codes associated with counties: Social Security
Administration (SSA) codes and Federal Information Processing Standard
(FIPS) codes. Historically, CMS has listed and used SSA and FIPS county
codes to identify and crosswalk counties to CBSA codes for purposes of
the hospital wage index. As we discussed in the FY 2018 IPPS/LTCH PPS
final rule (82 FR 38129 through 38130), we have learned that SSA county
codes are no longer being maintained and updated. However, the FIPS
codes continue to be maintained by the U.S. Census Bureau. We believe
that using the latest FIPS codes will allow us to maintain a more
accurate and up-to-date payment system that reflects the reality of
population shifts and labor market conditions.
The Census Bureau's most current statistical area information is
derived from ongoing census data received since 2010; the most recent
data are from 2015. The Census Bureau maintains a complete list of
changes to counties or county equivalent entities on the website at:
https://www.census.gov/geo/reference/county-changes.html. We believe
that it is important to use the latest counties or county equivalent
entities in order to properly crosswalk hospitals from a county to a
CBSA for purposes of the hospital wage index used under the IPPS.
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38129 through
38130), we adopted a policy to discontinue the use of the SSA county
codes and began using only the FIPS county codes for purposes of
crosswalking counties to
[[Page 19375]]
CBSAs. In addition, in the same rule, we implemented the latest FIPS
code updates which were effective October 1, 2017, beginning with the
FY 2018 wage indexes. These updates have been used to calculate the
wage indexes in a manner generally consistent with the CBSA-based
methodologies finalized in the FY 2005 IPPS final rule and the FY 2015
IPPS/LTCH PPS final rule.
For FY 2020, we are continuing to use only the FIPS county codes
for purposes of crosswalking counties to CBSAs. For FY 2020, Tables 2
and 3 associated with this proposed rule and the County to CBSA
Crosswalk File and Urban CBSAs and Constituent Counties for Acute Care
Hospitals File posted on the CMS website reflect these county changes.
B. Worksheet S-3 Wage Data for the Proposed FY 2020 Wage Index
The proposed FY 2020 wage index values are based on the data
collected from the Medicare cost reports submitted by hospitals for
cost reporting periods beginning in FY 2016 (the FY 2019 wage indexes
were based on data from cost reporting periods beginning during FY
2015).
1. Included Categories of Costs
The proposed FY 2020 wage index includes all of the following
categories of data associated with costs paid under the IPPS (as well
as outpatient costs):
Salaries and hours from short-term, acute care hospitals
(including paid lunch hours and hours associated with military leave
and jury duty);
Home office costs and hours;
Certain contract labor costs and hours, which include
direct patient care, certain top management, pharmacy, laboratory, and
nonteaching physician Part A services, and certain contract indirect
patient care services (as discussed in the FY 2008 final rule with
comment period (72 FR 47315 through 47317)); and
Wage-related costs, including pension costs (based on
policies adopted in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51586
through 51590)) and other deferred compensation costs.
2. Excluded Categories of Costs
Consistent with the wage index methodology for FY 2019, the
proposed wage index for FY 2020 also excludes the direct and overhead
salaries and hours for services not subject to IPPS payment, such as
skilled nursing facility (SNF) services, home health services, costs
related to GME (teaching physicians and residents) and certified
registered nurse anesthetists (CRNAs), and other subprovider components
that are not paid under the IPPS. The proposed FY 2020 wage index also
excludes the salaries, hours, and wage-related costs of hospital-based
rural health clinics (RHCs), and Federally qualified health centers
(FQHCs) because Medicare pays for these costs outside of the IPPS (68
FR 45395). In addition, salaries, hours, and wage-related costs of CAHs
are excluded from the wage index for the reasons explained in the FY
2004 IPPS final rule (68 FR 45397 through 45398). For FY 2020 and
subsequent years, other wage-related costs are also excluded from the
calculation of the wage index. As discussed in the FY 2019 IPPS/LTCH
final rule (83 FR 41365 through 41369), other wage-related costs
reported on Worksheet S-3, Part II, Line 18 and Worksheet S-3, Part IV,
Line 25 and subscripts, as well as all other wage-related costs, such
as contract labor costs, are excluded from the calculation of the wage
index.
3. Use of Wage Index Data by Suppliers and Providers Other Than Acute
Care Hospitals Under the IPPS
Data collected for the IPPS wage index also are currently used to
calculate wage indexes applicable to suppliers and other providers,
such as SNFs, home health agencies (HHAs), ambulatory surgical centers
(ASCs), and hospices. In addition, they are used for prospective
payments to IRFs, IPFs, and LTCHs, and for hospital outpatient
services. We note that, in the IPPS rules, we do not address comments
pertaining to the wage indexes of any supplier or provider except IPPS
providers and LTCHs. Such comments should be made in response to
separate proposed rules for those suppliers and providers.
C. Verification of Worksheet S-3 Wage Data
The wage data for the proposed FY 2020 wage index were obtained
from Worksheet S-3, Parts II and III of the Medicare cost report (Form
CMS-2552-10, OMB Control Number 0938-0050) for cost reporting periods
beginning on or after October 1, 2015, and before October 1, 2016. For
wage index purposes, we refer to cost reports during this period as the
``FY 2016 cost report,'' the ``FY 2016 wage data,'' or the ``FY 2016
data.'' Instructions for completing the wage index sections of
Worksheet S-3 are included in the Provider Reimbursement Manual (PRM),
Part 2 (Pub. 15-2), Chapter 40, Sections 4005.2 through 4005.4. The
data file used to construct the proposed FY 2020 wage index includes FY
2016 data submitted to us as of February 7, 2019. As in past years, we
performed an extensive review of the wage data, mostly through the use
of edits designed to identify aberrant data.
We asked our MACs to revise or verify data elements that result in
specific edit failures. For the proposed FY 2020 wage index, we
identified and excluded 81 providers with aberrant data that should not
be included in the wage index, although if data elements for some of
these providers are corrected, we intend to include data from those
providers in the final FY 2020 wage index. We also adjusted certain
aberrant data and included these data in the proposed wage index. For
example, in situations where a hospital did not have documentable
salaries, wages, and hours for housekeeping and dietary services, we
imputed estimates, in accordance with policies established in the FY
2015 IPPS/LTCH PPS final rule (79 FR 49965 through 49967). We
instructed MACs to complete their data verification of questionable
data elements and to transmit any changes to the wage data no later
than March 22, 2019. In addition, as a result of the April and May
appeals processes, and posting of the April 30, 2019 PUF, we may make
additional revisions to the FY 2020 wage data, as described further
below. The revised data would be reflected in the FY 2020 IPPS/LTCH PPS
final rule.
Among the hospitals we identified and excluded with aberrant data
that should not be included in the proposed FY 2020 wage index are
eight hospitals that are part of a health care delivery system that is
unique in several ways. The vast majority of the system's hospitals
(38) are located in a single State, with one union representing most of
their hospital employees in the ``northern'' region of the State, while
another union represents most of their hospital employees in the
``southern'' region of the State. The salaries negotiated do not
reflect competitive local labor market salaries; rather, the salaries
reflect negotiated salary rates for the ``northern'' and ``southern''
regions of the State respectively. For example, all medical assistants
in the ``northern'' region start at $24.31 per hour, and medical
assistants in the ``southern'' region start at $20.36 per hour. Thus,
all salaries for similar positions and levels of experience in the
northern region, for example, are the same regardless of prevailing
labor market conditions in the area in which the hospital is located.
In addition, this chain is part of a managed care organization and an
integrated delivery system wherein the hospitals rely on the system's
health care plans for funding. For the FY 2020 proposed wage index
calculation, we have identified and excluded eight of the hospitals
that are part of this health
[[Page 19376]]
care system. The average hourly wages of these eight hospitals differ
most from their respective CBSA average hourly wages, and there is a
large gap between the average hourly wage of each of the eight
hospitals and the next closest average hourly wage in their respective
CBSAs. We do not believe that the average hourly wages of these eight
hospitals accurately reflect the economic conditions in their
respective labor market areas during the FY 2016 cost reporting period.
Therefore, we believe the inclusion of the wage data for these eight
hospitals in the proposed wage index would not ensure that the FY 2020
wage index represents the relative hospital wage level in the
geographic area of the hospital as compared to the national average of
wages. Rather, the inclusion of these data would distort the comparison
of the average hourly wage of each of these hospitals' labor market
areas to the national average hourly wage. We believe that under
section 1886(d)(3)(E) of the Act, which requires the Secretary to
establish an adjustment factor (the wage index) reflecting the relative
hospital wage level in the geographic area of a hospital compared to
the national average hospital wage level, we have the discretion to
remove hospital data from the wage index that is not reflective of the
relative hospital wage level in the hospitals' geographic area. In
previous rulemaking (80 FR 49491), we explained that we remove
hospitals from the wage index because their average hourly wages are
either extraordinarily high or extraordinarily low compared to their
labor market areas, even though their data were properly documented.
For this reason, we have removed the data of other hospitals in the
past; for example, data from government-owned hospitals and hospitals
providing unique or niche services which affect their average hourly
wages. We note that we are considering removing all of the hospitals in
this health care system from the FY 2021 and subsequent wage index
calculations, not because they are failing edits due to inaccuracy, but
because of the uniqueness of this chain of hospitals, in particular,
the fact that the salaries of their employees are not based on local
labor market rates.
In constructing the proposed FY 2020 wage index, we included the
wage data for facilities that were IPPS hospitals in FY 2016, inclusive
of those facilities that have since terminated their participation in
the program as hospitals, as long as those data did not fail any of our
edits for reasonableness. We believe that including the wage data for
these hospitals is, in general, appropriate to reflect the economic
conditions in the various labor market areas during the relevant past
period and to ensure that the current wage index represents the labor
market area's current wages as compared to the national average of
wages. However, we excluded the wage data for CAHs as discussed in the
FY 2004 IPPS final rule (68 FR 45397 through 45398); that is, any
hospital that is designated as a CAH by 7 days prior to the publication
of the preliminary wage index public use file (PUF) is excluded from
the calculation of the wage index. For this proposed rule, we removed 4
hospitals that converted to CAH status on or after January 26, 2018,
the cut-off date for CAH exclusion from the FY 2019 wage index, and
through and including January 24, 2019, the cut-off date for CAH
exclusion from the FY 2020 wage index. After excluding CAHs and
hospitals with aberrant data, we calculated the proposed wage index
using the Worksheet S-3, Parts II and III wage data of 3,221 hospitals.
For the proposed FY 2020 wage index, we allotted the wages and
hours data for a multicampus hospital among the different labor market
areas where its campuses are located in the same manner that we
allotted such hospitals' data in the FY 2019 wage index (83 FR 41364
through 41365); that is, using campus full-time equivalent (FTE)
percentages as originally finalized in the FY 2012 IPPS/LTCH PPS final
rule (76 FR 51591). Table 2, which contains the proposed FY 2020 wage
index associated with this proposed rule (available via the internet on
the CMS website), includes separate wage data for the campuses of 17
multicampus hospitals. The following chart lists the multicampus
hospitals by CSA certification number (CCN) and the FTE percentages on
which the wages and hours of each campus were allotted to their
respective labor market areas:
------------------------------------------------------------------------
Full-time
equivalent
CCN of multicampus hospital (FTE)
percentages
------------------------------------------------------------------------
050121.................................................. 0.83
05B121.................................................. 0.17
070033.................................................. 0.92
07B033.................................................. 0.08
100029.................................................. 0.54
10B029.................................................. 0.46
100167.................................................. 0.39
10B167.................................................. 0.61
140010.................................................. 0.83
14B010.................................................. 0.17
220074.................................................. 0.86
22B074.................................................. 0.14
330195.................................................. 0.90
33B195.................................................. 0.10
330234.................................................. 0.73
33B234.................................................. 0.27
340115.................................................. 0.96
34B115.................................................. 0.04
360020.................................................. 0.99
36B020.................................................. 0.01
370041.................................................. 0.89
37B041.................................................. 0.11
390006.................................................. 0.94
39B006.................................................. 0.06
390115.................................................. 0.86
39B115.................................................. 0.14
390142.................................................. 0.83
39B142.................................................. 0.17
460051.................................................. 0.82
46B051.................................................. 0.18
510022.................................................. 0.95
51B022.................................................. 0.05
670062.................................................. 0.55
67B062.................................................. 0.45
------------------------------------------------------------------------
We note that, in past years, in Table 2, we have placed a ``B'' to
designate the subordinate campus in the fourth position of the hospital
CCN. However, for the FY 2019 IPPS/LTCH PPS proposed and final rules
and subsequent rules, we have moved the ``B'' to the third position of
the CCN. Because all IPPS hospitals have a ``0'' in the third position
of the CCN, we believe that placement of the ``B'' in this third
position, instead of the ``0'' for the subordinate campus, is the most
efficient method of identification and interferes the least with the
other, variable, digits in the CCN.
D. Method for Computing the Proposed FY 2020 Unadjusted Wage Index
In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 41365), we
indicated we were committed to transforming the health care delivery
system, including the Medicare program, by putting an additional focus
on patient-centered care and working with providers, physicians, and
patients to improve outcomes. One key to that transformation is
ensuring that the Medicare payment rates are as accurate and
appropriate as possible, consistent with the law. We invited the public
to submit comments, suggestions, and recommendations for regulatory and
policy changes to address wage index disparities. Our proposals for FY
2020 to address wage index disparities, particularly for rural
hospitals, to the extent permitted under current law, are discussed in
section III.N. of the preamble to this proposed rule. We continue to
believe that broader statutory wage index reform is needed.
[[Page 19377]]
1. Proposed Methodology for FY 2020
The method used to compute the proposed FY 2020 wage index without
an occupational mix adjustment follows the same methodology that we
used to compute the proposed wage indexes without an occupational mix
adjustment since FY 2012 (76 FR 51591 through 51593), except as
discussed below. Typically, we do not restate all of the steps of the
methodology to compute the wage indexes in each proposed and final
rulemaking; instead, we refer readers to the FY 2012 IPPS/LTCH PPS
final rule. However, below in this FY 2020 IPPS/LTCH PPS proposed rule,
we are (1) restating the steps of the methodology in order to update
outdated references to certain cost report lines which were then
reflected on Medicare CMS Form 2552-96 but are now reflected on
Medicare CMS Form 2552-10; (2) proposing to change the calculation of
the Overhead Rate in Step 4; (3) proposing to modify our methodology
with regard to how dollar amounts, hours, and other numerical values in
the wage index calculation are rounded; and (4) proposing a methodology
for calculating the wage index for urban areas without wage data. We
are otherwise not proposing to make any other policy changes in this
section to the methodology set forth in the FY 2012 IPPS/LTCH PPS
proposed rule (76 FR 51591 through 51593) for computing the proposed
wage index without an occupational mix adjustment. Unless otherwise
specified, all cost report line references below refer to CMS Form
2552-10.
Step 1.--We gathered data from each of the non-Federal, short-term,
acute care hospitals for which data were reported on the Worksheet S-3,
Parts II and III of the Medicare cost report for the hospital's cost
reporting period relevant to the proposed wage index (in this case, for
FY 2020, these would be data from cost reports for cost reporting
periods beginning on or after October 1, 2015, and before October 1,
2016). In addition, we include data from some hospitals that had cost
reporting periods beginning before October 2015 and reported a cost
reporting period covering all of FY 2016. These data are included
because no other data from these hospitals would be available for the
cost reporting period described above, and because particular labor
market areas might be affected due to the omission of these hospitals.
However, we generally describe these wage data as FY 2016 data. We note
that, if a hospital had more than one cost reporting period beginning
during FY 2016 (for example, a hospital had two short cost reporting
periods beginning on or after October 1, 2015, and before October 1,
2016), we include wage data from only one of the cost reporting
periods, the longer, in the wage index calculation. If there was more
than one cost reporting period and the periods were equal in length, we
included the wage data from the later period in the wage index
calculation.
Step 2.--Salaries.--The method used to compute a hospital's average
hourly wage excludes certain costs that are not paid under the IPPS.
(We note that, beginning with FY 2008 (72 FR 47315), we included what
were then Lines 22.01, 26.01, and 27.01 of Worksheet S-3, Part II of
CMS Form 2552-96 for overhead services in the wage index. Currently,
these lines are lines 28, 33, and 35 on CMS Form 2552-10. However, we
note that the wages and hours on these lines are not incorporated into
Line 101, Column 1 of Worksheet A, which, through the electronic cost
reporting software, flows directly to Line 1 of Worksheet S-3, Part II.
Therefore, the first step in the wage index calculation is to compute a
``revised'' Line 1, by adding to the Line 1 on Worksheet S-3, Part II
(for wages and hours respectively) the amounts on Lines 28, 33, and
35.) In calculating a hospital's Net Salaries (we note that we
previously used the term ``average'' salaries in the FY 2012 IPPS/LTCH
PPS final rule (76 FR 51592), but we now use the term ``net'' salaries)
plus wage-related costs, we first compute the following: Subtract from
Line 1 (total salaries) the GME and CRNA costs reported on CMS Form
2552-10, Lines 2, 4.01, 7, and 7.01, the Part B salaries reported on
Lines 3, 5 and 6, home office salaries reported on Line 8, and exclude
salaries reported on Lines 9 and 10 (that is, direct salaries
attributable to SNF services, home health services, and other
subprovider components not subject to the IPPS). We also subtract from
Line 1 the salaries for which no hours were reported. Therefore, the
formula for Net Salaries (from Worksheet S-3, Part II) is the
following:
((Line 1 + Line 28 + Line 33 + Line 35) - (Line 2 + Line 3 + Line 4.01
+ Line 5 + Line 6 + Line 7 + Line 7.01 + Line 8 + Line 9 + Line 10))
To determine Total Salaries plus Wage-Related Costs, we add to the
Net Salaries the costs of contract labor for direct patient care,
certain top management, pharmacy, laboratory, and nonteaching physician
Part A services (Lines 11, 12 and 13), home office salaries and wage-
related costs reported by the hospital on Lines 14.01, 14.02, and 15,
and nonexcluded area wage-related costs (Lines 17, 22, 25.50, 25.51,
and 25.52). We note that contract labor and home office salaries for
which no corresponding hours are reported are not included. In
addition, wage-related costs for nonteaching physician Part A employees
(Line 22) are excluded if no corresponding salaries are reported for
those employees on Line 4.
The formula for Total Salaries plus Wage-Related Costs (from
Worksheet S-3, Part II) is the following: ((Line 1 + Line 28 + Line 33
+ Line 35) - (Line 2 + Line 3 + Line 4.01 + Line 5 + Line 6 + Line 7 +
Line 7.01 + Line 8 + Line 9 + Line 10)) + (Line 11 + Line 12 + Line 13
+ Line 14.01 + 14.02 + Line 15) + (Line 17 + Line 22 + 25.50 + 25.51 +
25.52)
Step 3.--Hours.--With the exception of wage-related costs, for
which there are no associated hours, we compute total hours using the
same methods as described for salaries in Step 2.
The formula for Total Hours (from Worksheet S-3, Part II) is the
following: ((Line 1 + Line 28 + Line 33 + Line 35) - (Line 2 + Line 3 +
Line 4.01 + Line 5 + Line 6 + Line 7 + Line 7.01 + Line 8 + Line 9 +
Line 10)) + (Line 11 + Line 12 + Line 13 + Line 14.01 + 14.02 + Line
15).
Step 4.--For each hospital reporting both total overhead salaries
and total overhead hours greater than zero, we then allocate overhead
costs to areas of the hospital excluded from the wage index
calculation. First, we determine the ``excluded rate'', which is the
ratio of excluded area hours to Revised Total Hours (from Worksheet S-
3, Part II) with the following formula: (Line 9 + Line 10)/(Line 1 +
Line 28 + Line 33 + Line 35) - (Lines 2, 3, 4.01, 5, 6, 7, 7.01, and 8
and Lines 26 through 43).
We then compute the amounts of overhead salaries and hours to be
allocated to excluded areas by multiplying the above ratio by the total
overhead salaries and hours reported on Lines 26 through 43 of
Worksheet S-3, Part II. Next, we compute the amounts of overhead wage-
related costs to be allocated to excluded areas using three steps:
(1) We determine the ``overhead rate'' (from Worksheet S-3, Part
II), which is the ratio of overhead hours (Lines 26 through 43 minus
the sum of Lines 28, 33, and 35) to revised hours excluding the sum of
lines 28, 33, and 35 (Line 1 minus the sum of Lines 2, 3, 4.01, 5, 6,
7, 7.01, 8, 9, 10, 28, 33, and 35). We note that, for the FY 2008 and
subsequent wage index calculations, we have been excluding the overhead
contract labor (Lines 28, 33, and 35) from the determination of the
ratio of overhead hours to revised hours because hospitals
[[Page 19378]]
typically do not provide fringe benefits (wage-related costs) to
contract personnel. Therefore, it is not necessary for the wage index
calculation to exclude overhead wage-related costs for contract
personnel. Further, if a hospital does contribute to wage-related costs
for contracted personnel, the instructions for Lines 28, 33, and 35
require that associated wage-related costs be combined with wages on
the respective contract labor lines.
The formula for the Overhead Rate (from Worksheet S-3, Part II) has
been the following: (Lines 26 through 43-Lines 28, 33 and 35)/((((Line
1 + Lines 28, 33, 35) - (Lines 2, 3, 4.01, 5, 6, 7, 7.01, 8, 26 through
43)) - (Lines 9, 10, 28, 33, and 35)) + (Lines 26 through 43 - Lines
28, 33, and 35)).
We note that, for the calculation for FY 2020 and subsequent fiscal
years, we are reexamining this step above regarding removal of the sum
of overhead contract labor hours on Lines 28, 33, and 35. In the
denominator of this calculation of the overhead rate, we have been
subtracting out the sum of the overhead contract labor hours from
Revised Total Hours. However, this requires modification because
Revised Total Hours do not include these overhead contract labor hours.
We are proposing to modify this step of the calculation of the overhead
rate as follows:
The formula for the Overhead Rate (from Worksheet S-3, Part II)
would be the following: (Lines 26 through 43-Lines 28, 33 and 35)/
((((Line 1 + Lines 28, 33, 35) - (Lines 2, 3, 4.01, 5, 6, 7, 7.01, 8,
and 26 through 43)) - (Lines 9 and 10)) + (Lines 26 through 43 - Lines
28, 33, and 35)).
(2) We compute overhead wage-related costs by multiplying the
overhead hours ratio by wage-related costs reported on Part II, Lines
17, 22, 25.50, 25.51, and 25.52.
(3) We multiply the computed overhead wage-related costs by the
above excluded area hours ratio.
Finally, we subtract the computed overhead salaries, wage-related
costs, and hours associated with excluded areas from the total salaries
(plus wage-related costs) and hours derived in Steps 2 and 3.
Step 5.--For each hospital, we adjust the total salaries plus wage-
related costs to a common period to determine total adjusted salaries
plus wage-related costs. To make the wage adjustment, we estimate the
percentage change in the employment cost index (ECI) for compensation
for each 30-day increment from October 14, 2015 through April 15, 2017,
for private industry hospital workers from the BLS' Compensation and
Working Conditions. We use the ECI because it reflects the price
increase associated with total compensation (salaries plus fringes)
rather than just the increase in salaries. In addition, the ECI
includes managers as well as other hospital workers. This methodology
to compute the monthly update factors uses actual quarterly ECI data
and assures that the update factors match the actual quarterly and
annual percent changes. We also note that, since April 2006 with the
publication of March 2006 data, the BLS' ECI uses a different
classification system, the North American Industrial Classification
System (NAICS), instead of the Standard Industrial Codes (SICs), which
no longer exist. We have consistently used the ECI as the data source
for our wages and salaries and other price proxies in the IPPS market
basket, and we are not proposing to make any changes to the usage for
FY 2020. The factors used to adjust the hospital's data were based on
the midpoint of the cost reporting period, as indicated below.
Step 6.--Each hospital is assigned to its appropriate urban or
rural labor market area before any reclassifications under section
1886(d)(8)(B), section 1886(d)(8)(E), or section 1886(d)(10) of the
Act. Within each urban or rural labor market area, we add the total
adjusted salaries plus wage-related costs obtained in Step 5 for all
hospitals in that area to determine the total adjusted salaries plus
wage-related costs for the labor market area.
Step 7.--We divide the total adjusted salaries plus wage-related
costs obtained under Step 6 by the sum of the corresponding total hours
(from Step 4) for all hospitals in each labor market area to determine
an average hourly wage for the area.
Step 8.--We add the total adjusted salaries plus wage-related costs
obtained in Step 5 for all hospitals in the Nation and then divide the
sum by the national sum of total hours from Step 4 to arrive at a
national average hourly wage.
Step 9.--For each urban or rural labor market area, we calculate
the hospital wage index value, unadjusted for occupational mix, by
dividing the area average hourly wage obtained in Step 7 by the
national average hourly wage computed in Step 8.
Step 10.--For each urban labor market area for which we do not have
any hospital wage data (either because there are no IPPS hospitals in
that labor market area, or there are IPPS hospitals in that area but
their data are either too new to be reflected in the current year's
wage index calculation, or their data are aberrant and are deleted from
the wage index), we are proposing that, for FY 2020 and subsequent
years' wage index calculations, such CBSA's wage index would be equal
to total urban salaries plus wage-related costs (from Step 5) in the
State, divided by the total urban hours (from Step 4) in the State,
divided by the national average hourly wage from Step 8. We believe
that, in the absence of wage data for an urban labor market area, it is
reasonable to propose to use a statewide urban average, which is based
on actual, acceptable wage data of hospitals in that State, rather than
impute some other type of value using a different methodology.
For calculation of the proposed FY 2020 wage index, we note there
are 2 urban CBSAs for which we do not have IPPS hospital wage data. In
Table 3 associated with this proposed rule (which is available via the
internet on the CMS website) which contains the area wage indexes, we
are including a footnote to indicate to which CBSAs this proposed
policy would apply. We are proposing that these CBSAs' wage indexes
would be equal to total urban salaries plus wage-related costs (from
Step 5) in the respective State, divided by the total urban hours (from
Step 4) in the respective State, divided by the national average hourly
wage (from Step 8). Under this step, we also are proposing to apply our
proposed policy with regard to how dollar amounts, hours, and other
numerical values in the wage index calculations are rounded.
We refer readers to section II. of the Appendix of this proposed
rule for the policy regarding rural areas that do not have IPPS
hospitals.
Step 11.--Section 4410 of Public Law 105-33 provides that, for
discharges on or after October 1, 1997, the area wage index applicable
to any hospital that is located in an urban area of a State may not be
less than the area wage index applicable to hospitals located in rural
areas in that State. The areas affected by this provision are
identified in Table 2 which is listed in section VI. of the Addendum to
this proposed rule and available via the internet on the CMS website.
As we noted previously in this section, we are proposing to modify
our methodology with regard to how dollar amounts, hours, and other
numerical values in the unadjusted and adjusted wage index calculation
are rounded, in order to help ensure consistency in the calculation.
For example, we have received questions from stakeholders who use data
printed in our proposed and final rules and online in our public use
files (PUFs) to calculate the wage indexes, and it has come to our
attention that, due in part to occasional inconsistencies in rounding
of data,
[[Page 19379]]
CMS' calculations and stakeholders' calculations may not match.
Therefore, to help ensure consistency in the calculation, we are
proposing to modify how the wage data numbers are rounded, as follows.
For data that we consider to be ``raw data,'' such as the cost report
data on Worksheets S-3, Parts II and III, and the occupational mix
survey data, we are proposing to use such data ``as is,'' and not round
any of the individual line items or fields. However, for any dollar
amounts within the wage index calculations, including any type of
summed wage amount, average hourly wages, and the national average
hourly wage (both the unadjusted and adjusted for occupational mix), we
are proposing to round the dollar amounts to 2 decimals. For any hour
amounts within the wage index calculations, we are proposing to round
such hour amounts to the nearest whole number. For any numbers not
expressed as dollars or hours within the wage index calculations, which
could include ratios, percentages, or inflation factors, we are
proposing to round such numbers to 5 decimals. However, we are
proposing to continue rounding the actual unadjusted and adjusted wage
indexes to 4 decimals, as we have done historically.
As discussed in the FY 2012 IPPS/LTCH PPS final rule, in ``Step
5,'' for each hospital, we adjust the total salaries plus wage-related
costs to a common period to determine total adjusted salaries plus
wage-related costs. To make the wage adjustment, we estimate the
percentage change in the employment cost index (ECI) for compensation
for each 30-day increment from October 14, 2015, through April 15,
2017, for private industry hospital workers from the BLS' Compensation
and Working Conditions. We have consistently used the ECI as the data
source for our wages and salaries and other price proxies in the IPPS
market basket, and we are not proposing any changes to the usage of the
ECI for FY 2020. The factors used to adjust the hospital's data were
based on the midpoint of the cost reporting period, as indicated in the
following table.
Midpoint of Cost Reporting Period
------------------------------------------------------------------------
Adjustment
After Before factor
------------------------------------------------------------------------
10/14/2015.................................... 11/15/2015 1.03058
11/14/2015.................................... 12/15/2015 1.02885
12/14/2015.................................... 01/15/2016 1.02708
01/14/2016.................................... 02/15/2016 1.02532
02/14/2016.................................... 03/15/2016 1.02357
03/14/2016.................................... 04/15/2016 1.02177
04/14/2016.................................... 05/15/2016 1.01988
05/14/2016.................................... 06/15/2016 1.01790
06/14/2016.................................... 07/15/2016 1.01585
07/14/2016.................................... 08/15/2016 1.01375
08/14/2016.................................... 09/15/2016 1.01162
09/14/2016.................................... 10/15/2016 1.00952
10/14/2016.................................... 11/15/2016 1.00751
11/14/2016.................................... 12/15/2016 1.00560
12/14/2016.................................... 01/15/2017 1.00374
01/14/2017.................................... 02/15/2017 1.00187
02/14/2017.................................... 03/15/2017 1.00000
03/14/2017.................................... 04/15/2017 0.99818
------------------------------------------------------------------------
For example, the midpoint of a cost reporting period beginning
January 1, 2016, and ending December 31, 2016, is June 30, 2016. An
adjustment factor of 1.01585 was applied to the wages of a hospital
with such a cost reporting period.
Previously, we also would provide a Puerto Rico overall average
hourly wage. As discussed in the FY 2017 IPPS/LTCH PPS final rule (81
FR 56915), prior to January 1, 2016, Puerto Rico hospitals were paid
based on 75 percent of the national standardized amount and 25 percent
of the Puerto Rico-specific standardized amount. As a result, we
calculated a Puerto Rico-specific wage index that was applied to the
labor-related share of the Puerto Rico-specific standardized amount.
Section 601 of the Consolidated Appropriations Act, 2016 (Pub. L. 114-
113) amended section 1886(d)(9)(E) of the Act to specify that the
payment calculation with respect to operating costs of inpatient
hospital services of a subsection (d) Puerto Rico hospital for
inpatient hospital discharges on or after January 1, 2016, shall use
100 percent of the national standardized amount. As we stated in the FY
2017 IPPS/LTCH PPS final rule (81 FR 56915 through 56916), because
Puerto Rico hospitals are no longer paid with a Puerto Rico-specific
standardized amount as of January 1, 2016, under section 1886(d)(9)(E)
of the Act, as amended by section 601 of the Consolidated
Appropriations Act, 2016, there is no longer a need to calculate a
Puerto Rico-specific average hourly wage and wage index. Hospitals in
Puerto Rico are now paid 100 percent of the national standardized
amount and, therefore, are subject to the national average hourly wage
(unadjusted for occupational mix) and the national wage index, which is
applied to the national labor-related share of the national
standardized amount. Therefore, for FY 2020, there is no Puerto Rico-
specific overall average hourly wage or wage index.
Based on the above methodology, the proposed unadjusted national
average hourly wage is the following:
------------------------------------------------------------------------
------------------------------------------------------------------------
Proposed FY 2020 Unadjusted National Average Hourly Wage..... $44.03
------------------------------------------------------------------------
2. Policies Regarding Rural Reclassification and Special Statuses for
Multicampus Hospitals
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41369 through
41374), we codified policies regarding rural reclassification and
special statuses for multicampus hospitals in the regulations at Sec.
412.92 for sole community hospitals (SCHs), Sec. 412.96 for rural
referral centers (RRCs), Sec. 412.103 for rural reclassification, and
Sec. 412.108 for Medicare-dependent, small rural hospitals (MDHs).
We stated that these policies apply to hospitals that have a main
campus and one or more remote locations under a single provider
agreement where services are provided and billed under the IPPS and
that meet the provider-based criteria at Sec. 413.65 as a main campus
and a remote location of a hospital, also referred to as multicampus
hospitals or hospitals with remote locations. As discussed in the FY
2019 IPPS/LTCH PPS final rule (83 FR 41369), a main campus of a
hospital cannot obtain an SCH, RRC, or MDH status or rural
reclassification independently or separately from its remote
location(s), and vice versa. Rather, if the criteria are met in the
regulations at Sec. 412.92 for SCHs, Sec. 412.96 for RRCs, Sec.
412.103 for rural reclassification, or Sec. 412.108 for MDHs, the
hospital (that is, the main campus and its remote location(s)) will be
granted the special treatment or rural reclassification afforded by the
aforementioned regulations.
We stated that, to qualify for rural reclassification or SCH, RRC,
or MDH status, a hospital with remote locations must demonstrate that
both the main campus and its remote location(s) satisfy the relevant
qualifying criteria. If the regulations at Sec. 412.92, Sec. 412.96,
Sec. 412.103, and Sec. 412.108 require data, such as bed count,
number of discharges, or case-mix index, for example, to demonstrate
that the hospital meets the qualifying criteria, the combined data from
the main campus and its remote location(s) are to be used.
[[Page 19380]]
For other qualifying criteria set forth in the regulations at
Sec. Sec. 412.92, 412.96, 412.103, and 412.108 that do not involve
data that can be combined, specifically qualifying criteria related to
location, mileage, travel time, and distance requirements, a hospital
would need to demonstrate that the main campus and its remote
location(s) each independently satisfy those requirements in order for
the entire hospital, including its remote location(s), to be
reclassified or obtain a special status.
We refer readers to the FY 2019 IPPS/LTCH PPS final rule (83 FR
41369 through 41374) for a detailed discussion of our policies for
multicampus hospitals.
E. Proposed Occupational Mix Adjustment to the FY 2020 Wage Index
As stated earlier, section 1886(d)(3)(E) of the Act provides for
the collection of data every 3 years on the occupational mix of
employees for each short-term, acute care hospital participating in the
Medicare program, in order to construct an occupational mix adjustment
to the wage index, for application beginning October 1, 2004 (the FY
2005 wage index). The purpose of the occupational mix adjustment is to
control for the effect of hospitals' employment choices on the wage
index. For example, hospitals may choose to employ different
combinations of registered nurses, licensed practical nurses, nursing
aides, and medical assistants for the purpose of providing nursing care
to their patients. The varying labor costs associated with these
choices reflect hospital management decisions rather than geographic
differences in the costs of labor.
1. Use of 2016 Medicare Wage Index Occupational Mix Survey for the FY
2019, FY 2020, and FY 2021 Wage Indexes
Section 304(c) of the Consolidated Appropriations Act, 2001 (Pub.
L. 106-554) amended section 1886(d)(3)(E) of the Act to require CMS to
collect data every 3 years on the occupational mix of employees for
each short-term, acute care hospital participating in the Medicare
program. We collected data in 2013 to compute the occupational mix
adjustment for the FY 2016, FY 2017, and FY 2018 wage indexes. As
discussed in the FY 2018 IPPS/LTCH PPS proposed rule (82 FR 19903) and
final rule (82 FR 38137), a new measurement of occupational mix (the
2016 survey) was required for FY 2019, FY 2020, and FY 2021.
The FY 2020 occupational mix adjustment is based on the calendar
year (CY) 2016 survey. Hospitals were required to submit their
completed 2016 surveys (Form CMS-10079, OMB number 0938-0907) to their
MACs by July 3, 2017. The preliminary, unaudited CY 2016 survey data
were posted on the CMS website on July 12, 2017. As with the Worksheet
S-3, Parts II and III cost report wage data, as part of the FY 2020
desk review process, the MACs revised or verified data elements in
hospitals' occupational mix surveys that resulted in certain edit
failures.
2. Calculation of the Occupational Mix Adjustment for FY 2020
For FY 2020, we are proposing to calculate the occupational mix
adjustment factor using the same methodology that we have used since
the FY 2012 wage index (76 FR 51582 through 51586) and to apply the
occupational mix adjustment to 100 percent of the FY 2020 wage index.
As we explained in section III.D. of the preamble of this proposed
rule, we are proposing to modify our methodology with regard to how
dollar amounts, hours, and other numerical values in the unadjusted and
adjusted wage index calculation are rounded, in order to ensure
consistency in the calculation. For data that we consider to be ``raw
data,'' such as the cost report data on Worksheets S-3, Parts II and
III, and the occupational mix survey data, we are proposing to use
these data ``as is'', and not round any of the individual line items or
fields. However, for any dollar amounts within the wage index
calculations, including any type of summed wage amount, average hourly
wages, and the national average hourly wage (both the unadjusted and
adjusted for occupational mix), we are proposing to round such dollar
amounts to 2 decimals. We are proposing to round any hour amounts
within the wage index calculations to the nearest whole number. We are
proposing to round any numbers not expressed as dollars or hours in the
wage index calculations, which could include ratios, percentages, or
inflation factors, to 5 decimals. However, we are proposing to continue
rounding the actual unadjusted and adjusted wage indexes to 4 decimals,
as we have done historically.
Similar to the method we use for the calculation of the wage index
without occupational mix, salaries and hours for a multicampus hospital
are allotted among the different labor market areas where its campuses
are located. Table 2 associated with this proposed rule (which is
available via the internet on the CMS website), which contains the
proposed FY 2020 occupational mix adjusted wage index, includes
separate wage data for the campuses of multicampus hospitals. We refer
readers to section III.C. of the preamble of this proposed rule for a
chart listing the multicampus hospitals and the FTE percentages used to
allot their occupational mix data.
Because the statute requires that the Secretary measure the
earnings and paid hours of employment by occupational category not less
than once every 3 years, all hospitals that are subject to payments
under the IPPS, or any hospital that would be subject to the IPPS if
not granted a waiver, must complete the occupational mix survey, unless
the hospital has no associated cost report wage data that are included
in the FY 2020 wage index. For the proposed FY 2020 wage index, we are
using the Worksheet S-3, Parts II and III wage data of 3,221 hospitals,
and we are using the occupational mix surveys of 3,119 hospitals for
which we also have Worksheet S-3 wage data, which represented a
``response'' rate of 97 percent (3,119/3,221). For the proposed FY 2020
wage index, we are applying proxy data for noncompliant hospitals, new
hospitals, or hospitals that submitted erroneous or aberrant data in
the same manner that we applied proxy data for such hospitals in the FY
2012 wage index occupational mix adjustment (76 FR 51586). As a result
of applying this methodology, the proposed FY 2020 occupational mix
adjusted national average hourly wage is the following:
------------------------------------------------------------------------
------------------------------------------------------------------------
Proposed FY 2020 Occupational Mix Adjusted National Average $43.99
Hourly Wage.................................................
------------------------------------------------------------------------
F. Analysis and Implementation of the Proposed Occupational Mix
Adjustment and the Proposed FY 2020 Occupational Mix Adjusted Wage
Index
As discussed in section III.E. of the preamble of this proposed
rule, for FY 2020, we are proposing to apply the occupational mix
adjustment to 100 percent of the FY 2020 wage index. We calculated the
proposed occupational mix adjustment using data from the 2016
occupational mix survey data, using the methodology described in the FY
2012 IPPS/LTCH PPS final rule (76 FR 51582 through 51586).
The proposed FY 2020 national average hourly wages for each
occupational mix nursing subcategory as calculated in Step 2 of the
occupational mix calculation are as follows. (We note that the average
hourly wage figures are rounded to two decimal places as we are
proposing in section III.D. of the preamble of this proposed rule.)
[[Page 19381]]
------------------------------------------------------------------------
Average
Occupational mix nursing subcategory hourly
wage
------------------------------------------------------------------------
National RN................................................... $41.54
National LPN and Surgical Technician.......................... 24.67
National Nurse Aide, Orderly, and Attendant................... 16.95
National Medical Assistant.................................... 18.14
National Nurse Category....................................... 34.91
------------------------------------------------------------------------
The proposed national average hourly wage for the entire nurse
category is computed in Step 5 of the occupational mix calculation.
Hospitals with a nurse category average hourly wage (as calculated in
Step 4) of greater than the national nurse category average hourly wage
receive an occupational mix adjustment factor (as calculated in Step 6)
of less than 1.0. Hospitals with a nurse category average hourly wage
(as calculated in Step 4) of less than the national nurse category
average hourly wage receive an occupational mix adjustment factor (as
calculated in Step 6) of greater than 1.0.
Based on the 2016 occupational mix survey data, we determined (in
Step 7 of the occupational mix calculation) that the national
percentage of hospital employees in the nurse category is 42 percent,
and the national percentage of hospital employees in the all other
occupations category is 58 percent. At the CBSA level, the percentage
of hospital employees in the nurse category ranged from a low of 27
percent in one CBSA to a high of 82 percent in another CBSA.
We compared the FY 2020 proposed occupational mix adjusted wage
indexes for each CBSA to the proposed unadjusted wage indexes for each
CBSA. Applying the proposed occupational mix adjustment to the wage
data resulted in the following:
Comparison of the FY 2020 Proposed Occupational Mix Adjusted Wage
Indexes to the Proposed Unadjusted Wage Indexes by CBSA
------------------------------------------------------------------------
------------------------------------------------------------------------
Number of Urban Areas Wage Index 233 (56.8 percent).
Increasing.
Number of Rural Areas Wage Index 23 (48.9 percent).
Increasing.
Number of Urban Areas Wage Index 113 (27.6 percent).
Increasing by Greater Than or Equal to 1
Percent But Less Than 5 Percent.
Number of Urban Areas Wage Index 7 (1.7 percent).
Increasing by 5 percent or More.
Number of Rural Areas Wage Index 10 (21.3 percent).
Increasing by Greater Than or Equal to 1
Percent But Less Than 5 percent.
Number of Rural Areas Wage Index 0 (0 percent).
Increasing by 5 Percent or More.
Number of Urban Areas Wage Index 175 (42.7 percent).
Decreasing.
Number of Rural Areas Wage Index 24 (51.1 percent).
Decreasing.
Number of Urban Areas Wage Index 80 (19.5 percent).
Decreasing by Greater Than or Equal to 1
Percent But Less Than 5 percent.
Number of Urban Areas Wage Index 1 (0.2 percent).
Decreasing by 5 Percent or More.
Number of Rural Areas Wage Index 7 (14.9 percent).
Decreasing by Greater Than or Equal to 1
Percent But Less than 5 Percent.
Number of Rural Areas Wage Index 0 (0 percent).
Decreasing by 5 Percent or More.
Largest Proposed Positive Impact for an 6.39 percent.
Urban Area.
Largest Proposed Positive Impact for a 3.82 percent.
Rural Area.
Largest Proposed Negative Impact for an 5.90 percent.
Urban Area.
Largest Proposed Negative Impact for a 1.66 percent.
Rural Area.
Urban Areas Unchanged by Application of 2.
the Proposed Occupational Mix Adjustment.
Rural Areas Unchanged by Application of 0.
the Proposed Occupational Mix Adjustment.
------------------------------------------------------------------------
These results indicate that a larger percentage of urban areas
(56.8 percent) would benefit from the occupational mix adjustment than
would rural areas (48.9 percent).
G. Proposed Application of the Rural Floor, Summary of Expired Imputed
Floor Policy, and Proposed Application of the State Frontier Floor
1. Proposed Rural Floor
Section 4410(a) of Public Law 105-33 provides that, for discharges
on or after October 1, 1997, the area wage index applicable to any
hospital that is located in an urban area of a State may not be less
than the area wage index applicable to hospitals located in rural areas
in that State. This provision is referred to as the ``rural floor''.
Section 3141 of Public Law 111-148 also requires that a national budget
neutrality adjustment be applied in implementing the rural floor. Based
on the proposed FY 2020 wage index associated with this proposed rule
(which is available via the internet on the CMS website) and our
proposal, as discussed in section III.N. of the preamble of this
proposed rule, to calculate the rural floor without the wage data of
hospitals that have reclassified as rural under Sec. 412.103, we
estimated that 166 hospitals would receive an increase in their FY 2020
proposed wage index due to the application of the rural floor.
2. Summary of Expired Imputed Floor Policy
As discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41376
through 41380), the imputed floor under both the original methodology
and the alternative methodology expired on September 30, 2018. As such,
the wage index and impact tables associated with this FY 2020 IPPS/LTCH
PPS proposed rule (which are available on the internet via the CMS
website) do not reflect the imputed floor policy, and we are not
applying a national budget neutrality adjustment for the imputed floor
for FY 2020. For a complete discussion, we refer readers to the FY 2019
IPPS/LTCH PPS final rule (83 FR 41376 through 41380). As discussed in
section III.N. of the preamble of this proposed rule, we are seeking
public comments on proposals to help address wage index disparities
under the IPPS. We also are seeking public comments on how the
expiration of the imputed floor has impacted hospitals in FY 2019.
3. Proposed State Frontier Floor for FY 2020
Section 10324 of Public Law 111-148 requires that hospitals in
frontier States cannot be assigned a wage index of less than 1.0000.
(We refer readers to the regulations at 42 CFR 412.64(m) and to a
discussion of the implementation of this provision in the FY 2011 IPPS/
LTCH PPS final rule (75 FR 50160 through 50161).) In this FY 2020 IPPS/
LTCH PPS proposed rule, we are not proposing any changes to the
frontier floor policy for FY 2020. In this proposed rule, 45 hospitals
would receive the frontier floor value of 1.0000 for their FY 2020 wage
index. These hospitals are located in Montana, Nevada, North Dakota,
South Dakota, and Wyoming.
The areas affected by the proposed rural and frontier floor
policies for the proposed FY 2020 wage index are identified in Table 2
associated with this proposed rule, which is available via the internet
on the CMS website.
[[Page 19382]]
H. Proposed FY 2020 Wage Index Tables
In the FY 2016 IPPS/LTCH PPS final rule (80 FR 49498 and 49807
through 49808), we finalized a proposal to streamline and consolidate
the wage index tables associated with the IPPS proposed and final rules
for FY 2016 and subsequent fiscal years. Prior to FY 2016, the wage
index tables had consisted of 12 tables (Tables 2, 3A, 3B, 4A, 4B, 4C,
4D, 4E, 4F, 4J, 9A, and 9C) that were made available via the internet
on the CMS website. Effective beginning FY 2016, with the exception of
Table 4E, we streamlined and consolidated 11 tables (Tables 2, 3A, 3B,
4A, 4B, 4C, 4D, 4F, 4J, 9A, and 9C) into 2 tables (Tables 2 and 3). As
discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41380),
beginning with FY 2019, we added Table 4 which is titled and includes a
``List of Counties Eligible for the Out-Migration Adjustment under
Section 1886(d)(13) of the Act'' for the relevant fiscal year. We refer
readers to section VI. of the Addendum to this proposed rule for a
discussion of the proposed wage index tables for FY 2020.
I. Revisions to the Wage Index Based on Hospital Redesignations and
Reclassifications
1. General Policies and Effects of Reclassification and Redesignation
Under section 1886(d)(10) of the Act, the Medicare Geographic
Classification Review Board (MGCRB) considers applications by hospitals
for geographic reclassification for purposes of payment under the IPPS.
Hospitals must apply to the MGCRB to reclassify not later than 13
months prior to the start of the fiscal year for which reclassification
is sought (usually by September 1). Generally, hospitals must be
proximate to the labor market area to which they are seeking
reclassification and must demonstrate characteristics similar to
hospitals located in that area. The MGCRB issues its decisions by the
end of February for reclassifications that become effective for the
following fiscal year (beginning October 1). The regulations applicable
to reclassifications by the MGCRB are located in 42 CFR 412.230 through
412.280. (We refer readers to a discussion in the FY 2002 IPPS final
rule (66 FR 39874 and 39875) regarding how the MGCRB defines mileage
for purposes of the proximity requirements.) The general policies for
reclassifications and redesignations and the policies for the effects
of hospitals' reclassifications and redesignations on the wage index
are discussed in the FY 2012 IPPS/LTCH PPS final rule for the FY 2012
final wage index (76 FR 51595 and 51596). In addition, in the FY 2012
IPPS/LTCH PPS final rule, we discussed the effects on the wage index of
urban hospitals reclassifying to rural areas under 42 CFR 412.103.
Hospitals that are geographically located in States without any rural
areas are ineligible to apply for rural reclassification in accordance
with the provisions of 42 CFR 412.103.
On April 21, 2016, we published an interim final rule with comment
period (IFC) in the Federal Register (81 FR 23428 through 23438) that
included provisions amending our regulations to allow hospitals
nationwide to have simultaneous Sec. 412.103 and MGCRB
reclassifications. For reclassifications effective beginning FY 2018, a
hospital may acquire rural status under Sec. 412.103 and subsequently
apply for a reclassification under the MGCRB using distance and average
hourly wage criteria designated for rural hospitals. In addition, we
provided that a hospital that has an active MGCRB reclassification and
is then approved for redesignation under Sec. 412.103 will not lose
its MGCRB reclassification; such a hospital receives a reclassified
urban wage index during the years of its active MGCRB reclassification
and is still considered rural under section 1886(d) of the Act and for
other purposes.
We discussed that when there is both a Sec. 412.103 redesignation
and an MGCRB reclassification, the MGCRB reclassification controls for
wage index calculation and payment purposes. We exclude hospitals with
Sec. 412.103 redesignations from the calculation of the reclassified
rural wage index if they also have an active MGCRB reclassification to
another area. That is, if an application for urban reclassification
through the MGCRB is approved, and is not withdrawn or terminated by
the hospital within the established timelines, we consider the
hospital's geographic CBSA and the urban CBSA to which the hospital is
reclassified under the MGCRB for the wage index calculation. We refer
readers to the April 21, 2016 IFC (81 FR 23428 through 23438) and the
FY 2017 IPPS/LTCH PPS final rule (81 FR 56922 through 56930) for a full
discussion of the effect of simultaneous reclassifications under both
the Sec. 412.103 and the MGCRB processes on wage index calculations.
2. MGCRB Reclassification and Redesignation Issues for FY 2020
a. FY 2020 Reclassification Application Requirements and Approvals
As previously stated, under section 1886(d)(10) of the Act, the
MGCRB considers applications by hospitals for geographic
reclassification for purposes of payment under the IPPS. The specific
procedures and rules that apply to the geographic reclassification
process are outlined in regulations under 42 CFR 412.230 through
412.280.
At the time this proposed rule was constructed, the MGCRB had
completed its review of FY 2020 reclassification requests. Based on
such reviews, there are 357 hospitals approved for wage index
reclassifications by the MGCRB starting in FY 2020. Because MGCRB wage
index reclassifications are effective for 3 years, for FY 2020,
hospitals reclassified beginning in FY 2018 or FY 2019 are eligible to
continue to be reclassified to a particular labor market area based on
such prior reclassifications for the remainder of their 3-year period.
There were 332 hospitals approved for wage index reclassifications in
FY 2018 that will continue for FY 2020, and 274 hospitals approved for
wage index reclassifications in FY 2019 that will continue for FY 2020.
Of all the hospitals approved for reclassification for FY 2018, FY
2019, and FY 2020, based upon the review at the time of this proposed
rule, 963 hospitals are in a MGCRB reclassification status for FY 2020
(with 32 of these hospitals reclassified back to their geographic
location).
Under the regulations at 42 CFR 412.273, hospitals that have been
reclassified by the MGCRB are permitted to withdraw their applications
if the request for withdrawal is received by the MGCRB any time before
the MGCRB issues a decision on the application, or after the MGCRB
issues a decision, provided the request for withdrawal is received by
the MGCRB within 45 days of the date that CMS' annual notice of
proposed rulemaking is issued in the Federal Register concerning
changes to the inpatient hospital prospective payment system and
proposed payment rates for the fiscal year for which the application
has been filed. For information about withdrawing, terminating, or
canceling a previous withdrawal or termination of a 3-year
reclassification for wage index purposes, we refer readers to Sec.
412.273, as well as the FY 2002 IPPS final rule (66 FR 39887 through
39888) and the FY 2003 IPPS final rule (67 FR 50065 through 50066).
Additional discussion on withdrawals and terminations, and
clarifications regarding reinstating reclassifications and ``fallback''
reclassifications were included in the FY 2008 IPPS final rule (72 FR
47333) and the FY 2018 IPPS/LTCH PPS final rule (82 FR 38148 through
38150).
[[Page 19383]]
Changes to the wage index that result from withdrawals of requests
for reclassification, terminations, wage index corrections, appeals,
and the Administrator's review process for FY 2020 will be incorporated
into the wage index values published in the FY 2020 IPPS/LTCH PPS final
rule. These changes affect not only the wage index value for specific
geographic areas, but also the wage index value that redesignated/
reclassified hospitals receive; that is, whether they receive the wage
index that includes the data for both the hospitals already in the area
and the redesignated/reclassified hospitals. Further, the wage index
value for the area from which the hospitals are redesignated/
reclassified may be affected.
Applications for FY 2021 reclassifications (OMB control number
0938-0573) are due to the MGCRB by September 3, 2019 (the first working
day of September 2019). We note that this is also the deadline for
canceling a previous wage index reclassification withdrawal or
termination under 42 CFR 412.273(d). Applications and other information
about MGCRB reclassifications may be obtained beginning in mid-July
2019, via the internet on the CMS website at: https://www.cms.gov/Regulations-and-Guidance/Review-Boards/MGCRB/index.html, or by calling
the MGCRB at (410) 786-1174.
b. Proposed Elimination of Copy Requirement to CMS
Under regulations in effect prior to FY 2018 (42 CFR
412.256(a)(1)), applications for reclassification were required to be
mailed or delivered to the MGCRB, with a copy to CMS, and were not
allowed to be submitted through the facsimile (FAX) process or by other
electronic means. Because we believed this previous policy was outdated
and overly restrictive and to promote ease of application for FY 2018
and subsequent years, in the FY 2017 IPPS/LTCH PPS final rule (81 FR
56928), we revised this policy to require applications and supporting
documentation to be submitted via the method prescribed in instructions
by the MGCRB, with an electronic copy to CMS.
Beginning with applications from hospitals to reclassify for FY
2020, the MGCRB requires applications, supporting documents, and
subsequent correspondence to be filed electronically through the MGCRB
module of the Office of Hearings Case and Document Management System
(``OH CDMS''). Also, the MGCRB issues all of its notices and decisions
via email and these documents are accessible electronically through OH
CDMS. Registration instructions and the system user manual are
available at: https://www.cms.gov/Regulations-and-Guidance/Review-Boards/MGCRB/Electronic-Filing.html.
Filing a reclassification application using OH CDMS entails
completing required fields electronically and uploading supporting
documentation. We believe that the requirement for hospitals to submit
a copy of the application to CMS would now require hospitals to compile
their application information in a different format than what is
required by the MGCRB, which would result in additional burden for
hospitals. Furthermore, we believe that CMS can forgo the copy of
applications provided by hospitals because the MGCRB's electronic
module will facilitate CMS' verification of reclassification statuses
during the wage index development process. Therefore, we are proposing
to reduce burden for hospitals by eliminating the requirement to copy
CMS. Specifically, we are proposing to revise Sec. 412.256(a)(1) to
delete the requirement that an electronic copy of the application be
sent to CMS, so that this section would specify that an application
must be submitted to the MGCRB according to the method prescribed by
the MGCRB.
c. Proposed Revision To Clarify Criteria for a Hospital Seeking
Reclassification to Another Rural Area or Urban Area
Section 412.230(a)(4) of our regulations currently specifies that
the rounding of numbers to meet certain mileage or qualifying
percentage standards is not permitted when an individual hospital seeks
wage index reclassification through the MGCRB. In this section, the
regulation specifically cites paragraphs (b)(1), (b)(2), (d)(1)(iii),
and (d)(1)(iv)(A) and (B). The qualifying percentage standards included
in these paragraphs have been periodically updated, and additional
paragraphs have been added in Sec. 412.230 to reflect these changes.
Specifically, paragraphs (d)(1)(iv)(C), (D), and (E) have been added to
Sec. 412.230 to reflect changes in the percentage standards
implemented in FY 2002, FY 2010, and FY 2011, respectively. Although we
have continued to apply the policy set forth at Sec. 412.230(a)(4) to
the updated percentage standards set forth in paragraphs (d)(1)(iv)(C),
(D), and (E) in Sec. 412.230, conforming changes to Sec.
412.230(a)(4) were not made to reflect these new paragraphs. This
oversight has caused some confusion. Therefore, we are proposing to
revise Sec. 412.230(a)(4) to clarify that the policy prohibiting the
rounding of qualifying percentage standards applies to paragraphs
(d)(1)(iv)(C), (D), and (E) in Sec. 412.230. Specifically, we are
proposing to remove specific references to paragraphs (d)(1)(iv)(A) and
(B) and instead cite paragraph (d)(1)(iv) as a more general reference
to the specific standards.
3. Redesignations Under Section 1886(d)(8)(B) of the Act
a. Lugar Status Determinations
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51599 through
51600), we adopted the policy that, beginning with FY 2012, an eligible
hospital that waives its Lugar status in order to receive the out-
migration adjustment has effectively waived its deemed urban status
and, thus, is rural for all purposes under the IPPS effective for the
fiscal year in which the hospital receives the out-migration
adjustment. In addition, in that rule, we adopted a minor procedural
change that would allow a Lugar hospital that qualifies for and accepts
the out-migration adjustment (through written notification to CMS
within 45 days from the publication of the proposed rule) to waive its
urban status for the full 3-year period for which its out-migration
adjustment is effective. By doing so, such a Lugar hospital would no
longer be required during the second and third years of eligibility for
the out-migration adjustment to advise us annually that it prefers to
continue being treated as rural and receive the out-migration
adjustment. In the FY 2017 IPPS/LTCH PPS final rule (81 FR 56930), we
further clarified that if a hospital wishes to reinstate its urban
status for any fiscal year within this 3-year period, it must send a
request to CMS within 45 days of publication of the proposed rule for
that particular fiscal year. We indicated that such reinstatement
requests may be sent electronically to [email protected]. In the FY
2018 IPPS/LTCH PPS final rule (82 FR 38147 through 38148), we finalized
a policy revision to require a Lugar hospital that qualifies for and
accepts the out-migration adjustment, or that no longer wishes to
accept the out-migration adjustment and instead elects to return to its
deemed urban status, to notify CMS within 45 days from the date of
public display of the proposed rule at the Office of the Federal
Register. These revised notification timeframes were effective
beginning October 1, 2017. In addition, in the FY 2018 IPPS/LTCH PPS
final rule (82 FR 38148), we clarified that both requests to waive and
to reinstate ``Lugar'' status may be sent to
[[Page 19384]]
[email protected]. To ensure proper accounting, we request
hospitals to include their CCN, and either ``waive Lugar'' or
``reinstate Lugar'', in the subject line of these requests.
b. Clarification Regarding Accepting the Out-Migration Adjustment When
the Outmigration Adjustment Changes After Reclassification
Section 1886(d)(8)(B) of the Act provides that for purposes a
reclassification under this subsection, the Secretary shall treat a
hospital located in a rural county adjacent to one or more urban areas
as being located in the urban metropolitan statistical area to which
the greatest number of workers in the county commute if certain
criteria are met. Rural hospitals in these counties are commonly known
as ``Lugar'' hospitals. This statutory provision specifies that Lugar
status is mandatory (not optional) if the statutory criteria are met.
However, as discussed in the FY 2012 IPPS/LTCH PPS proposed and final
rules (76 FR 25885 through 25886 and 51599), Lugar hospitals located in
counties that qualify for the out-migration adjustment are required to
waive their Lugar urban status in its entirety in order to receive the
out-migration adjustment. We stated our belief that this represents one
permissible reading of the statute, given that section 1886(d)(13)(G)
of the Act states that a hospital in a county that has an out-migration
adjustment and that has not waived that adjustment under section
1886(d)(13)(F) of the Act is not eligible for reclassification under
section 1886(d)(8) or (10) of the Act. Therefore, a hospital may opt to
receive either its county's out-migration adjustment or the wage index
determined by its Lugar reclassification.
We have become aware of a potential issue with the current election
process that requires further clarification. As discussed in the
following section, the out-migration adjustment is calculated to
provide a positive adjustment to the wage index for hospitals located
in certain counties that have a relatively high percentage of hospital
employees who reside in the county but work in a different county (or
counties) with a higher wage index. When a county is determined to
qualify for an out-migration adjustment, the final adjustment value is
determined in accordance with section 1886(d)(13)(D) of the Act and is
fixed by statute for a 3-year period under section 1886(d)(13)(F) of
the Act. CMS performs an annual analysis to evaluate all counties
without current out-migration adjustment values assigned, including
counties where the out-migration adjustment value will be expiring
after a 3-year period. Initial out-migration adjustment values are
published in Table 4 associated with the IPPS proposed and final rules
(which are available via the internet on the CMS website). Due to
various factors, including hospitals withdrawing or terminating MGCRB
reclassifications, obtaining Sec. 412.103 rural reclassifications, or
corrections to hospital wage data, the amount of newly proposed (1st
year) out-migration adjustment values may fluctuate between the
proposed rule and the final rule (and subsequent correction notices).
These fluctuations are typically minimal. However, in certain
circumstances, after processing varying forms of reclassification, wage
index values may change so that a county would no longer qualify for an
out-migration adjustment. In particular, when changes in wage index
reclassification status alter the State rural floor so that multiple
CBSAs would be assigned the same wage index value, an out-migration
adjustment may no longer be indicated for a county as there would be
little, if any, differential in nearby wage index values. This can lead
to a situation where a hospital has opted to receive a non-existent
out-migration adjustment. We believe this situation is not compatible
with longstanding CMS policy preventing a hospital from waiving its
deemed urban Lugar status outside the prescribed out-migration
adjustment election process described above. Section 1886(d)(13)(G) of
the Act specifies that a hospital in a county that has a wage index
increase under section 1886(d)(13)(F) of the Act (the out-migration
adjustment) and that has not waived such increase under section
1886(d)(13)(F) of the Act is not eligible for reclassification under
section 1886(d)(8) or (10) of the Act during that period. If there is
no out-migration adjustment available to provide a wage index increase,
the fact pattern for which CMS established the process for a hospital
to opt to receive a county out-migration adjustment in lieu of its
``Lugar'' reclassification no longer applies, and the hospital must be
assigned its deemed urban status. Therefore, we are clarifying that, in
circumstances where an eligible hospital elects to receive the out-
migration adjustment within 45 days of the public display date of the
proposed rule at the Office of the Federal Register in lieu of its
Lugar wage index reclassification, and the county in which the hospital
is located would no longer qualify for an out-migration adjustment when
the final rule (or a subsequent correction notice) wage index
calculations are completed, the hospital's request to accept the out-
migration adjustment would be denied, and the hospital would be
automatically assigned to its deemed urban status under section
1886(d)(8)(B) of the Act. Final rule wage index values would be
recalculated to reflect this reclassification, and in some instances,
after taking into account this reclassification, the out-migration
adjustment for the county in question could be restored in the final
rule. However, as the hospital is assigned a Lugar reclassification
under section 1886(d)(8)(B) of the Act, it would be ineligible to
receive the county out-migration adjustment under section
1886(d)(13)(G) of the Act. Because the out-migration adjustment, once
finalized, is locked for a 3-year period under section 1886(d)(13)(F)
of the Act, the hospital would be eligible to accept its out-migration
adjustment in either the second or third year.
c. Proposed Change to Lugar County Assignments
Section 1886(d)(8)(B) of the Act establishes a wage index
reclassification process by which the Secretary is required to treat a
hospital located in a rural county adjacent to one or more urban areas
as being located in the urban metropolitan statistical area (MSA), or
core based statistical area (CBSA), to which the greatest number of
workers in the county commute if certain criteria are met. Rural
hospitals in these counties are known as ``Lugar'' hospitals and the
counties themselves are often referred to as ``Lugar'' counties. These
Lugar counties are not located in any urban area, but are adjacent to
two or more urban CBSAs. In determining whether a county qualifies as a
Lugar county, sections 1886(d)(8)(B)(i) and (ii) of the Act require us
to use the standards for designating MSAs published in the Federal
Register by OMB based on the most recent available decennial population
data. Based on OMB definitions (75 FR 37246 through 37252), a CBSA is
composed of ``central'' counties and ``outlying'' counties. While
``central'' counties meet certain population density requirements and
other urban characteristics, a county qualifies as an ``outlying''
county of a CBSA if it meets one of the following commuting
requirements: (a) At least 25 percent of the workers living in the
county work in the central county or counties of the CBSA; or (b) at
least 25 percent of the employment in the county is accounted for by
workers who reside in the central county or counties
[[Page 19385]]
of the CBSA. Given the OMB standards above, when a county is located
between two or more urban centers, these ``central'' county commuting
patterns may be split between two or more CBSAs, and the 25-percent
thresholds to qualify as an outlying county for any single CBSA may not
be met. In such situations, the county would be considered rural
according to CMS, based on the OMB definitions above, as it would not
be part of an urban CBSA. Section 1886(d)(8)(B) of the Act addresses
this issue where a county would have qualified as an outlying urban
county if all its central county commuting data to adjacent urban CBSAs
were combined. Specifically, section 1886(d)(8)(B)(i) of the Act
requires CMS to consider a rural county to be part of an adjacent CBSA
if the rural county would otherwise be considered part of an urban area
under the OMB standards for designating MSAs if the commuting rates
used in determining outlying counties were determined on the basis of
the aggregate number of resident workers who commute to (and, if
applicable under the standards, from) the central county or counties of
all contiguous MSAs. Section 1886(d)(8)(B)(i) further requires CMS to
assign these Lugar counties to the CBSA to which the greatest number of
workers in the county commute. Since the implementation of section
1886(d)(8)(B) of the Act for discharges occurring after October 1,
1988, CMS' policy has been that, once a county qualifies as Lugar, the
proper methodology for determining the CBSA to which the greatest
number of workers in the county commute should be based on the same OMB
dataset used to determine whether a county qualifies as an ``outlying''
county of a CBSA. These data are a summary of commuting patterns
between the non-central county being evaluated and the ``central''
county or counties of an urban metropolitan area (without taking into
account outlying counties). Section 1886(d)(8)(B) of the Act clearly
instructs CMS to use the OMB criteria for determining ``outlying''
counties when determining the list of qualifying Lugar counties. These
criteria are limited to assessing commuting patterns to and from
central counties. Further, we do not believe the statute requires that
CMS perform an additional and separate community analysis, taking into
account outlying counties, to determine to which CBSA a Lugar county
should be assigned. When CMS updated the OMB labor market delineations
based on 2010 decennial census in FY 2015, we were made aware that a
hospital in Henderson County, TX (a Lugar county) disagreed with CMS'
interpretation of the statute. In particular, the hospital stated that
section 1886(d)(8)(B)(i) of the Act requires that CMS assign a
qualified Lugar county to ``the urban metropolitan statistical area to
which the greatest number of workers in the county commute,'' and that
this instruction does not distinguish between an urban CBSA's central
counties and outlying counties. The hospital claimed that the
assignment of a Lugar county to a CBSA should not be based solely on
commuting data and commuting patterns to and from the central county or
counties of a CBSA, but should consider outlying counties as well.
After consideration of this matter, we continue to believe that
CMS' methodology is a reasonable interpretation of the statute.
However, upon further consideration and analysis, we have determined
that the Henderson, TX hospital's interpretation of section
1886(d)(8)(B) of the Act is a reasonable alternative. After reanalyzing
the commuting data used when developing the FY 2015 IPPS/LTCH PPS final
rule (the American Community Survey commuting data for 2006-2010), we
identified 10 instances where a rural county would have been assigned
to a different CBSA if we had considered outlying counties in our
analysis of the urban metropolitan statistical area to which the
greatest number of workers in the county commute, as shown in the table
below.
BILLING CODE 4120-01-P
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[GRAPHIC] [TIFF OMITTED] TP03MY19.020
BILLING CODE 4120-01-C
Of these 10 counties, currently only 3 counties (Talladega, AL,
Pearl River, MS, and Henderson, TX) contain IPPS hospitals (4 hospitals
in total). When including ``outlying'' counties in the commuting
analysis, the analysis suggests that generally (but not always) the
revised CBSA assignment would be to a larger CBSA, which would be
expected as larger CBSAs generally include a greater number of
``outlying'' counties. After further consideration of this issue, we
believe that inclusion of outlying counties in the commuting analysis
for purposes of assigning counties that qualify as Lugar counties (the
second step of the Lugar analysis),
[[Page 19387]]
although not unambiguously required by statute, is a reasonable, and
arguably more natural, reading of the language in section
1886(d)(8)(B)(i) of the Act. Accordingly, we are proposing to modify
the assigned CBSA for the 10 Lugar counties specified in the table
above for FY 2020. We also plan to fully reevaluate this proposed
policy and underlying methodologies, if finalized, when CMS updates
Lugar county assignments, which typically occurs after OMB labor market
delineations are updated in response to the next decennial census.
J. Proposed Out-Migration Adjustment Based on Commuting Patterns of
Hospital Employees
In accordance with section 1886(d)(13) of the Act, as added by
section 505 of Public Law 108-173, beginning with FY 2005, we
established a process to make adjustments to the hospital wage index
based on commuting patterns of hospital employees (the ``out-
migration'' adjustment). The process, outlined in the FY 2005 IPPS
final rule (69 FR 49061), provides for an increase in the wage index
for hospitals located in certain counties that have a relatively high
percentage of hospital employees who reside in the county but work in a
different county (or counties) with a higher wage index.
Section 1886(d)(13)(B) of the Act requires the Secretary to use
data the Secretary determines to be appropriate to establish the
qualifying counties. When the provision of section 1886(d)(13) of the
Act was implemented for the FY 2005 wage index, we analyzed commuting
data compiled by the U.S. Census Bureau that were derived from a
special tabulation of the 2000 Census journey-to-work data for all
industries (CMS extracted data applicable to hospitals). These data
were compiled from responses to the ``long-form'' survey, which the
Census Bureau used at that time and which contained questions on where
residents in each county worked (69 FR 49062). However, the 2010 Census
was ``short form'' only; information on where residents in each county
worked was not collected as part of the 2010 Census. The Census Bureau
worked with CMS to provide an alternative dataset based on the latest
available data on where residents in each county worked in 2010, for
use in developing a new out-migration adjustment based on new commuting
patterns developed from the 2010 Census data beginning with FY 2016.
To determine the out-migration adjustments and applicable counties
for FY 2016, we analyzed commuting data compiled by the Census Bureau
that were derived from a custom tabulation of the American Community
Survey (ACS), an official Census Bureau survey, utilizing 2008 through
2012 (5-year) Microdata. The data were compiled from responses to the
ACS questions regarding the county where workers reside and the county
to which workers commute. As we discussed in the FYs 2016, 2017, 2018,
and 2019 IPPS/LTCH PPS final rules (80 FR 49501, 81 FR 56930, 82 FR
38150, and 83 FR 41384, respectively), the same policies, procedures,
and computation that were used for the FY 2012 out-migration adjustment
were applicable for FYs 2016 through 2019, and we are proposing to use
them again for FY 2020. We have applied the same policies, procedures,
and computations since FY 2012, and we believe they continue to be
appropriate for FY 2020. We refer readers to the FY 2016 IPPS/LTCH PPS
final rule (80 FR 49500 through 49502) for a full explanation of the
revised data source.
For FY 2020, the out-migration adjustment will continue to be based
on the data derived from the custom tabulation of the ACS utilizing
2008 through 2012 (5-year) Microdata. For future fiscal years, we may
consider determining out-migration adjustments based on data from the
next Census or other available data, as appropriate. For FY 2020, we
are not proposing any changes to the methodology or data source that we
used for FY 2016 (81 FR 25071). (We refer readers to a full discussion
of the out-migration adjustment, including rules on deeming hospitals
reclassified under section 1886(d)(8) or section 1886(d)(10) of the Act
to have waived the out-migration adjustment, in the FY 2012 IPPS/LTCH
PPS final rule (76 FR 51601 through 51602).)
Table 2 associated with this proposed rule (which is available via
the internet on the CMS website) includes the proposed out-migration
adjustments for the FY 2020 wage index. In addition, as discussed in
the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20367), we have added a
Table 4, ``List of Counties Eligible for the Out-Migration Adjustment
under Section 1886(d)(13) of the Act.'' For this proposed rule, Table 4
consists of the following: A list of counties that would be eligible
for the out-migration adjustment for FY 2020 identified by FIPS county
code, the proposed FY 2020 out-migration adjustment, and the number of
years the adjustment would be in effect. We believe this table makes
this information more transparent and provides the public with easier
access to this information. We note that we intend to make the
information available annually via Table 4 associated with the IPPS/
LTCH PPS proposed and final rules, and are including it among the
tables associated with this FY 2020 IPPS/LTCH PPS proposed rule that
are available via the internet on the CMS website.
K. Reclassification From Urban to Rural Under Section 1886(d)(8)(E) of
the Act, Implemented at 42 CFR 412.103
1. Application for Rural Status and Lock-In Date
Under section 1886(d)(8)(E) of the Act, a qualifying prospective
payment hospital located in an urban area may apply for rural status
for payment purposes separate from reclassification through the MGCRB.
Specifically, section 1886(d)(8)(E) of the Act provides that, not later
than 60 days after the receipt of an application (in a form and manner
determined by the Secretary) from a subsection (d) hospital that
satisfies certain criteria, the Secretary shall treat the hospital as
being located in the rural area (as defined in paragraph (2)(D)) of the
State in which the hospital is located. We refer readers to the
regulations at 42 CFR 412.103 for the general criteria and application
requirements for a subsection (d) hospital to reclassify from urban to
rural status in accordance with section 1886(d)(8)(E) of the Act. The
FY 2012 IPPS/LTCH PPS final rule (76 FR 51595 through 51596) includes
our policies regarding the effect of wage data from reclassified or
redesignated hospitals.
Hospitals must meet the criteria to be reclassified from urban to
rural status under Sec. 412.103, as well as fulfill the requirements
for the application process. There may be one or more reasons that a
hospital applies for the urban to rural reclassification, and the
timeframe that a hospital submits an application is often dependent on
those reason(s). Because the wage index is part of the methodology for
determining the prospective payments to hospitals for each fiscal year,
we stated in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56931) that we
believed there should be a definitive timeframe within which a hospital
should apply for rural status in order for the reclassification to be
reflected in the next Federal fiscal year's wage data used for setting
payment rates.
Therefore, after notice of proposed rulemaking and consideration of
public comments, in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56931
through 56932), we revised Sec. 412.103(b) by
[[Page 19388]]
adding paragraph (6) to specify that, in order for a hospital to be
treated as rural in the wage index and budget neutrality calculations
under Sec. Sec. 412.64(e)(1)(ii), (e)(2), (e)(4), and (h) for payment
rates for the next Federal fiscal year, the hospital's filing date (the
lock-in date) must be no later than 70 days prior to the second Monday
in June of the current Federal fiscal year and the application must be
approved by the CMS Regional Office in accordance with the requirements
of Sec. 412.103.
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41384 through
41386), we changed the lock-in date to provide for additional time in
the ratesetting process and to match the lock-in date with another
existing deadline, the usual public comment deadline for the IPPS
proposed rule. We revised Sec. 412.103(b)(6) to specify that, in order
for a hospital to be treated as rural in the wage index and budget
neutrality calculations under Sec. Sec. 412.64(e)(1)(ii), (e)(2),
(e)(4), and (h) for payment rates for the next Federal fiscal year, the
hospital's application must be approved by the CMS Regional Office in
accordance with the requirements of Sec. 412.103 no later than 60 days
after the public display date at the Office of the Federal Register of
the IPPS proposed rule for the next Federal fiscal year.
The lock-in date does not affect the timing of payment changes
occurring at the hospital-specific level as a result of
reclassification from urban to rural under Sec. 412.103. As we
discussed in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56931) and the
FY 2019 IPPS/LTCH PPS final rule (83 FR 41385 through 41386), this
lock-in date also does not change the current regulation that allows
hospitals that qualify under Sec. 412.103(a) to request, at any time
during a cost reporting period, to reclassify from urban to rural. A
hospital's rural status and claims payment reflecting its rural status
continue to be effective on the filing date of its reclassification
application, which is the date the CMS Regional Office receives the
application, in accordance with Sec. 412.103(d). The hospital's IPPS
claims will be paid reflecting its rural status beginning on the filing
date (the effective date) of the reclassification, regardless of when
the hospital applies.
2. Proposed Change to the Regulations To Allow for Electronic
Submission of Applications for Reclassification From Urban to Rural
Status
The application requirements at Sec. 412.103(b)(3) for
reclassification from urban to rural status currently state that an
application must be mailed to the CMS Regional Office by the requesting
hospital and may not be submitted by facsimile or other electronic
means. We believe that this policy is outdated and overly restrictive.
In the interest of burden reduction and to promote ease of application,
in this proposed rule, we are proposing to eliminate the restriction on
submitting an application by facsimile or other electronic means so
that hospitals may also submit applications to the CMS Regional Office
electronically. Accordingly, we are proposing to revise Sec.
412.103(b)(3) to allow a requesting hospital to submit an application
to the CMS Regional Office by mail or by facsimile or other electronic
means.
3. Proposed Changes to Cancellation Requirements for Rural
Reclassifications
Under current regulations at Sec. 412.103(g)(1), hospitals, other
than those hospitals that are rural referral centers (RRCs), may cancel
a rural reclassification by submitting a written request to the CMS
Regional Office not less than 120 days before the end of its current
cost reporting period, effective beginning with the next full cost
reporting period. Under the current regulations at Sec. 412.103(g)(2),
a hospital that was classified as an RRC under Sec. 412.96 based on
rural reclassification under Sec. 412.103 may cancel its rural
reclassification by submitting a written request to the CMS Regional
Office not less than 120 days prior to the end of the Federal fiscal
year and after being paid as rural for at least one 12-month cost
reporting period. The RRC's cancellation of a Sec. 412.103 rural
reclassification is not effective until it has been paid as rural for
at least one 12-month cost reporting period, and not until the
beginning of the Federal fiscal year following both the request for
cancellation and the 12-month cost reporting period.
In this proposed rule, we are proposing to revise the rural
reclassification cancellation requirements at Sec. 412.103(g) for
hospitals classified as RRCs. Currently, Sec. 412.103(g)(2) requires
that, for a hospital that has been classified as an RRC based on rural
reclassification under Sec. 412.103, cancellation of a Sec. 412.103
rural reclassification is not effective until the hospital that is
classified as an RRC has been paid as rural for at least one 12-month
cost reporting period, and not until the beginning of the Federal
fiscal year following both the request for cancellation and the 12-
month cost reporting period. We stated in the FY 2008 IPPS final rule
(72 FR 47371 through 47373) that the goal of creating this minimum time
period was to disincentivize hospitals from receiving a rural
redesignation, obtaining RRC status to take advantage of special MGCRB
reclassification rules, and then terminating their rural status.
However, as suggested by a commenter in response to the April 22, 2016
interim final rule with comment period (81 FR 56926), this disincentive
is no longer necessary now that hospitals can have simultaneous MGCRB
and Sec. 412.103 reclassifications. Accordingly, in this proposed
rule, we are proposing to revise Sec. 412.103(g)(2)(iii) to specify
that the provisions set forth at Sec. 412.103(g)(2)(i) and (ii) are
effective for all written requests submitted by hospitals on or after
October 1, 2007 and before October 1, 2019 to cancel rural
reclassifications. Therefore, the reclassification cancellation
requirements specific to RRCs at Sec. 412.103(g)(2) would no longer
apply for cancellation requests submitted on or after October 1, 2019.
In addition, as further discussed below, we are proposing to revise
Sec. 412.103(g) to include uniform reclassification cancellation
requirements that would be applied to all hospitals effective for
cancellation requests submitted on or after October 1, 2019.
As further discussed below, we are proposing to revise the
regulations at Sec. 412.103(g) to set forth uniform requirements
applicable to all hospitals for cancelling rural reclassifications.
Currently, for non-RRCs, the cancellation of rural status is effective
beginning with the hospital's next cost reporting period. A hospital
that has a Sec. 412.103 rural reclassification and that does not have
an additional MGCRB or ``Lugar'' reclassification is assigned the rural
wage index value for its State. Because wage index values are
determined and assigned to hospitals on a Federal fiscal year basis,
when such an aforementioned hospital cancels its rural
reclassification, the wage index value must be manually updated by the
MAC to its appropriate urban wage index value. Because the end dates of
cost reporting periods vary among hospitals, this process can be
cumbersome and some cancellation requests may not be processed in time
to be accurately reflected in the IPPS final rule appendix tables.
Because there is no apparent advantage to continuing to link the rural
reclassification cancellation date to a hospital's cost reporting
period, we believe that, in the interests of reducing overall
complexity and administrative burden, the cancellation of rural
reclassification should be effective for all hospitals
[[Page 19389]]
beginning with the next Federal fiscal year (that is, the Federal
fiscal year following the cancellation request). In addition, similar
to the current requirements at Sec. 412.103(g)(2), we believe it would
be appropriate to require hospitals to request cancellation not less
than 120 days prior to the end of a Federal fiscal year. We believe
this proposed 120-day timeframe would provide hospitals adequate time
to assess and review reclassification options, and provide CMS adequate
time to incorporate the cancellation in the wage index development
process. As discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR
41384 through 41386), we finalized a lock-in date for a new rural
reclassification to be approved in order for a hospital to be treated
as rural in the wage index and budget neutrality calculations under
Sec. Sec. 412.64(e)(1)(ii), (e)(2), (e)(4), and (h) for payment rates
for the next Federal fiscal year. We considered using this deadline,
which is 60 days after the public display date at the Office of the
Federal Register of the IPPS proposed rule for the next Federal fiscal
year, as the deadline to submit cancellation requests effective for the
next Federal fiscal year as well. While we see certain advantages with
aligning various wage index deadlines to the same date, based on the
public display date of the proposed rule, we believe the proposed
deadline of not less than 120 days prior to the end of the Federal
fiscal year would give hospitals adequate time to assess and review
reclassification options, and CMS adequate time to incorporate the
cancellation in the wage index and budget neutrality calculations under
Sec. Sec. 412.64(e)(1)(ii), (e)(2), (e)(4), and (h) for payment rates
for the next Federal fiscal year. In addition, this proposed 120-day
deadline is already familiar to many hospitals because it is similar to
the current deadline under Sec. 412.103(g)(2), and therefore, we
believe implementation of the proposed deadline may pose less of a
burden overall for many hospitals. For these reasons, we are proposing
to add paragraph (g)(3) to Sec. 412.103 to specify that, for all
written requests submitted by hospitals on or after October 1, 2019 to
cancel rural reclassifications, a hospital may cancel its rural
reclassification by submitting a written request to the CMS Regional
Office not less than 120 days prior to the end of a Federal fiscal
year, and the hospital's cancellation of the classification would be
effective beginning with the next Federal fiscal year. In addition, we
are proposing to add paragraph (g)(1)(iii) to Sec. 412.103 to specify
that the provisions of paragraphs (g)(1)(i) and (ii) of Sec. 412.103
are effective only for written requests submitted by hospitals before
October 1, 2019 to cancel rural reclassification.
In addition, we are proposing to codify into regulations a
longstanding CMS policy regarding canceling a Sec. 412.103
reclassification when a hospital opts to accept and receives its county
out-migration adjustment in lieu of its ``Lugar'' reclassification. As
discussed in section III.I.3. of the preamble of this proposed rule, a
hospital may opt to receive either its ``Lugar'' county
reclassification established under section 1886(d)(8)(B) of the Act, or
the county out-migration adjustment determined under section
1886(d)(13) of the Act. Such requests may be submitted to CMS by email
to [email protected] within 45 days of the public display date of
the proposed rule for the next Federal fiscal year. We established this
process because section 1886(d)(13)(G) of the Act prohibits a hospital
from having both an out-migration wage index adjustment and
reclassification under section 1886(d)(8) or (10) of the Act. Because
Sec. 412.103 reclassifications were established under section
1886(d)(8)(E) of the Act, a hospital cannot simultaneously have an out-
migration adjustment and be reclassified as rural under Sec. 412.103.
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51600), we addressed a
commenter's concern regarding timing issues for some hospitals that
wish to receive their county out-migration adjustment, but would not
have adequate time to also cancel their rural reclassification. In that
rule, we stated that ``we will allow the act of waiving Lugar status
for the out-migration adjustment to simultaneously waive the hospital's
deemed urban status and cancel the hospital's acquired rural status,
thus treating the hospital as a rural provider effective on October
1.'' While this policy modification was initially discussed in the FY
2012 IPPS/LTCH PPS final rule in the context of hospitals wishing to
obtain or maintain sole community hospital (SCH) or Medicare-dependent
hospital (MDH) status, its application has not been limited to current
or potential SCHs or MDHs. We continue to believe this policy of
automatically canceling rural reclassifications when a hospital waives
its Lugar reclassification to receive its out-migration adjustment
reduces overall burden on hospitals by not requiring them to file a
separate rural reclassification cancellation request. We also believe
this policy reduces overall complexity for CMS, avoiding the need to
track and process multiple cancellation requests. Accordingly, we
believe this policy should be codified in the regulations at Sec.
412.103.
Therefore, we are proposing to add paragraph (g)(4) to Sec.
412.103 to specify that a rural reclassification will be considered
cancelled effective for the next Federal fiscal year when a hospital
opts (by submitting a request to CMS within 45 days of the date of
public display of the proposed rule for the next Federal fiscal year at
the Office of the Federal Register in accordance with the procedure
described in section III.I.3. of the preamble of this proposed rule) to
accept and receives its county out-migration wage index adjustment
determined under section 1886(d)(13) of the Act in lieu of its
geographic reclassification described under section 1886(d)(8)(B) of
the Act. If the hospital wishes to once again obtain a Sec. 412.103
rural reclassification, it would have to reapply through the CMS
Regional Office in accordance with Sec. 412.103, and the hospital
would once again be ineligible to receive its out-migration adjustment.
We note that, in a case where a hospital reclassified as rural under
Sec. 412.103 wishes to receive its out-migration adjustment but does
not qualify for a ``Lugar'' reclassification, the hospital would need
to formally cancel its Sec. 412.103 rural reclassification by written
request to the CMS Regional Office within the timeframe specified at
Sec. 412.103. Finally, in order to address the scenario described in
section III.I.3.b. of the preamble of this proposed rule, we note that,
in proposed Sec. 412.103(g)(4), we are providing that the hospital
must not only opt to accept, but also receive, its county out-migration
wage index adjustment to trigger cancellation of rural reclassification
under that provision. In such cases where an out-migration adjustment
is no longer applicable based on the wage index in the final rule, a
hospital's rural reclassification remains in effect (unless otherwise
cancelled by written request to the CMS Regional Office within the
timeframe specified at Sec. 412.103).
L. Process for Requests for Wage Index Data Corrections
1. Process for Hospitals To Request Wage Index Data Corrections
The preliminary, unaudited Worksheet S-3 wage data files and the
preliminary CY 2016 occupational mix data files for the proposed FY
2020 wage index were made available on June 5, 2018 through the
internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-
Fee-for-Service-
[[Page 19390]]
Payment/AcuteInpatientPPS/Wage-Index-Files-Items/FY2020-Wage-Index-
Home-Page.html.
On January 31, 2019, we posted a public use file (PUF) at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatient
PPS/Wage-Index-Files-Items/FY2020-Wage-Index-Home-Page.html containing
FY 2020 wage index data available as of January 30, 2019. This PUF
contains a tab with the Worksheet S-3 wage data (which includes
Worksheet S-3, Parts II and III wage data from cost reporting periods
beginning on or after October 1, 2015 through September 30, 2016; that
is, FY 2016 wage data), a tab with the occupational mix data (which
includes data from the CY 2016 occupational mix survey, Form CMS-
10079), a tab containing the Worksheet S-3 wage data of hospitals
deleted from the January 31, 2019 wage data PUF, and a tab containing
the CY 2016 occupational mix data of the hospitals deleted from the
January 31, 2019 occupational mix PUF. In a memorandum dated January
18, 2019, we instructed all MACs to inform the IPPS hospitals that they
service of the availability of the January 31, 2019 wage index data
PUFs, and the process and timeframe for requesting revisions in
accordance with the FY 2020 Wage Index Timetable.
In the interest of meeting the data needs of the public, beginning
with the proposed FY 2009 wage index, we post an additional PUF on the
CMS website that reflects the actual data that are used in computing
the proposed wage index. The release of this file does not alter the
current wage index process or schedule. We notify the hospital
community of the availability of these data as we do with the current
public use wage data files through our Hospital Open Door Forum. We
encourage hospitals to sign up for automatic notifications of
information about hospital issues and about the dates of the Hospital
Open Door Forums at the CMS website at: http://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums/index.html.
In a memorandum dated April 20, 2018, we instructed all MACs to
inform the IPPS hospitals that they service of the availability of the
preliminary wage index data files and the CY 2016 occupational mix
survey data files posted on May 18, 2018, and the process and timeframe
for requesting revisions.
In a memorandum dated June 6, 2018, we corrected and reposted the
preliminary wage file on our website because we realized that the PUF
originally posted on May 18 2018 did not include new line items that
were first included in cost reports for cost reporting periods
beginning on or after October 1, 2015 (and will be used for the first
time in the FY 2020 wage index). Specifically, the lines are: Worksheet
S-3, Part II, lines 14.01 and 14.02, and 25.50, 25.51, 25.52, and
25.53; and Worksheet S-3, Part IV, lines 8.01, 8.02, 8.03. In the same
memorandum, we instructed all MACs to inform the IPPS hospitals that
they service of the availability of the corrected and reposted
preliminary wage index data files and the CY 2016 occupational mix
survey data files posted on June 6, 2018, and the process and timeframe
for requesting revisions.
If a hospital wished to request a change to its data as shown in
the June 6, 2018 preliminary wage and occupational mix data files, the
hospital had to submit corrections along with complete, detailed
supporting documentation to its MAC by September 4, 2018. Hospitals
were notified of this deadline and of all other deadlines and
requirements, including the requirement to review and verify their data
as posted in the preliminary wage index data files on the internet,
through the letters sent to them by their MACs. November 16, 2018 was
the deadline for MACs to complete all desk reviews for hospital wage
and occupational mix data and transmit revised Worksheet S-3 wage data
and occupational mix data to CMS.
November 6, 2018 was the date by when MACs notified State hospital
associations regarding hospitals that failed to respond to issues
raised during the desk reviews. Additional revisions made by the MACs
were transmitted to CMS throughout January 2019. CMS published the wage
index PUFs that included hospitals' revised wage index data on January
31, 2019. Hospitals had until February 15, 2019, to submit requests to
the MACs to correct errors in the January 31, 2019 PUF due to CMS or
MAC mishandling of the wage index data, or to revise desk review
adjustments to their wage index data as included in the January 31,
2019 PUF. Hospitals also were required to submit sufficient
documentation to support their requests.
After reviewing requested changes submitted by hospitals, MACs were
required to transmit to CMS any additional revisions resulting from the
hospitals' reconsideration requests by March 22, 2019. Under our
current policy as adopted in the FY 2018 IPPS/LTCH PPS final rule (82
FR 38153), the deadline for a hospital to request CMS intervention in
cases where a hospital disagreed with a MAC's handling of wage data on
any basis (including a policy, factual, or other dispute) was April 4,
2019. Data that were incorrect in the preliminary or January 31, 2019
wage index data PUFs, but for which no correction request was received
by the February 15, 2019 deadline, are not considered for correction at
this stage. In addition, April 4, 2019 was the deadline for hospitals
to dispute data corrections made by CMS of which the hospital is
notified after the January 31, 2019 PUF and at least 14 calendar days
prior to April 4, 2019 (that is, March 21, 2018), that do not arise
from a hospital's request for revisions. We note that, as with previous
years, for the proposed FY 2020 wage index, in accordance with the FY
2020 wage index timeline posted on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatient
PPS/Wage-Index-Files-Items/FY2020-Wage-Index-Home-Page.html, the April
appeals have to be sent via mail and email. We refer readers to the
wage index timeline for complete details.
Hospitals are given the opportunity to examine Table 2 associated
with this proposed rule, which is listed in section VI. of the Addendum
to this proposed rule and available via the internet on the CMS website
at: https://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/AcuteInpatientPPS-FY2020-IPPS-Proposed-Rule-Home-Page.html. Table 2
contains each hospital's proposed adjusted average hourly wage used to
construct the wage index values for the past 3 years, including the FY
2016 data used to construct the proposed FY 2020 wage index. We note
that the proposed hospital average hourly wages shown in Table 2 only
reflect changes made to a hospital's data that were transmitted to CMS
by early February 2019.
We plan to post the final wage index data PUFs in late April 2019
via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatient PPS/Wage-Index-Files-
Items/FY2020-Wage-Index-Home-Page.html. The April 2019 PUFs are made
available solely for the limited purpose of identifying any potential
errors made by CMS or the MAC in the entry of the final wage index data
that resulted from the correction process previously described (the
process for disputing revisions submitted to CMS by the MACs by March
21, 2019, and the process for disputing data corrections made by CMS
that did not arise from a hospital's request for wage data revisions as
discussed earlier).
After the release of the April 2019 wage index data PUFs, changes
to the wage and occupational mix data can only be made in those very
limited situations involving an error by the
[[Page 19391]]
MAC or CMS that the hospital could not have known about before its
review of the final wage index data files. Specifically, neither the
MAC nor CMS will approve the following types of requests:
Requests for wage index data corrections that were
submitted too late to be included in the data transmitted to CMS by the
MACs on or before March 21, 2018.
Requests for correction of errors that were not, but could
have been, identified during the hospital's review of the January 31,
2019 wage index PUFs.
Requests to revisit factual determinations or policy
interpretations made by the MAC or CMS during the wage index data
correction process.
If, after reviewing the April 2019 final wage index data PUFs, a
hospital believes that its wage or occupational mix data are incorrect
due to a MAC or CMS error in the entry or tabulation of the final data,
the hospital is given the opportunity to notify both its MAC and CMS
regarding why the hospital believes an error exists and provide all
supporting information, including relevant dates (for example, when it
first became aware of the error). The hospital is required to send its
request to CMS and to the MAC no later than May 30, 2019. May 30, 2019
is also the deadline for hospitals to dispute data corrections made by
CMS of which the hospital is notified on or after 13 calendar days
prior to April 4, 2019 (that is, March 22, 2019), and at least 14
calendar days prior to May 30, 2019 (that is, May 16, 2019), that do
not arise from a hospital's request for revisions. (Data corrections
made by CMS of which a hospital is notified on or after 13 calendar
days prior to May 30, 2019 (that is, May 17, 2019) may be appealed to
the Provider Reimbursement Review Board (PRRB)). Similar to the April
appeals, beginning with the FY 2015 wage index, in accordance with the
FY 2020 wage index timeline posted on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Wage-Index-Files-Items/FY2020-Wage-Index-Home-Page.html, the May appeals must be sent via mail and email to CMS and
the MACs. We refer readers to the wage index timeline for complete
details.
Verified corrections to the wage index data received timely (that
is, by May 30, 2019) by CMS and the MACs will be incorporated into the
final FY 2020 wage index, which will be effective October 1, 2019.
We created the processes previously described to resolve all
substantive wage index data correction disputes before we finalize the
wage and occupational mix data for the FY 2020 payment rates.
Accordingly, hospitals that do not meet the procedural deadlines set
forth earlier will not be afforded a later opportunity to submit wage
index data corrections or to dispute the MAC's decision with respect to
requested changes. Specifically, our policy is that hospitals that do
not meet the procedural deadlines set forth above (requiring requests
to MACs by the specified date in February and, where such requests are
unsuccessful, requests for intervention by CMS by the specified date in
April) will not be permitted to challenge later, before the PRRB, the
failure of CMS to make a requested data revision. We refer readers also
to the FY 2000 IPPS final rule (64 FR 41513) for a discussion of the
parameters for appeals to the PRRB for wage index data corrections. As
finalized in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38154 through
38156), this policy also applies to a hospital disputing corrections
made by CMS that do not arise from a hospital's request for a wage
index data revision. That is, a hospital disputing an adjustment made
by CMS that did not arise from a hospital's request for a wage index
data revision would be required to request a correction by the first
applicable deadline. Hospitals that do not meet the procedural
deadlines set forth earlier will not be afforded a later opportunity to
submit wage index data corrections or to dispute CMS' decision with
respect to requested changes.
Again, we believe the wage index data correction process described
earlier provides hospitals with sufficient opportunity to bring errors
in their wage and occupational mix data to the MAC's attention.
Moreover, because hospitals have access to the final wage index data
PUFs by late April 2019, they have the opportunity to detect any data
entry or tabulation errors made by the MAC or CMS before the
development and publication of the final FY 2020 wage index by August
2019, and the implementation of the FY 2020 wage index on October 1,
2019. Given these processes, the wage index implemented on October 1
should be accurate. Nevertheless, in the event that errors are
identified by hospitals and brought to our attention after May 30,
2019, we retain the right to make midyear changes to the wage index
under very limited circumstances.
Specifically, in accordance with 42 CFR 412.64(k)(1) of our
regulations, we make midyear corrections to the wage index for an area
only if a hospital can show that: (1) The MAC or CMS made an error in
tabulating its data; and (2) the requesting hospital could not have
known about the error or did not have an opportunity to correct the
error, before the beginning of the fiscal year. For purposes of this
provision, ``before the beginning of the fiscal year'' means by the May
deadline for making corrections to the wage data for the following
fiscal year's wage index (for example, May 30, 2019 for the FY 2020
wage index). This provision is not available to a hospital seeking to
revise another hospital's data that may be affecting the requesting
hospital's wage index for the labor market area. As indicated earlier,
because CMS makes the wage index data available to hospitals on the CMS
website prior to publishing both the proposed and final IPPS rules, and
the MACs notify hospitals directly of any wage index data changes after
completing their desk reviews, we do not expect that midyear
corrections will be necessary. However, under our current policy, if
the correction of a data error changes the wage index value for an
area, the revised wage index value will be effective prospectively from
the date the correction is made.
In the FY 2006 IPPS final rule (70 FR 47385 through 47387 and
47485), we revised 42 CFR 412.64(k)(2) to specify that, effective on
October 1, 2005, that is, beginning with the FY 2006 wage index, a
change to the wage index can be made retroactive to the beginning of
the Federal fiscal year only when CMS determines all of the following:
(1) The MAC or CMS made an error in tabulating data used for the wage
index calculation; (2) the hospital knew about the error and requested
that the MAC and CMS correct the error using the established process
and within the established schedule for requesting corrections to the
wage index data, before the beginning of the fiscal year for the
applicable IPPS update (that is, by the May 30, 2019 deadline for the
FY 2020 wage index); and (3) CMS agreed before October 1 that the MAC
or CMS made an error in tabulating the hospital's wage index data and
the wage index should be corrected.
In those circumstances where a hospital requested a correction to
its wage index data before CMS calculated the final wage index (that
is, by the May 30, 2019 deadline for the FY 2020 wage index), and CMS
acknowledges that the error in the hospital's wage index data was
caused by CMS' or the MAC's mishandling of the data, we believe that
the hospital should not be penalized by our delay in publishing or
implementing the correction. As with our current policy, we indicated
that the provision is not available to a hospital seeking to revise
another hospital's data.
[[Page 19392]]
In addition, the provision cannot be used to correct prior years' wage
index data; and it can only be used for the current Federal fiscal
year. In situations where our policies would allow midyear corrections
other than those specified in 42 CFR 412.64(k)(2)(ii), we continue to
believe that it is appropriate to make prospective-only corrections to
the wage index.
We note that, as with prospective changes to the wage index, the
final retroactive correction will be made irrespective of whether the
change increases or decreases a hospital's payment rate. In addition,
we note that the policy of retroactive adjustment will still apply in
those instances where a final judicial decision reverses a CMS denial
of a hospital's wage index data revision request.
2. Process for Data Corrections by CMS After the January 31 Public Use
File (PUF)
The process set forth with the wage index timeline discussed in
section III.L.1. of the preamble of this proposed rule allows hospitals
to request corrections to their wage index data within prescribed
timeframes. In addition to hospitals' opportunity to request
corrections of wage index data errors or MACs' mishandling of data, CMS
has the authority under section 1886(d)(3)(E) of the Act to make
corrections to hospital wage index and occupational mix data in order
to ensure the accuracy of the wage index. As we explained in the FY
2016 IPPS/LTCH PPS final rule (80 FR 49490 through 49491) and the FY
2017 IPPS/LTCH PPS final rule (81 FR 56914), section 1886(d)(3)(E) of
the Act requires the Secretary to adjust the proportion of hospitals'
costs attributable to wages and wage-related costs for area differences
reflecting the relative hospital wage level in the geographic areas of
the hospital compared to the national average hospital wage level. We
believe that, under section 1886(d)(3)(E) of the Act, we have
discretion to make corrections to hospitals' data to help ensure that
the costs attributable to wages and wage-related costs in fact
accurately reflect the relative hospital wage level in the hospitals'
geographic areas.
We have an established multistep, 15-month process for the review
and correction of the hospital wage data that is used to create the
IPPS wage index for the upcoming fiscal year. Since the origin of the
IPPS, the wage index has been subject to its own annual review process,
first by the MACs, and then by CMS. As a standard practice, after each
annual desk review, CMS reviews the results of the MACs' desk reviews
and focuses on items flagged during the desk review, requiring that, if
necessary, hospitals provide additional documentation, adjustments, or
corrections to the data. This ongoing communication with hospitals
about their wage data may result in the discovery by CMS of additional
items that were reported incorrectly or other data errors, even after
the posting of the January 31 PUF, and throughout the remainder of the
wage index development process. In addition, the fact that CMS analyzes
the data from a regional and even national level, unlike the review
performed by the MACs that review a limited subset of hospitals, can
facilitate additional editing of the data that may not be readily
apparent to the MACs. In these occasional instances, an error may be of
sufficient magnitude that the wage index of an entire CBSA is affected.
Accordingly, CMS uses its authority to ensure that the wage index
accurately reflects the relative hospital wage level in the geographic
area of the hospital compared to the national average hospital wage
level, by continuing to make corrections to hospital wage data upon
discovering incorrect wage data, distinct from instances in which
hospitals request data revisions.
We note that CMS corrects errors to hospital wage data as
appropriate, regardless of whether that correction will raise or lower
a hospital's average hourly wage. For example, as discussed in section
III.C. of the preamble of the FY 2019 IPPS/LTCH PPS final rule (83 FR
41364), in situations where a hospital did not have documentable
salaries, wages, and hours for housekeeping and dietary services, we
imputed estimates, in accordance with policies established in the FY
2015 IPPS/LTCH PPS final rule (79 FR 49965 through 49967). Furthermore,
if CMS discovers after conclusion of the desk review, for example, that
a MAC inadvertently failed to incorporate positive adjustments
resulting from a prior year's wage index appeal of a hospital's wage-
related costs such as pension, CMS would correct that data error and
the hospital's average hourly wage would likely increase as a result.
While we maintain CMS' authority to conduct additional review and
make resulting corrections at any time during the wage index
development process, in accordance with the policy finalized in the FY
2018 IPPS/LTCH PPS final rule (82 FR 38154 through 38156) and as first
implemented with the FY 2019 wage index (83 FR 41389), hospitals are
able to request further review of a correction made by CMS that did not
arise from a hospital's request for a wage index data correction.
Instances where CMS makes a correction to a hospital's data after the
January 31 PUF based on a different understanding than the hospital
about certain reported costs, for example, could potentially be
resolved using this process before the final wage index is calculated.
We believe this process and the timeline for requesting such
corrections (as described earlier and in the FY 2018 IPPS/LTCH PPS
final rule) promote additional transparency to instances where CMS
makes data corrections after the January 31 PUF, and provide
opportunities for hospitals to request further review of CMS changes in
time for the most accurate data to be reflected in the final wage index
calculations. These additional appeals opportunities are described
earlier and in the FY 2020 Wage Index Development Time Table, as well
as in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38154 through 38156).
M. Proposed Labor-Related Share for the Proposed FY 2020 Wage Index
Section 1886(d)(3)(E) of the Act directs the Secretary to adjust
the proportion of the national prospective payment system base payment
rates that are attributable to wages and wage-related costs by a factor
that reflects the relative differences in labor costs among geographic
areas. It also directs the Secretary to estimate from time to time the
proportion of hospital costs that are labor-related and to adjust the
proportion (as estimated by the Secretary from time to time) of
hospitals' costs that are attributable to wages and wage-related costs
of the DRG prospective payment rates. We refer to the portion of
hospital costs attributable to wages and wage-related costs as the
labor-related share. The labor-related share of the prospective payment
rate is adjusted by an index of relative labor costs, which is referred
to as the wage index.
Section 403 of Public Law 108-173 amended section 1886(d)(3)(E) of
the Act to provide that the Secretary must employ 62 percent as the
labor-related share unless this would result in lower payments to a
hospital than would otherwise be made. However, this provision of
Public Law 108-173 did not change the legal requirement that the
Secretary estimate from time to time the proportion of hospitals' costs
that are attributable to wages and wage-related costs. Thus, hospitals
receive payment based on either a 62-percent labor-related share, or
the labor-related share estimated from time to time by the Secretary,
depending on which labor-
[[Page 19393]]
related share resulted in a higher payment.
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38158 through
38175), we rebased and revised the hospital market basket. We
established a 2014-based IPPS hospital market basket to replace the FY
2010-based IPPS hospital market basket, effective October 1, 2017.
Using the 2014-based IPPS market basket, we finalized a labor-related
share of 68.3 percent for discharges occurring on or after October 1,
2017. In addition, in FY 2018, we implemented this revised and rebased
labor-related share in a budget neutral manner (82 FR 38522). However,
consistent with section 1886(d)(3)(E) of the Act, we did not take into
account the additional payments that would be made as a result of
hospitals with a wage index less than or equal to 1.0000 being paid
using a labor-related share lower than the labor-related share of
hospitals with a wage index greater than 1.0000. In the FY 2019 IPPS/
LTCH PPS final rule (83 FR 41389 and 41390), for FY 2019, we continued
to use a labor-related share of 68.3 percent for discharges occurring
on or after October 1, 2018.
The labor-related share is used to determine the proportion of the
national IPPS base payment rate to which the area wage index is
applied. We include a cost category in the labor-related share if the
costs are labor intensive and vary with the local labor market. In this
proposed rule, for FY 2020, we are not proposing to make any further
changes to the national average proportion of operating costs that are
attributable to wages and salaries, employee benefits, professional
fees: Labor-related, administrative and facilities support services,
installation, maintenance, and repair services, and all other labor-
related services. Therefore, for FY 2020, we are proposing to continue
to use a labor-related share of 68.3 percent for discharges occurring
on or after October 1, 2019.
As discussed in section IV.B. of the preamble of this proposed
rule, prior to January 1, 2016, Puerto Rico hospitals were paid based
on 75 percent of the national standardized amount and 25 percent of the
Puerto Rico-specific standardized amount. As a result, we applied the
Puerto Rico-specific labor-related share percentage and nonlabor-
related share percentage to the Puerto Rico-specific standardized
amount. Section 601 of the Consolidated Appropriations Act, 2016 (Pub.
L. 114-113) amended section 1886(d)(9)(E) of the Act to specify that
the payment calculation with respect to operating costs of inpatient
hospital services of a subsection (d) Puerto Rico hospital for
inpatient hospital discharges on or after January 1, 2016, shall use
100 percent of the national standardized amount. Because Puerto Rico
hospitals are no longer paid with a Puerto Rico-specific standardized
amount as of January 1, 2016, under section 1886(d)(9)(E) of the Act as
amended by section 601 of the Consolidated Appropriations Act, 2016,
there is no longer a need for us to calculate a Puerto Rico-specific
labor-related share percentage and nonlabor-related share percentage
for application to the Puerto Rico-specific standardized amount.
Hospitals in Puerto Rico are now paid 100 percent of the national
standardized amount and, therefore, are subject to the national labor-
related share and nonlabor-related share percentages that are applied
to the national standardized amount. Accordingly, for FY 2020, we are
not proposing a Puerto Rico-specific labor-related share percentage or
a nonlabor-related share percentage.
Tables 1A and 1B, which are published in section VI. of the
Addendum to this FY 2020 IPPS/LTCH PPS proposed rule and available via
the internet on the CMS website, reflect the proposed national labor-
related share, which is also applicable to Puerto Rico hospitals. For
FY 2020, for all IPPS hospitals (including Puerto Rico hospitals) whose
wage indexes are less than or equal to 1.0000, we are proposing to
apply the wage index to a labor-related share of 62 percent of the
national standardized amount. For all IPPS hospitals (including Puerto
Rico hospitals) whose wage indexes are greater than 1.000, for FY 2020,
we are proposing to apply the wage index to a proposed labor-related
share of 68.3 percent of the national standardized amount.
N. Proposals To Address Wage Index Disparities Between High and Low
Wage Index Hospitals
In the FY 2019 IPPS/LTCH PPS proposed rule (83 FR 20372), we
invited the public to submit further comments, suggestions, and
recommendations for regulatory and policy changes to the Medicare wage
index. Many of the responses received from this request for information
(RFI) reflect a common concern that the current wage index system
perpetuates and exacerbates the disparities between high and low wage
index hospitals. Many respondents also expressed concern that the
calculation of the rural floor has allowed a limited number of States
to manipulate the wage index system to achieve higher wages for many
urban hospitals in those states at the expense of hospitals in other
states, which also contributes to wage index disparities.
To help mitigate these wage index disparities, including those
resulting from the inclusion of hospitals with rural reclassifications
under 42 CFR 412.103 in the calculation of the rural floor, we are
proposing to reduce the disparity between high and low wage index
hospitals by increasing the wage index values for certain hospitals
with low wage index values and decreasing the wage index values for
certain hospitals with high wage index values to maintain budget
neutrality, and changing the calculation of the rural floor, as further
discussed below. We also are proposing a transition for hospitals
experiencing significant decreases in their wage index values as a
result of our proposed wage index policies. We discuss these proposed
changes to the wage index in more detail below.
1. Prior Rulemaking Public Comments
As described in the FY 2019 IPPS/LTCH PPS proposed rule (83 FR
20372 through 20377), there have been numerous studies, analyses, and
reports on ways to revise the Medicare wage index. In public comments
received on prior rulemakings for FYs 2009, 2010, and 2011, many
commenters argued that the current labor market definitions and wage
data sources used by CMS, in many instances, are not reflective of the
true cost of labor for any given hospital or are inappropriate to use
for this purpose because of, for example, the resulting payment
disparities, or both. For our responses to public comments received on
the FY 2009 IPPS/LTCH PPS proposed rule, we refer readers to the FY
2009 IPPS/LTCH PPS final rule (73 FR 48563 through 48567); for
responses to public comments on the FY 2010 IPPS/LTCH PPS proposed
rule, we refer readers to the FY 2010 IPPS/LTCH PPS final rule (74 FR
43824 through 43826); and for responses to public comments on the FY
2011 IPPS/LTCH PPS proposed rule, we refer readers to the FY 2011 IPPS/
LTCH PPS final rule (75 FR 50157 through 50160). The public comments on
these proposed rules are available at www.regulations.gov under file
numbers CMS-1390-P, CMS-1406-P, and CMS-1498-P, respectively.
In the FY 2019 IPPS/LTCH proposed rule, we invited the public to
submit further comments, suggestions, and recommendations for
regulatory and policy changes to the Medicare wage index. We requested
the public to submit appropriate supporting data and specific
recommendations in their comments. We also welcomed analysis
[[Page 19394]]
regarding CMS' authority for our consideration. We received many
comments, many of which addressed wage index disparities between high
and low wage index hospitals. The following is a summary of the
comments we received on the wage index disparity issue. We note that we
also received comments regarding other aspects of the wage index
system, including current labor market areas, MGCRB reclassifications,
use of alternative data, and the use of the hospital wage index by
nonhospital providers. We will continue to consider those comments for
potential future rulemaking.
2. Public Comments on Wage Index Disparities in Response to the Request
for Information in the FY 2019 IPPS/LTCH PPS Proposed Rule
One of the concerns regarding the wage index system expressed by
hospitals in low wage index areas is the disparity in wage index values
between high and low wage index areas. The following comment, received
in response to the request for information in the FY 2019 IPPS/LTCH PPS
proposed rule, is a typical comment in this regard:
``The most significant issue with the current system can be traced
to the data sources used to calculate the wage index. Relying
exclusively on hospital cost reports as the source to calculate the
wage index allows hospitals in States with significantly higher wage
indexes to maintain and improve their favorable position in the current
system by setting higher than market value wages for their employees.
The higher wage hospitals can, by virtue of higher Medicare payments,
afford to pay wages that allow them to continue as a high wage index
State. Low wage index States . . . cannot afford to pay wages that
would allow their hospitals to climb back toward the median wage index.
Over time this condition of circularity has increased the gap between
the wage indexes of the high and low wage States to a much larger
degree than what the wage index was initially designed to address, the
difference in labor markets across the country for comparable
services.''
For discussion purposes, we will refer to this situation as the
``downward spiral,'' as this term has been used by some stakeholders to
describe this issue. Some respondents stated that the disparity between
the higher and lower wage index areas continues to grow and suggested
that the problem is, in large part, due to providers in low wage index
areas having difficulty keeping pace with competitive labor costs and
having to reduce expenses in other areas to make up for it. Some
respondents indicated that the downward spiral faced by hospitals in
low wage index areas was the most important wage index issue facing the
system and it needed to be addressed quickly.
Some respondents recommended that CMS create a wage index floor for
low wage hospitals, and that, in order to maintain budget neutrality,
CMS reduce the wage index values for high wage hospitals through the
creation of wage index ceiling.
Some respondents also indicated that the current wage index
methodology encourages misuse and opportunist gaming, especially in the
area of urban to rural reclassifications and the rural floor. According
to these respondents, under current policies, providers in some urban
areas are able to reclassify to a rural area and substantially raise
the rural floor for an entire State. Several respondents suggested that
this is inconsistent with the intent of the rural floor policy, which
is to protect vulnerable urban hospitals, and that the policy was not
intended to allow urban hospitals to artificially inflate the rural
floor through urban to rural reclassification. These respondents
indicated that, because the rural floor policy is budget neutral
nationally, all providers throughout the country that do not benefit
from the rural floor policy have their payments lowered due to this
misuse and opportunistic gaming. These respondents stressed that this
further contributes to financial distress of hospitals in low wage
index areas.
Some respondents stated that CMS has the regulatory authority to
determine how it calculates the rural floor. They stated that the
calculation should mirror the spirit and intent of law by only
considering the geographically rural providers in a State when
calculating a rural floor. According to these respondents, CMS should
consider changing the existing calculation to include only the
geographically rural providers when calculating the rural floor for a
State in order to ensure that existing regulatory policy around the
rural floor calculation meets the intent of law and does not harm
vulnerable providers the law intended to protect.
Other commenters were not critical in their comments regarding wage
index disparities. The following is a typical comment arguing that the
reflection of such disparities in the wage index is appropriate:
``CMS has requested comments on wage index disparities, but we urge
the agency to continue to recognize that as long as there are
`disparities' in the cost of labor and cost of living between different
parts of the country, there will and should always be wage index
`disparities'. The area wage index is intended to recognize differences
in resource use across types and location of hospitals. In a quest to
smooth out so-called `disparities', we urge CMS to continue to
adequately account for these resource differences in its payment
systems.''
Some commenters indicated that further analysis and study are
needed. The following comment is a typical comment expressing this
view:
``The area wage index is intended to recognize differences in
resource use across types and location of hospitals. If these resource
differences are not adequately accounted for by Medicare payment
adjustments, hospitals are either inappropriately rewarded or put under
fiscal pressure. Taking this into account, hospitals have repeatedly
expressed concern that the wage index is greatly flawed in many
respects, including its accuracy, volatility, circularity, and
substantial reclassifications and exceptions. Members of Congress and
Medicare officials also have voiced concerns with the present system.
While a consensus solution to the wage index's shortcomings has not yet
been developed, further analysis of alternatives is needed to identify
approaches that promote payment adjustments that are accurate, fair,
and effective.''
As noted earlier, we also received comments regarding other aspects
of the wage index system. We will continue to consider those responses
for potential future rulemaking. We encourage interested members of the
public to review all the comments on the wage index received in
response to the request for information in their entirety, which are
available at www.regulations.gov under file number CMS-1694-P.
3. Proposals To Address Wage Index Disparities
a. Providing an Opportunity for Low Wage Index Hospitals To Increase
Employee Compensation
As CMS and other entities have stated in the past, comprehensive
wage index reform would require both statutory and regulatory changes,
and could require new data sources. Notwithstanding the challenges
associated with comprehensive wage index reform, we agree with
respondents to the request for information who indicated that some
current wage index policies create barriers to hospitals with low wage
index values from being able to increase employee compensation due to
the lag
[[Page 19395]]
between when hospitals increase the compensation and when those
increases are reflected in the calculation of the wage index. (We note
that this lag results from the fact that the wage index calculations
rely on historical data.) We also agree that addressing this systemic
issue does not need to wait for comprehensive wage index reform given
the growing disparities between low and high wage index hospitals,
including rural hospitals that may be in financial distress and facing
potential closure. Therefore, in response to these concerns, we are
proposing a policy that would provide certain low wage index hospitals
with an opportunity to increase employee compensation without the usual
lag in those increases being reflected in the calculation of the wage
index.
In general terms, as discussed further below, we are proposing to
increase the wage index values for hospitals with a wage index value in
the lowest quartile of the wage index values across all hospitals.
Quartiles are a common way to divide a distribution, and therefore we
believe it is appropriate to divide the wage indexes into quartiles for
this purpose. For example, the interquartile range is a common measure
of variability based on dividing data into quartiles. Furthermore,
quartiles are used to divide distributions for other purposes under the
Medicare program. For example, when determining Medicare Advantage
benchmarks, excluding quality bonuses, counties are organized into
quartiles based on their Medicare fee-for-service (FFS) spending. Also,
Congress chose the worst performing quartile of hospitals for the
Hospital-Acquired Condition Reduction Program penalty. (We refer
readers to section IV.J. of the preamble of this proposed rule for a
discussion of the Hospital-Acquired Condition Reduction Program.)
Having determined that quartiles are a reasonable method of dividing
the distribution of hospitals' wage index values, we believe that
identifying hospitals in the lowest quartile as low wage index
hospitals, hospitals in the second and third ``middle'' quartiles as
hospitals with wages index values that are neither low nor high, and
hospitals in the highest quartile as hospitals with high wage index
values, is then a reasonable method of determining low wage index and
high wage index hospitals for purposes of our proposals (discussed
below) addressing wage index disparities. While we acknowledge that
there is no set standard for identifying hospitals as having low or
high wage index values, we believe our proposed quartile approach is
reasonable for this purpose, given that, as discussed above, quartiles
are a common way to divide distributions, and this proposed approach is
consistent with approaches used in other areas of the Medicare program.
Based on the data for this proposed rule, for FY 2020, the 25th
percentile wage index value across all hospitals is 0.8482. If this
policy is adopted in the final rule, this number would be updated in
the final rule based on the final wage index values.
Under our proposed methodology, we are proposing to increase the
wage index for hospitals with a wage index value below the 25th
percentile wage index. The proposed increase in the wage index for
these hospitals would be equal to half the difference between the
otherwise applicable final wage index value for a year for that
hospital and the 25th percentile wage index value for that year across
all hospitals. For example, assume the otherwise applicable final FY
2020 wage index value for a geographically rural hospital in Alabama is
0.6663, and the 25th percentile wage index value for FY 2020 is 0.8482.
Half the difference between the otherwise applicable wage index value
and the 25th percentile wage index value is 0.0910 (that is, (0.8482 -
0.6663)/2). Under our proposal, the FY 2020 wage index value for such a
hospital would be 0.7573 (that is, 0.6663 + 0.0910).
Some respondents to the request for information indicated that CMS
should establish a wage index floor for hospitals with low wage index
values. However, we believe that it is important to preserve the rank
order of the wage index values under the current policy and, therefore,
are proposing to increase the wage index for the low-wage index
hospitals described above by half the difference between the otherwise
applicable final wage index value and the 25th percentile wage index
value. We believe the rank order generally reflects meaningful
distinctions between the employee compensation costs faced by hospitals
in different geographic areas. Although wage index value differences
between areas may be artificially magnified by the current wage index
policies, we do not believe those differences are nonexistent. For
example, if we were to instead create a floor to address the lag issue
discussed above, it does not seem likely that hospitals in Puerto Rico
and Alabama would have the same wage index value after hospitals in
both areas have had the opportunity increase their employee
compensation costs. We believe a distinction between their wage index
values would remain because hospitals in these areas face different
employee compensation costs in their respective labor market areas.
We are proposing that this policy would be effective for at least 4
years, beginning in FY 2020, in order to allow employee compensation
increases implemented by these hospitals sufficient time to be
reflected in the wage index calculation. For the FY 2020 wage index, we
are proposing to use data from the FY 2016 cost reports. Four years is
the minimum time before increases in employee compensation included in
the Medicare cost report could be reflected in the wage index data, and
additional time may be necessary. We intend to revisit the issue of the
duration of the policy in future rulemaking as we gain experience under
the policy if adopted.
b. Budget Neutrality for Providing an Opportunity for Low Wage Index
Hospitals To Increase Employee Compensation
As noted earlier, in response to the request for information on
wage index disparities in the FY 2019 IPPS/LTCH PPS proposed rule, some
respondents recommended that CMS create a wage index floor for low wage
index hospitals, and that, in order to maintain budget neutrality, CMS
reduce the wage index values for high wage index hospitals through the
creation of wage index ceiling.
While we do not believe it would be appropriate to create a wage
index floor or a wage index ceiling as suggested in the comment
summarized above, we believe the suggestion that we provide a mechanism
to increase the wage index of low wage index hospitals (as we have
proposed in section III.N.3.a. of the preamble of this proposed rule)
while maintaining budget neutrality for that increase through an
adjustment to the wage index of high wage index hospitals has two key
merits. First, by compressing the wage index for hospitals on the high
and low ends, that is, those hospitals with a low wage index and those
hospitals with a high wage index, such a methodology increases the
impact on existing wage index disparities more than by simply
addressing one end. Second, such a methodology ensures those hospitals
in the middle, that is, those hospitals whose wage index is not
considered high or low, do not have their wage index values affected by
this proposed policy. Thus, given the growing disparities between low
wage index hospitals and high wage index hospitals, consistent with the
comment summarized above, we believe it would
[[Page 19396]]
be appropriate to maintain budget neutrality for the low wage index
policy proposed in section III.N.3.a. of the preamble of this proposed
rule by adjusting the wage index for high wage index hospitals.
As discussed earlier, we believe it is important to preserve the
rank order of wage index values because the rank order generally
reflects meaningful distinctions between the employee compensation
costs faced by hospitals in different geographic areas. Although wage
index value differences between areas (including areas with high wage
index hospitals) may be artificially magnified by the current wage
index policies, we do not believe those differences are nonexistent,
and therefore, we do not believe it would be appropriate to set a wage
index ceiling or floor. Accordingly, in order to offset the estimated
increase in IPPS payments to hospitals with wage index values below the
25th percentile under our proposal in section III.N.3.a. of the
preamble of this proposed rule, we are proposing to decrease the wage
index values for hospitals with high wage index values, but preserve
the rank order among those values, as further discussed below.
As discussed in section III.N.3.a. of the preamble of this proposed
rule, we believe it is reasonable to divide all hospitals into
quartiles based on their wage index value whereby we identify hospitals
in the lowest quartile as low wage index hospitals, hospitals in the
second and third ``middle'' quartiles as hospitals with wage index
values that are neither high nor low, and hospitals in the highest
quartile as hospitals with high wage index values. We believe our
proposed quartile approach is reasonable for this purpose, given that,
as discussed above, quartiles are a common way to divide distributions,
and this proposed approach is consistent with approaches used in other
areas of the Medicare program. Therefore, we are proposing to identify
high wage index hospitals as hospitals in the highest quartile, and in
the budget neutrality discussion that follows, we refer to hospitals
with wage index values above the 75th percentile wage index value
across all hospitals for a fiscal year as ``high wage index
hospitals.''
To ensure our proposal in section III.N.3.a. of the preamble of
this proposed rule is budget neutral, we are proposing to reduce the
wage index values for high wage index hospitals using a methodology
analogous to the methodology used to increase the wage index values for
low wage index hospitals described in section III.N.3.a. of the
preamble of this proposed rule; that is, we are proposing to decrease
the wage index values for high wage index hospitals by a uniform factor
of the distance between the hospital's otherwise applicable wage index
and the 75th percentile wage index value for a fiscal year across all
hospitals. As described below, the proposed budget neutrality
adjustment factor is 3.4 percent for FY 2020.
In calculating the proposed budget neutrality adjustment factor for
our proposal in section III.N.3.a. of the preamble of this proposed
rule, we would first examine the distance between the wage index values
for high wage index hospitals and the 75th percentile wage index value
across all hospitals for a fiscal year. Based on the data for this
proposed rule, the 75th percentile wage index value is 1.0351.
Therefore, for example, if high wage index Hospital A had an otherwise
applicable wage index value of 1.7351, the distance between that
hospital's wage index value and the 75th percentile is 0.7000 (that is,
1.7351 - 1.0351). If high wage index Hospital B had an otherwise
applicable wage index value of 1.2351, the distance between that
hospital's wage index value and the 75th percentile is 0.2000 (that is,
1.2351 - 1.0351).
We would next estimate the uniform multiplicative budget neutrality
factor needed to reduce those distances for all high wage index
hospitals so that the estimated decreased aggregate payments to high
wage index hospitals offset the estimated increased aggregate payments
to low wage index hospitals under our proposed policy in section
III.N.3.a. of the preamble of this proposed rule. Based on the data for
this proposed rule, we estimate this factor is 3.4 percent for FY 2020.
Therefore, in the examples we provided earlier, the distance
between Hospital A's wage index value and the 75th percentile would be
reduced by 0.0238 (that is, the prior distance of 0.7000 * 0.034), and
therefore the wage index for Hospital A after application of the
proposed budget neutrality adjustment would be 1.7113 (that is, 1.7351
- 0.0238). The distance between Hospital B's wage index value and the
75th percentile would be reduced by 0.0068 (that is, the prior distance
of 0.2000 * 0.034), and therefore the wage index for Hospital B after
application of the proposed budget neutrality adjustment would be
1.2283 (that is, 1.2351-0.0068).
We believe we have authority to implement our lowest quartile wage
index proposal in section III.N.3.a. of the preamble of this proposed
rule and our budget neutrality proposal in this section III.N.3.b. of
the preamble of this proposed rule under section 1886(d)(3)(E) of the
Act (which gives the Secretary broad authority to adjust for area
differences in hospital wage levels by a factor (established by the
Secretary) reflecting the relative hospital wage level in the
geographic area of the hospital compared to the national average
hospital wage level, and requires those adjustments to be budget
neutral), and under our exceptions and adjustments authority under
section 1886(d)(5)(I) of the Act.
c. Preventing Inappropriate Payment Increases Due to Rural
Reclassifications Under the Provisions of 42 CFR 412.103
We also agree with respondents to the request for information who
indicated that another contributing systemic factor to wage index
disparities is the rural floor. As discussed in section III.G.1. of the
preamble of this proposed rule, section 4410(a) of Public Law 105-33
provides that, for discharges on or after October 1, 1997, the area
wage index applicable to any hospital that is located in an urban area
of a State may not be less than the area wage index applicable to
hospitals located in rural areas in that State. Section 3141 of Public
Law 111-148 also requires that a national budget neutrality adjustment
be applied in implementing the rural floor.
The rural floor policy was addressed by the Office of the Inspector
General (OIG) in its recent November 2018 report, ``Significant
Vulnerabilities Exist in the Hospital Wage Index System for Medicare
Payment'' (A-01-17-00500), which is available on the OIG website at:
https://oig.hhs.gov/oas/reports/region1/11700500.pdf. The OIG stated
(we note that the footnote references included here were in the
original document but are not carried here):
``The stated legislative intent of the rural floor was to correct
the `anomaly' of `some urban hospitals being paid less than the average
rural hospital in their States.' \9\ However, MedPAC, an independent
congressional advisory board, has since stated that it is `not aware of
any empirical support for this policy,\10\ and that the policy is built
on the false assumption that hospital wage rates in all urban labor
markets in a State are always higher than the average hospital wage
rate in rural areas of that State.\11\ ''
As one simplified example for purposes of illustrating the rural
floor policy, assume that the rural wage index for a State is 1.1000.
Therefore, under current policy, the rural floor for that State would
be 1.1000. Any urban hospital with a wage index value below
[[Page 19397]]
1.1000 in that State would have its wage index value raised to 1.1000.
The additional Medicare payments to those urban hospitals in that State
increase the national budget neutrality adjustment for the rural floor
provision.
For a real world example of the impact of the rural floor policy,
we point to FY 2018, in which 366 urban hospitals benefitted from the
rural floor. The increase in the wage indexes of urban hospitals
receiving the rural floor was offset by a nationwide decrease in all
hospitals' wage indexes of approximately 0.67 percent. In
Massachusetts, that meant that 36 urban hospitals received a wage index
based on hospital wages in Nantucket, an island that is home to the
only rural hospital contributing to the State's rural floor wage index.
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38557), we estimated
that those 36 hospitals would receive an additional $44 million in
inpatient payments for the year. These increased payments were offset
by decreased payments to hospitals nationwide, and those decreases were
not based on actual local wage rates but on the current rural floor
calculation.
As acknowledged by the OIG, CMS has long recognized the disparate
impacts and unintended outcomes of the rural floor. We have stated that
the rural floor creates a benefit for a minority of States that is then
funded by a majority of States, including States that are
overwhelmingly rural in character (73 FR 23528 and 23622). We also have
stated that ``as a result of hospital actions not envisioned by
Congress, the rural floor is resulting in significant disparities in
wage index and, in some cases, resulting in situations where all
hospitals in a State receive a wage index higher than that of the
single highest wage index urban hospital in the State'' (76 FR 42170
and 42212).
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41748), we indicated
that wage index disparities associated with the rural floor
significantly increased in FY 2019 with the urban to rural
reclassification of an urban hospital in Massachusetts. We also note
that Massachusetts is not the only State where urban hospitals
reclassified as rural under Sec. 412.103 have a significant impact on
the State's rural floor. This also occurs, for example, in Arizona and
Connecticut. The rural floor policy was meant to address anomalies of
some urban hospitals being paid less than the average rural hospital in
their States, not to raise the payments of many hospitals in a State to
the high wage level of a geographically urban hospital.
We note that, for FY 2020, the urban Massachusetts hospital
reclassified as rural under Sec. 412.103 has an approved MGCRB
reclassification back to its geographic location, and, therefore, its
MGCRB reclassification is used for wage index calculation and payment
purposes in this proposed rule (that is, this hospital would not be
considered rural for wage index purposes). However, under our current
wage index policy, the hospital would be able to influence the
Massachusetts rural floor by withdrawing or terminating its MGCRB
reclassification in accordance with the regulation at Sec. 412.273 for
FY 2020 or subsequent years.
Returning to our simplified example, for purposes of illustrating
the impact of an urban to rural reclassification on the calculation of
the rural floor under current policy, again assume that the rural wage
index for a State is 1.1000. Therefore, under current policy, the rural
floor for that State would be 1.1000. Any urban hospital with a wage
index value below 1.1000 in that State would have its wage index value
raised to 1.1000. However, now assume that one urban hospital in that
State subsequently reclassifies from urban to rural and raises the
rural wage index from 1.1000 to 1.2000. Now, solely because of a
geographically urban hospital, the rural floor in that State would go
from 1.1000 to 1.2000 under current policy.
As noted by OIG in the November 2018 report referenced above, the
stated legislative intent of the rural floor was to correct the
``anomaly'' of ``some urban hospitals being paid less than the average
rural hospital in their States.'' (Report 105-149 of the Committee on
the Budget, House of Representatives, to Accompany H.R. 2015, June 24,
1997, section 10205, page 1305.) We believe that urban to rural
reclassifications have stretched the rural floor provision beyond a
policy designed to address such anomalies. Rather than raising the
payment of some urban hospitals to the level of the average rural
hospital in their State, urban hospitals may have their payments raised
to the relatively high level of one or more geographically urban
hospitals reclassified as rural. The current state of affairs with
respect to urban to rural reclassifications goes beyond the general
criticisms of the rural floor policy by MedPAC, CMS, OIG, and many
stakeholders. We believe an adjustment is necessary to address the
unanticipated effects of urban to rural reclassifications on the rural
floor and the resulting wage index disparities, including the
inappropriate wage index disparities caused by the manipulation of the
rural floor policy by some hospitals.
Therefore, given the circumstances described above, the comments
received on the request for information, and that urban to rural
reclassifications have stretched the rural floor provision beyond a
policy designed to address anomalies of some urban hospitals being paid
less than the average rural hospital in their States, we are proposing
to remove urban to rural reclassifications from the calculation of the
rural floor. In other words, under our proposal, beginning in FY 2020,
the rural floor would be calculated without including the wage data of
urban hospitals that have reclassified as rural under section
1886(d)(8)(E) of the Act (as implemented at Sec. 412.103). We believe
our proposed calculation methodology is permissible under section
1886(d)(8)(E) of the Act and the rural floor statute (section 4410 of
Pub. L. 105-33). Section 1886(d)(8)(E) of the Act does not specify
where the wage data of reclassified hospitals must be included.
Therefore, we believe we have discretion to exclude the wage data of
such hospitals from the calculation of the rural floor. Furthermore,
the rural floor statute does not specify how the rural floor wage index
is to be calculated or what data are to be included in the calculation.
Therefore, we also believe we have discretion under the rural floor
statute to exclude the wage data of hospitals reclassified under
section 1886(d)(8)(E) of the Act from the calculation of the rural
floor. We believe this proposed policy is necessary and appropriate to
address the unanticipated effects of rural reclassifications on the
rural floor and the resulting wage index disparities, including the
effects of the manipulation of the rural floor by certain hospitals. As
discussed above, the inclusion of reclassified hospitals in the rural
floor calculation has had the unforeseen effect of exacerbating the
wage index disparities between low and high wage index hospitals.
Therefore, under our proposal, in the case of Massachusetts, for
example, the geographically rural hospital in Nantucket would still be
included in the calculation of the rural floor for Massachusetts, but a
geographically urban hospital reclassified under Sec. 412.103 would
not.
Returning to our simplified example for purposes of illustrating
the impact of the proposed policy, again assume that the rural wage
index for a State is 1.1000 without any hospital in the State having
reclassified from urban to rural. Therefore, the rural floor for that
State would be 1.1000. Any urban hospital
[[Page 19398]]
with a wage index value below 1.1000 in that State would have its wage
index value raised to 1.1000. However, again assume that one urban
hospital in that State subsequently reclassifies from urban to rural
and raises the rural wage index from 1.1000 to 1.2000. Under our
proposed policy, the rural floor in that State would not go from 1.1000
to 1.2000, but would remain at 1.1000 because urban to rural
reclassifications would no longer impact the rural floor.
As we discuss earlier, the purpose of our proposal to calculate the
rural floor without including the wage data of urban hospitals
reclassified as rural under section 1886(d)(8)(E) of the Act (as
implemented at Sec. 412.103) is to address wage index disparities that
result when urban hospitals may have their payments raised to the
relatively high level of one or more geographically urban hospitals
reclassified as rural. In particular, we believe that no urban hospital
not reclassified as rural should have its payments raised to the
relatively high level of one or more geographically urban hospitals
reclassified as rural, and we believe it would be inappropriate to
prevent this for one class of urban hospitals not reclassified as rural
(that is, under the rural floor provision) but allow this for another.
As such, for consistent treatment of urban hospitals not reclassified
as rural, we also are proposing to apply the provisions of section
1886(d)(8)(C)(iii) of the Act without including the wage data of urban
hospitals that have reclassified as rural under section 1886(d)(8)(E)
of the Act (as implemented at Sec. 412.103). Because section
1886(d)(8)(C)(iii) of the Act provides that reclassifications under
section 1886(d)(8)(B) of the Act and section 1886(d)(10) of the Act may
not reduce any county's wage index below the wage index for rural areas
in the State, we are making this proposal to help ensure no urban
hospitals not reclassified as rural, including those hospitals with no
reclassification as well as those hospitals reclassified under section
1886(d)(8)(B) of the Act or section 1886(d)(10) of the Act, have their
payments raised to the relatively high level of one or more
geographically urban hospitals reclassified as rural. Specifically, for
purposes of applying the provisions of section 1886(d)(8)(C)(iii) of
the Act, we are proposing to remove urban to rural reclassifications
from the calculation of ``the wage index for rural areas in the State
in which the county is located'' referred to in section
1886(d)(8)(C)(iii) of the Act.
d. Proposed Transition for Hospitals Negatively Impacted
We recognize that, absent further adjustments, the combined effect
of the proposed changes to the FY 2020 wage index could lead to
significant decreases in the wage index values for some hospitals
depending on the data for the final rule. In the past, we have proposed
and finalized budget neutral transition policies to help mitigate any
significant negative impacts on hospitals of certain wage index
proposals, and we believe it would be appropriate to propose a
transition policy here for the same purpose. For example, in the FY
2015 IPPS/LTCH PPS final rule (79 FR 49957 through 49963), we finalized
a budget neutral transition to address certain wage index changes that
occurred under the new OMB CBSA delineations.
Therefore, for FY 2020, we are proposing a transition wage index to
help mitigate any significant decreases in the wage index values of
hospitals compared to their final wage indexes for FY 2019.
Specifically, for FY 2020, we are proposing to place a 5-percent cap on
any decrease in a hospital's wage index from the hospital's final wage
index in FY 2019. In other words, we are proposing that a hospital's
final wage index for FY 2020 would not be less than 95 percent of its
final wage index for FY 2019. This proposed transition would allow the
effects of our proposed policies to be phased in over 2 years with no
estimated reduction in the wage index of more than 5 percent in FY 2020
(that is, no cap would be applied the second year). We believe 5
percent is a reasonable level for the cap because it would effectively
mitigate any significant decreases in the wage index for FY 2020.
However, we are seeking public comments on alternative levels for the
cap and accompanying rationale. Under the proposed transition policy,
we would compute the proposed FY 2020 wage index for each hospital as
follows.
Step 1.--Compute the proposed FY 2020 ``uncapped'' wage index that
would result from the implementation of proposed changes to the FY 2020
wage index.
Step 2.--Compute a proposed FY 2020 ``capped'' wage index which
would equal 95 percent of that provider's FY 2019 final wage index.
Step 3.--The proposed FY 2020 wage index is the greater of the
``uncapped'' wage index computed in Step 1 or the ``capped'' wage index
computed in Step 2.
e. Transition Budget Neutrality
We are proposing to apply a budget neutrality adjustment to the
standardized amount so that our proposed transition (described in
section III.N.3.c. of the preamble of this proposed rule) for hospitals
that could be negatively impacted is implemented in a budget neutral
manner under our authority in section 1886(d)(5)(I) of the Act. We note
that implementing the proposed transition wage index in a budget
neutral manner is consistent with past practice (for example, 79 FR
50372) where CMS has used its exceptions and adjustments authority
under section 1886(d)(5)(I)(i) of the Act to budget neutralize
transition wage index policies when such policies allow for the
application of a transitional wage index only when it benefits the
hospital. We believed, and continue to believe, that it would be
appropriate to ensure that such policies do not increase estimated
aggregate Medicare payments beyond the payments that would be made had
we never proposed these transition policies (79 FR 50732). Therefore,
for FY 2020, we are proposing to use our exceptions and adjustments
authority under section 1886(d)(5)(I)(i) of the Act to apply a budget
neutrality adjustment to the standardized amount so that our proposed
transition (described in section III.N.3.d. of the preamble of this
proposed rule) for hospitals negatively impacted is implemented in a
budget neutral manner.
Specifically, we are proposing to apply a budget neutrality
adjustment to ensure that estimated aggregate payments under our
proposed transition (described in section III.N.3.d. of the preamble of
this proposed rule) for hospitals negatively impacted by our proposed
wage index policies would equal what estimated aggregate payments would
have been without the proposed transition for hospitals negatively
impacted. To determine the associated budget neutrality factor, we
compared estimated aggregate IPPS payments with and without the
proposed transition. To achieve budget neutrality for the proposed
transition policy, we are proposing to apply a budget neutrality
adjustment factor of 0.998349 to the FY 2020 standardized amount, as
further discussed in section I.A.4.f. of the Addendum to this proposed
rule. If this policy is adopted in the final rule, this number would be
updated based on the final rule data.
We note that our proposal, discussed in section III.N.3.c. of the
preamble of this proposed rule, to prevent inappropriate payment
increases due rural reclassifications under Sec. 412.103 would also be
budget neutral, but this budget neutrality would occur through the
proposed budget neutrality
[[Page 19399]]
adjustments for geographic reclassifications and the rural floor that
are discussed in the Addendum to this proposed rule.
IV. Other Decisions and Proposed Changes to the IPPS for Operating
System
A. Proposed Changes to MS-DRGs Subject to Postacute Care Transfer
Policy and MS-DRG Special Payments Policies (Sec. 412.4)
1. Background
Existing regulations at 42 CFR 412.4(a) define discharges under the
IPPS as situations in which a patient is formally released from an
acute care hospital or dies in the hospital. Section 412.4(b) defines
acute care transfers, and Sec. 412.4(c) defines postacute care
transfers. Our policy set forth in Sec. 412.4(f) provides that when a
patient is transferred and his or her length of stay is less than the
geometric mean length of stay for the MS-DRG to which the case is
assigned, the transferring hospital is generally paid based on a
graduated per diem rate for each day of stay, not to exceed the full
MS-DRG payment that would have been made if the patient had been
discharged without being transferred.
The per diem rate paid to a transferring hospital is calculated by
dividing the full MS-DRG payment by the geometric mean length of stay
for the MS-DRG. Based on an analysis that showed that the first day of
hospitalization is the most expensive (60 FR 45804), our policy
generally provides for payment that is twice the per diem amount for
the first day, with each subsequent day paid at the per diem amount up
to the full MS-DRG payment (Sec. 412.4(f)(1)). Transfer cases also are
eligible for outlier payments. In general, the outlier threshold for
transfer cases, as described in Sec. 412.80(b), is equal to the fixed-
loss outlier threshold for nontransfer cases (adjusted for geographic
variations in costs), divided by the geometric mean length of stay for
the MS-DRG, and multiplied by the length of stay for the case, plus 1
day.
We established the criteria set forth in Sec. 412.4(d) for
determining which DRGs qualify for postacute care transfer payments in
the FY 2006 IPPS final rule (70 FR 47419 through 47420). The
determination of whether a DRG is subject to the postacute care
transfer policy was initially based on the Medicare Version 23.0
GROUPER (FY 2006) and data from the FY 2004 MedPAR file. However, if a
DRG did not exist in Version 23.0 or a DRG included in Version 23.0 is
revised, we use the current version of the Medicare GROUPER and the
most recent complete year of MedPAR data to determine if the DRG is
subject to the postacute care transfer policy. Specifically, if the MS-
DRG's total number of discharges to postacute care equals or exceeds
the 55th percentile for all MS-DRGs and the proportion of short-stay
discharges to postacute care to total discharges in the MS-DRG exceeds
the 55th percentile for all MS-DRGs, CMS will apply the postacute care
transfer policy to that MS-DRG and to any other MS-DRG that shares the
same base MS-DRG. The statute directs us to identify MS-DRGs based on a
high volume of discharges to postacute care facilities and a
disproportionate use of postacute care services. As discussed in the FY
2006 IPPS final rule (70 FR 47416), we determined that the 55th
percentile is an appropriate level at which to establish these
thresholds. In that same final rule (70 FR 47419), we stated that we
will not revise the list of DRGs subject to the postacute care transfer
policy annually unless we are making a change to a specific MS-DRG.
To account for MS-DRGs subject to the postacute care policy that
exhibit exceptionally higher shares of costs very early in the hospital
stay, Sec. 412.4(f) also includes a special payment methodology. For
these MS-DRGs, hospitals receive 50 percent of the full MS-DRG payment,
plus the single per diem payment, for the first day of the stay, as
well as a per diem payment for subsequent days (up to the full MS-DRG
payment (Sec. 412.4(f)(6)). For an MS-DRG to qualify for the special
payment methodology, the geometric mean length of stay must be greater
than 4 days, and the average charges of 1-day discharge cases in the
MS-DRG must be at least 50 percent of the average charges for all cases
within the MS-DRG. MS-DRGs that are part of an MS-DRG severity level
group will qualify under the MS-DRG special payment methodology policy
if any one of the MS-DRGs that share that same base MS-DRG qualifies
(Sec. 412.4(f)(6)).
Prior to the enactment of the Bipartisan Budget Act of 2018 (Pub.
L. 115-123), under section 1886(d)(5)(J) of the Act, a discharge was
deemed a ``qualified discharge'' if the individual was discharged to
one of the following postacute care settings:
A hospital or hospital unit that is not a subsection (d)
hospital.
A skilled nursing facility.
Related home health services provided by a home health
agency provided within a timeframe established by the Secretary
(beginning within 3 days after the date of discharge).
Section 53109 of the Bipartisan Budget Act of 2018 amended section
1886(d)(5)(J)(ii) of the Act to also include discharges to hospice care
provided by a hospice program as a qualified discharge, effective for
discharges occurring on or after October 1, 2018. Accordingly,
effective for discharges occurring on or after October 1, 2018, if a
discharge is assigned to one of the MS-DRGs subject to the postacute
care transfer policy and the individual is transferred to hospice care
by a hospice program, the discharge is subject to payment as a transfer
case. In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41394), we made
conforming amendments to Sec. 412.4(c) of the regulation to include
discharges to hospice care occurring on or after October 1, 2018 as
qualified discharges. We specified that hospital bills with a Patient
Discharge Status code of 50 (Discharged/Transferred to Hospice--Routine
or Continuous Home Care) or 51 (Discharged/Transferred to Hospice,
General Inpatient Care or Inpatient Respite) are subject to the
postacute care transfer policy in accordance with this statutory
amendment. Consistent with our policy for other qualified discharges,
CMS claims processing software has been revised to identify cases in
which hospice benefits were billed on the date of hospital discharge
without the appropriate discharge status code. Such claims will be
returned as unpayable to the hospital and may be rebilled with a
corrected discharge code.
2. Proposed Changes for FY 2020
As discussed in section II.F. of the preamble of this FY 2020 IPPS/
LTCH PPS proposed rule, based on our analysis of FY 2018 MedPAR claims
data, we are proposing to make changes to a number of MS-DRGs,
effective for FY 2020. Specifically, we are proposing to:
Reassign procedure codes from MS-DRGs 216 through 218
(Cardiac Valve and Other Major Cardiothoracic Procedures with Cardiac
Catheterization with MCC, CC and without CC/MCC, respectively), MS-DRGs
219 through 221 (Cardiac Valve and Other Major Cardiothoracic
Procedures without Cardiac Catheterization with MCC, CC and without CC/
MCC, respectively), and MS-DRGs 273 and 274 (Percutaneous Intracardiac
Procedures with and without MCC, respectively) and create new MS-DRGs
319 and 320 (Other Endovascular Cardiac Valve Procedures with and
without MCC, respectively); and
Delete MS-DRGs 691 and 692 (Urinary Stones with ESW
Lithotripsy with CC/MCC and without CC/MCC,
[[Page 19400]]
respectively) and revise the titles for MS-DRGs 693 and 694 to
``Urinary Stones with MCC'' and ``Urinary Stones without MCC'',
respectively.
In light of the proposed changes to these MS-DRGs for FY 2020,
according to the regulations under Sec. 412.4(d), we evaluated these
MS-DRGs using the general postacute care transfer policy criteria and
data from the FY 2018 MedPAR file. If an MS-DRG qualified for the
postacute care transfer policy, we also evaluated that MS-DRG under the
special payment methodology criteria according to regulations at Sec.
412.4(f)(6). We continue to believe it is appropriate to reassess MS-
DRGs when proposing reassignment of procedure codes or diagnosis codes
that would result in material changes to an MS-DRG. MS-DRGs 216, 217,
218, 219, 220, and 221 are currently subject to the postacute care
transfer policy. As a result of our review, these MS-DRGs, as proposed
to be revised, would continue to qualify to be included on the list of
MS-DRGs that are subject to the postacute care transfer policy. MS-DRGs
273 and 274 are also currently subject to the postacute care transfer
policy and MS-DRGs 693 and 694 are currently not subject to the
postacute care transfer policy. As a result of our review, these MS-
DRGs, as proposed to be revised, would not qualify to be included on
the list of MS-DRGs that are subject to the postacute care transfer
policy. Proposed new MS-DRGs 319 and 320 also would not qualify to be
included on the list of MS-DRGs that are subject to the postacute care
transfer policy. Therefore, we are proposing to remove MS-DRGs 273 and
274 from the list of MS-DRGs that are subject to the postacute care
transfer policy. We note that MS-DRGs that are subject to the postacute
care transfer policy for FY 2019 and are not revised will continue to
be subject to the policy in FY 2020.
Using the December 2018 update of the FY 2018 MedPAR file, we
developed the chart below, which sets forth the most recent analysis of
the postacute care transfer policy criteria completed for this proposed
rule with respect to each of these proposed new or revised MS-DRGs. For
the FY 2020 final rule, we intend to update this analysis using the
most recent available data at that time.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of
short-stay
Postacute care postacute care
Proposed new or transfers Short-stay transfers to Current postacute Proposed postacute
revised MS-DRGS MS-DRG title Total cases (55th postacute care all cases care transfer policy care transfer policy
percentile: transfers (55th status status
1,400) percentile:
8.5132%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
216................. Cardiac Valve & Other 5,733 4,196 1,643 28.6586 Yes................. Yes.
Major Cardiothoracic
Procedure with
Cardiac
Catheterization with
MCC.
217................. Cardiac Valve & Other 2,317 1,551 424 18.2995 Yes................. Yes.
Major Cardiothoracic
Procedure with
Cardiac
Catheterization with
CC.
218................. Cardiac Valve & Other 599 * 328 67 11.1853 Yes................. ** Yes.
Major Cardiothoracic
Procedure with
Cardiac
Catheterization
without CC/MCC.
219................. Cardiac Valve & Other 13,177 9,216 3,450 26.182 Yes................. Yes.
Major Cardiothoracic
Procedure without
Cardiac
Catheterization with
MCC.
220................. Cardiac Valve & Other 16,201 10,247 2,914 17.9865 Yes................. Yes.
Major Cardiothoracic
Procedure without
Cardiac
Catheterization with
CC.
221................. Cardiac Valve & Other 6,070 3,205 239 * 3.9374 Yes................. ** Yes.
Major Cardiothoracic
Procedure without
Cardiac
Catheterization
without CC/MCC.
273................. Percutaneous 5,958 2,152 280 * 4.6996 Yes................. No.
Intracardiac
Procedures with MCC.
274................. Percutaneous 0 * 0 0 * 0 Yes................. No.
Intracardiac
Procedures without
MCC.
319................. Other Endovascular 1,651 * 842 191 11.5687 New................. No.
Cardiac Valve
Procedures with MCC.
320................. Other Endovascular 707 * 229 30 * 4.2433 New................. No.
Cardiac Valve
Procedures without
MCC.
693................. Urinary Stones with 1,300 * 541 81 * 6.2308 No.................. No.
MCC.
694................. Urinary Stones without 8,025 1,739 185 * 2.3053 No.................. No.
MCC.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Indicates a current postacute care transfer policy criterion that the MS-DRG did not meet.
** As described in the policy at 42 CFR 412.4(d)(3)(ii)(D), MS-DRGs that share the same base MS-DRG will all qualify under the postacute care transfer
policy if any one of the MS-DRGs that share that same base MS-DRG qualifies.
During our annual review of proposed new or revised MS-DRGs and
analysis of the December 2018 update of the FY 2018 MedPAR file, we
reviewed the list of proposed revised or new MS-DRGs that qualify to be
included on the list of MS-DRGs subject to the postacute care transfer
policy for FY 2020 to determine if any of these MS-DRGs would also be
subject to the special payment methodology policy for FY 2020. Based on
our analysis of proposed changes to MS-DRGs included in this proposed
rule, we determined that proposed revised MS-DRGs 216, 217, 218, 219,
220, and 221 would continue to meet the criteria for the MS-DRG special
payment methodology. Because we are proposing to remove MS-DRGs 273 and
274 from the list of MS-DRGs subject to the postacute care transfer
policy, we also are proposing to remove these MS-DRGs from the list of
MS-DRGs subject to the MS-DRG special payment methodology, effective FY
2020.
For the FY 2020 final rule, we intend to update this analysis using
the most recent available data at that time.
[[Page 19401]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
50 Percent of
Geometric mean Average average
Proposed revised MS- MS-DRG title length of charges of 1- charges for Current special Proposed special
DRG stay day all cases payment policy status payment policy status
discharges within MS-DRG
--------------------------------------------------------------------------------------------------------------------------------------------------------
216..................... Cardiac Valve & Other 14.1126 0 $186,087.76 Yes..................... Yes.
Major Cardiothoracic
Procedure with Cardiac
Catheterization with MCC.
217..................... Cardiac Valve & Other 8.9229 147,964.00 128,141.91 Yes..................... Yes.
Major Cardiothoracic
Procedure with Cardiac
Catheterization with CC.
218..................... Cardiac Valve & Other 6.46878 203,555.50 101,286.68 Yes..................... Yes.
Major Cardiothoracic
Procedure with Cardiac
Catheterization without
CC/MCC.
219..................... Cardiac Valve & Other 9.48987 185,157.20 152,482.54 Yes..................... Yes.
Major Cardiothoracic
Procedure without Cardiac
Catheterization with MCC.
220..................... Cardiac Valve & Other 6.3373 115,955.36 101,812.54 Yes..................... Yes.
Major Cardiothoracic
Procedure without Cardiac
Catheterization with CC.
221..................... Cardiac Valve & Other 4.66413 127,074.88 82,400.23 Yes..................... Yes.
Major Cardiothoracic
Procedure without Cardiac
Catheterization without
CC/MCC.
--------------------------------------------------------------------------------------------------------------------------------------------------------
The proposed postacute care transfer and special payment policy
status of these MS-DRGs is reflected in Table 5 associated with this
proposed rule, which is listed in section VI. of the Addendum to this
proposed rule and available via the internet on the CMS website.
B. Proposed Changes in the Inpatient Hospital Update for FY 2020 (Sec.
412.64(d))
1. Proposed FY 2020 Inpatient Hospital Update
In accordance with section 1886(b)(3)(B)(i) of the Act, each year
we update the national standardized amount for inpatient hospital
operating costs by a factor called the ``applicable percentage
increase.'' For FY 2020, we are setting the applicable percentage
increase by applying the adjustments listed in this section in the same
sequence as we did for FY 2019. (We note that section
1886(b)(3)(B)(xii) of the Act required an additional reduction each
year only for FYs 2010 through 2019.) Specifically, consistent with
section 1886(b)(3)(B) of the Act, as amended by sections 3401(a) and
10319(a) of the Affordable Care Act, we are setting the applicable
percentage increase by applying the following adjustments in the
following sequence. The applicable percentage increase under the IPPS
for FY 2020 is equal to the rate-of-increase in the hospital market
basket for IPPS hospitals in all areas, subject to--
(a) A reduction of one-quarter of the applicable percentage
increase (prior to the application of other statutory adjustments; also
referred to as the market basket update or rate-of-increase (with no
adjustments)) for hospitals that fail to submit quality information
under rules established by the Secretary in accordance with section
1886(b)(3)(B)(viii) of the Act;
(b) A reduction of three-quarters of the applicable percentage
increase (prior to the application of other statutory adjustments; also
referred to as the market basket update or rate-of-increase (with no
adjustments)) for hospitals not considered to be meaningful EHR users
in accordance with section 1886(b)(3)(B)(ix) of the Act; and
(c) An adjustment based on changes in economy-wide productivity
(the multifactor productivity (MFP) adjustment).
Section 1886(b)(3)(B)(xi) of the Act, as added by section 3401(a)
of the Affordable Care Act, states that application of the MFP
adjustment may result in the applicable percentage increase being less
than zero.
In compliance with section 404 of the MMA, in the FY 2018 IPPS/LTCH
PPS final rule (82 FR 38158 through 38175), we replaced the FY 2010-
based IPPS operating market basket with the rebased and revised 2014-
based IPPS operating market basket, effective with FY 2018.
We are proposing to base the proposed FY 2020 market basket update
used to determine the applicable percentage increase for the IPPS on
IHS Global Inc.'s (IGI's) fourth quarter 2018 forecast of the 2014-
based IPPS market basket rate-of-increase with historical data through
third quarter 2018, which is estimated to be 3.2 percent. We also are
proposing that if more recent data subsequently become available (for
example, a more recent estimate of the market basket and the MFP
adjustment), we would use such data, if appropriate, to determine the
FY 2020 market basket update and the MFP adjustment in the final rule.
For FY 2020, depending on whether a hospital submits quality data
under the rules established in accordance with section
1886(b)(3)(B)(viii) of the Act (hereafter referred to as a hospital
that submits quality data) and is a meaningful EHR user under section
1886(b)(3)(B)(ix) of the Act (hereafter referred to as a hospital that
is a meaningful EHR user), there are four possible applicable
percentage increases that can be applied to the standardized amount, as
specified in the table that appears later in this section.
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51689 through
51692), we finalized our methodology for calculating and applying the
MFP adjustment. As we explained in that rule, section
1886(b)(3)(B)(xi)(II) of the Act, as added by section 3401(a) of the
Affordable Care Act, defines this productivity adjustment as equal to
the 10-year moving average of changes in annual economy-wide, private
nonfarm business MFP (as projected by the Secretary for the 10-year
period ending with the applicable fiscal year, calendar year, cost
reporting period, or other annual period). The Bureau of Labor
Statistics (BLS) publishes the official measure of private nonfarm
business MFP. We refer readers to the BLS website at http://www.bls.gov/mfp for the BLS historical published MFP data.
MFP is derived by subtracting the contribution of labor and capital
input growth from output growth. The projections of the components of
MFP are currently produced by IGI, a nationally recognized economic
[[Page 19402]]
forecasting firm with which CMS contracts to forecast the components of
the market baskets and MFP. As we discussed in the FY 2016 IPPS/LTCH
PPS final rule (80 FR 49509), beginning with the FY 2016 rulemaking
cycle, the MFP adjustment is calculated using the revised series
developed by IGI to proxy the aggregate capital inputs. Specifically,
in order to generate a forecast of MFP, IGI forecasts BLS aggregate
capital inputs using a regression model. A complete description of the
MFP projection methodology is available on the CMS website at: http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html. As
discussed in the FY 2016 IPPS/LTCH PPS final rule, if IGI makes changes
to the MFP methodology, we will announce them on our website rather
than in the annual rulemaking.
For FY 2020, we are proposing an MFP adjustment of 0.5 percentage
point. Similar to the market basket update, for this proposed rule, we
used IGI's fourth quarter 2018 forecast of the MFP adjustment to
compute the proposed FY 2020 MFP adjustment. As noted previously, we
are proposing that if more recent data subsequently become available,
we would use such data, if appropriate, to determine the FY 2020 market
basket update and the MFP adjustment for the final rule.
Based on these data, for this proposed rule, we have determined
four proposed applicable percentage increases to the standardized
amount for FY 2020, as specified in the following table:
Proposed FY 2020 Applicable Percentage Increases for the IPPS
----------------------------------------------------------------------------------------------------------------
Hospital Hospital Hospital did Hospital did
submitted submitted NOT submit NOT submit
quality data quality data quality data quality data
FY 2020 and is a and is NOT a and is a and is NOT a
meaningful EHR meaningful EHR meaningful EHR meaningful EHR
user user user user
----------------------------------------------------------------------------------------------------------------
Proposed Market Basket 3.2 3.2 3.2 3.2
Rate[dash]of[dash]Increase.....................
Proposed Adjustment for Failure to Submit 0 0 -0.8 -0.8
Quality Data under Section 1886(b)(3)(B)(viii)
of the Act.....................................
Proposed Adjustment for Failure to be a 0 -2.4 0 -2.4
Meaningful EHR User under Section
1886(b)(3)(B)(ix) of the Act...................
Proposed MFP Adjustment under Section -0.5 -0.5 -0.5 -0.5
1886(b)(3)(B)(xi) of the Act...................
Proposed Applicable Percentage Increase Applied 2.7 0.3 1.9 -0.5
to Standardized Amount.........................
----------------------------------------------------------------------------------------------------------------
We are proposing to revise the existing regulations at 42 CFR
412.64(d) to reflect the current law for the update for FY 2020 and
subsequent fiscal years. Specifically, in accordance with section
1886(b)(3)(B) of the Act, we are proposing to add paragraph (viii) to
Sec. 412.64(d)(1) to set forth the applicable percentage increase to
the operating standardized amount for FY 2020 and subsequent fiscal
years as the percentage increase in the market basket index, subject to
the reductions specified under Sec. 412.64(d)(2) for a hospital that
does not submit quality data and Sec. 412.64(d)(3) for a hospital that
is not a meaningful EHR user, less an MFP adjustment. (As noted above,
section 1886(b)(3)(B)(xii) of the Act required an additional reduction
each year only for FYs 2010 through 2019.)
Section 1886(b)(3)(B)(iv) of the Act provides that the applicable
percentage increase to the hospital-specific rates for SCHs and MDHs
equals the applicable percentage increase set forth in section
1886(b)(3)(B)(i) of the Act (that is, the same update factor as for all
other hospitals subject to the IPPS). Therefore, the update to the
hospital-specific rates for SCHs and MDHs also is subject to section
1886(b)(3)(B)(i) of the Act, as amended by sections 3401(a) and
10319(a) of the Affordable Care Act. (Under current law, the MDH
program is effective for discharges on or before September 30, 2022, as
discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41429 through
41430).)
For FY 2020, we are proposing the following updates to the
hospital-specific rates applicable to SCHs and MDHs: A proposed update
of 2.7 percent for a hospital that submits quality data and is a
meaningful EHR user; a proposed update of 1.9 percent for a hospital
that fails to submit quality data and is a meaningful EHR user; a
proposed update of 0.3 percent for a hospital that submits quality data
and is not a meaningful EHR user; and a proposed update of -0.5 percent
for a hospital that fails to submit quality data and is not a
meaningful EHR user. As noted previously, for this FY 2020 IPPS/LTCH
PPS proposed rule, we are using IGI's fourth quarter 2018 forecast of
the 2014-based IPPS market basket update with historical data through
third quarter 2018. Similarly, we are using IGI's fourth quarter 2018
forecast of the MFP adjustment. We are proposing that if more recent
data subsequently become available (for example, a more recent estimate
of the market basket increase and the MFP adjustment), we would use
such data, if appropriate, to determine the update in the final rule.
2. Proposed FY 2020 Puerto Rico Hospital Update
As discussed in the FY 2017 IPPS/LTCH PPS final rule (81 FR 56937
through 56938), prior to January 1, 2016, Puerto Rico hospitals were
paid based on 75 percent of the national standardized amount and 25
percent of the Puerto Rico-specific standardized amount. Section 601 of
Public Law 114-113 amended section 1886(d)(9)(E) of the Act to specify
that the payment calculation with respect to operating costs of
inpatient hospital services of a subsection (d) Puerto Rico hospital
for inpatient hospital discharges on or after January 1, 2016, shall
use 100 percent of the national standardized amount. Because Puerto
Rico hospitals are no longer paid with a Puerto Rico-specific
standardized amount under the amendments to section 1886(d)(9)(E) of
the Act, there is no longer a need for us to determine an update to the
Puerto Rico standardized amount. Hospitals in Puerto Rico are now paid
100 percent of the national standardized amount and, therefore, are
subject to the same update to the national standardized amount
discussed under section IV.B.1. of the preamble of this proposed rule.
Accordingly, in this FY 2020 IPPS/LTCH PPS proposed rule, for FY 2020,
we are proposing an applicable percentage increase of 2.7 percent to
the
[[Page 19403]]
standardized amount for hospitals located in Puerto Rico.
We note that section 1886(b)(3)(B)(viii) of the Act, which
specifies the adjustment to the applicable percentage increase for
``subsection (d)'' hospitals that do not submit quality data under the
rules established by the Secretary, is not applicable to hospitals
located in Puerto Rico.
In addition, section 602 of Public Law 114-113 amended section
1886(n)(6)(B) of the Act to specify that Puerto Rico hospitals are
eligible for incentive payments for the meaningful use of certified EHR
technology, effective beginning FY 2016, and also to apply the
adjustments to the applicable percentage increase under section
1886(b)(3)(B)(ix) of the Act to Puerto Rico hospitals that are not
meaningful EHR users, effective FY 2022. Accordingly, because the
provisions of section 1886(b)(3)(B)(ix) of the Act are not applicable
to hospitals located in Puerto Rico until FY 2022, the adjustments
under this provision are not applicable for FY 2020.
C. Rural Referral Centers (RRCs) Proposed Annual Updates to Case-Mix
Index and Discharge Criteria (Sec. 412.96)
Under the authority of section 1886(d)(5)(C)(i) of the Act, the
regulations at Sec. 412.96 set forth the criteria that a hospital must
meet in order to qualify under the IPPS as a rural referral center
(RRC). RRCs receive some special treatment under both the DSH payment
adjustment and the criteria for geographic reclassification.
Section 402 of Public Law 108-173 raised the DSH payment adjustment
for RRCs such that they are not subject to the 12-percent cap on DSH
payments that is applicable to other rural hospitals. RRCs also are not
subject to the proximity criteria when applying for geographic
reclassification. In addition, they do not have to meet the requirement
that a hospital's average hourly wage must exceed, by a certain
percentage, the average hourly wage of the labor market area in which
the hospital is located.
Section 4202(b) of Public Law 105-33 states, in part, that any
hospital classified as an RRC by the Secretary for FY 1991 shall be
classified as such an RRC for FY 1998 and each subsequent fiscal year.
In the August 29, 1997 IPPS final rule with comment period (62 FR
45999), we reinstated RRC status for all hospitals that lost that
status due to triennial review or MGCRB reclassification. However, we
did not reinstate the status of hospitals that lost RRC status because
they were now urban for all purposes because of the OMB designation of
their geographic area as urban. Subsequently, in the August 1, 2000
IPPS final rule (65 FR 47089), we indicated that we were revisiting
that decision. Specifically, we stated that we would permit hospitals
that previously qualified as an RRC and lost their status due to OMB
redesignation of the county in which they are located from rural to
urban, to be reinstated as an RRC. Otherwise, a hospital seeking RRC
status must satisfy all of the other applicable criteria. We use the
definitions of ``urban'' and ``rural'' specified in Subpart D of 42 CFR
part 412. One of the criteria under which a hospital may qualify as an
RRC is to have 275 or more beds available for use (Sec.
412.96(b)(1)(ii)). A rural hospital that does not meet the bed size
requirement can qualify as an RRC if the hospital meets two mandatory
prerequisites (a minimum case-mix index (CMI) and a minimum number of
discharges), and at least one of three optional criteria (relating to
specialty composition of medical staff, source of inpatients, or
referral volume). (We refer readers to Sec. 412.96(c)(1) through
(c)(5) and the September 30, 1988 Federal Register (53 FR 38513) for
additional discussion.) With respect to the two mandatory
prerequisites, a hospital may be classified as an RRC if--
The hospital's CMI is at least equal to the lower of the
median CMI for urban hospitals in its census region, excluding
hospitals with approved teaching programs, or the median CMI for all
urban hospitals nationally; and
The hospital's number of discharges is at least 5,000 per
year, or, if fewer, the median number of discharges for urban hospitals
in the census region in which the hospital is located. The number of
discharges criterion for an osteopathic hospital is at least 3,000
discharges per year, as specified in section 1886(d)(5)(C)(i) of the
Act.
1. Case-Mix Index (CMI)
Section 412.96(c)(1) provides that CMS establish updated national
and regional CMI values in each year's annual notice of prospective
payment rates for purposes of determining RRC status. The methodology
we used to determine the national and regional CMI values is set forth
in the regulations at Sec. 412.96(c)(1)(ii). The proposed national
median CMI value for FY 2020 is based on the CMI values of all urban
hospitals nationwide, and the proposed regional median CMI values for
FY 2020 are based on the CMI values of all urban hospitals within each
census region, excluding those hospitals with approved teaching
programs (that is, those hospitals that train residents in an approved
GME program as provided in Sec. 413.75). These proposed values are
based on discharges occurring during FY 2018 (October 1, 2017 through
September 30, 2018), and include bills posted to CMS' records through
December 2018.
In this FY 2020 IPPS/LTCH PPS proposed rule, we are proposing that,
in addition to meeting other criteria, if rural hospitals with fewer
than 275 beds are to qualify for initial RRC status for cost reporting
periods beginning on or after October 1, 2019, they must have a CMI
value for FY 2018 that is at least--
1.68555 (national--all urban); or
The median CMI value (not transfer-adjusted) for urban
hospitals (excluding hospitals with approved teaching programs as
identified in Sec. 413.75) calculated by CMS for the census region in
which the hospital is located.
The proposed median CMI values by region are set forth in the table
below. We intend to update the proposed CMI values in the FY 2020 final
rule to reflect the updated FY 2018 MedPAR file, which will contain
data from additional bills received through March 2019.
------------------------------------------------------------------------
Proposed
Region case-mix
index value
------------------------------------------------------------------------
1. New England (CT, ME, MA, NH, RI, VT).................... 1.4231
2. Middle Atlantic (PA, NJ, NY)............................ 1.492
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)..... 1.576
4. East North Central (IL, IN, MI, OH, WI)................. 1.5921
5. East South Central (AL, KY, MS, TN)..................... 1.5579
6. West North Central (IA, KS, MN, MO, NE, ND, SD)......... 1.67025
7. West South Central (AR, LA, OK, TX)..................... 1.7172
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)............... 1.7769
9. Pacific (AK, CA, HI, OR, WA)............................ 1.6699
------------------------------------------------------------------------
A hospital seeking to qualify as an RRC should obtain its hospital-
specific CMI value (not transfer-adjusted) from its MAC. Data are
available on the Provider Statistical and Reimbursement (PS&R) System.
In keeping with our policy on discharges, the CMI values are computed
based on all Medicare patient discharges subject to the IPPS MS-DRG-
based payment.
2. Discharges
Section 412.96(c)(2)(i) provides that CMS set forth the national
and regional numbers of discharges criteria in each year's annual
notice of prospective
[[Page 19404]]
payment rates for purposes of determining RRC status. As specified in
section 1886(d)(5)(C)(ii) of the Act, the national standard is set at
5,000 discharges. For FY 2020, we are proposing to update the regional
standards based on discharges for urban hospitals' cost reporting
periods that began during FY 2017 (that is, October 1, 2016 through
September 30, 2017), which are the latest cost report data available at
the time this proposed rule was developed. Therefore, we are proposing
that, in addition to meeting other criteria, a hospital, if it is to
qualify for initial RRC status for cost reporting periods beginning on
or after October 1, 2019, must have, as the number of discharges for
its cost reporting period that began during FY 2017, at least--
5,000 (3,000 for an osteopathic hospital); or
If less, the median number of discharges for urban
hospitals in the census region in which the hospital is located. The
proposed numbers of discharges are set forth in the table below. We
intend to update these numbers in the FY 2020 final rule based on the
latest available cost report data.
------------------------------------------------------------------------
Number of
Region discharges
------------------------------------------------------------------------
1. New England (CT, ME, MA, NH, RI, VT).................... 8,542
2. Middle Atlantic (PA, NJ, NY)............................ 10,154
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)..... 10,653
4. East North Central (IL, IN, MI, OH, WI)................. 8,379
5. East South Central (AL, KY, MS, TN)..................... 7,627
6. West North Central (IA, KS, MN, MO, NE, ND, SD)......... 7,850
7. West South Central (AR, LA, OK, TX)..................... 5,468
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)............... 8,618
9. Pacific (AK, CA, HI, OR, WA)............................ 8,618
------------------------------------------------------------------------
We note that because the median number of discharges for hospitals
in each census region is greater than the national standard of 5,000
discharges, under this proposed rule, 5,000 discharges is the minimum
criterion for all hospitals, except for osteopathic hospitals for which
the minimum criterion is 3,000 discharges.
D. Proposed Payment Adjustment for Low-Volume Hospitals (Sec. 412.101)
1. Background
Section 1886(d)(12) of the Act provides for an additional payment
to each qualifying low-volume hospital under the IPPS beginning in FY
2005. The additional payment adjustment to a low-volume hospital
provided for under section 1886(d)(12) of the Act is in addition to any
payment calculated under section 1886 of the Act. Therefore, the
additional payment adjustment is based on the per discharge amount paid
to the qualifying hospital under section 1886 of the Act. In other
words, the low-volume hospital payment adjustment is based on total per
discharge payments made under section 1886 of the Act, including
capital, DSH, IME, and outlier payments. For SCHs and MDHs, the low-
volume hospital payment adjustment is based in part on either the
Federal rate or the hospital-specific rate, whichever results in a
greater operating IPPS payment.
As discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41398
through 41399), section 50204 of the Bipartisan Budget Act of 2018
(Pub. L. 115-123) modified the definition of a low-volume hospital and
the methodology for calculating the payment adjustment for low-volume
hospitals for FYs 2019 through 2022. (Section 50204 also extended prior
changes to the definition of a low-volume hospital and the methodology
for calculating the payment adjustment for low-volume hospitals through
FY 2018.) Beginning with FY 2023, the low-volume hospital qualifying
criteria and payment adjustment will revert to the statutory
requirements that were in effect prior to FY 2011. (For additional
information on the low-volume hospital payment adjustment prior to FY
2018, we refer readers to the FY 2017 IPPS/LTCH PPS final rule (81 FR
56941 through 56943). For additional information on the low-volume
hospital payment adjustment for FY 2018, we refer readers to the FY
2018 IPPS notice (CMS-1677-N) that appeared in the Federal Register on
April 26, 2018 (83 FR 18301 through 18308).)
2. Temporary Changes to the Low-Volume Hospital Definition and Payment
Adjustment Methodology for FYs 2019 Through 2022
As discussed earlier, section 50204 of the Bipartisan Budget Act of
2018 further modified the definition of a low-volume hospital and the
methodology for calculating the payment adjustment for low-volume
hospitals for FYs 2019 through 2022. Specifically, the qualifying
criteria for low-volume hospitals under section 1886(d)(12)(C)(i) of
the Act were amended to specify that, for FYs 2019 through 2022, a
subsection (d) hospital qualifies as a low-volume hospital if it is
more than 15 road miles from another subsection (d) hospital and has
less than 3,800 total discharges during the fiscal year. Section
1886(d)(12)(D) of the Act was also amended to provide that, for
discharges occurring in FYs 2019 through 2022, the Secretary shall
determine the applicable percentage increase using a continuous, linear
sliding scale ranging from an additional 25 percent payment adjustment
for low-volume hospitals with 500 or fewer discharges to a zero percent
additional payment for low-volume hospitals with more than 3,800
discharges in the fiscal year. Consistent with the requirements of
section 1886(d)(12)(C)(ii) of the Act, the term ``discharge'' for
purposes of these provisions refers to total discharges, regardless of
payer (that is, Medicare and non-Medicare discharges).
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41399), to implement
this requirement, we specified a continuous, linear sliding scale
formula to determine the low volume hospital payment adjustment for FYs
2019 through 2022 that is similar to the continuous, linear sliding
scale formula used to determine the low-volume hospital payment
adjustment originally established by the Affordable Care Act and
implemented in the regulations at Sec. 412.101(c)(2)(ii) in the FY
2011 IPPS/LTCH PPS final rule (75 FR 50240 through 50241). Consistent
with the statute, we provided that qualifying hospitals with 500 or
fewer total discharges will receive a low-volume hospital payment
adjustment of 25 percent. For qualifying hospitals with fewer than
3,800 discharges but more than 500 discharges, the low-volume payment
adjustment is calculated by subtracting from 25 percent the proportion
of payments associated with the discharges in excess of 500. As such,
for qualifying hospitals with fewer than 3,800 total discharges but
more than 500 total discharges, the low-volume hospital payment
adjustment for FYs 2019 through 2022 is calculated using the following
formula:
Low-Volume Hospital Payment Adjustment = 0.25-[0.25/3300] x (number of
total discharges-500) = (95/330)-(number of total discharges/13,200).
For this purpose, we specified that the ``number of total
discharges'' is determined as total discharges, which includes Medicare
and non-Medicare discharges during the fiscal year, based on the
hospital's most recently submitted cost report. The low-volume hospital
payment adjustment for FYs 2019 through 2022 is set forth in the
regulations at 42 CFR 412.101(c)(3).
[[Page 19405]]
3. Process for Requesting and Obtaining the Low-Volume Hospital Payment
Adjustment
In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50238 through 50275
and 50414) and subsequent rulemaking (for example, the FY 2019 IPPS/
LTCH PPS final rule (83 FR 41399 through 41401), we discussed the
process for requesting and obtaining the low-volume hospital payment
adjustment. Under this previously established process, a hospital makes
a written request for the low-volume payment adjustment under Sec.
412.101 to its MAC. This request must contain sufficient documentation
to establish that the hospital meets the applicable mileage and
discharge criteria. The MAC will determine if the hospital qualifies as
a low-volume hospital by reviewing the data the hospital submits with
its request for low-volume hospital status in addition to other
available data. Under this approach, a hospital will know in advance
whether or not it will receive a payment adjustment under the low-
volume hospital policy. The MAC and CMS may review available data such
as the number of discharges, in addition to the data the hospital
submits with its request for low-volume hospital status, in order to
determine whether or not the hospital meets the qualifying criteria.
(For additional information on our existing process for requesting the
low-volume hospital payment adjustment, we refer readers to the FY 2019
IPPS/LTCH PPS final rule (83 FR 41399 through 41401).)
As explained earlier, for FY 2019 and subsequent fiscal years, the
discharge determination is made based on the hospital's number of total
discharges, that is, Medicare and non-Medicare discharges, as was the
case for FYs 2005 through 2010. Under Sec. 412.101(b)(2)(i) and Sec.
412.101(b)(2)(iii), a hospital's most recently submitted cost report is
used to determine if the hospital meets the discharge criterion to
receive the low-volume payment adjustment in the current year. As
discussed in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41399 and
41400), we use cost report data to determine if a hospital meets the
discharge criterion because this is the best available data source that
includes information on both Medicare and non-Medicare discharges. (For
FYs 2011 through 2018, the most recently available MedPAR data were
used to determine the hospital's Medicare discharges because non-
Medicare discharges were not used to determine if a hospital met the
discharge criterion for those years.) Therefore, a hospital should
refer to its most recently submitted cost report for total discharges
(Medicare and non-Medicare) in order to decide whether or not to apply
for low-volume hospital status for a particular fiscal year.
As also discussed in the FY 2019 IPPS/LTCH PPS final rule, in
addition to the discharge criterion, for FY 2019 and for subsequent
fiscal years, eligibility for the low-volume hospital payment
adjustment is also dependent upon the hospital meeting the applicable
mileage criterion specified in Sec. 412.101(b)(2)(i) or Sec.
412.101(b)(2)(iii) for the fiscal year. Specifically, to meet the
mileage criterion to qualify for the low-volume hospital payment
adjustment for FY 2020, as was the case for FY 2019, a hospital must be
located more than 15 road miles from the nearest subsection (d)
hospital. (We define in Sec. 412.101(a) the term ``road miles'' to
mean ``miles'' as defined in Sec. 412.92(c)(1) (75 FR 50238 through
50275 and 50414).) For establishing that the hospital meets the mileage
criterion, the use of a web-based mapping tool as part of the
documentation is acceptable. The MAC will determine if the information
submitted by the hospital, such as the name and street address of the
nearest hospitals, location on a map, and distance from the hospital
requesting low-volume hospital status, is sufficient to document that
it meets the mileage criterion. If not, the MAC will follow up with the
hospital to obtain additional necessary information to determine
whether or not the hospital meets the applicable mileage criterion.
In accordance with our previously established process, a hospital
must make a written request for low-volume hospital status that is
received by its MAC by September 1 immediately preceding the start of
the Federal fiscal year for which the hospital is applying for low-
volume hospital status in order for the applicable low-volume hospital
payment adjustment to be applied to payments for its discharges for the
fiscal year beginning on or after October 1 immediately following the
request (that is, the start of the Federal fiscal year). For a hospital
whose request for low-volume hospital status is received after
September 1, if the MAC determines the hospital meets the criteria to
qualify as a low-volume hospital, the MAC will apply the applicable
low-volume hospital payment adjustment to determine payment for the
hospital's discharges for the fiscal year, effective prospectively
within 30 days of the date of the MAC's low-volume status
determination.
Consistent with this previously established process, for FY 2020,
we are proposing that a hospital must submit a written request for low-
volume hospital status to its MAC that includes sufficient
documentation to establish that the hospital meets the applicable
mileage and discharge criteria (as described earlier). Consistent with
historical practice, for FY 2020, we are proposing that a hospital's
written request must be received by its MAC no later than September 1,
2019 in order for the low-volume hospital payment adjustment to be
applied to payments for its discharges beginning on or after October 1,
2019. If a hospital's written request for low-volume hospital status
for FY 2020 is received after September 1, 2019, and if the MAC
determines the hospital meets the criteria to qualify as a low-volume
hospital, the MAC would apply the low-volume hospital payment
adjustment to determine the payment for the hospital's FY 2020
discharges, effective prospectively within 30 days of the date of the
MAC's low-volume hospital status determination. We note that this
proposal is consistent with the process for requesting and obtaining
the low-volume hospital payment adjustment for FY 2019 (83 FR 41399
through 41400).
Under this process, a hospital receiving the low-volume hospital
payment adjustment for FY 2019 may continue to receive a low-volume
hospital payment adjustment for FY 2020 without reapplying if it
continues to meet the applicable mileage and discharge criteria (which,
as discussed previously, are the same qualifying criteria that apply
for FY 2019). In this case, a hospital's request can include a
verification statement that it continues to meet the mileage criterion
applicable for FY 2020. (Determination of meeting the discharge
criterion is discussed earlier in this section.) We note that a
hospital must continue to meet the applicable qualifying criteria as a
low-volume hospital (that is, the hospital must meet the applicable
discharge criterion and mileage criterion for the fiscal year) in order
to receive the payment adjustment in that fiscal year; that is, low-
volume hospital status is not based on a ``one-time'' qualification (75
FR 50238 through 50275). Consistent with historical policy, a hospital
must submit its request, including this written verification, for each
fiscal year for which it seeks to receive the low-volume hospital
payment adjustment, and in accordance with the timeline described
earlier.
[[Page 19406]]
4. Proposed Conforming Changes To Codify Certain Changes to the Low-
Volume Hospital Payment Adjustment for FYs 2011 Through 2017 Provided
by Section 429 of the Consolidated Appropriations Act, 2018
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38188 through
38189), for the reasons discussed in that rule, we adopted a parallel
adjustment in the regulations at Sec. 412.101(e) which specifies that,
for discharges occurring in FY 2018 and subsequent years, only the
distance between Indian Health Service (IHS) and Tribal hospitals
(collectively referred to here as ``IHS hospitals'') will be considered
when assessing whether an IHS hospital meets the mileage criterion
under Sec. 412.101(b)(2), and similarly, only the distance between
non-IHS hospitals would be considered when assessing whether a non-IHS
hospital meets the mileage criterion under Sec. 412.101(b)(2). Section
429 of the Consolidated Appropriations Act, 2018, which was enacted on
March 23, 2018, subsequently amended section 1886(d)(12)(C) of the Act
by adding a new clause (iii) specifying that, for purposes of
determining whether an IHS or a non-IHS hospital meets the mileage
criterion under section 1886(d)(12)(C)(i) of the Act with respect to FY
2011 or a succeeding year, the Secretary shall apply the policy
described in the regulations at Sec. 412.101(e) (as in effect on the
date of enactment). In other words, under this statutory change, the
special treatment with respect to the proximities between IHS and non-
IHS hospitals as set forth in Sec. 412.101(e) for discharges occurring
in FY 2018 and subsequent fiscal years is also applicable for purposes
of applying the mileage criterion for the low-volume hospital payment
adjustment for FYs 2011 through 2017. We refer readers to the notice
that appeared in the Federal Register on August 23, 2018 (83 FR 42596
through 42600) for further detail on the process for requesting the
low-volume hospital payment adjustment for any applicable fiscal years
between FY 2011 and FY 2017 under the provisions of section 429 of the
Consolidated Appropriations Act, 2018, including the details on the
limitations under the reopening rules at 42 CFR 405.1885.
In this proposed rule, we are proposing to make conforming changes
to the regulatory text at Sec. 412.101(e) to reflect the changes to
the low-volume hospital payment adjustment policy in accordance with
the amendments made by section 429 of the Consolidated Appropriations
Act, 2018. Specifically, we are proposing to revise Sec. 412.101(e) to
specify that, subject to the reopening rules at 42 CFR 405.1885, a
qualifying hospital may request the application of the policy set forth
in proposed amended Sec. 412.101(e)(1) for FYs 2011 through 2017. As
noted previously, the process for requesting the low-volume hospital
payment adjustment for any applicable fiscal years between FY 2011 and
2017 under the provisions of section 429 of the Consolidated
Appropriations Act, 2018, as well as further discussion on the
limitations under the reopening rules at 42 CFR 405.1885, are described
in the August 23, 2018 Federal Register notice (83 FR 42596 through
425600). We note that proposed amended Sec. 412.101(e) would apply to
discharges occurring in FY 2011 through FY 2017, consistent with the
provisions of section 429 of the Consolidated Appropriations Act, 2018.
To the extent that these proposed revisions could be viewed as
retroactive rulemaking, they would be authorized under section
1871(e)(1)(A)(i) of the Act as the Secretary has determined that these
changes are necessary to comply with the statute as amended by the
Consolidated Appropriations Act, 2018.
E. Indirect Medical Education (IME) Payment Adjustment Factor (Sec.
412.105)
Under the IPPS, an additional payment amount is made to hospitals
with residents in an approved graduate medical education (GME) program
in order to reflect the higher indirect patient care costs of teaching
hospitals relative to nonteaching hospitals. The payment amount is
determined by use of a statutorily specified adjustment factor. The
regulations regarding the calculation of this additional payment, known
as the IME adjustment, are located at Sec. 412.105. We refer readers
to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51680) for a full
discussion of the IME adjustment and IME adjustment factor. Section
1886(d)(5)(B)(ii)(XII) of the Act provides that, for discharges
occurring during FY 2008 and fiscal years thereafter, the IME formula
multiplier is 1.35. Accordingly, for discharges occurring during FY
2020, the formula multiplier is 1.35. We estimate that application of
this formula multiplier for the FY 2020 IME adjustment will result in
an increase in IPPS payment of 5.5 percent for every approximately 10
percent increase in the hospital's resident-to-bed ratio.
F. Proposed Payment Adjustment for Medicare Disproportionate Share
Hospitals (DSHs) for FY 2020 (Sec. 412.106)
1. General Discussion
Section 1886(d)(5)(F) of the Act provides for additional Medicare
payments to subsection (d) hospitals that serve a significantly
disproportionate number of low-income patients. The Act specifies two
methods by which a hospital may qualify for the Medicare
disproportionate share hospital (DSH) adjustment. Under the first
method, hospitals that are located in an urban area and have 100 or
more beds may receive a Medicare DSH payment adjustment if the hospital
can demonstrate that, during its cost reporting period, more than 30
percent of its net inpatient care revenues are derived from State and
local government payments for care furnished to needy patients with low
incomes. This method is commonly referred to as the ``Pickle method.''
The second method for qualifying for the DSH payment adjustment, which
is the most common, is based on a complex statutory formula under which
the DSH payment adjustment is based on the hospital's geographic
designation, the number of beds in the hospital, and the level of the
hospital's disproportionate patient percentage (DPP). A hospital's DPP
is the sum of two fractions: The ``Medicare fraction'' and the
``Medicaid fraction.'' The Medicare fraction (also known as the ``SSI
fraction'' or ``SSI ratio'') is computed by dividing the number of the
hospital's inpatient days that are furnished to patients who were
entitled to both Medicare Part A and Supplemental Security Income (SSI)
benefits by the hospital's total number of patient days furnished to
patients entitled to benefits under Medicare Part A. The Medicaid
fraction is computed by dividing the hospital's number of inpatient
days furnished to patients who, for such days, were eligible for
Medicaid, but were not entitled to benefits under Medicare Part A, by
the hospital's total number of inpatient days in the same period.
Because the DSH payment adjustment is part of the IPPS, the
statutory references to ``days'' in section 1886(d)(5)(F) of the Act
have been interpreted to apply only to hospital acute care inpatient
days. Regulations located at 42 CFR 412.106 govern the Medicare DSH
payment adjustment and specify how the DPP is calculated as well as how
beds and patient days are counted in determining the Medicare DSH
payment adjustment. Under Sec. 412.106(a)(1)(i), the number of beds
for
[[Page 19407]]
the Medicare DSH payment adjustment is determined in accordance with
bed counting rules for the IME adjustment under Sec. 412.105(b).
Section 3133 of the Patient Protection and Affordable Care Act, as
amended by section 10316 of the same Act and section 1104 of the Health
Care and Education Reconciliation Act (Pub. L. 111-152), added a
section 1886(r) to the Act that modifies the methodology for computing
the Medicare DSH payment adjustment. (For purposes of this final rule,
we refer to these provisions collectively as section 3133 of the
Affordable Care Act.) Beginning with discharges in FY 2014, hospitals
that qualify for Medicare DSH payments under section 1886(d)(5)(F) of
the Act receive 25 percent of the amount they previously would have
received under the statutory formula for Medicare DSH payments. This
provision applies equally to hospitals that qualify for DSH payments
under section 1886(d)(5)(F)(i)(I) of the Act and those hospitals that
qualify under the Pickle method under section 1886(d)(5)(F)(i)(II) of
the Act.
The remaining amount, equal to an estimate of 75 percent of what
otherwise would have been paid as Medicare DSH payments, reduced to
reflect changes in the percentage of individuals who are uninsured, is
available to make additional payments to each hospital that qualifies
for Medicare DSH payments and that has uncompensated care. The payments
to each hospital for a fiscal year are based on the hospital's amount
of uncompensated care for a given time period relative to the total
amount of uncompensated care for that same time period reported by all
hospitals that receive Medicare DSH payments for that fiscal year.
As provided by section 3133 of the Affordable Care Act, section
1886(r) of the Act requires that, for FY 2014 and each subsequent
fiscal year, a subsection (d) hospital that would otherwise receive DSH
payments made under section 1886(d)(5)(F) of the Act receives two
separately calculated payments. Specifically, section 1886(r)(1) of the
Act provides that the Secretary shall pay to such subsection (d)
hospital (including a Pickle hospital) 25 percent of the amount the
hospital would have received under section 1886(d)(5)(F) of the Act for
DSH payments, which represents the empirically justified amount for
such payment, as determined by the MedPAC in its March 2007 Report to
Congress. We refer to this payment as the ``empirically justified
Medicare DSH payment.''
In addition to this empirically justified Medicare DSH payment,
section 1886(r)(2) of the Act provides that, for FY 2014 and each
subsequent fiscal year, the Secretary shall pay to such subsection (d)
hospital an additional amount equal to the product of three factors.
The first factor is the difference between the aggregate amount of
payments that would be made to subsection (d) hospitals under section
1886(d)(5)(F) of the Act if subsection (r) did not apply and the
aggregate amount of payments that are made to subsection (d) hospitals
under section 1886(r)(1) of the Act for such fiscal year. Therefore,
this factor amounts to 75 percent of the payments that would otherwise
be made under section 1886(d)(5)(F) of the Act.
The second factor is, for FY 2018 and subsequent fiscal years, 1
minus the percent change in the percent of individuals who are
uninsured, as determined by comparing the percent of individuals who
were uninsured in 2013 (as estimated by the Secretary, based on data
from the Census Bureau or other sources the Secretary determines
appropriate, and certified by the Chief Actuary of CMS), and the
percent of individuals who were uninsured in the most recent period for
which data are available (as so estimated and certified), minus 0.2
percentage point for FYs 2018 and 2019.
The third factor is a percent that, for each subsection (d)
hospital, represents the quotient of the amount of uncompensated care
for such hospital for a period selected by the Secretary (as estimated
by the Secretary, based on appropriate data), including the use of
alternative data where the Secretary determines that alternative data
are available which are a better proxy for the costs of subsection (d)
hospitals for treating the uninsured, and the aggregate amount of
uncompensated care for all subsection (d) hospitals that receive a
payment under section 1886(r) of the Act. Therefore, this third factor
represents a hospital's uncompensated care amount for a given time
period relative to the uncompensated care amount for that same time
period for all hospitals that receive Medicare DSH payments in the
applicable fiscal year, expressed as a percent.
For each hospital, the product of these three factors represents
its additional payment for uncompensated care for the applicable fiscal
year. We refer to the additional payment determined by these factors as
the ``uncompensated care payment.''
Section 1886(r) of the Act applies to FY 2014 and each subsequent
fiscal year. In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50620
through 50647) and the FY 2014 IPPS interim final rule with comment
period (78 FR 61191 through 61197), we set forth our policies for
implementing the required changes to the Medicare DSH payment
methodology made by section 3133 of the Affordable Care Act for FY
2014. In those rules, we noted that, because section 1886(r) of the Act
modifies the payment required under section 1886(d)(5)(F) of the Act,
it affects only the DSH payment under the operating IPPS. It does not
revise or replace the capital IPPS DSH payment provided under the
regulations at 42 CFR part 412, subpart M, which were established
through the exercise of the Secretary's discretion in implementing the
capital IPPS under section 1886(g)(1)(A) of the Act.
Finally, section 1886(r)(3) of the Act provides that there shall be
no administrative or judicial review under section 1869, section 1878,
or otherwise of any estimate of the Secretary for purposes of
determining the factors described in section 1886(r)(2) of the Act or
of any period selected by the Secretary for the purpose of determining
those factors. Therefore, there is no administrative or judicial review
of the estimates developed for purposes of applying the three factors
used to determine uncompensated care payments, or the periods selected
in order to develop such estimates.
2. Eligibility for Empirically Justified Medicare DSH Payments and
Uncompensated Care Payments
As explained earlier, the payment methodology under section 3133 of
the Affordable Care Act applies to ``subsection (d) hospitals'' that
would otherwise receive a DSH payment made under section 1886(d)(5)(F)
of the Act. Therefore, hospitals must receive empirically justified
Medicare DSH payments in a fiscal year in order to receive an
additional Medicare uncompensated care payment for that year.
Specifically, section 1886(r)(2) of the Act states that, in addition to
the payment made to a subsection (d) hospital under section 1886(r)(1)
of the Act, the Secretary shall pay to such subsection (d) hospitals an
additional amount. Because section 1886(r)(1) of the Act refers to
empirically justified Medicare DSH payments, the additional payment
under section 1886(r)(2) of the Act is limited to hospitals that
receive empirically justified Medicare DSH payments in accordance with
section 1886(r)(1) of the Act for the applicable fiscal year.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50622) and the FY
2014
[[Page 19408]]
IPPS interim final rule with comment period (78 FR 61193), we provided
that hospitals that are not eligible to receive empirically justified
Medicare DSH payments in a fiscal year will not receive uncompensated
care payments for that year. We also specified that we would make a
determination concerning eligibility for interim uncompensated care
payments based on each hospital's estimated DSH status for the
applicable fiscal year (using the most recent data that are available).
We indicated that our final determination on the hospital's eligibility
for uncompensated care payments will be based on the hospital's actual
DSH status at cost report settlement for that payment year.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50622) and in the
rulemaking for subsequent fiscal years, we have specified our policies
for several specific classes of hospitals within the scope of section
1886(r) of the Act. In this proposed rule, we are discussing our
specific policies for FY 2020 with respect to the following hospitals:
Subsection (d) Puerto Rico hospitals that are eligible for
DSH payments also are eligible to receive empirically justified
Medicare DSH payments and uncompensated care payments under the new
payment methodology (78 FR 50623 and 79 FR 50006).
Maryland hospitals are not eligible to receive empirically
justified Medicare DSH payments and uncompensated care payments under
the payment methodology of section 1886(r) of the Act because they are
not paid under the IPPS. As discussed in the FY 2019 IPPS/LTCH PPS
final rule (83 FR 41402 through 41403), CMS and the State have entered
into an agreement to govern payments to Maryland hospitals under a new
payment model, the Maryland Total Cost of Care (TCOC) Model, which
began on January 1, 2019. Under the Maryland TCOC Model, Maryland
hospitals will not be paid under the IPPS in FY 2020, and will be
ineligible to receive empirically justified Medicare DSH payments and
uncompensated care payments under section 1886(r) of the Act.
Sole community hospitals (SCHs) that are paid under their
hospital-specific rate are not eligible for Medicare DSH payments. SCHs
that are paid under the IPPS Federal rate receive interim payments
based on what we estimate and project their DSH status to be prior to
the beginning of the Federal fiscal year (based on the best available
data at that time) subject to settlement through the cost report, and
if they receive interim empirically justified Medicare DSH payments in
a fiscal year, they also will receive interim uncompensated care
payments for that fiscal year on a per discharge basis, subject as well
to settlement through the cost report. Final eligibility determinations
will be made at the end of the cost reporting period at settlement, and
both interim empirically justified Medicare DSH payments and
uncompensated care payments will be adjusted accordingly (78 FR 50624
and 79 FR 50007).
Medicare-dependent, small rural hospitals (MDHs) are paid
based on the IPPS Federal rate or, if higher, the IPPS Federal rate
plus 75 percent of the amount by which the Federal rate is exceeded by
the updated hospital-specific rate from certain specified base years
(76 FR 51684). The IPPS Federal rate that is used in the MDH payment
methodology is the same IPPS Federal rate that is used in the SCH
payment methodology. Section 50205 of the Bipartisan Budget Act of 2018
(Pub. L. 115-123), enacted on February 9, 2018, extended the MDH
program for discharges on or after October 1, 2017, through September
30, 2022. Because MDHs are paid based on the IPPS Federal rate, they
continue to be eligible to receive empirically justified Medicare DSH
payments and uncompensated care payments if their DPP is at least 15
percent, and we apply the same process to determine MDHs' eligibility
for empirically justified Medicare DSH and uncompensated care payments
as we do for all other IPPS hospitals. Due to the extension of the MDH
program, MDHs will continue to be paid based on the IPPS Federal rate
or, if higher, the IPPS Federal rate plus 75 percent of the amount by
which the Federal rate is exceeded by the updated hospital-specific
rate from certain specified base years. Accordingly, we will continue
to make a determination concerning eligibility for interim
uncompensated care payments based on each hospital's estimated DSH
status for the applicable fiscal year (using the most recent data that
are available). Our final determination on the hospital's eligibility
for uncompensated care payments will be based on the hospital's actual
DSH status at cost report settlement for that payment year. In
addition, as we do for all IPPS hospitals, we will calculate a
numerator for Factor 3 for all MDHs, regardless of whether they are
projected to be eligible for Medicare DSH payments during the fiscal
year, but the denominator for Factor 3 will be based on the
uncompensated care data from the hospitals that we have projected to be
eligible for Medicare DSH payments during the fiscal year.
IPPS hospitals that elect to participate in the Bundled
Payments for Care Improvement Advanced Initiative (BPCI Advanced) model
starting October 1, 2018, will continue to be paid under the IPPS and,
therefore, are eligible to receive empirically justified Medicare DSH
payments and uncompensated care payments. For further information
regarding the BPCI Advanced model, we refer readers to the CMS website
at: https://innovation.cms.gov/initiatives/bpci-advanced/.
IPPS hospitals that are participating in the Comprehensive
Care for Joint Replacement Model (80 FR 73300) continue to be paid
under the IPPS and, therefore, are eligible to receive empirically
justified Medicare DSH payments and uncompensated care payments.
Hospitals participating in the Rural Community Hospital
Demonstration Program are not eligible to receive empirically justified
Medicare DSH payments and uncompensated care payments under section
1886(r) of the Act because they are not paid under the IPPS (78 FR
50625 and 79 FR 50008). The Rural Community Hospital Demonstration
Program was originally authorized for a 5-year period by section 410A
of the Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (MMA) (Pub. L. 108-173), and extended for another 5-year period
by sections 3123 and 10313 of the Affordable Care Act (Pub. L. 114-
255). The period of performance for this 5-year extension period ended
December 31, 2016. Section 15003 of the 21st Century Cures Act (Pub. L.
114-255), enacted December 13, 2016, again amended section 410A of
Public Law 108-173 to require a 10-year extension period (in place of
the 5-year extension required by the Affordable Care Act), therefore
requiring an additional 5-year participation period for the
demonstration program. Section 15003 of Public Law 114-255 also
required a solicitation for applications for additional hospitals to
participate in the demonstration program. At the time of issuance of
this proposed rule, there are 29 hospitals participating in the
demonstration program. Under the payment methodology that applies
during the second 5 years of the extension period under the
demonstration program, participating hospitals do not receive
empirically justified Medicare DSH payments, and they are also excluded
from receiving interim and final uncompensated care payments.
[[Page 19409]]
3. Empirically Justified Medicare DSH Payments
As we have discussed earlier, section 1886(r)(1) of the Act
requires the Secretary to pay 25 percent of the amount of the Medicare
DSH payment that would otherwise be made under section 1886(d)(5)(F) of
the Act to a subsection (d) hospital. Because section 1886(r)(1) of the
Act merely requires the program to pay a designated percentage of these
payments, without revising the criteria governing eligibility for DSH
payments or the underlying payment methodology, we stated in the FY
2014 IPPS/LTCH PPS final rule that we did not believe that it was
necessary to develop any new operational mechanisms for making such
payments. Therefore, in the FY 2014 IPPS/LTCH PPS final rule (78 FR
50626), we implemented this provision by advising MACs to simply adjust
the interim claim payments to the requisite 25 percent of what would
have otherwise been paid. We also made corresponding changes to the
hospital cost report so that these empirically justified Medicare DSH
payments can be settled at the appropriate level at the time of cost
report settlement. We provided more detailed operational instructions
and cost report instructions following issuance of the FY 2014 IPPS/
LTCH PPS final rule that are available on the CMS website at: http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2014-Transmittals-Items/R5P240.html.
4. Uncompensated Care Payments
As we discussed earlier, section 1886(r)(2) of the Act provides
that, for each eligible hospital in FY 2014 and subsequent years, the
uncompensated care payment is the product of three factors. These three
factors represent our estimate of 75 percent of the amount of Medicare
DSH payments that would otherwise have been paid, an adjustment to this
amount for the percent change in the national rate of uninsurance
compared to the rate of uninsurance in 2013, and each eligible
hospital's estimated uncompensated care amount relative to the
estimated uncompensated care amount for all eligible hospitals. Below
we discuss the data sources and methodologies for computing each of
these factors, our final policies for FYs 2014 through 2019, and our
proposed policies for FY 2020.
a. Proposed Calculation of Factor 1 for FY 2020
Section 1886(r)(2)(A) of the Act establishes Factor 1 in the
calculation of the uncompensated care payment. Section 1886(r)(2)(A) of
the Act states that this factor is equal to the difference between: (1)
The aggregate amount of payments that would be made to subsection (d)
hospitals under section 1886(d)(5)(F) of the Act if section 1886(r) of
the Act did not apply for such fiscal year (as estimated by the
Secretary); and (2) the aggregate amount of payments that are made to
subsection (d) hospitals under section 1886(r)(1) of the Act for such
fiscal year (as so estimated). Therefore, section 1886(r)(2)(A)(i) of
the Act represents the estimated Medicare DSH payments that would have
been made under section 1886(d)(5)(F) of the Act if section 1886(r) of
the Act did not apply for such fiscal year. Under a prospective payment
system, we would not know the precise aggregate Medicare DSH payment
amount that would be paid for a Federal fiscal year until cost report
settlement for all IPPS hospitals is completed, which occurs several
years after the end of the Federal fiscal year. Therefore, section
1886(r)(2)(A)(i) of the Act provides authority to estimate this amount,
by specifying that, for each fiscal year to which the provision
applies, such amount is to be estimated by the Secretary. Similarly,
section 1886(r)(2)(A)(ii) of the Act represents the estimated
empirically justified Medicare DSH payments to be made in a fiscal
year, as prescribed under section 1886(r)(1) of the Act. Again, section
1886(r)(2)(A)(ii) of the Act provides authority to estimate this
amount.
Therefore, Factor 1 is the difference between our estimates of: (1)
The amount that would have been paid in Medicare DSH payments for the
fiscal year, in the absence of the new payment provision; and (2) the
amount of empirically justified Medicare DSH payments that are made for
the fiscal year, which takes into account the requirement to pay 25
percent of what would have otherwise been paid under section
1886(d)(5)(F) of the Act. In other words, this factor represents our
estimate of 75 percent (100 percent minus 25 percent) of our estimate
of Medicare DSH payments that would otherwise be made, in the absence
of section 1886(r) of the Act, for the fiscal year.
As we did for FY 2019, in this FY 2020 IPPS/LTCH PPS proposed rule,
in order to determine Factor 1 in the uncompensated care payment
formula for FY 2020, we are proposing to continue the policy
established in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50628
through 50630) and in the FY 2014 IPPS interim final rule with comment
period (78 FR 61194) of determining Factor 1 by developing estimates of
both the aggregate amount of Medicare DSH payments that would be made
in the absence of section 1886(r)(1) of the Act and the aggregate
amount of empirically justified Medicare DSH payments to hospitals
under 1886(r)(1) of the Act. These estimates will not be revised or
updated after we know the final Medicare DSH payments for FY 2020.
Therefore, in order to determine the two elements of proposed Factor 1
for FY 2020 (Medicare DSH payments prior to the application of section
1886(r)(1) of the Act, and empirically justified Medicare DSH payments
after application of section 1886(r)(1) of the Act), for this proposed
rule, we used the most recently available projections of Medicare DSH
payments for the fiscal year, as calculated by CMS' Office of the
Actuary using the most recently filed Medicare hospital cost reports
with Medicare DSH payment information and the most recent Medicare DSH
patient percentages and Medicare DSH payment adjustments provided in
the IPPS Impact File. The determination of the amount of DSH payments
is partially based on the Office of the Actuary's Part A benefits
projection model. One of the results of this model is inpatient
hospital spending. Projections of DSH payments require projections for
expected increases in utilization and case-mix. The assumptions that
were used in making these projections and the resulting estimates of
DSH payments for FY 2017 through FY 2020 are discussed in the table
titled ``Factors Applied for FY 2017 through FY 2020 to Estimate
Medicare DSH Expenditures Using FY 2016 Baseline.''
For purposes of calculating Factor 1 and modeling the impact of
this FY 2020 IPPS/LTCH PPS proposed rule, we used the Office of the
Actuary's December 2018 Medicare DSH estimates, which were based on
data from the September 2018 update of the Medicare Hospital Cost
Report Information System (HCRIS) and the FY 2019 IPPS/LTCH PPS final
rule IPPS Impact File, published in conjunction with the publication of
the FY 2019 IPPS/LTCH PPS final rule. Because SCHs that are projected
to be paid under their hospital-specific rate are excluded from the
application of section 1886(r) of the Act, these hospitals also were
excluded from the December 2018 Medicare DSH estimates. Furthermore,
because section 1886(r) of the Act specifies that the uncompensated
care payment is in addition to the empirically justified Medicare DSH
payment (25 percent of DSH payments
[[Page 19410]]
that would be made without regard to section 1886(r) of the Act),
Maryland hospitals, which are not eligible to receive DSH payments,
were also excluded from the Office of the Actuary's December 2018
Medicare DSH estimates. The 29 hospitals that are participating in the
Rural Community Hospital Demonstration Program were also excluded from
these estimates because, under the payment methodology that applies
during the second 5 years of the extension period, these hospitals are
not eligible to receive empirically justified Medicare DSH payments or
interim and final uncompensated care payments.
For this proposed rule, using the data sources discussed above, the
Office of the Actuary's December 2018 estimate for Medicare DSH
payments for FY 2020, without regard to the application of section
1886(r)(1) of the Act, is approximately $16.857 billion. Therefore,
also based on the December 2018 estimate, the estimate of empirically
justified Medicare DSH payments for FY 2020, with the application of
section 1886(r)(1) of the Act, is approximately $4.214 billion (or 25
percent of the total amount of estimated Medicare DSH payments for FY
2020). Under Sec. 412.l06(g)(1)(i) of the regulations, Factor 1 is the
difference between these two estimates of the Office of the Actuary.
Therefore, in this proposed rule, we are proposing that Factor 1 for FY
2020 would be $12,643,011,209.74, which is equal to 75 percent of the
total amount of estimated Medicare DSH payments for FY 2020
($16,857,348,279.65 minus $4,214,337,069.91).
The Factor 1 estimates for proposed rules are generally consistent
with the economic assumptions and actuarial analysis used to develop
the President's Budget estimates under current law, and the Factor 1
estimates for the final rule are generally consistent with those used
for the Midsession Review of the President's Budget. As we have in the
past, for additional information on the development of the President's
Budget, we refer readers to the Office of Management and Budget website
at: https://www.whitehouse.gov/omb/budget. We recognize that our
reliance on the economic assumptions and actuarial analysis used to
develop the President's Budget in estimating Factor 1 has an impact on
stakeholders who wish to replicate the Factor 1 calculation, such as
modelling the relevant Medicare Part A portion of the budget, but we
believe commenters are able to meaningfully comment on our proposed
estimate of Factor 1 without replicating the President's Budget.
For a general overview of the principal steps involved in
projecting future inpatient costs and utilization, we refer readers to
the ``2018 Annual Report of the Boards of Trustees of the Federal
Hospital Insurance and Federal Supplementary Medical Insurance Trust
Funds'' available on the CMS website at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrust
Funds/index.html?redirect=/reportstrustfunds/ under ``Downloads.'' We
note that the annual reports of the Medicare Boards of Trustees to
Congress represent the Federal Government's official evaluation of the
financial status of the Medicare Program. The actuarial projections
contained in these reports are based on numerous assumptions regarding
future trends in program enrollment, utilization and costs of health
care services covered by Medicare, as well as other factors affecting
program expenditures. In addition, although the methods used to
estimate future costs based on these assumptions are complex, they are
subject to periodic review by independent experts to ensure their
validity and reasonableness.
We also refer readers to the Actuarial Report on the Financial
Outlook for Medicaid for a discussion of general issues regarding
Medicaid projections.
In this proposed rule, we include information regarding the data
sources, methods, and assumptions employed by the actuaries in
determining the OACT's estimate of Factor 1. In summary, we indicate
the historical HCRIS data update OACT used to identify Medicare DSH
payments, we explain that the most recent Medicare DSH payment
adjustments provided in the IPPS Impact File were used, and we provide
the components of all the update factors that were applied to the
historical data to estimate the Medicare DSH payments for the upcoming
fiscal year, along with the associated rationale and assumptions. This
discussion also includes a description of the ``Other'' and
``Discharges'' assumptions, and also provides additional information
regarding how we address the Medicaid and CHIP expansion.
The Office of the Actuary's estimates for FY 2020 for this proposed
rule began with a baseline of $13.981 billion in Medicare DSH
expenditures for FY 2016. The following table shows the factors applied
to update this baseline through the current estimate for FY 2020:
Factors Applied for FY 2017 Through FY 2020 To Estimate Medicare DSH Expenditures Using FY 2016 Baseline
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated DSH
FY Update Discharges Case-mix Other Total payment (in
billions) *
--------------------------------------------------------------------------------------------------------------------------------------------------------
2017.................................................... 1.0015 0.9986 1.004 1.0751 1.0795 15.093
2018.................................................... 1.018088 0.9819 1.018 1.0345 1.0528 15.889
2019.................................................... 1.0185 0.9791 1.005 1.02206 1.0243 16.275
2020.................................................... 1.032 1.0055 1.005 0.9932 1.0358 16.857
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Rounded.
In this table, the discharges column shows the increase in the
number of Medicare fee-for-service (FFS) inpatient hospital discharges.
The figures for FY 2017 are based on Medicare claims data that have
been adjusted by a completion factor. The discharge figure for FY 2018
is based on preliminary data for 2018. The discharge figures for FY
2019 and FY 2020 are assumptions based on recent trends recovering back
to the long-term trend and assumptions related to how many
beneficiaries will be enrolled in Medicare Advantage (MA) plans. The
case-mix column shows the increase in case-mix for IPPS hospitals. The
case-mix figures for FY 2017 and FY 2018 are based on actual data
adjusted by a completion factor. The FY 2019 and FY 2020 increases are
estimates based on the recommendation of the 2010-2011 Medicare
Technical Review Panel. The ``Other'' column shows the increase in
other factors that contribute to the Medicare DSH estimates. These
factors include the difference between the total inpatient
[[Page 19411]]
hospital discharges and the IPPS discharges, and various adjustments to
the payment rates that have been included over the years but are not
reflected in the other columns (such as the change in rates for the 2-
midnight stay policy). In addition, the ``Other'' column includes a
factor for the Medicaid expansion due to the Affordable Care Act. The
factor for Medicaid expansion was developed using public information
and statements for each State regarding its intent to implement the
expansion. Based on this information, it is assumed that 50 percent of
all individuals who were potentially newly eligible Medicaid enrollees
in 2016 resided in States that had elected to expand Medicaid
eligibility and, for 2017 and thereafter, that 55 percent of such
individuals would reside in expansion States. In the future, these
assumptions may change based on actual participation by States. For a
discussion of general issues regarding Medicaid projections, we refer
readers to the 2017 Actuarial Report on the Financial Outlook for
Medicaid, which is available on the CMS website at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/Downloads/MedicaidReport2017.pdf. We note that, in
developing their estimates of the effect of Medicaid expansion on
Medicare DSH expenditures, our actuaries have assumed that the new
Medicaid enrollees are healthier than the average Medicaid recipient
and, therefore, use fewer hospital services. Specifically, based on
data from the President's Budget, the OACT assumed per capita spending
for Medicaid beneficiaries who enrolled due to the expansion to be 50
percent of the average per capita expenditures for a pre-expansion
Medicaid beneficiary due to the better health of these beneficiaries.
This assumption is consistent with recent internal estimates of
Medicaid per capita spending pre-expansion and post-expansion.
The table below shows the factors that are included in the
``Update'' column of the above table:
----------------------------------------------------------------------------------------------------------------
Affordable
Market basket Care Act Multifactor Documentation Total update
FY percentage payment productivity and coding percentage
reductions adjustment
----------------------------------------------------------------------------------------------------------------
2017............................ 2.7 -0.75 -0.3 -1.5 0.15
2018............................ 2.7 -0.75 -0.6 0.4588 1.8088
2019............................ 2.9 -0.75 -0.8 0.5 1.885
2020............................ 3.2 0 -0.5 0.5 3.2
----------------------------------------------------------------------------------------------------------------
Note: All numbers are based on the FY 2020 President's Budget projections, except for the FY 2020 percentages,
which are based on the most recent forecast. We refer readers to section IV.B. of the preamble of this
proposed rule for a complete discussion of the proposed changes in the inpatient hospital update for FY 2020.
b. Calculation of Proposed Factor 2 for FY 2020
(1) Background
Section 1886(r)(2)(B) of the Act establishes Factor 2 in the
calculation of the uncompensated care payment. Section
1886(r)(2)(B)(ii) of the Act provides that, for FY 2018 and subsequent
fiscal years, the second factor is 1 minus the percent change in the
percent of individuals who are uninsured, as determined by comparing
the percent of individuals who were uninsured in 2013 (as estimated by
the Secretary, based on data from the Census Bureau or other sources
the Secretary determines appropriate, and certified by the Chief
Actuary of CMS) and the percent of individuals who were uninsured in
the most recent period for which data are available (as so estimated
and certified), minus 0.2 percentage point for FYs 2018 and 2019. In FY
2020 and subsequent fiscal years, there is no longer a reduction. We
note that, unlike section 1886(r)(2)(B)(i) of the Act, which governed
the calculation of Factor 2 for FYs 2014, 2015, 2016, and 2017, section
1886(r)(2)(B)(ii) of the Act permits the use of a data source other
than the CBO estimates to determine the percent change in the rate of
uninsurance beginning in FY 2018. In addition, for FY 2018 and
subsequent years, the statute does not require that the estimate of the
percent of individuals who are uninsured be limited to individuals who
are under 65 years of age.
As we discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR
38197), in our analysis of a potential data source for the rate of
uninsurance for purposes of computing Factor 2 in FY 2018, we
considered the following: (a) The extent to which the source accounted
for the full U.S. population; (b) the extent to which the source
comprehensively accounted for both public and private health insurance
coverage in deriving its estimates of the number of uninsured; (c) the
extent to which the source utilized data from the Census Bureau; (d)
the timeliness of the estimates; (e) the continuity of the estimates
over time; (f) the accuracy of the estimates; and (g) the availability
of projections (including the availability of projections using an
established estimation methodology that would allow for calculation of
the rate of uninsurance for the applicable Federal fiscal year). As we
explained in the FY 2018 IPPS/LTCH PPS final rule, these considerations
are consistent with the statutory requirement that this estimate be
based on data from the Census Bureau or other sources the Secretary
determines appropriate and help to ensure the data source will provide
reasonable estimates for the rate of uninsurance that are available in
conjunction with the IPPS rulemaking cycle. We are proposing to use the
same methodology as was used in FY 2018 and FY 2019 to determine Factor
2 for FY 2020.
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38197 and 38198), we
explained that we determined the source that, on balance, best meets
all of these considerations is the uninsured estimates produced by CMS'
Office of the Actuary (OACT) as part of the development of the National
Health Expenditure Accounts (NHEA). The NHEA represents the
government's official estimates of economic activity (spending) within
the health sector. The information contained in the NHEA has been used
to study numerous topics related to the health care sector, including,
but not limited to, changes in the amount and cost of health services
purchased and the payers or programs that provide or purchase these
services; the economic causal factors at work in the health sector; the
impact of policy changes, including major health reform; and
comparisons to other countries' health spending. Of relevance to the
determination of Factor 2 is that the comprehensive and integrated
structure of the NHEA creates an ideal tool for evaluating changes to
the health care system, such as the mix of the insured and uninsured
because this mix is
[[Page 19412]]
integral to the well-established NHEA methodology. Below we describe
some aspects of the methodology used to develop the NHEA that were
particularly relevant in estimating the percent change in the rate of
uninsurance for FY 2018 and FY 2019 that we believe continue to be
relevant in developing the estimate for FY 2020. A full description of
the methodology used to develop the NHEA is available on the CMS
website at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/DSM-15.pdf.
The NHEA estimates of U.S. population reflect the Census Bureau's
definition of the resident-based population, which includes all people
who usually reside in the 50 States or the District of Columbia, but
excludes residents living in Puerto Rico and areas under U.S.
sovereignty, members of the U.S. Armed Forces overseas, and U.S.
citizens whose usual place of residence is outside of the United
States, plus a small (typically less than 0.2 percent of population)
adjustment to reflect Census undercounts. In past years, the estimates
for Factor 2 were made using the CBO's uninsured population estimates
for the under 65 population. For FY 2018 and subsequent years, the
statute does not restrict the estimate to the measurement of the
percent of individuals under the age of 65 who are uninsured.
Accordingly, as we explained in the FY 2018 IPPS/LTCH PPS proposed and
final rules, we believe it is appropriate to use an estimate that
reflects the rate of uninsurance in the United States across all age
groups. In addition, we continue to believe that a resident-based
population estimate more fully reflects the levels of uninsurance in
the United States that influence uncompensated care for hospitals than
an estimate that reflects only legal residents. The NHEA estimates of
uninsurance are for the total U.S. population (all ages) and not by
specific age cohort, such as the population under the age of 65.
The NHEA includes comprehensive enrollment estimates for total
private health insurance (PHI) (including direct and employer-sponsored
plans), Medicare, Medicaid, the Children's Health Insurance Program
(CHIP), and other public programs, and estimates of the number of
individuals who are uninsured. Estimates of total PHI enrollment are
available for 1960 through 2017, estimates of Medicaid, Medicare, and
CHIP enrollment are available for the length of the respective
programs, and all other estimates (including the more detailed
estimates of direct-purchased and employer-sponsored insurance) are
available for 1987 through 2017. The NHEA data are publicly available
on the CMS website at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealth ExpendData/
index.html.
In order to compute Factor 2, the first metric that is needed is
the proportion of the total U.S. population that was uninsured in 2013.
In developing the estimates for the NHEA, OACT's methodology included
using the number of uninsured individuals for 1987 through 2009 based
on the enhanced Current Population Survey (CPS) from the State Health
Access Data Assistance Center (SHADAC). The CPS, sponsored jointly by
the U.S. Census Bureau and the U.S. Bureau of Labor Statistics (BLS),
is the primary source of labor force statistics for the population of
the United States. (We refer readers to the website at: http://www.census.gov/programs-surveys/cps.html.) The enhanced CPS, available
from SHADAC (available at: http://datacenter.shadac.org) accounts for
changes in the CPS methodology over time. OACT further adjusts the
enhanced CPS for an estimated undercount of Medicaid enrollees (a
population that is often not fully captured in surveys that include
Medicaid enrollees due to a perceived stigma associated with being
enrolled in the Medicaid program or confusion about the source of their
health insurance).
To estimate the number of uninsured individuals for 2010 through
2014, the OACT extrapolates from the 2009 CPS data using data from the
National Health Interview Survey (NHIS). The NHIS is one of the major
data collection programs of the National Center for Health Statistics
(NCHS), which is part of the Centers for Disease Control and Prevention
(CDC). The U.S. Census Bureau is the data collection agent for the
NHIS. The NHIS results have been instrumental over the years in
providing data to track health status, health care access, and progress
toward achieving national health objectives. For further information
regarding the NHIS, we refer readers to the CDC website at: https://www.cdc.gov/nchs/nhis/index.htm.
The next metrics needed to compute Factor 2 are projections of the
rate of uninsurance in both calendar years 2019 and 2020. On an annual
basis, OACT projects enrollment and spending trends for the coming 10-
year period. Those projections (currently for years 2018 through 2027)
use the latest NHEA historical data, which presently run through 2017.
The NHEA projection methodology accounts for expected changes in
enrollment across all of the categories of insurance coverage
previously listed. The sources for projected growth rates in enrollment
for Medicare, Medicaid, and CHIP include the latest Medicare Trustees
Report, the Medicaid Actuarial Report, or other updated estimates as
produced by OACT. Projected rates of growth in enrollment for private
health insurance and the uninsured are based largely on OACT's
econometric models, which rely on the set of macroeconomic assumptions
underlying the latest Medicare Trustees Report. Greater detail can be
found in OACT's report titled ``Projections of National Health
Expenditure: Methodology and Model Specification,'' which is available
on the CMS website at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/ProjectionsMethodology.pdf.
The use of data from the NHEA to estimate the rate of uninsurance
is consistent with the statute and meets the criteria we have
identified for determining the appropriate data source. Section
1886(r)(2)(B)(ii) of the Act instructs the Secretary to estimate the
rate of uninsurance for purposes of Factor 2 based on data from the
Census Bureau or other sources the Secretary determines appropriate.
The NHEA utilizes data from the Census Bureau; the estimates are
available in time for the IPPS rulemaking cycle; the estimates are
produced by OACT on an annual basis and are expected to continue to be
produced for the foreseeable future; and projections are available for
calendar year time periods that span the upcoming fiscal year.
Timeliness and continuity are important considerations because of our
need to be able to update this estimate annually. Accuracy is also a
very important consideration and, all things being equal, we would
choose the most accurate data source that sufficiently meets our other
criteria.
(2) Proposed Factor 2 for FY 2020
Using these data sources and the methodologies described above, the
OACT estimates that the uninsured rate for the historical, baseline
year of 2013 was 14 percent and for CYs 2019 and 2020 is 9.4 percent
and 9.3 percent, respectively.\394\ As required by section
1886(r)(2)(B)(ii) of the Act, the Chief Actuary of CMS has certified
these estimates.
---------------------------------------------------------------------------
\394\ Certification of Rates of Uninsured. March 28, 2019.
Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInPatientPPS/dsh.html.
---------------------------------------------------------------------------
[[Page 19413]]
As with the CBO estimates on which we based Factor 2 in prior
fiscal years, the NHEA estimates are for a calendar year. In the
rulemaking for FY 2014, many commenters noted that the uncompensated
care payments are made for the fiscal year and not on a calendar year
basis and requested that CMS normalize the CBO estimate to reflect a
fiscal year basis. Specifically, commenters requested that CMS
calculate a weighted average of the CBO estimate for October through
December 2013 and the CBO estimate for January through September 2014
when determining Factor 2 for FY 2014. We agreed with the commenters
that normalizing the estimate to cover FY 2014 rather than CY 2014
would more accurately reflect the rate of uninsurance that hospitals
would experience during the FY 2014 payment year. Accordingly, we
estimated the rate of uninsurance for FY 2014 by calculating a weighted
average of the CBO estimates for CY 2013 and CY 2014 (78 FR 50633). We
have continued this weighted average approach in each fiscal year since
FY 2014.
We continue to believe that, in order to estimate the rate of
uninsurance during a fiscal year more accurately, Factor 2 should
reflect the estimated rate of uninsurance that hospitals will
experience during the fiscal year, rather than the rate of uninsurance
during only one of the calendar years that the fiscal year spans.
Accordingly, we are proposing to continue to apply the weighted average
approach used in past fiscal years in order to estimate the rate of
uninsurance for FY 2020. The OACT has certified this estimate of the
fiscal year rate of uninsurance to be reasonable and appropriate for
purposes of section 1886(r)(2)(B)(ii) of the Act.
The calculation of the proposed Factor 2 for FY 2020 using a
weighted average of the OACT's projections for CY 2019 and CY 2020 is
as follows:
Percent of individuals without insurance for CY 2013: 14
percent.
Percent of individuals without insurance for CY 2019: 9.4
percent.
Percent of individuals without insurance for CY 2020: 9.4
percent.
Percent of individuals without insurance for FY 2020 (0.25
times 0.094) + (0.75 times 0.094): 9.4 percent 1 - [bond]((0.094 -
0.14)/0.14)[bond] = 1 - 0.3286 = 0.6714 (67.14 percent).
For FY 2020 and subsequent fiscal years, section 1886(r)(2)(B)(ii)
of the Act no longer includes any reduction to the above calculation.
Therefore, we are proposing that Factor 2 for FY 2020 will be 67.14
percent.
The proposed FY 2020 uncompensated care amount is
$12,643,011,209.74 x 0.6714 = $8,488,517,726.22.
------------------------------------------------------------------------
------------------------------------------------------------------------
Proposed FY 2020 Uncompensated Care Amount........ $8,488,517,726.22
------------------------------------------------------------------------
We are inviting public comments on our proposed methodology for
calculating Factor 2 for FY 2020.
c. Calculation of Proposed Factor 3 for FY 2020
(1) General Background
Section 1886(r)(2)(C) of the Act defines Factor 3 in the
calculation of the uncompensated care payment. As we have discussed
earlier, section 1886(r)(2)(C) of the Act states that Factor 3 is equal
to the percent, for each subsection (d) hospital, that represents the
quotient of: (1) The amount of uncompensated care for such hospital for
a period selected by the Secretary (as estimated by the Secretary,
based on appropriate data (including, in the case where the Secretary
determines alternative data are available that are a better proxy for
the costs of subsection (d) hospitals for treating the uninsured, the
use of such alternative data)); and (2) the aggregate amount of
uncompensated care for all subsection (d) hospitals that receive a
payment under section 1886(r) of the Act for such period (as so
estimated, based on such data).
Therefore, Factor 3 is a hospital-specific value that expresses the
proportion of the estimated uncompensated care amount for each
subsection (d) hospital and each subsection (d) Puerto Rico hospital
with the potential to receive Medicare DSH payments relative to the
estimated uncompensated care amount for all hospitals estimated to
receive Medicare DSH payments in the fiscal year for which the
uncompensated care payment is to be made. Factor 3 is applied to the
product of Factor 1 and Factor 2 to determine the amount of the
uncompensated care payment that each eligible hospital will receive for
FY 2014 and subsequent fiscal years. In order to implement the
statutory requirements for this factor of the uncompensated care
payment formula, it was necessary to determine: (1) The definition of
uncompensated care or, in other words, the specific items that are to
be included in the numerator (that is, the estimated uncompensated care
amount for an individual hospital) and the denominator (that is, the
estimated uncompensated care amount for all hospitals estimated to
receive Medicare DSH payments in the applicable fiscal year); (2) the
data source(s) for the estimated uncompensated care amount; and (3) the
timing and manner of computing the quotient for each hospital estimated
to receive Medicare DSH payments. The statute instructs the Secretary
to estimate the amounts of uncompensated care for a period based on
appropriate data. In addition, we note that the statute permits the
Secretary to use alternative data in the case where the Secretary
determines that such alternative data are available that are a better
proxy for the costs of subsection (d) hospitals for treating
individuals who are uninsured.
In the course of considering how to determine Factor 3 during the
rulemaking process for FY 2014, the first year this provision was in
effect, we considered defining the amount of uncompensated care for a
hospital as the uncompensated care costs of that hospital and
determined that Worksheet S-10 of the Medicare cost report potentially
provides the most complete data regarding uncompensated care costs for
Medicare hospitals. However, because of concerns regarding variations
in the data reported on Worksheet S-10 and the completeness of these
data, we did not use Worksheet S-10 data to determine Factor 3 for FY
2014, or for FYs 2015, 2016, or 2017. Instead, we believed that the
utilization of insured low-income patients, as measured by patient
days, would be a better proxy for the costs of hospitals in treating
the uninsured and therefore appropriate to use in calculating Factor 3
for these years. Of particular importance in our decision making was
the relative newness of Worksheet S-10, which went into effect on May
1, 2010. At the time of the rulemaking for FY 2014, the most recent
available cost reports would have been from FYs 2010 and 2011, which
were submitted on or after May 1, 2010, when the new Worksheet S-10
went into effect. We believed that concerns about the standardization
and completeness of the Worksheet S-10 data could be more acute for
data collected in the first year of the Worksheet's use (78 FR 50635).
In addition, we believed that it would be most appropriate to use data
elements that have been historically publicly available, subject to
audit, and used for payment purposes (or that the public understands
will be used for payment purposes) to determine the amount of
uncompensated care for purposes of Factor 3 (78 FR 50635). At the time
we issued the FY 2014 IPPS/LTCH PPS final rule, we did not believe that
the available data regarding uncompensated care from Worksheet S-10 met
these criteria and, therefore, we believed they were not reliable
enough to use for
[[Page 19414]]
determining FY 2014 uncompensated care payments. For FYs 2015, 2016,
and 2017, the cost reports used for calculating uncompensated care
payments (that is, FYs 2011, 2012, and 2013) were also submitted prior
to the time that hospitals were on notice that Worksheet S-10 could be
the data source for calculating uncompensated care payments. Therefore,
we believed it was also appropriate to use proxy data to calculate
Factor 3 for these years. We indicated our belief that Worksheet S-10
could ultimately serve as an appropriate source of more direct data
regarding uncompensated care costs for purposes of determining Factor 3
once hospitals were submitting more accurate and consistent data
through this reporting mechanism.
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38202), we stated
that we could no longer conclude that alternative data to the Worksheet
S-10 are available for FY 2014 that are a better proxy for the costs of
subsection (d) hospitals for treating individuals who are uninsured.
Hospitals were on notice as of FY 2014 that Worksheet S-10 could
eventually become the data source for CMS to calculate uncompensated
care payments. Furthermore, hospitals' cost reports from FY 2014 had
been publicly available for some time, and CMS had analyses of
Worksheet S-10, conducted both internally and by stakeholders,
demonstrating that Worksheet S-10 accuracy had improved over time.
Analyses performed by MedPAC had already shown that the correlation
between audited uncompensated care data from 2009 and the data from the
FY 2011 Worksheet S-10 was over 0.80, as compared to a correlation of
approximately 0.50 between the audited uncompensated care data and 2011
Medicare SSI and Medicaid days. Based on this analysis, MedPAC
concluded that use of Worksheet S-10 data was already better than using
Medicare SSI and Medicaid days as a proxy for uncompensated care costs,
and that the data on Worksheet S-10 would improve over time as the data
are actually used to make payments (81 FR 25090). In addition, a 2007
MedPAC analysis of data from the Government Accountability Office (GAO)
and the American Hospital Association (AHA) had suggested that Medicaid
days and low-income Medicare days are not an accurate proxy for
uncompensated care costs (80 FR 49525).
Subsequent analyses from Dobson/DaVanzo, originally commissioned by
CMS for the FY 2014 rulemaking and updated in later years, compared
Worksheet S-10 and IRS Form 990 data and assessed the correlation in
Factor 3s derived from each of the data sources. Our analyses on
balance led us to believe that we had reached a tipping point in FY
2018 with respect to the use of the Worksheet S-10 data. We refer
readers to the FY 2018 IPPS/LTCH PPS final rule (82 FR 38201 through
38203) for a complete discussion of these analyses.
We found further evidence for this tipping point when we examined
changes to the FY 2014 Worksheet S-10 data submitted by hospitals
following the publication of the FY 2017 IPPS/LTCH PPS final rule. In
the FY 2017 IPPS/LTCH PPS final rule, as part of our ongoing quality
control and data improvement measures for the Worksheet S-10, we
referred readers to Change Request 9648, Transmittal 1681, titled ``The
Supplemental Security Income (SSI)/Medicare Beneficiary Data for Fiscal
Year 2014 for Inpatient Prospective Payment System (IPPS) Hospitals,
Inpatient Rehabilitation Facilities (IRFs), and Long Term Care
Hospitals (LTCHs),'' issued on July 15, 2016 (available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R1681OTN.pdf). In this transmittal, as part of the process for ensuring
complete submission of Worksheet S-10 by all eligible DSH hospitals, we
instructed MACs to accept amended Worksheets S-10 for FY 2014 cost
reports submitted by hospitals (or initial submissions of Worksheet S-
10 if none had been submitted previously) and to upload them to the
Health Care Provider Cost Report Information System (HCRIS) in a timely
manner. The transmittal stated that, for revisions to be considered,
hospitals were required to submit their amended FY 2014 cost report
containing the revised Worksheet S-10 (or a completed Worksheet S-10 if
no data were included on the previously submitted cost report) to the
MAC no later than September 30, 2016. For the FY 2018 IPPS/LTCH PPS
proposed rule (82 FR 19949 through 19950), we examined hospitals' FY
2014 cost reports to see if the Worksheet S-10 data on those cost
reports had changed as a result of the opportunity for hospitals to
submit revised Worksheet S-10 data for FY 2014. Specifically, we
compared hospitals' FY 2014 Worksheet S-10 data as they existed in the
first quarter of CY 2016 with data from the fourth quarter of CY 2016.
We found that the FY 2014 Worksheet S-10 data had changed over that
time period for approximately one quarter of hospitals that receive
uncompensated care payments. The fact that the Worksheet S-10 data
changed for such a significant number of hospitals following a review
of the cost report data they originally submitted and that the revised
Worksheet S-10 information is available to be used in determining
uncompensated care costs contributed to our belief that we could no
longer conclude that alternative data are available that are a better
proxy than the Worksheet S-10 data for the costs of subsection (d)
hospitals for treating individuals who are uninsured.
We also recognized commenters' concerns that, in using Medicaid
days as part of the proxy for uncompensated care, it would be possible
for hospitals in States that choose to expand Medicaid to receive
higher uncompensated care payments because they may have more Medicaid
patient days than hospitals in a State that does not choose to expand
Medicaid. Because the earliest Medicaid expansions under the Affordable
Care Act began in 2014, the 2011, 2012, and 2013 Medicaid days used to
calculate uncompensated care payments in FYs 2015, 2016, and 2017 are
the latest available data on Medicaid utilization that do not reflect
the effects of these Medicaid expansions. Accordingly, if we had used
only low-income insured days to estimate uncompensated care in FY 2018,
we would have needed to hold the time period of these data constant and
use data on Medicaid days from 2011, 2012, and 2013 in order to avoid
the risk of any redistributive effects arising from the decision to
expand Medicaid in certain States. As a result, we would have been
using older data that may provide a less accurate proxy for the level
of uncompensated care being furnished by hospitals, contributing to our
growing concerns regarding the continued use of low-income insured days
as a proxy for uncompensated care costs in FY 2018.
In summary, as we stated in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38203), when weighing the new information regarding the
correlation between the Worksheet S-10 data and IRS 990 data that
became available to us after the FY 2017 rulemaking in conjunction with
the information regarding Worksheet S-10 data and the low-income days
proxy that we analyzed as part of our consideration of this issue in
prior rulemaking, we determined that we could no longer conclude that
alternative data to the Worksheet S-10 are available for FY 2014 that
are a better proxy for the costs of subsection (d) hospitals for
treating individuals who are uninsured. We also stated that we believe
that continued use of Worksheet S-10 will improve the
[[Page 19415]]
accuracy and consistency of the reported data, especially in light of
CMS' concerted efforts to allow hospitals to review and resubmit their
Worksheet S-10 data for past years and the use of trims for potentially
aberrant data (82 FR 38207, 38217, and 38218). We also committed to
continue to work with stakeholders to address their concerns regarding
the accuracy of the reporting of uncompensated care costs through
provider education and refinement of the instructions to Worksheet S-
10.
For FY 2019, as discussed in the FY 2019 IPPS/LTCH PPS final rule
(83 FR 41413), we continued to monitor the reporting of Worksheet S-10
data in anticipation of using Worksheet S-10 data from hospitals' FY
2014 and FY 2015 cost reports in the calculation of Factor 3. We
acknowledged the concerns that had been raised regarding the
instructions for Worksheet S-10. In particular, commenters had
expressed concerns that the lack of clear and concise line-level
instructions prevented accurate and consistent data from being reported
on Worksheet S-10. We noted that, in November 2016, CMS issued
Transmittal 10, which clarified and revised the instructions for the
Worksheet S-10, including the instructions regarding the reporting of
charity care charges. Transmittal 10 is available for download on the
CMS website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R10P240.pdf. In Transmittal 10, we clarified
that hospitals may include discounts given to uninsured patients who
meet the hospital's charity care criteria in effect for that cost
reporting period. This clarification applied to cost reporting periods
beginning prior to October 1, 2016, as well as cost reporting periods
beginning on or after October 1, 2016. As a result, nothing prohibits a
hospital from considering a patient's insurance status as a criterion
in its charity care policy. A hospital determines its own financial
criteria as part of its charity care policy. The instructions for the
Worksheet S-10 set forth that hospitals may include discounts given to
uninsured patients, including patients with coverage from an entity
that does not have a contractual relationship with the provider, who
meet the hospital's charity care criteria in effect for that cost
reporting period. In addition, we revised the instructions for the
Worksheet S-10 for cost reporting periods beginning on or after October
1, 2016, to provide that charity care charges must be determined in
accordance with the hospital's charity care criteria/policy and written
off in the cost reporting period, regardless of the date of service.
During the FY 2018 rulemaking, commenters pointed out that, in the
FY 2017 IPPS/LTCH PPS final rule (81 FR 56963), CMS agreed to institute
certain additional quality control and data improvement measures prior
to moving forward with incorporating Worksheet S-10 data into the
calculation of Factor 3. However, the commenters indicated that, aside
from a brief window in 2016 for hospitals to submit corrected data on
their FY 2014 Worksheet S-10 by September 30, 2016, and the issuance of
revised instructions (Transmittal 10) in November 2016 that are
applicable to cost reports beginning on or after October 1, 2016, CMS
had not implemented any additional quality control and data improvement
measures. We stated in the FY 2018 IPPS/LTCH PPS final rule that we
would continue to work with stakeholders to address their concerns
regarding the reporting of uncompensated care through provider
education and refinement of the instructions to the Worksheet S-10 (82
FR 38206).
On September 29, 2017, we issued Transmittal 11, which clarified
the definitions and instructions for uncompensated care, non-Medicare
bad debt, non-reimbursed Medicare bad debt, and charity care, as well
as modified the calculations relative to uncompensated care costs and
added edits to ensure the integrity of the data reported on Worksheet
S-10. Transmittal 11 is available for download on the CMS website at:
https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R11p240.pdf. We further clarified that full or partial
discounts given to uninsured patients who meet the hospital's charity
care policy or financial assistance policy/uninsured discount policy
(hereinafter referred to as Financial Assistance Policy or FAP) may be
included on Line 20, Column 1 of Worksheet S-10. These clarifications
apply to cost reporting periods beginning on or after October 1, 2013.
We also modified the application of the CCR. We specified that the CCR
will not be applied to the deductible and coinsurance amounts for
insured patients approved for charity care and non-reimbursed Medicare
bad debt. The CCR will be applied to the charges for uninsured patients
approved for charity care or an uninsured discount, non-Medicare bad
debt, and charges for noncovered days exceeding a length of stay limit
imposed on patients covered by Medicaid or other indigent care
programs.
We also provided another opportunity for hospitals to submit
revisions to their Worksheet S-10 data for FY 2014 and FY 2015 cost
reports. We refer readers to Change Request 10378, Transmittal 1981,
titled ``Fiscal Year (FY) 2014 and 2015 Worksheet S-10 Revisions:
Further Extension for All Inpatient Prospective Payment System (IPPS)
Hospitals,'' issued on December 1, 2017 (available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R1981OTN.pdf). In this transmittal, we instructed MACs to
accept amended Worksheets S-10 for FY 2014 and FY 2015 cost reports
submitted by hospitals (or initial submissions of Worksheet S-10 if
none had been submitted previously) and to upload them to the Health
Care Provider Cost Report Information System (HCRIS) in a timely
manner. The transmittal included the deadlines by which hospitals
needed to submit their amended FY 2014 and FY 2015 cost reports
containing the revised Worksheet S-10 (or a completed Worksheet S-10 if
no data were included on the previously submitted cost report) to the
MAC, as well as the dates by which MACs must have accepted these data
and uploaded the revised cost report to the HCRIS, in order for the
data to be considered for purposes of the FY 2019 rulemaking.
(2) Background on the Methodology Used To Calculate Factor 3 for FY
2019
Section 1886(r)(2)(C) of the Act governs both the selection of the
data to be used in calculating Factor 3, and also allows the Secretary
the discretion to determine the time periods from which we will derive
the data to estimate the numerator and the denominator of the Factor 3
quotient. Specifically, section 1886(r)(2)(C)(i) of the Act defines the
numerator of the quotient as the amount of uncompensated care for such
hospital for a period selected by the Secretary. Section
1886(r)(2)(C)(ii) of the Act defines the denominator as the aggregate
amount of uncompensated care for all subsection (d) hospitals that
receive a payment under section 1886(r) of the Act for such period. In
the FY 2014 IPPS/LTCH PPS final rule (78 FR 50638), we adopted a
process of making interim payments with final cost report settlement
for both the empirically justified Medicare DSH payments and the
uncompensated care payments required by section 3133 of the Affordable
Care Act. Consistent with that process, we also determined the time
period from which to calculate the numerator and denominator of the
Factor 3 quotient in a way that would be consistent with making interim
and
[[Page 19416]]
final payments. Specifically, we must have Factor 3 values available
for hospitals that we estimate will qualify for Medicare DSH payments
and for those hospitals that we do not estimate will qualify for
Medicare DSH payments but that may ultimately qualify for Medicare DSH
payments at the time of cost report settlement.
In the FY 2017 IPPS/LTCH PPS final rule, in order to mitigate undue
fluctuations in the amount of uncompensated care payments to hospitals
from year to year and smooth over anomalies between cost reporting
periods, we finalized a policy of calculating a hospital's share of
uncompensated care based on an average of data derived from three cost
reporting periods instead of one cost reporting period. As explained in
the preamble to the FY 2017 IPPS/LTCH PPS final rule (81 FR 56957
through 56959), instead of determining Factor 3 using data from a
single cost reporting period as we did in FY 2014, FY 2015, and FY
2016, we used data from three cost reporting periods (Medicaid data for
FYs 2011, 2012, and 2013 and SSI days from the three most recent
available years of SSI utilization data (FYs 2012, 2013, and 2014)) to
compute Factor 3 for FY 2017. Furthermore, instead of determining a
single Factor 3 as we had done since the first year of the
uncompensated care payment in FY 2014, we calculated an individual
Factor 3 for each of the three cost reporting periods, which we then
averaged by the number of cost reporting years with data to compute the
final Factor 3 for a hospital. Under this policy, if a hospital had
merged, we would combine data from both hospitals for the cost
reporting periods in which the merger was not reflected in the
surviving hospital's cost report data to compute Factor 3 for the
surviving hospital. Moreover, to further reduce undue fluctuations in a
hospital's uncompensated care payments, if a hospital filed multiple
cost reports beginning in the same fiscal year, we combined data from
the multiple cost reports so that a hospital could have a Factor 3
calculated using more than one cost report within a cost reporting
period. We codified these changes for FY 2017 by amending the
regulation at Sec. 412.106(g)(1)(iii)(C).
As we stated in the FY 2019 IPPS/LTCH PPS final rule (83 FR 41414),
with the additional steps we had taken to ensure the accuracy and
consistency of the data reported on Worksheet S-10 since the
publication of the FY 2018 IPPS/LTCH PPS final rule, we continued to
believe that we can no longer conclude that alternative data to the
Worksheet S-10 are currently available for FY 2014 that are a better
proxy for the costs of subsection (d) hospitals for treating
individuals who are uninsured. Similarly, the actions that we have
taken to improve the accuracy and consistency of the Worksheet S-10
data, including the opportunity for hospitals to resubmit Worksheet S-
10 data for FY 2015, led us to conclude that there are no alternative
data to the Worksheet S-10 data currently available for FY 2015 that
are a better proxy for the costs of subsection (d) hospitals for
treating uninsured individuals. As such, in the FY 2019 IPPS/LTCH PPS
final rule (83 FR 41428), we finalized our proposal to advance the time
period of the data used in the calculation of Factor 3 forward by 1
year and to use data from FY 2013, FY 2014, and FY 2015 cost reports to
determine Factor 3 for FY 2019. For the reasons we described earlier,
we stated that we continue to believe it is inappropriate to use
Worksheet S-10 data for periods prior to FY 2014. Rather, for cost
reporting periods prior to FY 2014, we indicated that we believe it is
appropriate to continue to use low-income insured days. Accordingly,
with a time period that includes 3 cost reporting years consisting of
FY 2013, FY 2014, and FY 2015, we used Worksheet S-10 data for the FY
2014 and FY 2015 cost reporting periods and the low-income insured days
proxy data for the earliest cost reporting period. As in previous
years, in order to perform this calculation for the FY 2019 final rule,
we drew three sets of data (1 year of Medicaid utilization data and 2
years of Worksheet S-10 data) from the most recent available HCRIS
extract, which was the June 30, 2018 update of HCRIS, due to the unique
circumstances related to the impact of the hurricanes in 2017 (Harvey,
Irma, Maria, and Nate) and the extension of the deadline to resubmit
Worksheet S-10 data through January 2, 2018, and the subsequent impact
on the MAC review timeline (83 FR 41421).
Accordingly, for FY 2019, in addition to the Worksheet S-10 data
for FY 2014 and FY 2015, we used Medicaid days from FY 2013 cost
reports and FY 2016 SSI ratios. We noted that cost report data from
Indian Health Service and Tribal hospitals are included in HCRIS
beginning in FY 2013 and no longer need to be incorporated from a
separate data source. We also continued the policies that were
finalized in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50020) to
address several specific issues concerning the process and data to be
employed in determining Factor 3 in the case of hospital mergers. In
addition, we continued the policies that were finalized in the FY 2018
IPPS/LTCH PPS final rule to address technical considerations related to
the calculation of Factor 3 and the incorporation of Worksheet S-10
data (82 FR 38213 through 38220). In that final rule, we adopted a
policy, for purposes of calculating Factor 3, under which we annualize
Medicaid days data and uncompensated care cost data reported on the
Worksheet S-10 if a hospital's cost report does not equal 12 months of
data. As in FY 2018, for FY 2019, we did not annualize SSI days because
we do not obtain these data from hospital cost reports in HCRIS.
Rather, we obtained these data from the latest available SSI ratios
posted on the Medicare DSH homepage (https://www.cms.gov/Medicare/
Medicare-fee-for-service-payment/AcuteInpatientPPS/dsh.html), which
were aggregated at the hospital level and did not include the
information needed to determine if the data should be annualized. To
address the effects of averaging Factor 3s calculated for 3 separate
fiscal years, we continued to apply a scaling factor to the Factor 3
values of all DSH eligible hospitals such that total uncompensated care
payments are consistent with the estimated amount available to make
uncompensated care payments for the applicable fiscal year. With
respect to the incorporation of data from Worksheet S-10, we indicated
that we believe that the definition of uncompensated care adopted in FY
2018 is still appropriate because it incorporates the most commonly
used factors within uncompensated care as reported by stakeholders,
including charity care costs and non-Medicare bad debt costs, and
correlates to Line 30 of Worksheet S-10. Therefore, for purposes of
calculating Factor 3 and uncompensated care costs in FY 2019, we again
defined ``uncompensated care'' as the amount on Line 30 of Worksheet S-
10, which is the cost of charity care (Line 23) and the cost of non-
Medicare bad debt and non-reimbursable Medicare bad debt (Line 29).
We noted that we were discontinuing the policy finalized in the FY
2017 IPPS/LTCH PPS final rule concerning multiple cost reports
beginning in the same fiscal year (81 FR 56957). Under this policy, we
would first combine the data across the multiple cost reports before
determining the difference between the start date and the end date to
determine if annualization was needed. This policy was developed in
response to commenters' concerns regarding the unique circumstances of
[[Page 19417]]
hospitals that file cost reports that are shorter or longer than 12
months. As we explained in the FY 2017 IPPS/LTCH PPS final rule (81 FR
56957 through 56959) and in the FY 2018 IPPS/LTCH PPS proposed rule (82
FR 19953), we believed that, for hospitals that file multiple cost
reports beginning in the same year, combining the data from these cost
reports had the benefit of supplementing the data of hospitals that
filed cost reports that are less than 12 months, such that the basis of
their uncompensated care payments and those of hospitals that filed
full-year 12-month cost reports would be more equitable. As we stated
in the FY 2019 IPPS/LTCH PPS proposed and final rules, we now believe
that concerns about the equitability of the data used as the basis of
hospital uncompensated care payments are more thoroughly addressed by
the policy finalized in the FY 2018 IPPS/LTCH PPS final rule, under
which CMS annualizes the Medicaid days and uncompensated care cost data
of hospital cost reports that do not equal 12 months of data. Based on
our experience, we stated that we believe that in many cases where a
hospital files two cost reports beginning in the same fiscal year,
combining the data across multiple cost reports before annualizing
would yield a similar result to choosing the longer of the two cost
reports and then annualizing the data if the cost report is shorter or
longer than 12 months. Furthermore, even in cases where a hospital
files more than one cost report beginning in the same fiscal year, it
is not uncommon for one of those cost reports to span exactly 12
months. In this case, if Factor 3 is determined using only the full 12-
month cost report, annualization would be unnecessary as there would
already be 12 months of data. Therefore, for FY 2019, we stated that we
believed it was appropriate to eliminate the additional step of
combining data across multiple cost reports if a hospital filed more
than one cost report beginning in the same fiscal year. Instead, for
purposes of calculating Factor 3, we used data from the cost report
that is equivalent to 12 months or, if no such cost report existed, the
cost report that was closest to 12 months, and annualized the data.
Furthermore, we acknowledged that, in rare cases, a hospital may have
more than one cost report beginning in one fiscal year, where one
report also spans the entirety of the following fiscal year, such that
the hospital has no cost report beginning in that fiscal year. For
instance, a hospital's cost reporting period may have started towards
the end of FY 2012 but cover the duration of FY 2013. In these rare
situations, we would use data from the cost report that spans both
fiscal years in the Factor 3 calculation for the latter fiscal year as
the hospital would already have data from the preceding cost report
that could be used to determine Factor 3 for the previous fiscal year.
In FY 2019, we also continued to apply statistical trims to
anomalous hospital CCRs using a similar methodology to the one adopted
in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38217 through 38219),
where we stated our belief that, just as we apply trims to hospitals'
CCRs to eliminate anomalies when calculating outlier payments for
extraordinarily high cost cases (Sec. 412.84(h)(3)(ii)), it is
appropriate to apply statistical trims to the CCRs on Worksheet S-10,
Line 1, that are considered anomalies. Specifically, Sec.
412.84(h)(3)(ii) states that the Medicare contractor may use a
statewide CCR for hospitals whose operating or capital CCR is in excess
of 3 standard deviations above the corresponding national geometric
mean (that is, the CCR ``ceiling''). The geometric means for purposes
of the Worksheet S-10 trim of CCRs and for purposes of Sec.
412.84(h)(3)(ii) are separately calculated annually by CMS and
published in the applicable sections of the proposed and final IPPS
rules each year. We refer readers to the FY 2019 IPPS/LTCH PPS final
rule (83 FR 41415) for a detailed description of the CCR trim
methodology for purposes of the Worksheet S-10 trim of CCRs, which
included calculating 3 standard deviations above the national geometric
mean CCR for each of the applicable cost report years (FY 2014 and FY
2015) that were part of the Factor 3 methodology for FY 2019.
Similar in concept to the policy that we adopted for FY 2018, for
FY 2019, we stated that we continued to believe that uncompensated care
costs that represent an extremely high ratio of a hospital's total
operating expenses (such as the ratio of 50 percent used in the FY 2018
IPPS/LTCH PPS final rule) may be potentially aberrant, and that using
the ratio of uncompensated care costs to total operating costs to
identify potentially aberrant data when determining Factor 3 amounts
has merit. We noted that we had instructed the MACs to review
situations where a hospital has an extremely high ratio of
uncompensated care costs to total operating costs with the hospital,
but also indicated that we did not intend to make the MACs' review
protocols public (83 FR 41416). Similarly, we believe that situations
where there were extremely large dollar increases or decreases in a
hospital's uncompensated care costs when it resubmitted its FY 2014
Worksheet S-10 or FY 2015 Worksheet S-10 data, or when the data it had
previously submitted were reprocessed by the MAC, may reflect
potentially aberrant data and warrant further review. In the FY 2019
IPPS/LTCH PPS proposed rule (83 FR 20399), we noted that our
calculation of Factor 3 for the final rule would be contingent on the
results of the ongoing MAC reviews of hospitals' Worksheet S-10 data,
and in the event those reviews necessitate supplemental data edits, we
would incorporate such edits in the final rule for the purpose of
correcting aberrant data. After the completion of the MAC reviews, we
did not incorporate any additional edits to the Worksheet S-10 data
that we did not propose in the FY 2019 IPPS/LTCH PPS proposed rule. We
refer readers to the FY 2019 IPPS/LTCH PPS final rule (83 FR 41416) for
a detailed discussion of our policies for trimming aberrant data. In
brief summary, in cases where a hospital's uncompensated care costs for
FY 2014 or FY 2015 were an extremely high ratio of its total operating
costs, and the hospital could not justify the amount it reported, we
determined the ratio of uncompensated care costs to the hospital's
total operating costs from another available cost report, and applied
that ratio to the total operating expenses for the potentially aberrant
fiscal year to determine an adjusted amount of uncompensated care
costs. For example, if the FY 2015 cost report was determined to
include potentially aberrant data, data from the FY 2016 cost report
would be used for the ratio calculation. In this case, the hospital's
uncompensated care costs for FY 2015 would be trimmed by multiplying
its FY 2015 total operating costs by the ratio of uncompensated care
costs to total operating costs from the hospital's FY 2016 cost report
to calculate an estimate of the hospital's uncompensated care costs for
FY 2015 for purposes of determining Factor 3 for FY 2019.
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41416), for Indian
Health Service and Tribal hospitals, subsection (d) Puerto Rico
hospitals, and all-inclusive rate providers, we continued the policy we
first adopted for FY 2018 of substituting data regarding FY 2013 low-
income insured days for the Worksheet S-10 data when determining Factor
3. As we discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR
38209), the use of data from Worksheet S-10 to calculate the
uncompensated care amount for Indian Health Service and Tribal
hospitals may jeopardize
[[Page 19418]]
these hospitals' uncompensated care payments due to their unique
funding structure. With respect to Puerto Rico hospitals, we indicated
that we continue to agree with concerns raised by commenters that the
uncompensated care data reported by these hospitals need to be further
examined before the data are used to determine Factor 3 (82 FR 38209).
Finally, we acknowledged that the CCRs for all-inclusive rate providers
are potentially erroneous and still in need of further examination
before they can be used in the determination of uncompensated care
amounts for purposes of Factor 3 (82 FR 38212). For the reasons
described earlier related to the impact of the Medicaid expansion
beginning in FY 2014, we stated that we also continue to believe that
it is inappropriate to calculate a Factor 3 using FY 2014 and FY 2015
low-income insured days. Because we did not believe it was appropriate
to use the FY 2014 or FY 2015 uncompensated care data for these
hospitals and we also did not believe it was appropriate to use the FY
2014 or FY 2015 low-income insured days, we stated that the best proxy
for the costs of Indian Health Service and Tribal hospitals, subsection
(d) Puerto Rico hospitals, and all-inclusive rate providers for
treating the uninsured continues to be the low-income insured days data
for FY 2013. Accordingly, for these hospitals, we determined Factor 3
only on the basis of low-income insured days for FY 2013. We stated our
belief that this approach was appropriate as the FY 2013 data reflect
the most recent available information regarding these hospitals' low-
income insured days before any expansion of Medicaid. In addition,
because we continued to use 1 year of insured low-income patient days
as a proxy for uncompensated care and residents of Puerto Rico are not
eligible for SSI benefits, we continued to use a proxy for SSI days for
Puerto Rico hospitals consisting of 14 percent of the hospital's
Medicaid days, as finalized in the FY 2017 IPPS/LTCH PPS final rule (81
FR 56953 through 56956).
Therefore, for FY 2019, we computed Factor 3 for each hospital by--
Step 1: Calculating Factor 3 using the low-income insured days
proxy based on FY 2013 cost report data and the FY 2016 SSI ratio (or,
for Puerto Rico hospitals, 14 percent of the hospital's FY 2013
Medicaid days);
Step 2: Calculating Factor 3 based on the FY 2014 Worksheet S-10
data;
Step 3: Calculating Factor 3 based on the FY 2015 Worksheet S-10
data; and
Step 4: Averaging the Factor 3 values from Steps 1, 2, and 3; that
is, adding the Factor 3 values from FY 2013, FY 2014, and FY 2015 for
each hospital, and dividing that amount by the number of cost reporting
periods with data to compute an average Factor 3 (or for Puerto Rico
hospitals, Indian Health Service and Tribal hospitals, and all-
inclusive rate providers, using the Factor 3 value from Step 1).
We also amended the regulations at Sec. 412.106(g)(1)(iii)(C) by
adding a new paragraph (5) to reflect the above methodology for
computing Factor 3 for FY 2019.
In the FY 2019 IPPS/LTCH PPS final rule, we noted that if a
hospital does not have both Medicaid days for FY 2013 and SSI days for
FY 2016 available for use in the calculation of Factor 3 in Step 1, we
would consider the hospital not to have data available for the fiscal
year, and would remove that fiscal year from the calculation and divide
by the number of years with data. A hospital would be considered to
have both Medicaid days and SSI days data available if it reported zero
days for either component of the Factor 3 calculation in Step 1.
However, if a hospital was missing data due to not filing a cost report
in one of the applicable fiscal years, we would divide by the remaining
number of fiscal years.
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41417), we noted
that we did not make any proposals with respect to the development of
Factor 3 for FY 2020 and subsequent fiscal years. However, we noted
that the above methodology would have the effect of fully transitioning
the incorporation of data from Worksheet S-10 into the calculation of
Factor 3 if used in FY 2020, and therefore, the use of low-income
insured days would be phased out by FY 2020 if the same methodology
were to be proposed and finalized for that year. We also indicated that
it was possible that when we examine the FY 2016 Worksheet S-10 data,
we might determine that the use of multiple years of Worksheet S-10
data is no longer necessary in calculating Factor 3 for FY 2020. We
stated that, given the efforts hospitals have already undertaken with
respect to reporting their Worksheet S-10 data and the subsequent
reviews by the MACs that had already been conducted prior to the
development of the FY 2019 IPPS/LTCH PPS final rule, along with
additional review work that might take place following the issuance of
the FY 2019 final rule, we might consider using 1 year of Worksheet S-
10 data as the basis for calculating Factor 3 for FY 2020.
For new hospitals that did not have data for any of the three cost
reporting periods used in the Factor 3 calculation for FY 2019, we
continued to apply the new hospital policy finalized in the FY 2014
IPPS/LTCH PPS final rule (78 FR 50643). That is, the hospital would not
receive either interim empirically justified Medicare DSH payments or
interim uncompensated care payments. However, if the hospital is later
determined to be eligible to receive empirically justified Medicare DSH
payments based on its FY 2019 cost report, the hospital would also
receive an uncompensated care payment calculated using a Factor 3,
where the numerator is the uncompensated care costs reported on
Worksheet S-10 of the hospital's FY 2019 cost report, and the
denominator is the sum of the uncompensated care costs reported on
Worksheet S-10 of the FY 2015 cost reports for all DSH eligible
hospitals (that is, the most recent year of the 3-year time period used
in the development of Factor 3 for FY 2019). We noted that, given the
time period of the data used to calculate Factor 3, any hospitals with
a CCN established after October 1, 2015, would be considered new and
subject to this policy.
(3) Proposed Methodology for Calculating Factor 3 for FY 2020
(a) Proposal to Use of Audited FY 2015 Data
Since the publication of the FY 2019 IPPS/LTCH PPS final rule, we
have continued to monitor the reporting of Worksheet S-10 data in order
to determine the most appropriate data to use in the calculation of
Factor 3 for FY 2020. As stated in the FY 2019 IPPS/LTCH PPS final rule
(83 FR 41424), due to the overwhelming feedback from commenters
emphasizing the importance of audits in ensuring the accuracy and
consistency of data reported on the Worksheet S-10, we expected audits
of the Worksheet S-10 to begin in the Fall of 2018. The audit protocol
instructions were still under development at the time of the FY 2019
IPPS/LTCH PPS final rule; yet, we noted the audit protocols would be
provided to the MACs in advance of the audit. Once the audit protocol
instructions were complete, we began auditing the Worksheet S-10 data
for selected hospitals in the Fall of 2018 so that the audited
uncompensated care data from these hospitals would be available in time
for use in this FY 2020 proposed rule. We chose to audit 1 year of data
(that is, FY 2015) in order to maximize the available audit resources
and not spread those audit resources over multiple years, potentially
diluting their effectiveness. We chose to focus the audit on the FY
2015 cost reports primarily because this was the most
[[Page 19419]]
recent year of data that we had broadly allowed to be resubmitted by
hospitals, and many hospitals had already made considerable efforts to
amend their FY 2015 reports for the FY 2019 rulemaking. We also
considered that we had previously used the FY 2015 data as part of the
calculation of the FY 2019 uncompensated care payments; therefore, the
data had previously been subject to public comment and scrutiny.
Given that we have conducted audits of the FY 2015 Worksheet S-10
data and have previously used the FY 2015 data to determine
uncompensated care payments, and the fact that the FY 2015 data are the
most recent data that we have allowed to be resubmitted to date, we
believe that, on balance, the FY 2015 Worksheet S-10 data are the best
available data to use for calculating Factor 3 for FY 2020. However, as
discussed in more detail later in the next section, an alternative we
also considered is the use of FY 2017 data. We are seeking public
comments on this alternative and, based on the public comments we
receive, could adopt it in the FY 2020 final rule.
We recognize that, in FY 2019, we used 3 years of data in the
calculation of Factor 3 in order to smooth over anomalies between cost
reporting periods and to mitigate undue fluctuations in the amount of
uncompensated care payments from year to year. However, we believe
that, for FY 2020, mixing audited and unaudited data for individual
hospitals by averaging multiple years of data could potentially lead to
a less smooth result, which is counter to our original goal in using 3
years of data. To the extent that the audited FY 2015 data for a
hospital are relatively different from its unaudited FY 2014 data and/
or its unaudited FY 2016 data, we potentially would be diluting the
effect of our considerable auditing efforts and introducing unnecessary
variability into the calculation if we continued to use 3 years of data
to calculate Factor 3. For example, approximately 10 percent of audited
hospitals have more than a $20 million difference between their audited
FY 2015 data and their unaudited FY 2016 data.
Accordingly, we are proposing to use a single year of Worksheet S-
10 data from FY 2015 cost reports to calculate Factor 3 in the FY 2020
methodology. We note that the proposed uncompensated care payments to
hospitals whose FY 2015 Worksheet S-10 data were audited represent
approximately half of the proposed total uncompensated care payments
for FY 2020. For purposes of this FY 2020 proposed rule, we have used
the most recent available HCRIS extract available, which is the HCRIS
data updated through February 15, 2019. We expect to use the March 2019
update of HCRIS for the final rule.
(b) Alternative Considered To Use FY 2017 Data
Although we are proposing to use Worksheet S-10 data from the FY
2015 cost reports, we acknowledge that some hospitals have raised
concerns regarding some of the adjustments made to the FY 2015 cost
reports following the audits of these reports (for example, adjustments
made to Line 22 of Worksheet S-10). These hospitals contend that there
are issues regarding the instructions in effect for FY 2015, especially
compared to the reporting instructions that were effective for cost
reporting periods beginning on or after October 1, 2016, and some of
these adjustments would not have been made if CMS had chosen as an
alternative to audit the FY 2017 reports.
Accordingly, we are seeking public comments on whether the changes
in the reporting instructions between the FY 2015 cost reports and the
FY 2017 cost reports have resulted in a better common understanding
among hospitals of how to report uncompensated care costs and improved
relative consistency and accuracy across hospitals in reporting these
costs. We also are seeking public comments on whether, due to the
changes in the reporting instructions, we should use a single year of
uncompensated care cost data from the FY 2017 reports, instead of the
FY 2015 reports, to calculate Factor 3 for FY 2020. We note that we are
not proposing to use FY 2016 reports because the reporting instructions
for that year were similar to the reporting instructions for the FY
2015 reports. If, based on the public comments received, we were to
adopt a final policy in which we use Worksheet S-10 data from the FY
2017 cost reports to determine Factor 3 for FY 2020, we would also
expect to use the March 2019 update of HCRIS for the final rule.
Under the alternative considered on which we are seeking public
comment, the FY 2017 Worksheet S-10 data would be used instead of the
FY 2015 Worksheet S-10 data, but, in general, the proposed Factor 3
methodology would be unchanged. The limited circumstances where the
methodology would need to differ from the proposed methodology using FY
2015 data, if we were to adopt the alternative of using FY 2017 data in
the final rule based on the public comments received, are outlined in
section IV.F.4.c.(3)(d) of the preamble of this proposed rule
(Methodological Considerations for Calculating Factor 3). If an aspect
of the proposed methodology described below does not specifically
indicate that we would modify it under the alternative considered, that
aspect of the methodology would be unchanged, regardless of whether we
use FY 2015 data or FY 2017 data. We note that we are providing all of
the same public information regarding the alternative considered,
including the Factor 3 values for each hospital and the impact
information, that we are providing for our proposal to use FY 2015
data.
(c) Proposed Definition of ``Uncompensated Care''
We continue to believe that the definition of ``uncompensated
care'' first adopted in FY 2018 when we started to incorporate data
from Worksheet S-10 into the determination of Factor 3 and used again
in FY 2019 is appropriate, as it incorporates the most commonly used
factors within uncompensated care as reported by stakeholders, namely,
charity care costs and bad debt costs, and correlates to Line 30 of
Worksheet S-10. Therefore, we are proposing that, for purposes of
determining uncompensated care costs and calculating Factor 3 for FY
2020, ``uncompensated care'' would continue to be defined as the amount
on Line 30 of Worksheet S-10, which is the cost of charity care (Line
23) and the cost of non-Medicare bad debt and non-reimbursable Medicare
bad debt (Line 29).
(d) Methodological Considerations for Calculating Factor 3
For FY 2020, we are proposing to continue the merger policies that
were finalized in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50020).
In addition, we are proposing to continue the policy that was finalized
in the FY 2018 IPPS/LTCH PPS final rule of annualizing uncompensated
care cost data reported on the Worksheet S-10 if a hospital's cost
report does not equal 12 months of data.
We are proposing to modify the new hospital policy first adopted in
the FY 2014 IPPS/LTCH PPS final rule (78 FR 50643) and continued
through the FY 2019 IPPS/LTCH PPS final rule (83 FR 41417), for new
hospitals that do not have data for the cost reporting period(s) used
in the proposed Factor 3 calculation. For FY 2020, new hospitals that
are eligible for Medicare DSH would receive interim empirically
justified DSH payments. Generally, new hospitals do not yet have
available data to project their eligibility for DSH
[[Page 19420]]
payments because there is a lag until the SSI ratio and the Medicaid
ratio become available. However, we note that there are some new
hospitals (that is, hospitals with CCNs established after October 1,
2015) that have a preliminary projection of being eligible for DSH
payments based on their most recent available DSH percentages. Because
these hospitals do not have a FY 2015 cost report to use in the Factor
3 calculation and the projection of eligibility for DSH payments is
still preliminary, we are proposing that the MAC would make a final
determination concerning whether the hospital is eligible to receive
Medicare DSH payments at cost report settlement based on its FY 2020
cost report. If the hospital is ultimately determined to be eligible
for Medicare DSH payments for FY 2020, the hospital would receive an
uncompensated care payment calculated using a Factor 3, where the
numerator is the uncompensated care costs reported on Worksheet S-10 of
the hospital's FY 2020 cost report, and the denominator is the sum of
the uncompensated care costs reported on Worksheet S-10 of the FY 2015
cost reports for all DSH-eligible hospitals. This denominator would be
the same denominator that is determined prospectively for purposes of
determining Factor 3 for all DSH-eligible hospitals, excluding Puerto
Rico hospitals and Indian Health Service and Tribal hospitals. The new
hospital would not receive interim uncompensated care payments before
cost report settlement because we would have no FY 2015 uncompensated
care data on which to determine what those interim payments should be.
We note that, given the time period of the data we are proposing to use
to calculate Factor 3, any hospitals with a CCN established on or after
October 1, 2015, would be considered new and subject to this policy.
However, under the alternative policy considered of using FY 2017 data,
we would modify the new hospital policy, such that any hospital with a
CCN established on or after October 1, 2017, would be considered new
and subject to this policy with conforming changes to provide for the
use of FY 2017 uncompensated care data.
We have received questions regarding the new hospital policy for
new Puerto Rico hospitals. In FY 2018 and FY 2019, Factor 3 for all
Puerto Rico hospitals, including new Puerto Rico hospitals, was based
on the low-income insured proxy data. Under this approach, the MAC will
calculate a Factor 3 for new Puerto Rico hospitals at cost report
settlement for the applicable fiscal year using the Medicaid days from
the hospital's cost report and the SSI day proxy (that is, 14 percent
of the hospital's Medicaid days) divided by the low-income insured
proxy data denominator that was established for that fiscal year. For
FY 2020, we are proposing that Puerto Rico hospitals that do not have a
FY 2013 report would be considered new hospitals and would be subject
to the proposed new hospital policy, as discussed above. Specifically,
the numerator would be the uncompensated care costs reported on
Worksheet S-10 of the hospital's FY 2020 cost report and the
denominator would be the same denominator that is determined
prospectively for purposes of determining Factor 3 for all DSH-eligible
hospitals. We believe this notice of proposed rulemaking provides
sufficient time for all new hospitals to take the steps necessary to
ensure that their uncompensated care costs for FY 2020 are accurately
reported on their FY 2020 Worksheet S-10. In addition, we expect MACs
to review FY 2020 reports from new hospitals, as necessary, which will
address past commenters' concerns regarding the need for further review
of Puerto Rico hospitals' uncompensated care data before the data are
used to determine Factor 3. Therefore, we believe the uncompensated
care costs reported on their FY 2020 Worksheet S-10 are the best
available and appropriate data to use to calculate Factor 3 for new
Puerto Rico hospitals. This proposed would also allow our new hospital
policy to be more uniform, given that Worksheet S-10 would be the
source of the uncompensated care cost data across all new hospitals.
For Indian Health Service and Tribal hospitals and subsection (d)
Puerto Rico hospitals that have a FY 2013 cost report, we are proposing
to adapt the policy first adopted for the FY 2018 rulemaking regarding
FY 2013 low-income insured days when determining Factor 3. As we
discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38209), the
use of data from Worksheet S-10 to calculate the uncompensated care
amount for Indian Health Service and Tribal hospitals may jeopardize
these hospitals' uncompensated care payments due to their unique
funding structure. With respect to Puerto Rico hospitals that would not
be subject to the proposed new hospital policy, we continue to agree
with concerns raised by commenters that the uncompensated care data
reported by these hospitals need to be further examined before the data
are used to determine Factor 3 (82 FR 38209). Accordingly, for these
hospitals, we are proposing to determine Factor 3 based on Medicaid
days from FY 2013 and the most recent update of SSI days. The aggregate
amount of uncompensated care that is used in the Factor 3 denominator
for these hospitals would continue to be based on the low-income
patient proxy; that is, the aggregate amount of uncompensated care
determined for all DSH eligible hospitals using the low-income insured
days proxy. We believe this approach is appropriate because the FY 2013
data reflect the most recent available information regarding these
hospitals' Medicaid days before any expansion of Medicaid. At the time
of development of this proposed rule, for modeling purposes, we
computed Factor 3 for these hospitals using FY 2013 Medicaid days and
the most recent available FY 2017 SSI days. In addition, because we are
continuing to use 1 year of insured low-income patient days as a proxy
for uncompensated care for Puerto Rico hospitals and residents of
Puerto Rico are not eligible for SSI benefits, we are proposing to
continue to use a proxy for SSI days for Puerto Rico hospitals,
consisting of 14 percent of a hospital's Medicaid days, as finalized in
the FY 2017 IPPS/LTCH PPS final rule (81 FR 56953 through 56956).
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41417), we noted
that further examination of the CCRs for all-inclusive rate providers
was necessary before we considered incorporating Worksheet S-10 into
the Factor 3 calculation for these hospitals. We have examined the CCRs
from the FY 2015 cost reports and believe the risk that all-inclusive
rate providers will have aberrant CCRs and, consequently, aberrant
uncompensated care data, is mitigated by the proposal to apply trim
methodologies for potentially aberrant uncompensated care costs for all
hospitals. Therefore, we believe it is no longer necessary to propose
specific Factor 3 policies for all-inclusive rate providers.
Because we are proposing to use 1 year of cost report data, as
opposed to averaging 3 cost report years, it is also no longer
necessary to propose to apply a scaling factor to the Factor 3 of all
DSH eligible hospitals similar to the scaling factor that was finalized
in FY 2018 IPPS/LTCH PPS final rule (82 FR 38214) and also applied in
the FY 2019 IPPS/LTCH PPS final rule. The primary purpose of the
scaling factor was to account for the averaging effect of the use of 3
years of data on the Factor 3 calculation.
However, we are proposing to continue certain other policies
finalized
[[Page 19421]]
in the FY 2019 IPPS/LTCH PPS final rule, specifically: (1) For
providers with multiple cost reports, beginning in the same fiscal
year, using the longest cost report and annualizing Medicaid data and
uncompensated care data if a hospital's cost report does not equal 12
months of data; (2) in the rare case where a provider has multiple cost
reports, beginning in the same fiscal year, but one report also spans
the entirety of the following fiscal year, such that the hospital has
no cost report for that fiscal year, using the cost report that spans
both fiscal years for the latter fiscal year; and (3) applying
statistical trim methodologies to potentially aberrant CCRs and
potentially aberrant uncompensated care costs reported on the Worksheet
S-10. Thus, if a hospital's uncompensated care costs for FY 2015 are an
extremely high ratio of its total operating costs, and the hospital
cannot justify the amount it reported, we are proposing to determine
the ratio of uncompensated care costs to the hospital's total operating
costs from another available cost report, and apply that ratio to the
total operating expenses for the potentially aberrant fiscal year to
determine an adjusted amount of uncompensated care costs. For example,
if the FY 2015 cost report is determined to include potentially
aberrant data, data from the FY 2016 cost report would be used for the
ratio calculation. In this case, similar to the trim methodology used
for FY 2019, the hospital's uncompensated care costs for FY 2015 would
be trimmed by multiplying its FY 2015 total operating costs by the
ratio of uncompensated care costs to total operating costs from the
hospital's FY 2016 cost report to calculate an estimate of the
hospital's uncompensated care costs for FY 2015 for purposes of
determining Factor 3 for FY 2020.
In support of the alternative policy considered of using
uncompensated care data from FY 2017 and to improve the quality of the
Worksheet S-10 data generally, we are currently in a process of
outreach to hospitals related to potentially aberrant data reported in
their FY 2017 cost reports. For example, a significant positive or
negative difference in the percent of total uncompensated care costs to
total operating costs when comparing the hospital's FY 2015 cost report
to its FY 2017 cost report may indicate potentially aberrant data.
While hospitals may see uncompensated care cost fluctuations from year
to year, if a hospital experiences a significant change compared to
other comparable hospitals, this could be an indication of potentially
aberrant data. A hospital with such changes would have the opportunity
to justify its reporting fluctuation to the MAC and, if necessary, to
amend its FY 2017 cost report. If a hospital's FY 2017 cost report
remains unchanged without an acceptable response or explanation from
the provider, under the alternative policy considered, we would trim
the data in the provider's FY 2017 cost report using data from the
provider's FY 2015 cost report in order to determine Factor 3 for
purposes of the final rule.
While we expect all providers will have FY 2017 cost reports in
HCRIS by the time that any data would be taken from HCRIS for the final
rule, if such data are not reflected in HCRIS for an unforeseen reason
unrelated to any inappropriate action or improper reporting on the part
of the hospital, we would substitute the Worksheet S-10 data from the
FY 2015 cost report for the data from the FY 2017 cost report.
Similar to the process used in the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38217 through 38218) and the FY 2019 IPPS/LTCH PPS (83 FR 41415
and 41416) for trimming CCRs, in this FY 2020 IPPS/LTCH PPS proposed
rule, we are proposing the following steps:
Step 1: Remove Maryland hospitals. In addition, we would remove
all-inclusive rate providers because their CCRs are not comparable to
the CCRs calculated for other IPPS hospitals.
Step 2: For FY 2015 cost reports, calculate a CCR ``ceiling'' with
the following data: For each IPPS hospital that was not removed in Step
1 (including non-DSH eligible hospitals), we would use cost report data
to calculate a CCR by dividing the total costs on Worksheet C, Part I,
Line 202, Column 3 by the charges reported on Worksheet C, Part I, Line
202, Column 8. (Combining data from multiple cost reports from the same
fiscal year is not necessary, as the longer cost report would be
selected.) The ceiling would be calculated as 3 standard deviations
above the national geometric mean CCR for the applicable fiscal year.
This approach is consistent with the methodology for calculating the
CCR ceiling used for high-cost outliers. Remove all hospitals that
exceed the ceiling so that these aberrant CCRs do not skew the
calculation of the statewide average CCR. (For this proposed rule, this
trim would remove 8 hospitals that have a CCR above the calculated
ceiling of 0.925 for FY 2015 cost reports.) (Under the alternative
policy considered, the trim would remove 13 hospitals that have a CCR
above the calculated ceiling of 0.942 for FY 2017 cost reports.)
Step 3: Using the CCRs for the remaining hospitals in Step 2,
determine the urban and rural statewide average CCRs for FY 2015 for
hospitals within each State (including non-DSH eligible hospitals),
weighted by the sum of total inpatient discharges and outpatient visits
from Worksheet S-3, Part I, Line 14, Column 14.
Step 4: Assign the appropriate statewide average CCR (urban or
rural) calculated in Step 3 to all hospitals with a CCR for FY 2015
greater than 3 standard deviations above the national geometric mean
for that fiscal year (that is, the CCR ``ceiling''). For this proposed
rule, the statewide average CCR would therefore be applied to 8
hospitals, of which 4 hospitals have FY 2015 Worksheet S-10 data.
(Under the alternative policy considered, the statewide average CCR
would be applied to 13 hospitals, of which 5 hospitals have FY 2017
Worksheet S-10 data.)
For providers that did not report a CCR on Worksheet S-10, Line 1,
we would assign them the statewide average CCR in step 4.
After applying the applicable trims to a hospital's CCR as
appropriate, we are proposing that we would calculate a hospital's
uncompensated care costs for the applicable fiscal year as being equal
to Line 30, which is the sum of Line 23, Column 3, and Line 29
determined using the hospital's CCR or the statewide average CCR (urban
or rural), if applicable.
Therefore, for FY 2020, we are proposing to compute Factor 3 for
each hospital by--
Step 1: Selecting the provider's longest cost report from its
Federal fiscal year (FFY) 2015 cost reports. (Alternatively, in the
rare case when the provider has no FFY 2015 cost report because the
cost report for the previous Federal fiscal year spanned the FFY 2015
time period, the previous Federal fiscal year cost report would be used
in this step.)
Step 2: Annualizing the uncompensated care costs (UCC) from
Worksheet S-10 Line 30, if the cost report is more than or less than 12
months. (If applicable, use the statewide average CCR (urban or rural)
to calculate uncompensated care costs.)
Step 3: Combining annualized uncompensated care costs for hospitals
that merged.
Step 4: Calculating Factor 3 for Indian Health Service and Tribal
hospitals and Puerto Rico hospitals using the low-income insured days
proxy based on FY 2013 cost report data and the most recent available
SSI ratio (or, for Puerto Rico hospitals, 14 percent of the
[[Page 19422]]
hospital's FY 2013 Medicaid days). The denominator is calculated using
the low-income insured days proxy data from all DSH eligible hospitals.
Step 5: Calculating Factor 3 for the remaining DSH eligible
hospitals using annualized uncompensated care costs (Worksheet S-10
Line 30) based on FY 2015 cost report data (from Step 3). The hospitals
for which Factor 3 was calculated in Step 4 are excluded from this
calculation.
We also are proposing to amend the regulations at Sec.
412.106(g)(1)(iii)(C) by adding a new paragraph (6) to reflect the
above proposed methodology for computing Factor 3 for FY 2020.
We note that, if a hospital does not have Worksheet S-10 data for
FY 2015 and the hospital is not a new hospital (that is, its CCN was
established before October 1, 2015) nor has the rare case of no FY 2015
cost report, we are proposing to apply the steps above with
uncompensated care costs of zero for the hospital. In addition, if, in
the course of the Worksheet S-10 reviews by MACs, a hospital is unable
to provide sufficient documentation or is unwilling to justify its cost
report, which subsequently results in the hospital's Worksheet S-10
being adjusted to zero, we also are proposing to use the above steps to
calculate Factor 3. We recognize that, under this proposal, these
hospitals would be treated as having reported no uncompensated care
costs on the Worksheet S-10 for FY 2015, which would result in their
not receiving uncompensated care payments for FY 2020. However, we
believe this proposal is equitable to other hospitals because all
short-term acute care hospitals are required to report Worksheet S-10
and must maintain sufficient documentation to support the information
reported. In addition, hospitals have been on notice since the
beginning of FY 2014 that Worksheet S-10 could eventually become the
data source for CMS to calculate uncompensated care payments.
Furthermore, we have previously given hospitals the opportunity to
amend their Worksheet S-10 for FY 2015 cost reports (or to submit a
Worksheet S-10 for FY 2015 if none had been submitted previously).
As we have done for every proposed and final rule beginning in FY
2014, in conjunction with both the FY 2020 IPPS/LTCH PPS proposed rule
and final rule, we will publish on the CMS website a table listing
Factor 3 computed using both the proposed methodology and the potential
alternative methodology for all hospitals that we estimate would
receive empirically justified Medicare DSH payments in FY 2020 (that
is, those hospitals that would receive interim uncompensated care
payments during the fiscal year), and for the remaining subsection (d)
hospitals and subsection (d) Puerto Rico hospitals that have the
potential of receiving a Medicare DSH payment in the event that they
receive an empirically justified Medicare DSH payment for the fiscal
year as determined at cost report settlement. We note that, at the time
of development of this proposed rule, the FY 2017 SSI ratios were
available. Accordingly, for purposes of this proposed rule, we have
computed Factor 3 for Indian Health Service and Tribal hospitals and
Puerto Rico hospitals using the most recent available data regarding
SSI days from the FY 2017 SSI ratios. We also will publish in the
supplemental data file a list of the mergers that we are aware of and
the computed uncompensated care payment for each merged hospital.
Hospitals have 60 days from the date of public display of this FY
2020 IPPS/LTCH PPS proposed rule to review the table and supplemental
data file published on the CMS website in conjunction with the proposed
rule and to notify CMS in writing of any inaccuracies. Comments that
are specific to the information included in the table and supplemental
data file can be submitted to the CMS inbox at
[email protected]. We will address these comments as
appropriate in the table and the supplemental data file that we publish
on the CMS website in conjunction with the publication of the FY 2020
IPPS/LTCH PPS final rule. After the publication of the FY 2020 IPPS/
LTCH PPS final rule, hospitals will have until August 31, 2019, to
review and submit comments on the accuracy of the table and
supplemental data file published in conjunction with the final rule.
Comments may be submitted to the CMS inbox at
[email protected] through August 31, 2019, and any changes to
Factor 3 will be posted on the CMS website prior to October 1, 2019.
We are inviting public comments on our proposed methodology for
calculating Factor 3 for FY 2020, including, but not limited to, our
proposed use of the FY 2015 Worksheet S-10 data and the alternative
policy considered of using the FY 2017 Worksheet S-10 data instead of
the FY 2015 Worksheet S-10 data.
5. Request for Public Comments on Ways To Reduce Provider Reimbursement
Review Board (PRRB) Appeals Related to a Hospital's Medicaid Fraction
Used in the Disproportionate Share Hospital (DSH) Payment Adjustment
Calculation
As part of our ongoing efforts to reduce regulatory burden on
providers, we are examining the backlog of appeals cases at the
Provider Reimbursement Review Board (PRRB). A large number of appeals
before the PRRB relate to the calculation of a hospital's
disproportionate patient percentage (DPP) used in the calculation of
the DSH payment adjustment. (We refer readers to section IV.F. 1. of
the preamble of this proposed rule for a discussion of the calculation
of a hospitals DPP.) Many of these appeals before the PRRB focus on the
calculation of a hospital's Medicaid fraction, which is one of the two
fractions comprising the DPP, particularly the data used to determine
an individual's Medicaid eligibility in the calculation. Specifically,
it is possible that updated data on Medicaid eligibility are available
following cost report submission. As a result, many hospitals annually
appeal their cost reports to the PRRB in an effort to try and use
updated State Medicaid eligibility data to calculate the Medicaid
fraction. We believe it is in both CMS' and the providers' interest to
seek a solution to issues related to the Medicaid fraction that appear
to have led to a large volume and backlog of PRRB appeals. Therefore,
we believe it is appropriate to explore options that may prevent the
need for such appeals. We note that the Provider Reimbursement Review
Board Rules, Version 2.0, August 29, 2018, contain revisions in Rules
46 and 47 pertaining to ``Withdrawal of an Appeal or Issue Within an
Appeal'' and ``Reinstatement'', respectively. These changes may lower
the number of tracked PRRB appeals. In exploring possible solutions, we
are concerned about balancing the competing interests of administrative
finality, ease of implementation for both CMS and providers, and the
use of the most appropriate data.
We believe one such solution might be to develop regulations
governing the timing of the data for determining Medicaid eligibility,
somewhat similar to our existing policy on entitlement to SSI benefits
which is determined at a specific time. For more information on this
policy, we refer readers to the FY 2011 IPPS/LTCH PPS final rule (75 FR
50276). Under this possible solution, a provider would submit a cost
report
[[Page 19423]]
with Medicaid days based on the best available Medicaid eligibility
data at the time of filing and could request a ``reopening'' when the
cost report is settled without filing an appeal. CMS would issue
directives to the MACs requiring them to reopen those cost reports for
this issue at a specific time and set a realistic period during which
the provider could submit updated data. This would be an expansion of
the preamble instructions finalized in the CY 2016 OPPS/ASC final rule
with comment period issued on November 13, 2015 (80 FR 70563 and 70564)
which requires the MACs to accept one amended cost report submitted
within 12 months after the due date of the cost report solely for the
purpose of revising Medicaid days. (We note that an amendment of the
cost report is initiated by the provider prior to final settlement of
the cost report, while a reopening of the cost report occurs after
final settlement and can be requested by the provider or initiated by
the MAC.) Under this possible expansion, we would require MACs to
reopen cost reports for the purpose of revising the Medicaid fraction
near the end of the 3-year reopening window and use the Medicaid data
at that time to settle the cost report. We believe the 3 years of the
reopening period could provide adequate time to update the Medicaid
data used to determine an individual's Medicaid eligibility for
purposes of calculating a hospital's Medicaid fraction. However, we are
generally interested in public comments on using reopenings as a
mechanism to use updated Medicaid eligibility data and reduce the
filing of PRRB appeals--in particular, the optimal time for review of
data to occur taking into account the hospital's desire to receive
accurate payment and CMS' and the MACs' desire to settle cost reports
in a timely manner (for example, whether it makes sense to review data
2 years after cost report submission, near the end of the 3 years
mentioned in the reopening regulations, or at some other time).
We also are considering allowing hospitals, for a one-time option,
to resubmit a cost report with updated Medicaid eligibility
information, somewhat similar to our existing DSH policy allowing
hospitals a one-time option to have their SSI ratios calculated based
on their cost reporting period rather than the Federal fiscal year
under 42 CFR 412.106(a)(3). Under this option, we would undertake
rulemaking to determine the timeframe for exercising the option (which
may be a maximum allowable time after the close of a cost reporting
period or a specific window during which the request could be made). We
are interested in feedback and comments concerning the viability of
these options, as well as any alternative approaches, that could help
reduce the number of DSH-related appeals and inform our future
rulemaking efforts.
G. Hospital Readmissions Reduction Program: Proposed Updates and
Changes (Sec. Sec. 412.150 Through 412.154)
1. Statutory Basis for the Hospital Readmissions Reduction Program
Section 1886(q) of the Act, as amended by section 15002 of the 21st
Century Cures Act, establishes the Hospital Readmissions Reduction
Program. Under the Hospital Readmissions Reduction Program, Medicare
payments under the acute inpatient prospective payment system for
discharges from an applicable hospital, as defined under section
1886(d) of the Act, may be reduced to account for certain excess
readmissions. Section 15002 of the 21st Century Cures Act requires the
Secretary to compare hospitals with respect to the number of their
Medicare-Medicaid dual-eligible beneficiaries (dual-eligibles) in
determining the extent of excess readmissions. We refer readers to the
FY 2016 IPPS/LTCH PPS final rule (80 FR 49530 through 49531) and the FY
2018 IPPS/LTCH PPS final rule (82 FR 38221 through 38240) for a
detailed discussion of and additional information on the statutory
history of the Hospital Readmissions Reduction Program.
2. Regulatory Background
We refer readers to the following final rules for detailed
discussions of the regulatory background and descriptions of the
current policies for the Hospital Readmissions Reduction Program:
FY 2012 IPPS/LTCH PPS final rule (76 FR 51660 through
51676);
FY 2013 IPPS/LTCH PPS final rule (77 FR 53374 through
53401);
FY 2014 IPPS/LTCH PPS final rule (78 FR 50649 through
50676);
FY 2015 IPPS/LTCH PPS final rule (79 FR 50024 through
50048);
FY 2016 IPPS/LTCH PPS final rule (80 FR 49530 through
49543);
FY 2017 IPPS/LTCH PPS final rule (81 FR 56973 through
56979);
FY 2018 IPPS/LTCH PPS final rule (82 FR 38221 through
38240); and
FY 2019 IPPS/LTCH PPS final rule (83 FR 41431 through
41439).
These rules describe the general framework for the implementation
of the Hospital Readmissions Reduction Program, including: (1) The
selection of measures for the applicable conditions/procedures; (2) the
calculation of the excess readmission ratio (ERR), which is used, in
part, to calculate the payment adjustment factor; (3) beginning in FY
2019, the calculation of the proportion of ``dually eligible'' Medicare
beneficiaries which is used to stratify hospitals into peer groups and
establish the peer group median ERRs; (4) the calculation of the
payment adjustment factor, specifically addressing the base operating
DRG payment amount, aggregate payments for excess readmissions
(including calculating the peer group median ERRs), aggregate payments
for all discharges, and the neutrality modifier; (5) the opportunity
for hospitals to review and submit corrections using a process similar
to what is currently used for posting results on Hospital Compare; (6)
the adoption of an extraordinary circumstances exception policy to
address hospitals that experience a disaster or other extraordinary
circumstance; (7) the clarification that the public reporting of ERRs
will be posted on an annual basis to the Hospital Compare website as
soon as is feasible following the review and corrections period; and
(8) the specification that the definition of ``applicable hospital''
does not include hospitals and hospital units excluded from the IPPS,
such as LTCHs, cancer hospitals, children's hospitals, IRFs, IPFs,
CAHs, and hospitals in United States territories and Puerto Rico.
We also have codified certain requirements of the Hospital
Readmissions Reduction Program at 42 CFR 412.152 through 412.154, which
we are proposing to update in this proposed rule to reflect both
proposed and previously finalized policies.
The Hospital Readmissions Reduction Program strives to put patients
first by ensuring they are empowered to make decisions about their own
healthcare along with their clinicians, using information from data-
driven insights that are increasingly aligned with meaningful quality
measures. We believe the Hospital Readmissions Reduction Program
incentivizes hospitals to improve health care quality and value, while
giving patients the tools and information needed to make the best
decisions for them. To that end, we are committed to monitoring the
efficacy of the program to ensure that the Hospital Readmissions
Reduction Program improves the lives of patients and reduces cost.
[[Page 19424]]
3. Summary of Proposed Policies for the Hospital Readmissions Reduction
Program
In this proposed rule, we are proposing the following policies: (1)
A measure removal policy that aligns with the removal factor policies
previously adopted in other quality reporting and quality payment
programs; (2) an update to the program's definition of ``dual-
eligible'' beginning with the FY 2021 program year, to allow for a 1-
month lookback period in data sourced from the State Medicare
Modernization Act (MMA) files to determine dual-eligible status for
beneficiaries who die in the month of discharge; (3) a subregulatory
process to address any potential future nonsubstantive changes to the
payment adjustment factor components; and (4) an update to the
regulations at 42 CFR 412.152 and 412.154 to reflect proposed policies
and to codify additional previously finalized policies.
We discuss these proposals in greater detail below.
4. Current Measures and Proposed Measure Policies for FY 2020 and
Subsequent Years
a. Current Measures
The Hospital Readmissions Reduction Program currently includes six
applicable conditions/procedures: Acute myocardial infarction (AMI);
heart failure (HF); pneumonia; elective primary total hip arthroplasty/
total knee arthroplasty (THA/TKA); chronic obstructive pulmonary
disease (COPD); and coronary artery bypass graft (CABG) surgery. We
refer readers to the FY 2019 IPPS/LTCH PPS final rule (83 FR 41431
through 41439) for more information about how the Hospital Readmissions
Reduction Program supports CMS' goal of bringing quality measurement,
transparency, and improvement together with value-based purchasing to
the hospital inpatient care setting through the Meaningful Measures
Initiative. We continue to believe the measures we have adopted
adequately meet the goals of the Hospital Readmissions Reduction
Program. Therefore, we are not proposing to remove or adopt any
additional measures at this time.
b. Proposed Measure Removal Factors Policy
While we are not proposing to remove any measures from the Hospital
Readmissions Reduction Program in this proposed rule, we are proposing
to adopt a measure removal factors policy as part of our efforts to
ensure that the Hospital Readmissions Reduction Program measure set
continues to promote improved health outcomes for beneficiaries while
minimizing the overall burden and costs associated with the program.
The adoption of measure removal factors would align the Hospital
Readmissions Reduction Program with our other quality reporting and
quality payment programs and help ensure consistency in our measure
evaluation methodology across programs.
In the FY 2019 IPPS/LTCH PPS final rule, we updated a number of CMS
programs' considerations for removing measures from the respective
programs. Specifically, we finalized eight measure removal factors for
the Hospital IQR Program (83 FR 41540 through 41544), the Hospital VBP
Program (83 FR 41441 through 41446), the PCHQR Program (83 FR 41609
through 41611), and the LTCH QRP (83 FR 41625 through 41627).
We believe these removal factors are also appropriate for the
Hospital Readmissions Reduction Program, and we believe that alignment
between CMS quality programs is important to provide stakeholders with
a clear, consistent, and transparent process. Therefore, to align with
our other quality reporting and quality payment programs, we are
proposing to adopt the following removal factors for the Hospital
Readmissions Reduction Program:
Factor 1. Measure performance among hospitals is so high
and unvarying that meaningful distinctions and improvements in
performance can no longer be made (``topped-out'' measures);
Factor 2. Measure does not align with current clinical
guidelines or practice;
Factor 3. Measure can be replaced by a more broadly
applicable measure (across settings or populations) or a measure that
is more proximal in time to desired patient outcomes for the particular
topic;
Factor 4. Measure performance or improvement does not
result in better patient outcomes;
Factor 5. Measure can be replaced by a measure that is
more strongly associated with desired patient outcomes for the
particular topic;
Factor 6. Measure collection or public reporting leads to
negative unintended consequences other than patient harm; \395\
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\395\ When there is reason to believe that the continued
collection of a measure as it is currently specified raises
potential patient safety concerns, CMS will take immediate action to
remove a measure from the program and not wait for the annual
rulemaking cycle. In such situations, we would promptly retire such
measures followed by subsequent confirmation of the retirement in
the next IPPS rulemaking. When we do so, we will notify hospitals
and the public through the usual hospital and QIO communication
channels used for the Hospital Readmissions Reduction Program, which
include memo and email notification and QualityNet website articles
and postings.
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Factor 7. Measure is not feasible to implement as
specified; and
Factor 8. The costs associated with a measure outweigh the
benefit of its continued use in the program.\396\
---------------------------------------------------------------------------
\396\ We refer readers to the Hospital IQR Program's measure
removal factors discussions in the FY 2016 IPPS/LTCH PPS final rule
(80 FR 49641 through 49643) and the FY 2019 IPPS/LTCH PPS final rule
(83 FR 41540 through 41544) for additional details on the removal
factors and the rationale supporting them.
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We note that these factors are considerations taken into account
when deciding whether or not to remove measures, not firm requirements,
and that we will propose to remove measures based on these factors on a
case-by-case basis. We continue to believe that there may be
circumstances in which a measure that meets one or more factors for
removal should be retained regardless, because the benefits of a
measure can outweigh its drawbacks. Our goal is to move the program
forward in the least burdensome manner possible, while maintaining a
parsimonious set of meaningful quality measures and continuing to
incentivize improvement in the quality of care provided to patients.
5. Proposed Updated Definition of ``Dual-Eligible'' Beginning in FY
2021
In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38226 through
38229), as part of implementing the 21st Century Cures Act, we
finalized the definition of dual-eligible as follows: ``Dual-eligible
is a patient beneficiary who has been identified as having full benefit
status in both the Medicare and Medicaid programs in the State Medicare
Modernization Act (MMA) files for the month the beneficiary was
discharged from the hospital.'' In the FY 2019 IPPS/LTCH PPS final rule
(83 FR 41437 through 41438), we finalized our proposal to codify this
definition at 42 CFR 412.152 along with other definitions pertinent to
dual-eligibility calculations for assigning hospitals into peer groups.
In this proposed rule, we are proposing to update our previously
finalized definition of ``dual-eligible'' to specify that, for the
payment adjustment factors beginning with the FY 2021 program year,
``dual-eligible'' is a patient beneficiary who has been identified as
having full benefit status in both the Medicare and Medicaid programs
in data sourced from the State MMA files for the month the beneficiary
was discharged from the hospital, except for those patient
beneficiaries
[[Page 19425]]
who die in the month of discharge, who will be identified using the
previous month's data sourced from the State MMA files.\397\
---------------------------------------------------------------------------
\397\ In addition, it has come to our attention that the
determination of dual eligibility is made from data sourced from the
State MMA files, not the original State MMA files. The program also
considers this to be a nonsubstantive change as the data are
obtained from the specified source.
---------------------------------------------------------------------------
The updated definition is necessary to account for
misidentification of the dual-eligible status of patient beneficiaries
who die in the month of discharge, which can occur under the current
definition. We were not aware at the time we finalized our current
definition of ``dual-eligible'' that there are times when the data
sourced from the State MMA files may underreport the number of
beneficiaries with dual-eligibility status for the month in which the
beneficiaries dies, and, therefore, these data are not fully accurate
reflections of dual-eligible status for the month in which a
beneficiary dies. We have identified two situations that lead to the
underreporting of dual-eligible patients: (1) The dual-eligible status
is not recorded in the month of death; and (2) the dual-eligible status
changes from dual in the months prior to death to non-dual in the month
of death. While the number of misidentified patient beneficiaries is
very small and did not have a substantive impact, we believe that using
the most accurate information available is the most appropriate policy
for the program and consistent with our initial rationale for using the
State MMA files as the source to identify dual-eligibles. When we
adopted the current definition of ``dual-eligible'' in the FY 2018
IPPS/LTCH PPS final rule (82 FR 38226), we stated, and many commenters
agreed, that the State MMA file is considered the most current and most
accurate source of data for identifying dual-eligible beneficiaries
because the data are also used for operational purposes related to the
administration of Medicare Part D benefits.
Our intent was and remains to use the most accurate data available
to determine ``dual-eligible'' status in the hospital grouping portion
of the payment adjustment. Through our analysis, we believe using a 1-
month lookback period within the data sourced from the State MMA files
to determine dual-eligible status for beneficiaries who die in the
month of discharge will improve the accuracy of the number of
beneficiaries identified as having dual-eligible status. We note that
we are proposing to update this definition for FY 2021 instead of FY
2020 because of the time associated with updates to the data systems is
inconsistent with our ability to finalize this proposal in time for FY
2020 and the lack of a subregulatory policy, which would allow us to
make nonsubstantive changes outside of the rulemaking schedule.
We are proposing to revise the definition of ``dual-eligible''
codified at 42 CFR 412.152 to incorporate this update.
6. Proposed Adoption of a Subregulatory Process for Changes to Payment
Adjustment Factor Components
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41434), we
reiterated our policy regarding the maintenance of technical
specifications for quality measures. In adopting our policy for the
maintenance of technical specifications in the FY 2015 IPPS/LTCH PPS
final rule (79 FR 50039), we stated that it is important to have in
place a subregulatory process to incorporate nonsubstantive updates
required by the National Quality Forum into the measure specifications
we have adopted for the Hospital Readmissions Reduction Program, so
that these measures remain up to date. We also stated that we would
continue to use notice-and-comment rulemaking for any substantive
changes to measure specification. We continue to believe this process
is the most expeditious manner possible to ensure that quality measures
remain fully up to date while preserving the public's ability to
comment on updates that so fundamentally change a measure that it is no
longer the same measure that we originally adopted. When we adopted
this policy, we received commenter support for our policy of handling
substantive and nonsubstantive changes to measures. The policy allows
CMS two mechanisms to address measure updates: (1) The use of future
proposed rules and public comment periods for substantive changes; and
(2) subregulatory processes for nonsubstantive changes which also
preserve CMS' autonomy and flexibility, in order to rapidly implement
nonsubstantive updates to measures (79 FR 50039).
We now believe it is important for the Hospital Readmissions
Reduction Program to adopt an analogous subregulatory process for
changes to the payment adjustment factor components to provide similar
flexibility to rapidly implement nonsubstantive updates to implement
data sourcing and other minor changes when payment adjustment factor
components are impacted. We are proposing to adopt a policy under which
we would use a subregulatory process to make nonsubstantive changes to
the payment adjustment factor components used for the Hospital
Readmissions Reduction Program. We previously adopted our payment
adjustment factor components policies through the notice-and-comment
rulemaking process. The Hospital Readmissions Reduction Program relies
on these payment adjustment factor components, including, but not
limited to, dual proportion, peer group assignment, peer group median
ERR, neutrality modifier, and ratio of DRG payments to total payments,
to determine hospital payments in each fiscal year. Each year, we
provide details on most of that information in the Hospital Specific
Report (HSR) User Guide located on QualityNet website at: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1228772412669. However, there are times when data sourcing and other technical
aspects of the payment adjustment factor components change and require
updating, even when those changes do not alter the intent of our
previously finalized policies. Because the updates to data sourcing and
technical aspects of the components are not always linked to the timing
of regulatory actions, we believe this proposed policy is prudent to
allow for the use of the most up-to-date, accurate information. We
reiterate that we would continue to consider all changes to the
framework of the components themselves as substantive changes that we
would propose through the notice-and-comment rulemaking process.
Most recently, as discussed earlier, we identified an issue with
data accuracy for determining dual-eligible status from data sourced
from the State MMA files for beneficiaries who die in the same month as
discharge. In this proposed rule, we are proposing to amend the
definition of ``dual-eligible'' to account for this data issue.
However, we would like to clarify that the proposal is not altering the
intent of our previously finalized policy. Instead, the proposed
updated definition of ``dual-eligible'' allows for the use of the month
preceding discharge for identifying dual-eligibles who died during the
discharge month after learning that the current files misidentified the
dual-eligibility status of certain patient beneficiaries who die in the
month of discharge. Although we have identified this issue, and do not
believe that it is a substantive change to our policy for determining
dual-eligibles, we believe
[[Page 19426]]
that we should utilize the notice-and-comment rulemaking process to
address this clarification because we do not currently have a
subregulatory policy in place to address this type of data issue.
However, we believe that a subregulatory process for addressing
nonsubstantive data issues like the dual-eligible update could be used
for similar situations in the future. We would publish these
nonsubstantive data changes in the HSR User Guide annually. We note
that we would continue to use notice-and-comment rulemaking for
substantive changes.
With respect to what constitutes substantive changes versus
nonsubstantive changes, we expect to make this determination on a case-
by-case basis. In other quality reporting and quality payment programs
(77 FR 53504), we stated that substantive changes are those that are so
significant that the measures could no longer be considered the same
measure. For this proposed policy, we would utilize the same principle;
we would deem a change to be substantive and to require notice-and-
comment rulemaking when the impact of the change to the payment
adjustment factor component was so significant that it could no longer
be considered to be the same as the previously finalized component.
Examples of nonsubstantive changes would include, but not be limited
to, updated naming or locations of data files and/or other minor
discrepancies that do not change the intent of the policy. Examples of
substantive changes to data might include use of different
methodologies to use data than finalized for the payment adjustment
factor component or the use of a different component in the methodology
for payment calculations.
7. Proposed Applicable Period for FY 2022
We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR
51671) and the FY 2013 IPPS/LTCH PPS final rule (77 FR 53675) for
discussion of our previously finalized policy for defining applicable
periods. In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41434 through
41435), we finalized the following ``applicable periods'' to calculate
the readmission payment adjustment factor for FY 2019, FY 2020, and FY
2021, respectively:
The 3-year time period of July 1, 2014 through June 30,
2017 for FY 2019;
The 3-year time period of July 1, 2015 through June 30,
2018 for FY 2020; and
The 3-year time period of July 1, 2016 through June 30,
2019 for FY 2021.
These are the 3-year periods from which data are being collected in
order to calculate ERRs and payment adjustment factors for the fiscal
year; this includes aggregate payments for excess readmissions and
aggregate payments for all discharges used in the calculation of the
payment adjustment. The ``applicable period'' for dual-eligibles is the
same as the ``applicable period'' that we otherwise adopt for purposes
of the Hospital Readmissions Reduction Program.
We are proposing, for FY 2022, consistent with the definition
specified at Sec. 412.152, that the ``applicable period'' for the
Hospital Readmissions Reduction Program would be the 3-year period from
July 1, 2017 through June 30, 2020. The applicable period for dual-
eligibles for FY 2022 would similarly be the 3-year period from July 1,
2017 through June 30, 2020.
8. Identification of Aggregate Payments for Each Condition/Procedure
and All Discharges for FY 2020
When calculating the numerator (aggregate payments for excess
readmissions), we determine the base operating DRG payment amount for
an individual hospital for the applicable period for such condition/
procedure, using Medicare inpatient claims from the MedPAR file with
discharge dates that are within the applicable period. Under our
established methodology, we use the update of the MedPAR file for each
Federal fiscal year, which is updated 6 months after the end of each
Federal fiscal year within the applicable period, as our data source.
In identifying discharges for the applicable conditions/procedures
to calculate the aggregate payments for excess readmissions, we apply
the same exclusions to the claims in the MedPAR file as are applied in
the measure methodology for each of the applicable conditions/
procedures. For the FY 2020 applicable period, this includes the
discharge diagnoses for each applicable condition/procedure based on a
list of specific ICD-9-CM or ICD-10-CM and ICD-10-PCS code sets, as
applicable, for that condition/procedure, because diagnoses and
procedure codes for discharges occurring prior to October 1, 2015 were
reported under the ICD-9-CM code set, while discharges occurring on or
after October 1, 2015 (FY 2016), were reported under the ICD-10-CM and
ICD-10-PCS code sets.
We identify Medicare fee-for-service (FFS) claims that meet the
criteria described above for each applicable condition/procedure to
calculate the aggregate payments for excess readmissions (that is,
claims paid for under Medicare Part C (Medicare Advantage) are not
included in this calculation). This policy is consistent with the
methodology to calculate ERRs based solely on admissions and
readmissions for Medicare FFS patients. Therefore, consistent with our
established methodology, for FY 2020, we are proposing to continue to
exclude admissions for patients enrolled in Medicare Advantage, as
identified in the Medicare Enrollment Database.
In this proposed rule, for FY 2020, we are proposing to determine
aggregate payments for excess readmissions, aggregate payments for all
discharges using data from MedPAR claims with discharge dates that are
on or after July 1, 2015, and not later than June 30, 2018. As we
stated in FY 2018 IPPS/LTCH PPS final rule (82 FR 38232), we will
determine the neutrality modifier using the most recently available
full year of MedPAR data. However, we note that, for the purpose of
modeling the proposed FY 2020 readmissions payment adjustment factors
for this proposed rule, we are using the proportion of dual-eligibles,
excess readmission ratios, and aggregate payments for each condition/
procedure and all discharges for applicable hospitals from the FY 2019
Hospital Readmissions Reduction Program applicable period. For the FY
2020 program year, applicable hospitals will have the opportunity to
review and correct calculations based on the proposed FY 2020
applicable period of July 1, 2015 to June 30, 2018, before they are
made public under our policy regarding reporting of hospital-specific
information. Again, we reiterate that this period is intended to review
the program calculations, and not the underlying data. For more
information on the review and corrections process, we refer readers to
the FY 2013 IPPS/LTCH PPS final rule (77 FR 53399 through 53401).
In this proposed rule, for FY 2020, we are proposing to use MedPAR
data from July 1, 2015 through June 30, 2018 for the FY 2020 Hospital
Readmissions Reduction Program calculations. Specifically--
The March 2016 update of the FY 2015 MedPAR file to
identify claims within FY 2015 with discharges dates that are on or
after July 1, 2015;
The March 2017 update of the FY 2016 MedPAR file to
identify claims within FY 2016;
The March 2018 update of the FY 2017 MedPAR file to
identify claims within FY 2017; and
The March 2019 update of the FY 2018 MedPAR file to
identify claims
[[Page 19427]]
within FY 2018 with discharge dates that are on or before June 30,
2018.
9. Calculation of Payment Adjustment Factors for FY 2020
As we discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR
38226), section 1886(q)(3)(D) of the Act requires the Secretary to
group hospitals and apply a methodology that allows for separate
comparisons of hospitals within peer groups in determining a hospital's
adjustment factor for payments applied to discharges beginning in FY
2019.
To implement this provision, in the FY 2018 IPPS/LTCH PPS final
rule (82 FR 38226 through 38237), we finalized several changes to the
payment adjustment methodology for FY 2019. First, we finalized that an
individual would be counted as a full-benefit dual-eligible patient if
the beneficiary was identified as full-benefit dual status in the State
Medicare Modernization Act (MMA) files for the month he or she was
discharged from the hospital (82 FR 38226 through 38228). Second, we
finalized our policy to define the proportion of full benefit dual-
eligible beneficiaries as the proportion of dual-eligible patients
among all Medicare FFS and Medicare Advantage stays (82 FR 38226
through 38228). Third, we finalized our policy to define the data
period for determining dual-eligibility as the 3-year data period
corresponding to the Program's applicable period (82 FR 38229). Fourth,
we finalized our policy to stratify hospitals into quintiles, or five
peer groups, based on their proportion of dual-eligible patients (82 FR
38229 through 38231). Finally, we finalized our policy to use the
median ERR for the hospital's peer group in place of 1.0 in the payment
adjustment formula and apply a uniform modifier to maintain budget
neutrality (82 FR 38231 through 38237). The payment adjustment formula
would then be:
[GRAPHIC] [TIFF OMITTED] TP03MY19.021
where dx is AMI, HF, pneumonia, COPD, THA/TKA or CABG and payments
refers to the base operating DRG payments. The payment reduction (1-P)
resulting from use of the median ERR for the peer group is scaled by a
neutrality modifier to achieve budget neutrality. We refer readers to
the FY 2018 IPPS/LTCH PPS final rule (82 FR 38226 through 38237) for a
detailed discussion of the payment adjustment methodology. We are not
proposing any changes to this payment adjustment calculation
methodology for FY 2020.
10. Calculation of Payment Adjustment for FY 2020
Section 1886(q)(3)(A) of the Act defines the payment adjustment
factor for an applicable hospital for a fiscal year as ``equal to the
greater of: (i) The ratio described in subparagraph (B) for the
hospital for the applicable period (as defined in paragraph (5)(D)) for
such fiscal year; or (ii) the floor adjustment factor specified in
subparagraph (C).'' Section 1886(q)(3)(B) of the Act, in turn,
describes the ratio used to calculate the adjustment factor.
Specifically, it states that the ratio is equal to 1 minus the ratio
of--(i) the aggregate payments for excess readmissions, and (ii) the
aggregate payments for all discharges, scaled by the neutrality
modifier. The calculation of this ratio is codified at Sec.
412.154(c)(1) of the regulations and the floor adjustment factor is
codified at Sec. 412.154(c)(2) of the regulations. Section
1886(q)(3)(C) of the Act specifies the floor adjustment factor at 0.97
for FY 2015 and subsequent fiscal years.
Consistent with section 1886(q)(3) of the Act, codified in our
regulations at Sec. 412.154(c)(2), for FY 2020, the payment adjustment
factor will be either the greater of the ratio or the floor adjustment
factor of 0.97. Under our established policy, the ratio is rounded to
the fourth decimal place. In other words, for FY 2020, a hospital
subject to the Hospital Readmissions Reduction Program would have an
adjustment factor that is between 1.0 (no reduction) and 0.9700
(greatest possible reduction).
For additional information on the FY 2020 payment calculation, we
refer readers to the QualityNet website at: https://www.qualitynet.org/dcs/ContentServer?c=Page&pagename= QnetPublic%2FPage%2FQnetTier3&cid=
1228776124112.
11. Confidential Reporting of Stratified Data for Hospital Quality
Measures
Beginning as early as the spring of 2020, CMS plans to include in
confidential hospital-specific reports (HSR) data stratified by patient
dual eligible status for the six readmissions measures included in the
Hospital Readmissions Reduction Program. These data will include two
disparity methodologies designed to illuminate potential disparities
within individual hospitals and across hospitals nationally and will
supplement the measure data currently publicly reported on the Hospital
Compare website. The first methodology, the Within-Hospital Disparity
Method highlights differences in outcomes for dual eligible versus non-
dual eligible patients within an individual hospital, while the second
methodology, the Dual Eligible Outcome Method, allows for a comparison
of performance in care for dual-eligible patients across hospitals (82
FR 38405 through 38407; 83 FR 41598). These two disparity methods are
separate from the stratified methodology used by the Hospital
Readmissions Reduction Program, and we emphasize that the two disparity
methods would not be used in payment adjustment factors calculations
under the Hospital Readmissions Reduction Program. We believe that
providing the results of both disparity methods alongside a hospital's
measure data as a point of reference allows for a more meaningful
comparison and comprehensive assessment of the quality of care for
patients with social risk factors and the identification of providers
where disparities in health care may exist. We also believe the two
disparity methods provide additional perspectives on health care equity
(83 FR 41598).
We believe hospitals can use their results from the disparity
methods to identify and develop strategies to reduce disparities in the
quality of care for patients through targeted improvement efforts (83
FR 41598). The two disparity methods and the stratified methodology
used by the Hospital Readmissions Reduction Program are part of CMS'
broader effort to account for social risk factors in quality
measurement and quality payment programs. We refer readers to section
VIII.A.9. of the preamble of this proposed rule for more information on
confidential reporting of stratified data for hospital quality
measures. We further refer readers to the FY 2017 IPPS/LTCH PPS final
rule (81 FR 57167 through 57168), the FY 2018 IPPS/LTCH PPS final rule
(82 FR 38324 through 38326; 82 FR 38403 through 38409), and the FY 2019
IPPS/LTCH PPS final rule (83 FR 41597 through 41601) for detailed
discussions on disparity reporting.
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We note that the two disparity methods do not place any additional
collection or reporting burden on hospitals because dual-eligibility
data are readily available in claims data. In addition, we reiterate
that these confidential hospital-specific reports data do not impact
the calculation of hospital payment adjustment factors under the
Hospital Readmissions Reduction Program.
12. Proposed Revisions of Regulatory Text
We are proposing to revise 42 CFR 412.152 to reflect proposed
policies and to codify previously finalized policies. Specifically, we
are proposing to revise the definition of ``aggregate payments for
excess readmissions'', as discussed earlier, to specify that it means
the sum of the product for each applicable condition, among others, of
``the excess readmission ratio for the hospital for the applicable
period minus the peer group median excess readmission ratio'' (instead
of minus 1) (proposed paragraph (3) of the definition) and to include
the neutrality modifier--a multiplicative factor that equates total
Medicare savings under the current stratified methodology to the
previous non-stratified methodology (proposed paragraph (4) of the
definition).
We are proposing to revise the definition of ``applicable
condition'' to include other conditions and procedures as determined
appropriate by the Secretary. In expanding the applicable conditions,
the Secretary will seek endorsement of the entity with a contract under
section 1890(a) of the Act, but may apply such measures without such an
endorsement in the case of a specified area or medical topic determined
appropriate by the Secretary for which a feasible and practical measure
has not been endorsed by the entity with a contract under section
1890(a) of the Act as long as due consideration is given to measures
that have been endorsed or adopted by a consensus organization
identified by the Secretary.
We are proposing to revise the definition of ``base operating DRG
payment amount'', with respect to a sole community hospital that
receives payments under Sec. 412.92(d) or a Medicare-dependent, small
rural hospital that receives payments under Sec. 412.108(c), to remove
the applicability date of FY 2013, and to specify that this amount also
includes the difference between the hospital-specific payment rate and
the Federal payment rate determined under the subpart. This proposal is
intended to align the regulatory text with section 1886(q)(2)(b)(i) of
the Act, because the regulatory text was not updated following the
expiration of the FY 2013 changes.
We are proposing to revise the definition of ``dual-eligible'' to
specify that, for payment adjustment factors beginning in FY 2021,
dual-eligible is a patient beneficiary who has been identified as
having full benefit status in both the Medicare and Medicaid programs
in data sourced from the State MMA files for the month the beneficiary
was discharged from the hospital except for those patient beneficiaries
who die in the month of discharge, which will be identified using the
previous month's data as sourced from the State MMA files, as discussed
earlier.
We are proposing to revise Sec. 412.154(e) to specify that the
limitations on administrative or judicial review would include the
neutrality modifier and the proportion of dual-eligibles as discussed
earlier (proposed new paragraphs (e)(4) and (5); existing paragraph
(e)(4) would be redesignated as paragraph (e)(6)).
H. Hospital Value-Based Purchasing (VBP) Program: Proposed Policy
Changes
1. Background
a. Statutory Background and Overview of Past Program Years
Section 1886(o) of the Act requires the Secretary to establish a
hospital value-based purchasing program (the Hospital VBP Program)
under which value-based incentive payments are made in a fiscal year
(FY) to hospitals that meet performance standards established for a
performance period for such fiscal year. Both the performance standards
and the performance period for a fiscal year are to be established by
the Secretary.
For more of the statutory background and descriptions of our
current policies for the Hospital VBP Program, we refer readers to the
Hospital Inpatient VBP Program final rule (76 FR 26490 through 26547);
the FY 2012 IPPS/LTCH PPS final rule (76 FR 51653 through 51660); the
CY 2012 OPPS/ASC final rule with comment period (76 FR 74527 through
74547); the FY 2013 IPPS/LTCH PPS final rule (77 FR 53567 through
53614); the FY 2014 IPPS/LTCH PPS final rule (78 FR 50676 through
50707); the CY 2014 OPPS/ASC final rule (78 FR 75120 through 75121);
the FY 2015 IPPS/LTCH PPS final rule (79 FR 50048 through 50087); the
FY 2016 IPPS/LTCH PPS final rule (80 FR 49544 through 49570); the FY
2017 IPPS/LTCH PPS final rule (81 FR 56979 through 57011); the CY 2017
OPPS/ASC final rule with comment period (81 FR 79855 through 79862);
the FY 2018 IPPS/LTCH PPS final rule (82 FR 38240 through 38269); and
the FY 2019 IPPS/LTCH PPS final rule (83 FR 41440 through 41472).
We also have codified certain requirements for the Hospital VBP
Program at 42 CFR 412.160 through 412.167.
b. FY 2020 Program Year Payment Details
Section 1886(o)(7)(B) of the Act instructs the Secretary to reduce
the base operating DRG payment amount for a hospital for each discharge
in a fiscal year by an applicable percent. Under section 1886(o)(7)(A)
of the Act, the sum total of these reductions in a fiscal year must
equal the total amount available for value-based incentive payments for
all eligible hospitals for the fiscal year, as estimated by the
Secretary. We finalized details on how we would implement these
provisions in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53571 through
53573), and we refer readers to that rule for further details.
Under section 1886(o)(7)(C)(v) of the Act, the applicable percent
for the FY 2020 program year is 2.00 percent. Using the methodology we
adopted in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53571 through
53573), we estimate that the total amount available for value-based
incentive payments for FY 2020 is approximately $1.9 billion, based on
the December 2018 update of the FY 2018 MedPAR file. We intend to
update this estimate for the FY 2020 IPPS/LTCH PPS final rule using the
March 2019 update of the FY 2018 MedPAR file.
As finalized in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53573
through 53576), we will utilize a linear exchange function to translate
this estimated amount available into a value-based incentive payment
percentage for each hospital, based on its Total Performance Score
(TPS). We will then calculate a value-based incentive payment
adjustment factor that will be applied to the base operating DRG
payment amount for each discharge occurring in FY 2020, on a per-claim
basis. We are publishing proxy value-based incentive payment adjustment
factors in Table 16 associated with this proposed rule (which is
available via the internet on the CMS website). The proxy factors are
based on the TPSs from the FY 2019 program year. These FY 2019
performance scores are the most recently available performance scores
hospitals have been given the opportunity to review and correct. The
slope of the linear exchange function used to calculate the proxy
value-based incentive payment adjustment factors in
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Table 16 is 2.8391388973. This slope, along with the estimated amount
available for value-based incentive payments, is also published in
Table 16.
We intend to update this table as Table 16A in the final rule
(which will be available on the CMS website) to reflect changes based
on the March 2019 update to the FY 2018 MedPAR file. We also intend to
update the slope of the linear exchange function used to calculate
those updated proxy value-based incentive payment adjustment factors.
The updated proxy value-based incentive payment adjustment factors for
FY 2020 will continue to be based on historic FY 2019 program year TPSs
because hospitals will not have been given the opportunity to review
and correct their actual TPSs for the FY 2020 program year until after
the FY 2020 IPPS/LTCH PPS final rule is published.
After hospitals have been given an opportunity to review and
correct their actual TPSs for FY 2020, we will post Table 16B (which
will be available via the internet on the CMS website) to display the
actual value-based incentive payment adjustment factors, exchange
function slope, and estimated amount available for the FY 2020 program
year. We expect Table 16B will be posted on the CMS website in the fall
of 2019.
2. Retention and Removal of Quality Measures
a. Retention of Previously Adopted Hospital VBP Program Measures and
Relationship Between the Hospital IQR and Hospital VBP Program Measure
Sets
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53592), we finalized
a policy to retain measures from prior program years for each
successive program year, unless otherwise proposed and finalized. In
the FY 2019 IPPS/LTCH PPS final rule (83 FR 41440 through 41441), we
finalized a revision to our regulations at 42 CFR 412.164(a) to clarify
that once we have complied with the statutory prerequisites for
adopting a measure for the Hospital VBP Program (that is, we have
selected the measure from the Hospital IQR Program measure set and
included data on that measure on Hospital Compare for at least one year
prior to its inclusion in a Hospital VBP Program performance period),
the Hospital VBP Program statute does not require that the measure
continue to remain in the Hospital IQR Program. We are not proposing
any changes to these policies in this proposed rule.
b. Measure Removal Factors for the Hospital VBP Program
In the FY 2019 IPPS/LTCH PPS final rule (83 FR 41441 through
41446), in alignment with the Hospital IQR Program, we finalized the
following measure removal factors for the Hospital VBP Program:
Factor 1. Measure performance among hospitals is so high
and unvarying that meaningful distinctions and improvements in
performance can no longer be made (``topped out'' measures), defined
as: Statistically indistinguishable performance at the 75th and 90th
percentiles; and truncated coefficient of variation <=0.10; \398\
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\398\ We previously adopted the two criteria for determining the
``topped-out'' status of Hospital VBP Program measures in the FY
2015 IPPS/LTCH PPS final rule (79 FR 50055).
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Factor 2. A measure does not align with current clinical
guidelines or practice;
Factor 3. The availability of a more broadly applicable
measure (across settings or populations), or the availability of a
measure that is more proximal in time to desired patient outcomes for
the particular topic;
Factor 4. Performance or improvement on a measure does not
result in better patient outcomes;
Factor 5. The availability of a measure that is more
strongly associated with desired patient outcomes for the particular
topic;